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Appeals Nos. 781 to 784 of 1963. Appeals from the judgment and order dated March 17, 1961 of the Calcutta High Court in Appeal from Original orders Nos. 212, 433, 435 and 436 of 1959 respectively. D. N. Mukherjee, for the appellant (in C.A. No. 781/63). N. C. Chatterjee, Ramkrishna Pal, Taraknath Roy and D. N. Mukherjee, for the appellants (in C.As. Nos. 782 784/63). C. K. Daphtary, Attorney General, section C. Bose and P. K. Bose, for respondents Nos. 1 to 3 (in C.A. No. 781/63). B. Sen, section C. Bose and P. K. Bose, for respondents Nos. 1 to 3 (in C.As. Nos. 782 to 783/63) and respondents (in C.A. No. 784/63). The Judgment of the Court was delivered by Ayyangar J. These appeals are before us by virtue of certificates granted by the High Court under article 133(1)(c) of the Constitution and they raise for consideration the question of the proper construction of section 5(aa) of the West Bengal Estates Acquisition Act, 1953 (West Bengal Act 1 of 1954) as amended by West Bengal Act 25 of 1957. The relevant facts in these four appeals are analogous and they raise the common question of law which we have already indicated. For the disposal of these appeals it is sufficient therefore to refer to the facts of any one of them. We propose to set out those of Civil Appeal 781 of 1963. 3 The Zamindar of Simlapal in the Collectorate of Bankura entered into a contract with the appellant Ram Krissen Singh and by a document dated September 3, 1946, granted him the right to cut the trees, in certain demarcated areas, of certain forests of the Zamindari on payment of a sum of Rs. 7,131/8/ . Under the terms of the said document the period during which the appellant was given this right to cut trees was to end on April 14, 1955. The appellant started the cutting operations and cut only for, the first few years, but thereafter action was taken by the Forest Officers of the State to prevent him from further cutting under the powers vested in them by the West Bengal Private Forests Act, 1948. Thereupon, the appellant tiled a petition under article 226 of the Constitution for a writ of certiorari for quashing the orders passed against him and also for an injunction restraining the Forest Officers from taking delivery of possession and from cutting and disposing of the forests covered by his agreement. By the time the petition was filed the West Bengal Estates Acquisition Act, 1953 (Act 1 of 1954), (hereafter referred to as the Act) had been passed and in the counter affidavit which was filed to this petition reliance was placed upon its provisions for contending that the "estate" belonging to the Zamindar in which the forest lay as well as all the rights to the trees therein, to whomsoever belonging, had vested in the State under section 5 of the Act by reason of a notification issued by the State Government under section 4. By the date the writ petition came to be heard the West Bengal Legislature had, in view of certain decisions rendered by the Calcutta High Court which held that the terms of section 5 of the Act which specified the property or interest in property which would vest in the Government did not include the right to cut trees in a forest, which had been granted to a third person by the proprietor or intermediary before the date of the vesting, amended the said vesting section by introducing section 5 (aa) to have retrospective effect from the date of the commencement of the principal Act. Section 5 (aa) read: "5. Upon the due publication of a notification under section 4, on and from the date of vesting(aa) all lands in any estate comprised in a forest together with all rights to the trees therein or to the produce thereof and held by an intermediary or any other person shall, notwithstanding anything to the contrary contained in any judgment, decree or order of any court or Tribunal, vest in the State '; 4 After this amendment was brought to the notice of the Court the petitioner was allowed to amend his writ petition by adding allegations (a) regarding the construction of the said section, and ( b) its constitutional validity. The petition then came on for hearing in December, 1958, and the learned Single Judge, by his judgment dated December 24, 1958 discharged the rule followcertain earlier decisions of his on the same point. An appeal filed to the Division Bench under the Letters Patent was also dismissed but the learned Judges granted a certificate under article 133(1) (c) and that is how the appeal is before us. The first, and possibly the only, question that now calls for consideration is whether the terms of section 5 (aa) are sufficient and apt to provide for the vesting of the right to cut the trees when such right belonged, on the date of the vesting, not to the intermediary or Zamindar but to another person to whom it had been granted under a contract with the said intermediary. The argument addressed to us by Mr. Chatterjee learned counsel for the appellant was that it was only the land held or other rights possessed by an intermediary that became vested in the State and that cl. (aa) did not deal with those cases where the right to the trees had been severed from the right to the land and belonged to a third person on the date of the vesting. For this purpose learned counsel laid stress on two features of the clause. The first was the use of the words "together with" and the second the words "and held by an intermediary or any other person". Taking up, first, the word "together with" the submission was that it was only where the right to the trees constituted an integral part of the right to the land that a vesting was effected of the latter right and that where there had been a severance of the two rights it was only the land that remained in the intermediary that became vested and not the right to the tree, ,. We feel unable to accept this argument. We consider that the expression "together" is obviously used to denote not the necessity for integrality between the land and the right to cut trees by way of common ownership but as merely an enumeration of the items of property which vest in the State. In the context, the word means no more than the expression "as well as" and imports no condition that the right to the trees should also belong to the owner of the land. It may be added that the words "or to the produce thereof" occurring next also emphasis what we have just now pointed out, for if these words are read disjunctively, as they must, in view of the conjunction "or", the words would indicate that not merely lands in the estate and the right to the 5 trees but independently of them the right to the produce of the trees on the land would also vest in the State. Coming next to the words "and held by an intermediary" learned counsel could not justifiably submit an argument that both the land and the right to the trees should inhere in the intermediary to attract the operation of the clause, because the words "held by an intermediary" are followed by "any other person". Obviously, that other person i.e., person other than the intermediary, could have the right either to the land, a right to the trees or a right to the produce. By the use of the expression "or any other person" therefore the legislature could obviously have intended only a person like the appellant who might not have any right to the lands which are held by the intermediary but has a right to the trees in that land. Besides, it is not possible to read the words "held by an intermediary or any other person" to mean that they are applicable only to cases where the entirety of the interest to the land, to the trees and to the produce are vested in a single person be he the inter mediary or another person. These words would obviously apply equally to cases where the land belongs to an intermediary and the right to the trees or to the produce of the trees to another person. This apart, there is one further aspect Of the matter to which also reference might be made. The amendment effected by the addition of cl. (aa) to section 5 was admittedly necessitated by certain decisions of the High Court of Calcutta which held that where an intermediary had granted a right to cut trees or to forest produce, the rights so conferred were unaffected by the vesting provision in section 5 of the Act as it stood before the amendment. If the argument now put forward by Mr. Chatterjee is accepted it would mean that the amendment has achieved no purpose. Un doubtedly, if the words of the amendment, on their plain reading, are insufficient to comprehend the case now on hand the fact that the legislature intended to overcome a decision of the High Court could not be any determining consideration but, if as we find, the words normally bear that construction, the circumstance that the amendment was effected with a view to overcome certain decisions rendered under the original enactment is not an irrelevant factor to be taken into account. Mr. Chatterjee next submitted that the scheme of the Act was the provision of compensation for every interest acquired by the State by virtue of the vesting under section 5 and that as there was no provision in the Act for compensating the interest of persons 6 like the appellant, the Court should hold that such. an interest was not within the vesting section , ,. 5 (aa). This is, of course, a legitimate argument, and if there had been any ambiguity in the construction of section 5 (aa), the circumstance referred to by learned counsel would certainly have great weight. But in view of the plain words of section 5 (aa) which we have discussed earlier, we do not find it possible to accept the argument. The absence of a provision for compensation might render the vesting section unconstitutional, and that indeed was the argument addressed to the High Court and a matter which we shall immediately consider, but it cannot detract from the clear operation of the words used in section 5 (aa). A further point that was urged before the High Court was that the enactment was unconstitutional in that no provision was made for the award of compensation to persons in the position of the appellant whose rights to cut trees became vested in the State. Mr. Chatterjee pointed out that the learned judges of the High Court had upheld the validity of the enactment by holding that compensation had, in fact, been provided. Learned counsel drew our attention to the provisions quoted and submitted that the learned judges erred in their construction of these provisions and that, in fact, no compensation was provided, but this question about the constitutional validity of the amending Act does not really fall for consideration because learned counsel for the appellant did not contest the position that after the enactment of the 17th Amendment to the Constitution, and the inclusion of West Bengal Act 1 of 1954 among those specified in Schedule IX, the absence of a provision for compensation for the acquisition of the appellant 's rights would not render the West Bengal Act or the acquisition thereunder unconstitutional. These appeals fail but in the circumstances of the case there will be no order as to costs. Appeals dismissed.

The appellant had been granted by the Zamindar of Simlapal in West Bengal a right to cut trees in certain forests of the zamindari. The exercise of this right was interrupted by action taken against him under the West Bengal Private Forests Act, 1948. The appellant filed a writ petition under Article 226 of the Constitution of India. In the meantime, the West Bengal Estates Acquisition Act, 1953, (Act 1 of 1954) was passed. This Act provided that from the date specified in a notification under section 4 of the Act, property and interests specified in section 5 of the Act would vest in the State Government. According to the Forest Department the right to cut trees enjoyed by the appellant was within the purview of section 5 of the Act and, therefore, had become vested in the State Government. Certain decisions of the Calcutta High Court, however, went against this interpretation; it was held therein that a right to cut trees granted by an intermediary to a third person was not within the terms of section 5. Thereupon the State Legislature of West Bengal passed Act 25 of 1957 which by adding section 5(aa) to the Act provided that upon the due publication of a notification under section 4, on and from the date of vesting, all lands in any estate comprised in a forest together with all rights to trees therein or the produce thereof and held by an intermediary or any other person shall, notwithstanding anything to the contrary contained in any judgment, decree or order of any Court or Tribunal, vest in the State. The appellant 's writ petition, coming up for hearing after this amendment, was dismissed. An appeal to the Division Bench also failed. Appeal before the Supreme Court came by virtue of a certificate of fitness under Article 133 (1) (c) of the Constitution. The question for consideration was whether the terms of section 5(aa) were sufficient and apt to provide for the vesting of the right to cut the trees when such right belonged, on the date of vesting, not to the intermediary or zamindar but to another person to whom it had been granted under a contract with the said intermediary. HELD : (i) The words "together with" used in section 5(aa), on the basis of which it was contended by counsel for the appellant that it was only where the right to the trees constituted an integral part of the right to the land that a vesting was effected of the latter right, meant in the context of the section no more than the expression 'as well as ' and imported no condition that the right to the trees should also belong to the owner of the land. Also, it was not possible to read the words "held by an intermediary 2 or any other person" to mean that they were applicable only to cases where the entirety of the interest to the land, to the trees, and to the produce were vested in a single person be he the intermediary or another person. These words would obviously apply equally to cases where the land belonged to an intermediary and the right to the trees or to the produce of the trees to another person. In construing the section, moreover, the fact that it was amended to overcome certain decisions rendered under the original enactment was not an irrelevant factor to be taken into account. [41 G; 5B D, 5G]. (ii) From the mere fact that there was no provision in the Act for compensating the interest of persons like the appellant, the Court could not hold that such an interest was not within the vesting section section 5(aa). The absence ' of a provision for compensation might render the vesting section unconstitutional, but it could not detract from the clear operation of the words used in section 5(aa). After the passing of the 17th Amendment to the Constitution and the inclusion of West Bengal Act 1 of 1954 among those specified in Schedule IX, the absence of a provision for compensation for the acquisition of the appellant 's rights would not render the West Bengal Act or the acquisition thereunder, unconstitutional. [6B; 6E].

Appeals Nos. 225, 226, 228, 229 and 248 of 1955. Appeals from the judgments and orders dated October 5, 1953, in Misc. Judicial Cases Nos. 418/52 and 124/53 and October 8, 1953. , in T. section No. 106/53, 565 Misc. Judicial Cases Nos. 188/53 and 235/53 of the Patna High Court. R. Patnaik, for the appellant (in C. A. No. 225/55). R. C.Prasad, for the appellants (in C. As. Nos. 226, 228, 229 & 248/55). Mahabir Prasad, Advocate General for the State of Bihar, Tribeni Prdsad Sinha and section P. Varma, for the respondents (in C. As. 225, 226, 228 & 229/55). Mahabir Prasad, Advocate General for the State of Bihar and section P. Varma, for the respondent (in C. A. No. 248/55). April 15. The Judgment of the Court was delivered by ' section K. DAS, J. This is a batch of five appeals which have been heard together and the principal question for decision in these appeals is the constitutional validity of the Bihar Hindu Religious Trusts Act,, 1950 (Bihar I of 1951), hereinafter referred to as the Act. Four of these appeals arise out of writ proceedings taken in the High Court of Patna on petitions made under articles 226 and 227 of the Constitution. One of them, namely, Civil Appeal No. 228 of 1955, arises out of a suit which was originally instituted in the Court of the Subordinate Judge of Patna but was later transferred to the High Court by an order made by it tinder article 228 of the Constitution. The Petitioners in the writ petitions and the plaintiffs in the suit challenged the constitutional validity of the Act on certain grounds to which we shall presently refer. The petitions and the suit were contested by the State of Bihar and/or the President, Bihar State Board of Religious ,trusts, who are now respondents before us. The High Court in three separate judgments, two dated October 5, 1953, and the third dated October 8, 1953, held that the Act was a valid piece of legislation and on that main finding dismissed the writ petitions and the suit. The petitioners and the plaintiff ,, appellants before us, applied for and obtained certificates from the High Court under article 132 of the Constitution to the effect that the cases involved substantial ques 566 tions of law as to the interpretation of the Constitution and the appeals have been brought to this Court in pursuance of those certificates. The facts lie within a very narrow compass. In Civil Appeal No. 225 of 1955 the appellant is Mahant Moti Das, and he alleged that he was the Mahant of a math or astral situate in village Parbatta, district Monghyr, in Bihar, that he was a follower of the religion founded by Sri Kabir Sahib, that the properties of the asthal were treated as private properties of the mahants and that the President of the Bihar State Board of Religious Trusts constituted under the Act had no authority to serve him with a notice under section 59 of the Act, inasmuch as the Act was ultra vires and unconstitutional and, in any event, did not apply to his math or asthal. In Civil Appeal No. 226 of 1955 the appellant Mahant Ram Das similarly alleged that he was the mahant of a math or asthal situate in village Bhuthari in the same district of Monghyr, that he was a "bairagi sadhu " and follower of Ramanandi Laskari Sri Vaishnava Sampradaya, that he was the absolute owner of the properties belonging to the math and that the President, Bihar State Board of Religious Trusts, had no authority to issue a notice to him asking him to furnish statements and accounts of the properties in his possession. In Civil Appeal No. 228 of 1955 the appellants made similar allegations in their plaint and challenged the " vires " of the Act, mentioning as their cause of action the date on which the assent of the President of India to the Act was first published in the Bihar Gazette. In Civil Appeal No. 229 of 1955 the appellant Mahant Mahabir Das stated that he was the Mahant of a asthal known as Bisanpur Asthal situate in the self same district. He also received a notice from the President, Bihar State Board of Religious Trusts, to furnish statements and accounts, and he challenged the vires of the Act on similar grounds. In Civil Appeal No. 248 of 1955 Mahant Ram Krishna Das alleged that the temple in question, known as Bhikam as Thakurbari in the town of Patba, was constructed by one Benidasji with his own money and he installed certain deities therein. 567 The allegation was that the temple and the properties thereof did not constitute a ' religious trust ' within the meaning of that expression in the Act and further that the Act was ultra vires the Constitution inasmuch as it infringed some of his fundamental rights. The defence in all these cases was that the Act was valid, and applied to the asthals or temple in question and the properties thereof. The principal argument presented before us on behalf of the appellants is that the Act is bad on the ground that its several provisions infringe the appellants ' fundamental rights guaranteed under (a) article 14; (b) article 19 (1)(f); and (e) articles 25, 26 and 27 of the Constitution. The Act has also been impugned on the ground that it imposes an Unauthorised tax and also contravenes article 133 of the Constitution. At this stage, it is necessary to advert to the object or purpose of the Act and set out the relevant provisions thereof The Act was passed by the Bihar Legislature and received the assent of the President,, which assent was published in the Bihar Gazette on February 21, 1951. The long title of the Act and the preamble give the object of the Act. The long title says that it is an "Act to provide for the better administration of Hindu Religious Trusts and for the protection and preservation of properties appertaining to such trusts." The preamble repeats the same object or purpose, and makes it further clear that the Act is meant to provide for the better administration of Hindu Religious Trusts in the State of Bihar. Section I gives the short title, and provides for extent and commencement, the Act having come into force on August 15, 1951. Section 2 is the definition section, and the word 'Hindu ' in the Act means a person professing any religion of Hindu origin and includes a Jain and a Buddhist, but does not include a Sikh. The expressions " religious trust " and " trust property " are defined in the following way : "Section 2 (1). I religious trust ' means any express or constructive trust created or existing for any purpose recognised by Hindu Law to be religious, pious or charitable, but shall not include a trust created 568 according to the Sikh religion or purely for the benefit of the Sikh community and a private endowment created for the worship of a family idol in which the public are not interested ; (p) I trust property ' means the property appertaining to a religious trust Section 3 states: " This Act shall apply to all religious trusts, whether created before or after the commencement of this Act, any part of the property of which is situated in the State of Bihar. " Section 4 was amended by Bihar Act 16 of 1954, and it provides for necessary amendment or repeal, as the case may be, of certain earlier Acts dealing with public religious trusts and charitable endowments, such as, the (20 of 1863), the (6 of 1890) and the Charitable and Religious Trusts Act, 1920 (14 of 1920). Sub section (5) of section 4 has an important bearing on one of the questions before us and must be quoted in full : "Section 4 (5). The , and section 92 of the Code of Civil Procedure, 1908, shall not apply to any religious trust in this State, as defined in this Act." Chapter II of the Act deals with the constitution of the Board. Section 5 provides for the constitution of the Bihar State Board of Religious Trusts. Section 5(3) states that the Board shall be a body corporate and shall have perpetual succession and a common seal with power to acquire and hold property, both moveable and immovable. Section 7 makes provision for the appointment of the President and the members of the first Board and their terms of office. Section 8 contains the terms of the constitution of the second and every subsequent Board. Chapter IV refers to the appointment and qualification of the Superintendent of the religious trusts. The chapter further provides for the appointment of officers and servants for the Board. Chapter V relates to the power and duties of the Board. Section 28 (1) provides that the general superintendence of all religious trusts in the State shall be vested in the 569 Board and the Board shall do all things reasonable and necessary to ensure that such trusts are properly supervised and administered and that the income ' thereof is duly appropriated and applied to the objects of such trusts and in accordance with the purposes for which such trusts were founded and for which they exist. Section 28 (2) enumerates in great detail the powers and duties of the Board in regard to certain matters. Section 28(2)(e), for example, states that the duty of the Board shall be to cause inspection to be made of the property and the office of any religious trust including accounts and to authorise the Superintendent or any of its members, officers or servants for that purpose. Section 28(2)(g) empowers the Board to give directions for the proper administration of a religious trust in accordance with the law governing such trust and the wishes of the founder in so far as such wishes can be ascertained. Section 32 empowers the Board to settle a scheme for the proper administration of religious trusts. Chapter VI refers to the establishment of regional trusts committees and the powers and duties imposed on such committees. Chapter VIII refers to transfer of immovable properties and borrowing of money by trustees. Section 44 of this chapter states that no transfer made by a trustee, of any immovable property of a religious trust by way of sale, mortgage, or lease for a term exceeding three years shall be valid unless made with the previous sanction of the Board. Section 45 prohibits a trustee from borrowing money for the purpose of any religious trust without the previous sanction of the Board. Chapter X relates to trustees and their duties. Section 59 of this chapter imposes a duty on the trustee to furnish particulars of the religious trust. Section 60 relates to the budget of religious trusts and submission of such budgets to the Board and the Board may alter or modify the budget in such manner and to such extent as it thinks fit. Chapter Xi relates to audit of accounts and recovery of irregular expenses from the trustees in default. Chapter XIII provides for the creation of a trust fund which is to be vested in the 72 570 Board. Section 70 states that for the purpose of defraying the expenses incurred in the administration of the Act the trustee of every religious trust shall pay to the Board such fee, not exceeding five per centum of its net income as the Board may from time to time with the previous sanction of the State Government determine. Chapter XVI provides for the dissolution or supersession of the Board. Section 80 states that if in the opinion of the State Government the Board makes default in the performance of the duties imposed on it or exceeds or abuses its powers, the State Government may declare the Board to be in default and direct that the Board shall be superseded. Section 81 provides that where an order of supersession has been passed, all the members of the Board shall vacate their offices as such members and all the powers and duties to be performed by the Board shall be performed by such person as the State Government may direct. Section 81 empowers the State Government to make rules and section 83 empowers the Board to make bye laws not inconsistent with the Act and the rules made thereunder. We proceed now to consider the contentions urged on behalf of the appellants. The first contention is that the provisions in sections 2, 5, 6, 7 and 8 infringe article 14 of the Constitution. It is pointed out that the definition of the word ' Hindu ' in section 2 does riot include Sikhs; and section 5 constitutes a Board for religious trusts other than Jain religious trusts, and also two separate Boards one for Swetambar Jain religious trusts and the other for Digambar Jain religious trusts. It is further pointed out that under sections 6, 7 and 8 the constitution of the Board for religious trusts other than Jain religious trusts differs in material particulars from the constitution of the two Boards for Jain religious trusts. The submission is that there is inequality of treatment as between Hindu religious trusts on one hand and Sikh religious trusts on the other, the latter having been excluded from the purview of the Act; secondly, there is inequality of treatment even as between Hindu religious trusts and Jain religious trusts, though both come under the Act. We do not 571 think that there is any substance in this contention. The provisions of article 14 of the Constitution had come up for discussion before this Court in a number of earlier cases (see the cases referred to in Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar (1)). It is, therefore, unnecessary to enter upon any lengthy discussion as to the meaning, scope and effect of the Article. It is enough to say that it is now well settled by a series of decisions of this Court that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation, and in order to pass the test of permissible classification, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differential which distinguishes persons or things that are grouped together from others left out of the group and (2) that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different bases such as, geographical, or according to objects or occupations and the like. The decisions of this Court further establish that there is a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional guarantee ; that it must be presumed that the legislature understands and correctly appreciates the needs of its own people and that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; and further that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest. It is not disputed before us, and this has been pointed out by the High Court, that there are some differences between Hindus, Sikhs and Jains in some of the essential details of the faith which they profess and the religious practices they observe; the Sikhs have no caste or priests, though they have grantis who officiate at marriages and other ceremonies; they do not believe in the Vedas, Puranas or Shastras, at least not in the same (1) ; 372 way as the Hindus believe in them. The Jains also do not recognise the divine authority of the Vedas and do not practise sradhs or ceremonies of the dead, nor do they recognise the spiritual authority of the Brahmins (Maine 's Hindu Law, 11th Edition, p. 82). It has been further pointed out that there are also organizational differences in the matter of religious trusts between Hindus, Sikhs and Jains. There are not many Sikh religious trusts in Bihar, and their organization is essentially different. Jains consist of two main branches Swetambar Jains and Digambar Jains and each branch has a separate central organisation. Section 8 of the Act recognises these differences; for example, there is an assembly ' of Swetambar Jains known as Shree Sangh and under section 8(2)(c) of, the Act the Shree Sangh is entitled to elect five per . sons to the Board of Swetambar Jain Religious Trust. Similarly, Digambar Jains also have an assembly known as the Digambar Samaj and under section 8(3)(c) of the Act this assembly is entitled to elect five persons to the Board for Digambar Jain Religious Trust. In view of these differences it cannot be said that in the matter of religious trusts in the State of Bihar, Sikhs, Hindus and Jains are situated alike or that the needs of the Jains and Hindus are the same in the matter of the administration of their respective religious trusts; therefore, according to the well established principles laid down by this court with regard to legislative classification, it was open to the Bihar Legislature to exclude Sikhs who might have been in no need of protection and to distinguish between Hindus and Jains. Therefore, the contention urged on behalf of the appellants that the several provisions of the Act contravene article 14 is devoid of any merit. The next contention urged on behalf of the appellants is that the provisions in Chapter V, and in particular sections 28 and 32, violate the fundamental right guaranteed to the appellants under article 19(1)(f) of the Constitution, namely, their right to acquire, hold and dispose of the trust properties. This argument before us has proceeded on the footing that the properties which the appellants bold are trust properties within 573 the meaning of the Act ; but we must state here that the appellants have also alleged that the properties are their private properties, to which aspect of the case we shall advert later. Chapter V of the Act, and in particular section 28 thereof, lays down the powers and duties of the Board. To some of these powers and duties we have already made a reference earlier. Section 32 gives power to the Board, of its own motion or on application made to it in that behalf by two or more persons interested in any trust, to settle schemes for proper administration of the religious trust. There are other sections in the chapter which give the Board power to enter into contracts and to borrow money, etc., for carrying out any of the purposes of the Act or to give effect to the provisions thereof. Under section 58 every trustee must carry out all directions which may from time to time be issued to him by the Board under any of the provisions of the Act. The powers given under section 28 include the power to prepare and settle the budget, to cause inspection to be made of the property and the office of any religious trust, to call for information, reports, returns, etc., to give directions for the proper administration of a religious trust in accordance with the law governing such trusts and the wishes of the founder, to remove a trustee from his office in certain circumstances, and to control and administer the trust fund, etc. The argument before us is that the position of a maharani or shebait of a Hindu religious trust is a combination of office and proprietary right and under the provisions of the Act the mahant or shebait practically loses his right of management and is reduced to the position of a mere servant of the Board; this, it is contended, is violative of the appellants ' fundamental right under article 19(1)(f). In Angurbala Mullick vs Debabrata Mullick (1) Mukherjea, J., delivering the majority judgment of this Court, has said that the exact legal position of a, shebait may not be capable of precise definition, but its implications are fairly well established. It is now settled that the relation of a shebait in regard to (1) , 1133. 574 debutter property is not that of a trustee to trust property under the English law. Mukherjea, J., said : " In English law the legal estate in the trust property vests in the trustee who holds it for the benefit of cestui que trust. In a Hindu religious endowment on the other hand the entire ownership of the dedicated property is transferred to the deity or the institution itself as a juristic person and the shebait or mahant is a mere manager. But though a shebait is a manager and not a trustee in the technical sense, it would not be correct to describe the shebaitship as a mere office. The shebait has not only duties to discharge in connection with the endowment, but he has a beneficial interest in the debutter property. . In almost all such endowments the shebait has a share in the usufruct of the debutter property which depends upon the terms of the grant or upon custom or usage. Even where no emoluments are attached to the office of the shebait, he enjoys some sort of right or interest in the endowed property which partially at least has the character of a proprietary right. Thus, in the conception of shebaiti both the elements of office and property, of duties and personal interest, are mixed up and blended together ; and one of the elements cannot be detached from the other. It is the presence of this personal or beneficial interest in the endowed property which invests shebaitship with the character of proprietary rights and attaches to it the legal incidents of property. " It is to be remembered that even before the passing of the Act here impugned, there was statutory machinery for enforcing the obligations and duties imposed Upon mahant or shebait. Section 92 of the Code of Civil Procedure provided that in the case of an alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature or where the direction of the court was deemed necessary for the administration of any such trust, the Advocate General, or two or more persons having an interest in the trust and having obtained the consent in writing of the Advocate General, might institute 575 a suit to obtain a decree (a) to remove any trustee, (b) appointing a new trustee, (c) vesting any property in a trustee, (d) directing accounts and enquiries, (e) declaring what proportion of the trust property or of the interest therein shall be allocated to any particular object of the trust, (f) authorising the whole or any part of the trust property to be let, sold, mortgaged or exchanged, (g) settling scheme and/or (h) granting such further or other relief as the nature of the case might require. The section therefore provided an important machinery for enforcing the obligations and duties imposed on trustees and the jurisdiction given to the court was of a very wide extent. Now, the right guaranteed under article 19(1)(f) is subject to cl. (5), thereof, which says inter alia that nothing in sub clause (f) shall prevent the State from making any law imposing reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the general public. We are of the view, in agreement with that of the High Court, that the restrictions imposed by the Act on the power of the trustees are really intended, as the preamble of the Act states, for the better administration of Hindu religious trusts in the State of Bihar and for the protection and preservation of properties appertaining to such trusts. It is indeed true that the Act provides a better and more speedy remedy for the enforcement of the obligations and duties imposed on the trustees than the lengthy and cumbrous procedure of a suit under section 92 of the Civil Procedure Code. The Board is vested with summary powers in various matters, but the control is to be exercised for the better and more efficient administration of the trust and for the protection and preservation of the trust properties. It is germane to refer in this connection to sub section (1) of section 28 which states that the Board shall do all things reasonable and necessary to ensure that the religious trusts are properly supervised and administered and that the income thereof is duly appropriated and applied to the objects of such trusts and in accordance with the purposes for which such trusts were founded. Section 576 60 (2) no doubt empowers the Board to alter or modify the budget of any religious trust in such manner and to such extent as it thinks fit ; but sub section (6) of section 60 makes it clear that nothing contained in the section shall be deemed to autborise the Board to alter or modify any budget in a manner or to an extent inconsistent with the wishes of the founder, so far as such wishes can be ascertained, or with the provisions of the Act. Section 28 (2) (h) gives the Board power to remove a trustee from his office in certain contingencies; but sub section (3) of section 28 says that an order of removal passed by the Board under el. (h) of sub section (2) shall be communicated to the trustee concerned and such trustee may within 90 days of the communication of such order apply to the District Judge for varying, modifying or setting aside the order. Section 28 (2) (j) empowers the Board to sanction the conversion of any property of a religious trust into another property if the Board is satisfied that such conversion is beneficial for the trust; there is, however, an important proviso that no such conversion shall be sanctioned unless the Board so resolves by a majority which includes at least three fourths of its members and the resolution is approved by the District Judge. Even with regard to the settling of a scheme under section 32 there is a safeguard under sub section (3) thereof, which says that the trustee or any person interested in the trust may within three months of the publication of the scheme make an application to the District Judge for varying, modifying or setting aside the scheme. These and similar other safeguards clearly indicate Act, and we are of the view that having regard to the position of a trustee as respects the trust property which he holds and the object or purpose of the Act,the restrictions imposed are really for the purpose of carrying out the objects of the trust and for better administration, protection and preservation of the trust properties ; they are, therefore, reasonable restrictions in the interests of the general public within the meaning of el. (5) of article 19 of the Constitution. In 577 this respect, the impugned provisions of the Act differ from those provisions of the Madras Hindu Religious and Charitable Endowments Act, 1951, and the Orissa Hindu Religious Endowments Act, 1939, as amended by the Amending Act 11 of 1952, which came under consideration of this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Shri Shirur Mutt (1) and Mahant Shri Jagannath Ramanuj Das vs The State of Orissa (2), and were held to be invalid on the ground that they were not reasonable restrictions within the meaning of el. (5) of article 19 of the Constitution. The third contention of the appellants rests upon articles 25 and 26 of the Constitution. The appellants have invoked in aid article 25 (1) which says inter alia, that subject to public order, morality and health, all persons have the right freely to profess, practice and propagate religion. Article 26 is also relied on for the contention that every religious denomination or any section thereof has a, right (a) to establish and maintain institutions for religious and charitable purposes and (b) to manage its own affairs in matters of religion. It is difficult to see how any of the provisions of the Act can be said to interfere with the right guaranteed by article 25, viz., freedom of conscience and the right freely to profess, practice and propagate religion. Learned counsel for the appellants has not been able to point out to us any particular provision of the Act which interferes with such a right. On behalf of the appellants it has been submitted that the power to alter or modify the bud get relating to a religious trust or the power to give directions to a trustee may be exercised by the Board in such a way as to affect the due observance, of religious practices in a math or temple so as to constitute an encroachment on the right guaranteed under article 25, and learned counsel for the appellants had placed reliance on The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1), for his submission that (I) ; 73 (2) ; 578 freedom of religion in our Constitution is not confined to religious beliefs only, but extends to religious practices as well subject to the restrictions which the Constitution itself has laid down. The answer to this submission is two fold : we have pointed out earlier that the power to alter the budget is subject to cl. (6) of section 60 of the Act and the Board is nit authorised to alter or modify the budget in a manner or to an extent inconsistent with the wishes of the founder or with the provisions of the Act. The power to give directions to the trustee is also subject to a similar restriction, namely, the directions must be for the proper administration of the religious trust in ' accordance with the law governing such trust and the wishes of the founder in so far as such wishes can be ascertained and are not repugnant to such law. The keynote of all the relevant provisions of the Act is the due observance of the objects of the religious trust and not its breach or violation. Secondly, as was observed in The Commissioner, Hindu Religious Endowments, Madras vs Shri Lakshmindra Thirtha Swamiar of Shri Shirur Mutt(1), at p. 1030, " an apprehension that the powers conferred. may be abused in individual cases does not make the provision itself bad or invalid in law ". With regard to article 26, cls. (a) and (b), the position is the same. There is no provision of the Act which interferes with the right of any religious denomination or any section thereof to establish and maintain institutions for religious and charitable purposes; nor do the provisions of the Act interfere with the right of any religious denomination or any section thereof to manage its own affairs in matters of religion. Learned counsel for the appellants has drawn our attention to Sri Venkataramana Devaru vs The State of Mysore, (2), where following the earlier decision in The Commisssioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1), it was observed that matters of religion included even practices which are ,regarded; by ' the community as part of its religion. Our attention has also been drawn (I) (2) ; 579 to Ratilal Panachand Gandhi vs The State of Bombay in which it has been held that a religious sect or denomination has the right to manage its own affairs in matters of religion and this includes the right to spend the trust property or its income for religion and for religious purposes and objects indicated by the founder of the trust or established by usage obtaining in a particular institution. It was further held therein that to divert the trust property or funds for purposes which the charity commissioner or the court considered expedient or proper, although the original objects of the founder could still be carried out, was an unwarranted encroachment on the freedom of religious insti tutions in regard to the management of their religious affairs. We do not think that the aforesaid decisions afford any assistance to the appellants. Granting that matters of religion ' include practices which a religious denomination regards as part of its religion, none of the provisions of the Act interfere with such practices; nor do the provisions of the Act seek to divert the trust property or funds for purposes other than those indicated by the founder of the trust or those established by usage obtaining in a particular institution. On the contrary, the provisions of the Act seek to implement the purposes for which the trust was created and prevent mismanagement and waste by the trustee. In other words, the Act by its several provisions seeks to fulfill rather than defeat the trust. In our opinion, there is no substance in the argument that the provisions of the Act contravene articles 25 and 26 of the Constitution. Lastly, the appellants have challenged the validity of section 70 of the Act,the relevant portion of which states: expenses incurred or to be incurred in the administration of this Act, the trustee of every religious trust shall, in each financial year, pay to the Board such fee, not exceeding five per centum of its net income in the last preceding financial year, as the Board may, from time to time, with the previous sanction of the State Government, determine." (I) [1954] S.C.R. 1055. 580 The argument is that section 70 imposes an unauthorised tax. The point is, we think, concluded by our decision in Mahant Sri Jagannath Ramanuj Das vs The State of Orissa (1) where the distinction between a tax and a fee for legislative purposes under our Constitution was pointed out and with regard to an identical imposition under section 49 of the Orissa Hindu Religious Endowments Act, 1939, it was held that the contribution levied was a fee and not a tax. It was observed there at p. 1054: " The collections made are not merged in the general public revenue and are not appropriated in the manner laid down for appropriation of expenses for other public purposes. They go to constitute the fund which is contemplated by section 50 of the Act. We are further of opinion that an imposition like this cannot be said to be hit by article 27 of the Constitution. What is forbidden by article 27 is the specific appropriation of the proceeds of any tax in payment of expenses for the promotion or maintenance of any particular religion or religious denomination. The object of the contribution under section 49 is not the fostering or preservation of the Hindu religion or of any denomination within it; the purpose is to see that religious trusts and institutions wherever they exist are properly administered. It is the secular administration of the religious institutions that the legislature seeks to control and the object, as enunciated in the Act, is to ensure that the endowments attached to the religious institutions are properly administered and their income is duly appropriated for purposes for which they were founded or exist. As there is no question of favouring any particular religion or religious denomination, article 27 could not possibly apply. " These observations apply with equal force to the present case. It has also been argued that section 55 (2) of the Act con travenes article 133 of the Constitution and is accordingly invalid. Section 55 is in these terms: 55 (1). "Unless otherwise provided in this Act, an appeal shall lie to the High Court against every order passed by the District Judge under this Act. (I) ; 581 (2) No appeal shall lie from any order passed in appeal under this section. " We do not think that section 55 (2) of the Act overrides or is intended to override article 133 or any other Article of the Constitution relating to appeals to the Supreme Court. Such appeals must undoubtedly lie to the Supreme Court, provided the necessary requirements for such appeals are fulfilled. It is, we think, obvious that the Act cannot affect the jurisdiction of the Supreme Court. We now come to that part of the case of the appellants in which they claim the properties to be their private properties or, in the alternative, the trusts to be private trusts. The High Court has pointed out that in M. J. C. 418 of 1952 out of which has arisen Civil Appeal No. 225 of 1955, though there was an assertion that the properties were not trust properties, there was a counter affidavit on behalf of the State of Bihar that the asthal in question was a public asthal and the properties appertaining thereto trust properties within the meaning of the Act. In M. J. C. 124 of 1953 out of which has arisen Civil Appeal No. 226 of 1955 there was a similar claim that the mahant of the asthal was the absolute owner of the properties belonging to the math. In Suit No. 34 of 1952/106 of 1953 out of which has arisen Civil Appeal No. 228 of 1955 there was a prayer for adjournment in order to enable the plaintiffs (now ap pellants before us) to file a petition to amend the plaint, and the purpose of the amendment sought to be made was to claim that the institutions in question were of a private charater and the Act had no application to them. This prayer was disallowed by the High Court on the ground that the amendment sought to be made would alter the whole character of the suit. In M. J C. 188 of 1953 out of which has arisen Civil Appeal No. 229 of 1955 the claim was that there was no trust,. express or implied. In M. J. C. 235 of 1953 out of which has arisen Civil Appeal No. 248 of 1955 there was a counter affidavit on behalf of the State of Bihar that the temple in question was a public temple and the Act applied to it. In all these cases the High Court has 582 taken the view, rightly in our opinion, that the questions whether the trusts are public or private trusts or the properties are private or trust properties are questions which involve investigation of complicated facts and recording of evidence and such investigation could not be done on writ proceedings. In the one suit which was tried in the High Court the question did not arise as no amendment was allowed. Therefore, in these cases there are no materials on which the question as to the nature of the trust can be determined, though in Civil Appeal No. 343 of 1955 (1) in which also judgment is being delivered today, we have held that having regard to the preamble to the Act, the provisions in section 3 and the provisions of sub section (5) of section 4 the definition clause of 'religious trust ' in the Act must mean public trusts express or constructive, recognised by Hindu law to be religious, pious or charitable. That finding, however, is of no assistance to the appellants in the present cases. The fate of these cases must depend on the sole question whether the Act is constitutionally valid or not. We have held that the Act is constitutionally valid. In the result we hold that the appeals are without any merit. They are accordingly dismissed with costs. Appeals dismissed.

The appellants as the Mahants of the respective maths or asthals were served with notices under section 59 of the Bihar Hindu Religious Trusts Act, 195o, by the President, Bihar State Board of Religious Trusts, asking them to furnish statements and accounts of the properties in their possession. They challenged the constitutional validity of the Act by proceedings taken in the High Court on the grounds (1) that sections 2, 5, 6, 7 and 8 of the Act infringe article 14 Of the Constitution, inasmuch as there was inequality of treatment as between Hindu religious trusts on one hand and Sikh religious trusts on the other, the latter having been excluded from the purview of the Act, and that there was inequality of treatment even as between Hindu religious trusts and Jain religious trusts, though both came under the Act; (2) that the provisions of ch. V of the Act and in particular sections 28 and 32 violate article 19(1)(f) of the Constitution, as under those provisions the mahant or Shebait practically loses his right of management and is reduced to the position of a mere servant of the Board; (3) that the provisions of the Act contravene articles 25 and 26 of the Constitution, as the power to alter or modify the budget relating to a religious trust or the power to give directions to a trustee may be exercised by the Board in such a way as to affect the due observance of religious practices in the math or temple; (4) that section 70 imposes an unauthorised tax, and (5) that section 55(2) contravenes article I33 of the Constitution. Held, (1) that in view of the fact that in the matter of religious trusts in the State of Bihar, there are differences between Sikhs, Hindus and jains and that the needs of jains and Hindus are not the same in the matter of the administration of 564 their respective religious trusts, it is open to the Bihar Legislature to exclude Sikhs who might have been in no need of protection and to distinguish between Hindus and jains. Accordingly, SS. 2, 5, 6, 7, and 8 of the Act do not infringe article 14 Of the Constitution. It is well settled that while article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation, and in order to pass the test of permissible classification, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguished persons or things that are grouped together from others left out of the group and (2) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. Shri Ram Krishna Dalmia vs Shri Justice section R. Tcndollkar, ; , relied on. (2) that having regard to the position of a trustee in respect of the trust property which he holds and the object or purpose of the Act, the restrictions imposed in Ch. V of the Act are really for the purpose of carrying out the objects of the trust and for the better administration, protection and preservation of the trust properties, and are reasonable restrictions in the interests of the general public within the meaning Of cl. (5) Of article 19 of the Constitution. (3) that the Act does not contravene articles 25 and 26 of the Constitution, as the provisions of the Act relating to the power of the Board to alter the budget and to give directions to the trustee are subject to restrictions, namely, that they must be for the proper administration of the religious trust ; and, further, none of the provisions interfere with " matters of religion " including practices which a religious denomination regards as part of its religion. (4) that section 70 Of the Act is a valid provision as it only provides for the levy of a fee for the purpose of defraying the expenses incurred or to be incurred in the administration of the Act and is not a tax. Mahant Sri jagannath Ramanuj Das vs The State of Orissa, ; , followed. (5) that section 55(2) Of the Act does not contravene article I33 Of the Constitution as it does not override or is not intended to override article 133 or any other Article of the Constitution relating to appeals to the Supreme Court.

Civil Appeal No. 1654 of 1979. From the Judgment and order dated 28.3.1979 of the Allahabad High Court in Second Appeal No. 3064 of 1972. J.P. Goyal and S.K. Jain for the Appellant. S.N. Kacker and O.K. Garg for the Respondent. The Judgment of the Court was delivered by RANGANATHAN, J. The question which has come up for consideration in this appeal from judgment of the Allahabad High Court is whether the deposit of rent by a tenant under section 7 C of the Uttar 419 Pradesh (Temporary) Control of Rent and Eviction Act, 1947 (hereinafter called the 'Act ') as such entitles him to resist successfully eviction under the provisions of the Act on the ground of default in payment of rent. The appellant, Ram Sewak, was a tenant of the respondent, Munna Lal in respect of a shop on a rent of Rs.25 per month. The rent upto 30. 11.66 had been paid by the tenant. The landlord, however. claimed that the rent for the period from 1. 12.66 till 28.2.1971, less an amount of Rs.275 which had been received by him by way of money order, was due from the appellant tenant. This remained unpaid despite notices of demand dated 22.3.71 and 12.4.1971, and a notice of termination of the tenancy dated 27.4.1971. On these allegations. The landlord instituted a suit for ejectment of the tenant on the ground of non payment of rent. He also claimed the recovery of arrears of rent. mesne profits and certain taxes, which were alleged to be payable by the tenant. This suit was decreed by the learned Munsif, Jhansi. A first appeal was unsuccessful insorfar as the decree related to the eviction of the petitioner was concerned but the claim for arrears of rent was rejected in part on the ground of limitation. A second appeal was also dismissed by the High Court and hence the present appeal. The defence of the tenant to the suit was that he had tendered the rent to the plaintiff landlord but the latter had refused to accept it. The rent was sent by money order but even then it was refused. It was submitted that the tenant had thereupon made an application on 31.7.1967 under section 7 C of the Act in the court of the learned Munsif, Jhansi, for permission to deposit the rent in the court. The Court issued a notice to the landlord, which was also duly served on him. On the date of hearing there was no appearance on behalf of the landlord. Thereupon the learned Munsif passed an order, on 11.11.1967, permitting the tenant to deposit the arrears of rent as well as future rent in court. It was claimed that the tenant had deposited arrears of rent amounting to Rs.200 for the period from 1. 12.1966 to 31.7.1967 in the court along with application and that he continued to deposit in court the rent thereafter from month to month. It was, therefore, submitted that there were no arrears of rent due from the tenant to the landlord and that, therefore, the suit for eviction was not maintainable. The learned Munsif and, on appeal, the learned Subordinate Judge found as a fact that the plaintiff had failed to prove that he had tendered the rent to the landlord or that the latter that the latter had refused to 420 accept it. This being so, they held, the statutory conditions requisite for a valid deposit under section 7C were not fulfilled. Neither the application made by the plaintiff under section 7C nor the order passed by the learned Munsif on 11.11.67 could therefore, help the plaintiff. In this view of the matter, both the courts held that the default in payment of rent, within the meaning of sec. 3(1)(a) of the Act, stood established and the plaintiff was, therefore, liable to eviction. Before us, as before the courts below, learned counsel for the tenant based his case solely on the order under the provisions of section 7C of the Act. That section reads as follows: "7 C Payment by Deposit of Rental) When a landlord refuses to accept any rent lawfully paid to him by a tenant in respect of any accommodation the tenant may in the prescribed manner deposit such rent and continue to deposit any subsequent rent which becomes due in respect of such accommodation unless the landlord in the mean time signifies by notice in writing to the tenant his willingness to accept. (2) Where any bona fide doubt or dispute has arisen as to the person who is entitled to receive any rent referred to in sub section (I) in respect of any accommodation, the tenant may similarly deposit the rent stating the circumstances under which such deposit is made and may until such doubt has been removed or such dispute has been settled by the decision of any competent court, or by the settlement between the parties, continue to deposit, in like manner, the rent that may subsequently become due in respect of such building. (3) The deposit referred to in sub section (1) or (2) shall be made in the Court of the Munsif having jurisdiction in the area where the accommodation is situate. (4) on any deposit being made under sub section (1) the Court shall cause a notice of the deposit to be served on the landlord, and the amount of deposit may be withdrawn by the landlord on application made by him to the Court in this behalf. (5) When a deposit has been made under sub section (2) the amount of the deposit shall be held by the Court for 421 the benefit of the person who may be entitled to it and the same shall be payable to such person. (6) In any case where a deposit has been made, as aforesaid, it shall be deemed that the rent has been duly paid by the tenant to the landlord. " Learned counsel submitted that, in the event of a landlord 's refusal to accept the rent, the tenant had no other alternative but to deposit the same in the court under the above special provision. It was open to the landlord to have appeared before the learned Munsif at the time of hearing of the application for deposit and put forward any pleas, which he might have had. The landlord not having done this, it was claimed that the order passed by the learned Munsif on 11.11.1967 provides a complete defence to the action under section 3(1)(a) of the Act against the tenant particularly in view of the language of sub section (6) of section 7C. It was contended that the statute should not be constured as requiring that a tenant should prove the fact of his having tendered the rent and the landlord having refused it twice over once while making a deposit under section 7C and, again, in proceedings under section 3(1)(a). If, despite a deposit under section 7 C, an action under section 3(1)(a) were to be permitted, it was urged, section 7 C would be rendered nugatory and otiose. Learned counsel also made a point that though the landlord in this case had knowledge that the rent was being deposited in court since August 1967, he chose to keep quiet for a period of four years before issuing a notice calling upon the appellant to pay the arrears of rent. Prima facie, the arguments of the appellant appear to have some force. However, after hearing learned counsel for the respondent and considering the facts of this case and the relevant statutory provisions, we have come to the conclusion that this appeal must fail both on technicalities as well as on equities. section 7C is no doubt a provision intended to protect the interests of the tenant. But there is the authority of this Court holding that the mere fact of a deposit under this Section, in itself cannot be an answer to an action section 3(1)(a). In Brahmanand vs Kaushalya Devi, ; , the relations between the landlord and tenant were highly strained. The tenant therefore deposited the moneys into court and pleaded this as a defence to an action section 3(1)(a). The High Court rejected this plea on the ground that there was nothing to show that the tenant had tendered the rent physically to the landlord and so the 422 deposit could not be treated as a valid deposit section 7C(I) so attract the deeming effect in section 7C(6). This Court held that the High Court had taken too narrow a view of the words 'paid to ' the landlord. Krishna Iyer J. Observed: "a liberal construction of the expression 'paid to him by a tenant. in section 7 C(l) is necessary. Physically offering payment when the relations between the parties are strained is to ask for trouble and be impractical. But harassing the landlord by straight way depositing the rent in court without fulfilment of the conditions required by section 7 C( l) is also unwarranted. Section 7 C(6) by using the expression 'where the deposit has been made as aforesaid ' takes us back to section 7 C( I). That is to say the deposit is permissible only when the condition in section 7 C(l) is complied with. If the landlord refuses to accept rent paid to him a deposit is permissible. But payment need not be by physical tender, person to person. It can be by money order, or through messenger or by sending a notice to the landlord asking him to nominate a bank into which the rents may be regularly paid to the credit of the landlord. If the landlord refuses under these circumstances, then a court deposit will be the remedy. " In the present case, on account of the bad blood between the parties a physical tender of the rent is ruled out. At the same time the Courts below have not considered whether the circumstances which drove the appellant into depositing the rent in court were such as eliminated the other possibilities of direct payment we have indicated. It is therefore fair to set aside the finding of the Courts below and remand the case to the lower appellate Court (which is the final court of fact under ordinary circumstances) to ascertain whether any of the alternatives we have indicated, or may otherwise be made out by the tenant as equivalent to payment of rent, is present in the case. if no such circumstances is made out by the tenant justifying deposit of rent in court, the decree for eviction will stand. Other wise, the petition for eviction will be dismissed. " It is important to note that this Court did not view the deposit section 7C as conclusive of the issue. On the other hand, it held that if no circumstance was made out by the tenant justifying the deposit in 423 court, the decree for eviction will stand. In other words, this Court the view that, irrespective of the fact of deposit section 7C, the tenant has to show, when a suit is under section 3(1)(a), that the existence of circumstances justifying a deposit under section 7C. In the present case, the Courts have been concurrently found that there was no valid tender of rent by the tenant or refusal thereof by the landlord. There is no ground therefore to interfere with the decision of the Courts below. A careful perusal of section 7C and the rules and forms made thereunder also supports the above conclusion. The application for a deposit under this section has to be made in the form prescribed in Appendix A to the rules framed under the Act. The appellant 's application to the court was filed in this form. Column 6 of the application form is filled in by the tenant may be extracted: (A) (B) 6. Whether deposit is made "the deposit is being under sub section (1)/(2) made under sub section(1) of Section 7 C. In case of of 7 C of the Act. Fact in Sub section(1) briefly brief is that the landlord state the circumstances of has reused to accept the refusal by the owner. in rent. It is being deposited case of sub section(2), under section 7 c of the UP mention circumstances of act 3 of 1947. " doubt or dispute about ownership. The rules framed under the Act also prescribed the form in which notice is to be served on the respondent when an application is made under section 7 C This form reads as follows: XXXX XX "To Whereas . . . has deposited Rs . . as rent for the period . .for the premises . Of which you have been mentioned as the land lord. 424 Notice is hereby given to you under sub section (4) of Section 7 C of the U.P. (Temporary) Control of Rent and Eviction Act, 1947, that the said amount will be paid to you on an application for withdrawal being presented to this Court. Given under my hand seal this day of . . Munsif. " Reading section 7 C, the rules framed thereunder and the above statutory forms together, it would appear that this provision envisages that where a tenant finds that the landlord refuses to accept the rent or there is some dispute regarding the ownership, he can, in order to protect his interests seek the permission of the Court to deposit the arrears of rent as well as future rent in the court instead of running after the landlord. Though the applicant is asked to indicate briefly the circumstances in which he wants to make a deposit, there is no procedure contemplated for an enquiry into those circumstances. The section or rules do not seem to contemplate the transmission of this application to the landlord, the fixing of a date of hearing on which both the tenant and the landlord could be heard or the passing of a considered order by the court after hearing both sides and being satisfied that there was in fact a tender of rent by the tenant and a refusal by the landlord to receive the rent or a dispute regarding the ownership of the property which rendered it difficult or impossible for the tenant to send the money to the landlord straight. The notice which is sent to the landlord merely sets out that money has been deposited in the court and that the landlord is at liberty to withdraw it if he so desires. All that the landlord can do on receipt of the notice is either to withdraw the moneys deposited or stop future deposits by expressing a willingness directly to the tenant to accept direct payment of rent thereafter. On the language of the statutory provisions therefore, it is not possible to say that a deposit section 7C is necessarily a valid one preceded by an enquiry or satisfaction of the court that the condition precedent set out in section 7C( I) is fulfilled. Counsel for the petitioner submits that in Fateh Chand vs Bal Saroop Goel, [ and other cases, the Allahabad High Court has held that a deposit section 7C is not a mere formality and that before directing or permitting a deposit the court has to go into the question whether there has been a tender and a refusal. In fact, the 425 High Court has gone further and held that the Court has to go into that question, at two stages: one, when an application is presented and before issuing notice to the landlord; and the other when the landlord appears before the court and disputes the validity of the procedure sought to be invoked by the tenant. Perhaps these requirements have been read into the section on grounds of equity and natural justice. Whatever that may be, we are constrained to say that such procedure does not appear to have been followed in this case. As we have already mentioned the application in the present case gave no details in the space against column 6. Instead of setting out the circumstances in which it was alleged that the landlord had refused to receive the rent, the application barely asserted that the landlord had refused to accept the rent. There is no information as to the nature of the notice served on the landlord but it must have been only in the form of Appendix already set out. Again, though the application of the appellant under section 7 C appears to have come up before the Munsif on 11.11.1967, and the order mentions that the landlord is "absent though served sufficiently", the order is only that the landlord may withdraw the amount deposited on proper application. It does not indicate any application of mind by the learned Munsif as to whether the conditions precedent for a valid deposit section 7C were satisfied. There is certainly no finding at that stage on this vital requirement. The grant of permission to deposit under section 7C, in the circumstances of the case, cannot therefore be treated as conclusive that a valid deposit had been made under that section. Sri Kackar took up the stand that even if section 7C is interpreted as providing an opportunity to both parties and even if a clear finding is recorded in these proceedings, after hearing both parties, that the preconditions of a valid deposit under that section are satisfied, that will not constitute res judicata or take away the court 's rights in an action section 3(1)(a), of being satisfied on the evidence before it to the same effect. He relied in this context on two decisions of the Allahabad High Court. It is sufficient to refer to extract some portions from the head note of one of them, viz. Hazi Abdul Karim vs Mohd. Ismail. [1978] U.P. Rent Cases 691) P. "A finding merely on a collateral fact of jurisdiction cannot operate as res judicata in later proceedings between the same parties. It has been stated in Halsbury 's Laws of England, Third Edition (Volume XV) paragraph 367 (at page 192). It is a fundamental rule that a judgment is not conclusive to anything but the point decided, or of any matter 426 which came collaterally in question or of any matter incidentally cognizable. The principle behind this rule seems to be that even though in the previous proceedings a decision on a collateral fact about jurisdiction, wrongly given may be binding on the parties for a limited purpose i.e., only so far as those proceedings are concerned, yet it would completely defeat the ends of justice, if such erroneous decision were allowed to become final and perpetuate itself. It would be conducive to the ends of justice that in later regular proceedings the parties should not be thwarded by an earlier wrong . finding and should be afforded full opportunity of demonstrating that the condition precedent to the exercise of jurisdiction were absent. It cannot, therefore, operate as res judicata and the parties must be left free to agitate the same question again in a subsequent suit for ejectment or other appropriate proceedings. The whole scheme of Section 7 C is inconsistent with any adjudication of the rights of the parties. Under this section the learned Munsif is not required to determine the rights and obligations of the landlord and the tenant in these proceedings. All that he has to do on deposit of rent under Section 7 C (1) is to issue a notice to the landlord informing him that such deposit has been made. The deposit, made under section 7 C is by itself a neutral act and it acquires its legal completion only when F. the rights of the parties are later determined in appropriate proceedings. The deposit is thus without prejudice to the rights of the parties which ought to be determined in the appropriate proceedings. X x x x x X . . the entire scheme of Section 7 C leads to the inescapable conclusion that it is merely a tentative or provisional forum provided for the purpose of checkmating any sinister attempt on the part of the landlord for letting it appear that no rent had been actually paid to him and thereby procuring the ejectment of a tenant. It is a legal fiction operating 427 for the benefit of tenant in order to destroy a substerfuge which may unjustly result in the eviction of the tenant. A deposit, therefore, per se does not decide the rights of the parties. Its significance and legal impost actually take shape according to the tenor and upshot of other subsequent proceedings in which such rights any be actually adjudicated. For the purposes of the present case, we need not go into this larger question. In view of our conclusion regarding the scope of section 7C and our finding that, here. there was no enquiry or finding recorded in the proceedings u section 7C which could at all operate as res judicata against the landlord in the suit section 3( l)(a). Learned counsel for the appellant strongly relied on two decisions of this court in support of his contention. The first was Kaloo and others vs GauriShanker, 51. Learned counsel relied on certain passages in paragraphs 13, 19 and 23. In our opinion this decision is not of much help as the court in that case was concerned with a clear case of refusal of rent by the landlord fully justifying the deposit under section 7 C. This is cleary from various passages in the judgment particularly in paragraphs 19 and 20. The other judgment relied upon is that of this court in Kameshwar Singh Srivastava vs IV Addl. District Judge, Lucknow and others; , This was a decision under a later Act of Uttar Pradesh, namely Act 13 of 1972. Section 3() of the said Act is a provision similar to section 7 C of the Act presently in question. In this case also it was found as a fact that there had been a tender of rent to the landlord, who did not accept the same and this was held to be a complete answer in proceedings for eviction. There can be no doubt that, by virtue of section 7 C(6) a deposit properly and justifiably made under section 7 C would be deemed to be a payment of rent to the landlord himself. Once there is a proof of a valid deposit, then there can be no eviction of the tenant under section 3(1)(a) since the section equates such a deposit to a payment to the landlord, thus negativing the existence of any arrears of rent or any wilful default. But, at the same time it is necessary for the courts to ensure that the tenants do not resort to the provisions of section 7 C merely to harass the landlord. The decision in Kameshwar Singh 's case emphasises this aspect in paragraph 7: "7. We should not be understood to have laid down that the tenant should deposit rent in court instead of paying the same to the landlord. Primarily, a tenant is under a legal obligation to pay rent to the landlord as and when due and 428 if he fails to pay the same on demand from the landlord and if he is in arrears for a period of more than four months he would be liable to ejectment. Where there is a bona fide dispute regarding the landlord 's right to receive rent on account of there being several claimants or if the landlord refuses to accept the rent without there being any justification for the same, the tenant would be entitled to take proceedings under section 30 of the Act and deposit the rent in court thereupon he would be deemed to have paid the rent to the landlord, consequently he would be relieved of his liability of eviction. It does not however follow that the tenant is entitled to disregard the landlord or ignore his demand for payment of rent to him. The provisions of the Act safeguard tenants interest but it must be kept in mind that the landlord 's right to receive rent and in the event of the tenant 's being in arrears of rent for a period of more than four months, his right to evict the tenant is preserved, if the tenant makes the deposit in court without there being any justification for the same or it he refuses to pay the rent even on the service of notice of demand by the landlord, he would be liable to eviction. However, the question whether the tenant is justified in depositing the rent in court and whether deeming provision of s; 30(6) would be available to him to relieve him from the liability of eviction would depend upon facts of each case. As noted earlier on the special facts of the instant case we have no doubt in our mind that the appellant had relieved himself from the liability of eviction and he was not in arrears of rent for a period of more than four months. " This decision also, incidentally, proceeds on the basis that, despite an order section 30, it is open to the Court in the proceedings for eviction, to consider whether the deposit was a valid one or not. In the light of the above observations also, were justified, having regard to the facts and circumstances of the present case, in ordering eviction. Learned counsel for the appellant submitted that such an interpretation as we have upheld would completely render section 7 C a dead letter. This is not so. Section 7 C, as we have pointed out earlier, is only intended as a protection to the tenant to tide over a particular genuine difficulty. It enables the tenant to deposit the rent from time to time in the court so that the arrears of rent do not accummulate and he is not constrained to pay large sums of money owing to the landlord on a future date. Secondly, it safeguards the landlord inasmuch as the 429 rent from month to month is being deposited in the court and the landlord is not prejudiced by a huge accummulation of rent which he may find it later on, difficult to recover. Thirdly, it also protects the tenant in this that, if ultimately he is able to show in the eviction proceedings that the deposit was made because of the refusal of the landlord to accept the rent, it provides a complete answer to the plea of eviction under section 3(1)(a). It cannot, therefore, be said that section 7 C loses all its meaning and becomes otiose if it is interpreted in the restrictive manner above discussed. This leaves only the equities of the matter to be considered. The contention of the learned counsel for the appellant that though the landlord was aware that the rent was being deposited in the court ever since August 1967, he waited for a period of four years before issuing a notice of demand for arrears of rent is seen to be without substance. Shri Kacker has pointed out that the appellant had filed a suit (No. 786 of 1968) claiming that he had paid Rs.275 towards rent by money order and claiming refund of the same. This suit was pending till April 197 1. On 19.4.197 1, the suit was dismissed. The Third Additional Munsif, Jhansi found that the sum of Rs.275 had been paid towards rent for the period ending 30.11.1966 and that the appellant was not entitled to the refund thereof. Shri Kacker rightly points out that since the appellant had raised a plea in this suit that the sum of Rs.275 had been paid by him towards the arrears of rent due after November 1966, the landlord was disabled from instituting proceedings for eviction until this issue was decided in the suit. In other words, the delay from August 1967, when the appellant started depositing the rent in court till 1971, when the proceedings for ejectment were started, was not due to any laches on the part of the respondent but was caused on account of the pendency of the litigation instituted by the tenant. Indeed it is rather unbelievable that, after having alleged in the application under 'section 7 C that the landlord had refused to accept the amount tendered and deposited the arrears of rent in court, the tenant would have sent a sum of Rs.275 by money order on 30.11.67, as alleged. In fact the findings in that suit, incidentally, also negative the tenant 's allegation that he had sent several money orders which the landlord had refused to receive. But this aspect need not detain us as all the three courts have concurrently found that in the present case the appellant had not been able to prove that there had been a tender of the rent by him and refusal thereof by the landlord. In the result we have come to the conclusion that both in law and in equity the appellant has no case and that the ejectment suit was 430 properly decreed by the courts below. The appeal, therefore, fails and is dismissed. We, however, make no order as to costs, since the arrears of rent are available to the landlord for being withdrawn from the court P.S.S. Appeal dismissed.

^ % Section 3(1)(a) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947 permits eviction of the tenant who is. in arrears of rent for more than three months and has failed to pay the same to the landlord within one month of the service upon him of a notice of demand. When a landlord refuses to accept any rent lawfully paid to him, section 7C(l) entitles the tenant to deposit such rent in the court. Section 7C(4) requires the court to cause a notice of the deposit to be served on the landlord. Section 7C(6) provides that where a deposit has been made as aforesaid, it shall be deemed that the rent has been duly paid. The appellant tenant was in arrears of rent of the demised shop from December, 1966 to February, 1971. The amount remained unpaid despite notices dated March 22, 1971 and April 12, 1971. In the suit for his ejectment under section 3(1)(a), the tenant took the defence that he had tendered the rent to the plaintiff landlord but the latter had refused to accept it, that even the rent sent by money order was refused, and thereupon he had made the deposit in the court under section 7C(1) of the Act, and there were no arrears of rent due from him. The trial court and the first appellate court held that statutory conditions requisite for a valid deposit were not fulfilled and, therefore, the default in payment of rent within the meaning of section 3(1)(a) stood established and the tenant was liable to eviction. The High Court dismissed the appeal. In the appeal before this Court in addition to the defence taken before the courts below, it was contended that though the landlord was aware that the rent was being deposited in the court ever since August, 1967 he waited for a period of four years before issuing a notice of demand for arrears for rent. 417 Dismissing the appeal, A ^ HELD: 1. Both in law and equity the appellant had no case. The ejectment suit was properly decreed by the Courts below. [429H; 430A] 2.1 The mere fact of a deposit under section 7C.of the U.P. (Temporary) Control of Rent and Eviction Act, 1947 in itself cannot be an answer to an action under section 3(1)(a) for eviction of the tenant for default in payment of rent. Irrespective of the fact of such deposit the tenant has to show the existence of circumstances justifying the deposit. [42tG; 423A] Brahmanand vs Kaushalya Devi, ; , referred to. 2.2 Reading section 7C, the rules framed thereunder and the statutory forms together, it cannot be said that a deposit under section 7C is necessarily a valid one preceded by an enquiry or satisfaction of the Court that the condition precedent set out in section 7C(1) is fulfilled. Though the applicant is asked to indicate briefly the circumstances in which he wants to make a deposit, there is no procedure contemplated for an enquiry into those circumstances. The statutory provisions do not contemplate transmission of the application to the landlord, the fixing of a date of hearing on which both the tenant and the landlord could be heard or the passing of a considered order by the Court thereafter and being satisfied that there was in fact a tender of rent by the tenant and a refusal by the landlord to receive the rent or a dispute regarding the ownership of the property which rendered it difficult or impossible for the tenant to send money to the landlord straight. The notice which is sent to the landlord merely sets out that the landlord is at liberty to withdraw it if he so desires. [424C F] 2.3 In the instant case, the trial court, the first appellate court and the High Court have concurrently found that there was no valid tender of rent by the tenant or refusal thereof by the landlord. The application filed by the tenant under section 7C gave no details in the space against column 6 of the form prescribed in Appendix 'A ' to the Rules framed under the Act, setting out the circumstances in which it was alleged that the landlord had refused to receive the rent. The application barely asserted that the landlord had refused to accept the rent. 'Where was no information as to the nature of notice served on the landlord. [424H; 425B C] There was no enquiry of finding recorded in the proceedings 418 under section 7C which could at all operate as res judicata against the landlord in the suit under section 3(1)(a). Though the order of the Munsif under section 7C mentioned that the landlord was absent though served succinctly, the order was only that the landlord may withdraw the amount deposited on proper application. It does not indicate any application of mind by the Munsif as to whether the conditions precedent for a valid deposit under section 7C were satisfied. There was certainly no finding at that stage on this vital requirement. The grant of permission to deposit under section 7C, in the case cannot, therefore, be treated as conclusive of the fact that a valid deposit had been made under that section. [427B; 425D E] Haji Abdul Karim vs Mohd. Ismail, [1978] U.P. Rent Cases 691, referred to. Fateh Chand, vs Bal Saroop Goel, ; Kaloo and others vs Gauri Shankar, and Kameshwar Singh Srivastava vs IVAddl. District Judge, Lucknow and others, AIR 1987 S . 138 distinguished. The contention of the appellant that though the landlord was aware that the rent was being deposited in the court ever since August, 1967 he waited for a period of four years before issuing a notice of demand for arrears of rent was without substance. The delay was not due to any laches on the part of the respondent but was caused on account of the pendency of the litigation instituted by the tenant claiming refund of a sum of Rs.275 paid towards rent. [429C D]

Civil Appeal No. 722 of 1978. From the Judgment and Decree dated 11.4.1977 of the Madhya Pradesh High Court in Second Appeal No. 315 of 1970. S.K.Gambhir for the Appellant. S.S. Khanduja for the Respondent . The Judgment of the Court was delivered by K.RAMASWAMY,J. The facts in this appeal would lie in a short compass. The appellant appointed the respondent as Lower Division Clerk on September 22, 1966 and put him on probation for a period of two years which expired on September 21, 1968. On December 9, 1968, the appellant served him with one month 's notice terminating the services with effect from January 9, 1969. Calling in question the order of termination, the respondent laid the suit for declaration that the termination without enquiry and an opportunity of being heard was violative of Rule 9A of the Madhya Pradesh Civil Service Classification Control & Appeal (Rules), 1966 with consequential declaration that he became a permanent employee of the corporation with cotiuity of service and arrears of salary. The Trial Court dismissed the suit and on appeal it was confirmed. The High Court in Second Appeal No. 315/70 by judgment and decree dated April 11, 1977 allowed the appeal and decreed the suit as prayed for. On leave under article 136 the Appellant filed this appeal. Shri S.k. Gambhir, learned counsel for the appellant contended that the respondent being a probationer, acquires permanent status only on confirmation. Before confirmation the appellant had exercised its power, in terms of the rules, and terminated the respondent 's service. The High Court committed manifest error of law in its finding that on expiry of two years period of probation the respondent must be deemed to have been confirmed under Rule 14 of the Municipal Officers and Servants Recruitment Rules which no longer were in force. He further contended that rule 8 of the Madhya Pradesh Government Servants ' General Conditions of Service Rules, 1961 for short 'the Rules ' expressly provides confirmation of probation as a condition precedent. Notice was issued terminating the service before confirmation and so it is valid in law. Shri S.S. Khanduja, learned counsel for the respondent contended that by operation of the resolution passed 324 by the Municipal Corporation under section 25 of the Central Provinces and Berar Municipality Act 1922 the Municipal Officers and Servants are governed by recruitment rules thereunder. Rule 14 thereof, relied on by the High Court expressly provided to put an employee on probation for a period of two years subject to being confirmed. At the end of the probationary period, if the probationer was found unfit, the Municipal Committee shall, if he was a direct recruit, to dispense with his service and if he has been recruited by tranfer, to revert to his original post. On expiry of the period of two years, no action was taken by the Municipal Corporation. Therefore, the respondent must be deemed to have been confirmed. Thereafter the only power which the Corporation had was to terminate the service of the respondednt in accordance with Classification Control and Appeal Rules after conducting an enquiry and giving him reasonable opportunity that too for misconduct. No such procedure was adopted. Therefore, the impugned notice was illegal and the High Court was justified in granting the decree. The first question is, which are the relevant rules that would be applicable to the respondent? Admittedly, the Municipal Council became a Municipal Corporation on or after August 26, 1967. A resolution was passed making a draft bye law by a Municipal Council on November 11, 1960, exercising the power under section 178(3) of the Madhya Pradesh Municipal Act, 1922 and confirmed the same under section 25 (1) of the said Act, adopting Government Rules to regulate the conditions of service of officers and servants of Municipal Committee which provides thus: "The fundamental rules and the Civil Service regulations as amended from time to time in their applications to M.P., the M.P.Government Servants Conduct Rules 1959, as amended from time to time and the General Book Circulars of the Govt. of M.P. as in force for the time being shall apply to the officers and servants of the M.C. in the same way as they apply to Govt. Servants". Thus, it is clear that the Fundamental Rules, Civil Service Regulations, Govt, Servants Conduct Rules and the General Book Circulars of the Government of Madhya Pradesh as amended from time to time, etc. shall apply to the officers and servants of the Municipal Committee. The Previous rules were thus superseded and were no longer in force. Reliance on Rule 14 referred to above made by the High Court is, therefore, wrong. Rule 8 of the Rules reads thus: 325 "Probation (1) A person appointed to a service or post by direct recruitment shall ordinarily be placed on probation for such period as may be prescribed. (2) The appointing authority may, for sufficient reasons, extend the period of probation by a further period not exceeding one year. Note A probationer whose period of probation is not extended under this Sub Rule but who has neither been confirmed nor discharged from service at the end of the period of probation shall be deemed to have been continued in service, subject to the condition of his service being terminable on the expiry of a notice of one calender month given in writing by either side. (3) A probationer shall undergo such training and pass such departmental examinations during the period of his probation as may be prescribed. (4) and (5) are not relevant, hence omitted. (6) On the successful completion of probation and the passing of the prescribed departmental examinations, the probationer shall be confirmed in the services or post to which he has been appointed." Thus, it is clear from Rule 8 of the Rules that the procedure to place a direct recruit on probation for a prescribed period was provided. The appointing authority would be entitled to place a direct recruit on probation for a specified period and for sufficient reasons may extend the period of probation to a further period not exceeding one year. Under the note to sub rule (2) if the probationer is neither confirmed nor discharged from service at the end of the period of probation, he shall be deemed to have been continued in service as probationer subject to the condition of his service being terminated on the expiry of a notice of one calender month given in writing by either side. As per sub rule (6) on passing the prescribed departmental examination and on successful completion of the period of probation, the probationer shall be confirmed in the service or post to which he has been appointed. Then he becomes an approved probationer. Therefore, after the expiry of the period of probation and before its confirmation, he would be deemed to have been continued in service 326 as probationer. Confirmation of probation would be subject to satisfactory completion of the probation and to pass in the prescribed examinations. Expiry of the period of probation, therefore, does not entitle him with a right to a deemed confirmation. The rule contemplate to pass an express order of confirmation in that regard. By issue of notice of one calender month in writing by either side, the tenure could be put to an end, which was done in this case. In State of Punjab vs Dharam Singh; , considering the effect of continuing a probationer in service after the period of probation was completed, the Constitution Bench held that there was no rule for the extension of probation after October 1, 1960 and it was not possible to presume the competent authority extended it beyond October 1, 1960.Thus in the above case there was no power to extend the probation in the rules beyond the specified period. It was held that: "The initial period of probation of the respondents ended on October 1, 1958. By allowing the respondents to continue in their posts thereafter without any express order of confirmation, the competent authority must be taken to have extended the period of probation upto October 1, 1960 by implication. But under the proviso to Rule 6(3), the probationary period could not extend beyond October 1, 1960. In view of the proviso to Rule 6(3), it is not possible to presume that the competent authority extended the probationary period after October 1, 1960, or that there after the respondents continued to hold their posts as probationers". Accordingly it was held that the respondent therein was deemed to have been confirmed. In Om Prakash Maurya vs U.P. Co op. Sugar Factories Federation, Lucknow & Ors. ; this Court held that U.P. Co op. Sugar Factories Federation Service Rules, 1976 made under the U.P. Co op. Societies Act were in force. Regulations 17 of 1975 Regulations does not permit continuance of an employee for a period of more than two years. One year normally was the period of probation and further being extended to a period of one more year. Rule 5 of 1976 Rules does not prescribe any limit on the extension of the probationary period. In the light of the operation of those rules when the probationary period was prescribed on promotion to the post of Commercial Officers with a condition that his probationary period may be extended and he could be reverted to the post of Office Superinten 327 dent without any notice, this Court held that the stipulation for extension of probationary period in the appointment order must be considered in accordance with the proviso to regulation 17(1) which means that the probationary period could be extended for a period of one year more and the probationary period was further extended to one year during which period the service of the appellant was neither terminated nor was he reverted to his substantive post, instead he was allowed to continue. On those facts this Court held that "since under those regulations ' appellant 's probationary period could not be extended beyond the maximum period of two years, he stood confirmed on the expiry of maximum probationary period and there after he could not be reverted to lower post treating him on probation". In M.A. Agarwal vs Gurgaon Bank & Ors., and in State of Gujarat vs Akhilesh C. Bhargav & Ors. ; this Court reiterated the same view. Exercise of the power to extend the probation is hedged with the existence of the rule in that regard followed by positive act of either confirmation of the probation or discharge from service or reversion to the substantive post within a reasonable time after the expiry of the period of probation. If the rules do not empower the appointing authority to extend the probation beyond the prescribed period, or where the rules are absent about confirmation or passing of the prescribed test for confirmation of probation and inaction for a very long time may lead to an indication of the satisfactory completion of probation. But in this case Rule 8 expressly postulates otherwise. The period of probation is subject to extension by order in writing for another period of one year. Passing the prescribed examinations and successful completion of probation and to make an order of confirmation are condition precedent. Mere expiry of the initial period of probation does not automatically have the effect of deemed confirmation and the status of a deemed confirmation of the probation. An express order in that regard only confers the status of an approved probationer. We are of the view that note to sub rule (2) read with sub rule (6) of Rule 8 manifests the legislative intent that confirmation of the probation of the respondent would be made only on successful completion of the probation and the passing of the prescribed examinations. It is not the respondent 's case that he passed all the examinations. He shall be deemed to be continued on probation. Before confirmation the appointing authority is empowered to terminate the service of the probationer by issuing on calender month 's notice in writing and on expiry thereof the service stands terminated without any further notice. Within three months from the date of expiry of original two 328 years period of probation and within one year 's period, the order of termination was made. In this view the question of conducting an inquiry under the Classification Control and Appeal (Rules) after giving an opportunity and that too for specific charges does not arise. The High Court, therefore, committed manifest error of law in decreeing the suit. By an interim order passed by this court, the respondent received a sum of Rs. 5,000 from the appellant. The appellant shall not recover the same from him. The appeal is accordingly allowed. The judgment and decree of the High Court is set aside and that of the Trial Court and the Ist Appellate Court are confirmed. But in the circumstances parties are directed to bear their own costs. N.P.V. Appeal allowed.

The respondent was appointed in the appellant Corporation and put on probation for a period of two years. About three month 's after the completion of two years ' period he was served with one month 's notice for termination of his service. Challenging the termination order the respondent filed a suit for declaration that the termination without enquiry and opportunity of being heard was violative of Rule 9A of the Madhya Pradesh Civil Services Classification, Control and Appeal Rules 1966 and that he became a permanent employee of the Corporation with continuity of service and arrears of salary. The trail court dismissed the suit, and appeal, it was confirmed. The High Court allowed the respondent 's second appeal and decreed the suit. In the appeal, by special leave, before this Court, on behalf of the appellant Corporation it was contended that the respondent being a probationer, would acquire permanent status only on confirmation, that the High Court had committed manifest error in law in holding that on the expiry of two years ' period of probation, the respondent must be deemed to have been confirmed under Rule 14 of the Municipal Officers ' and Servants ' Recruitment Rules, which were no longer in force, and that Rule 8 of the Madhya Pradesh Government Servants ' General Conditions of Service expressly proved confirmation of probation as a condition precedent and since notice terminating respondent 's service was issued, in terms of the rules, before confirmation, it was valid in law. On behalf of the respondent, it was contended that by operation of the resolution passed by the Municipal Corporation under Section 25 of 321 the Central Provinces and Bearer Municipality Act, 1922, the Municipal Officers and Servants was governed by recruitment rules thereunder, that since no action was taken by the appellant Corporation to dispense with the respondent 's service, on the expiry of the period of two years, as envisaged in Rule 14 of the Municipal Officers ' and Servants ' Recruitment Rules, the respondent must be deemed to have been confirmed, and consequently, the only power the Corporation had was to terminate the respondent 's service in accordance with the classification, Control and Appeal Rules, after conducting an enquiry and giving him reasonable opportunity, that too for misconduct, but since no such procedure was adopted, the notice was illegal and the High Court was justified in granting the decree. Allowing the appeal, this Court, HELD: 1.1 Under the Note to sub rule (2) of Rule 8 of the Madhya Pradesh Govt. Servant 's, General Conditions of Service Rules, 1961 if the probationer is neither confirmed nor discharged from service at the end of the period of probation, he should be deemed to have been continued in service as probationer subject to the condition of his service being terminated on the expiry of a notice of one calendar month, given in writing by either side. As per sub rule (6) on passing the prescribed departmental examination and on successful completion of the period of probation, the probationer should be confirmed in the service or post to which he has been appointed. Then he becomes an approved probationer. Therefore, after the expiry of the period of probation and before its confirmation, he would be deemed to have been continued in service as probationer. [375F H] 1.2 Confirmation of probation would be subject to satisfactory completion of the probation and pass in the prescribed examinations. Expiry of the period of probation, therefore, does not entitle him with a right to deemed confirmation. The rule contemplates to pass an express order of confirmation in that regard. By issue of notice of one calendar month in writing by either side, the tenure could be put to an end. [326A B] 1.3 If the rules do not empower the appointing authority to extend the period of probation beyond the prescribed period, or where the rules are absent about confirmation or passing of the prescribed test for confirmation of probation, inaction for a very long time may lead to an indication of the satisfactory completion of probation. [327D E] 322 1.4 Rule 8 expressly postulates otherwise. Hence mere expiry of the initial period of probation which is subject to extension for another period of one year does not automatically have the effect of deemed confirmation, and the status of a deemed confirmation of the probation. An express order in that regard on fulfillment of the conditions stipulated in the Rule only confers the status of approved probation.[327E F] State of Punjab vs Dharam Singh ; ; Om Prakash Maurya vs U.P. Co op. Sugar Factories Federation, Lucknow & Ors. ; ; M.A. Agarwal vs Gurgaon Bank & Ors., and State of Gujarat vs Akhilesh C. Bhargav & Ors., ; , distinguished. 1.5 Note to sub rule (2) read with sub rule (6) of Rule 8 manifest she legislative intent that confirmation of the probation of the respondent would be made only on successful completion of the probation and the passing of the prescribed examinations. The respondent shall, therefore, be deemed to be continued an probation. Before confirmation the appointing authority is empowered to terminate the service of the probationer by issuing one calendar month 's notice in writing and on expiry thereof the service stands terminated without any further notice. Within three months from the date of expiry of original two years period of probation and within th extendable period of one year the order of termination was made. Hence, the question of conducting an inquiry under the Classification, Control and Appeal Rules after giving an opportunity and that too for specific charges does not arise. [327G H, 328A] In the circumstances the High Court, committed manifest error of law in decreeing the suit. [328B] 2. By virtue of the resolution passed by the Municipal Council, which subsequently became Municipal Corporation, making a draft bye law , exercising power under section 173(2) of the Madhya Pradesh Municipal Act, 1922 and confirmed under Section 25(1) of the Act, adopting Government rules to regulate the conditions of service of officers and servants of the Municipal Committee, the Fundamental Rules, Civil Service Regulations, Government Servants ' Conduct Rules, and General Book Circulars of the State Government, as amended from time to time, etc. would apply to the officers of the Municipal Committee and the previous rules were superseded and were no longer in force. Hence the reliance placed by the High Court on Rule 14 of the Municipal Officers ' and Servants ' Rules is wrong. [324D E, G H] 323

Civil Appeal No. 172 of 1979 From the Judgment and order dated 4.4.1978 of the Delhi High Court in Civil Writ No. 261 of 1978. B.R. Aggarwala for the Appellants. O.P. Sharma for the Respondents. The Judgment of the Court was delivered by OZA, J. This appeal on special leave arises out of a Judgment of 699 the Delhi High Court dated 4th April, 1978. The leave is granted on a limited question as regards the question of interpretation of sub clause . (m) of Section 111 of the ( 'Act ' for short). The appellants imported 27 knitting machines as the appellants owns a hosiery factory in 1972. The appellants held an import licence for import of knitting machinery. According to the Customs authorities the machinery was not new as the licence permitted to import, but was old reconditioned. The Customs authorities also held that the price shown by the appellant on the basis of invoice was much lower than what the price actually should be. The price shown by the appellant on the basis of invoice was Rs.77441 whereas according. to the Customs authorities the price came to Rs.2,98,359. On this basis, a show cause notice was issued and after hearing the appellant, the Collector of Customs Bombay by order dated 29.12.73 found that the appellants had committed breach of Section 111(d) of the Act and also Section 111(m) of the Act and for both the counts the penalty was imposed on the appellants. Under Section 111(d) the penalty imposed was Rs.1,12,000 in lieu of confiscation of goods and for breach Section 111(m) a penalty of Rs. 1.47,000 was imposed under Section 112 of the Act. Against this order passed by the Collector of Customs, an appeal was filed by the appellants before the Board and the Board maintained the order passed by the Collector of Customs. On revision, the Central Government reduced the penalty from Rs.1,47.000 to Rs. One lac only. Against this the appellant preferred a writ petition before the Delhi High Court which was dismissed by a Division Bench of the High Court by its judgment dated 4th April, 1978 and aggrieved by this the present appeal has been preferred. So far as the penalty under Section 111(d) in lieu of confiscation was concerned, the leave has not been granted and it is not disputed that the appellants have taken away the goods after paying the duty and in this appeal therefore we are not concerned with it. The only challenge before us therefore is in respect of penalty of Rs. One lac imposed under Section 111(m) of the Act. It is not disputed that Section 111(m) of the Act has been amended in 1973 by Act No. 36 of 1973 but this amendment will not be applicable to the present case. Section 111(m) as it stood before the amendment reads as under: 700 "Any dutiable or prohibited goods which do not correspond in any material particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77 in respect thereof." and After the Amendment Act 1973 this provision now reads like: "any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under Section 77 in respect thereof. " It is therefore clear that the word 'value ' was inserted in this provision. Before the insertion of this word 'value '; Section 111(m) appears to mean that if the dutiable or prohibited goods are imported which do not correspond in any material particular with the entry made under Section 46 of the Act and in case of baggage with the declaration made under Section 77, then alone Section 111(m) could be attracted: Section 46 of the Act provides: "46(1) The importer of any goods, other than goods in tended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form: Provided that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs or (b) to deposit the goods in a public warehouse appointed under Section 57 without warehousing the same. XX XX XX XX XX XX XX XX XX XX XX XX (4) The importer while presenting a bill of entry shall at the foot thereof make and subscribe to a declaration as to MANOHAR 701 the truth of the contents of such bill of entry and shall, in A support of such declaration, produce to the proper officer the invoice, if any, relating to the imported goods. " XX XX XX XX It is in respect of this that Section 111(m) indicated that wherever goods actually imported are different in material particulars than the goods which were shown in the bill of entry or a declaration as contemplated in Section 46 then it will be a breach of Section 111(m). The difference in particulars could be in respect of anything but value, as this sub clause clearly show that the difference in value could not be made the basis of breach of this sub clause before the amendment of 1973, when the term 'value ' has been introduced into this sub clause. It was contended by the learned counsel for the appellants that in fact in the decision of this Court in Union of India & ors. vs M/s Rai Bahadur Shree Ram Durga Prasad (P) Ltd. & ors. ; , this Court considered the question of description and came to the conclusion that a penal provision has to be construed strictly and in absence of specific words requiring 'value ' to be mentioned, it could not be inferred that any difference in value could be made the basis of penalty. Whereas learned counsel appearing for the respondents contended that although the term 'value ' was not in Sec. 111(m) of the Act before the amendment but that will make no difference as according to him even without the term 'value ' a mis description could be interpreted to be a mis description on the basis of value stated and ultimately the goods found to be of a higher value. By the amendment the Legislature had only tried to explain or clarify the position and he contended that this was the view taken by the High Court while considering this question. In Union of India 's case the Court held: "If we are to hold that every declaration which does not state accurately the full export value of the goods exported is a contravention of the restrictions imposed by section 12(1) then all exports on consignment basis must be held to contravene the restrictions imposed by section 12(1). Admittedly section 12(1) governs every type of export. Again it is hard to believe that the legislature intended that any minor mistake in giving the full export value should be penalised in the manner provided in section 23(A). The wording of section 12(1) does 702 not support such a conclusion. Such a conclusion does not accord with the purpose of section 12(1). It is true that the regulations contained in the Act are enacted in the economic and financial interest of this country. The contravention of those regulations which we were told are widespread are affecting vital economic interest of this country. Therefore the rigour and sanctity of those regulations should be maintained but at the same time it should not be forgotten that section 12(1) is a penal section. The true rule of construction of a section like section 12(1) is, if we may say so with respect, as mentioned by Plowman, J. in Re H.P.C. Productions Ltd. [1962] Ch. Dn. 466 at 473. " It is therefore clear that their Lordships relied on the rule of construction holding that penal provision has to be strictly construed and held that where the provision itself did not require the value to be stated for any error in respect of that, no penalty could be imposed. Learned counsel contended that it was because of this decision that the Amendment Act 1973 was passed by the Parliament and the term 'value ' was inserted in Sec. 111(m) of the Act. Learned counsel referred to objects and Reasons for the amendment mentioned in the Bill, which resulted in Act No. 36 of 1973. The material words mentioned in the objects and Reasons for the amendment as stated in the Bill reads as under "The amendments to these Acts proposed in the Bill mainly seek to make the punishments prescribed thereunder more severe and to make certain other provisions the rein with regard to the rules of evidence and procedure with a view to removing the loopholes noticed in the working of these Acts and making their enforcement more effective. The notes on clauses explain in detail the various provisions of the Bill. Clause(2). This clause seeks to amend Section 111 of the , with a view to providing for the confiscation of goods in cases of mis declaration of the value or imported goods irrespective of whether or not such goods 703 are dutiable or prohibited, in order to cover cases of over invoiced imports. " It is not in dispute that in order to interpret a particular provision and to infer the intention of the Legislature, the objects and Reasons stated in the bill, when it is presented to the Legislature, could be used. In this view of the matter it appears that before the amendment in 1973, Sec. 111(m) did not contemplate any difference in material particulars in respect of value but it referred matters other than the value. It is not disputed that penalty under Sec. 111(m) has been imposed solely on the ground that the price shown by the appellant in the declaration was much less than what was ultimately found by the Department to be the price of imported goods and in respect of this difference of price, it was held that there is a difference in material particulars which brought the matter within the mischief of Sec. 111(m) of the Act. But in view of the fact that the term 'value ' was not in Sec. 111(m) before the amendment of 1973 this difference on the basis of value could not be said to be a difference in material particulars within the meaning of the language of Sec. 111(m) and in this view of the matter, the view taken by the authorities could not be maintained. The High Court in its judgment realising this difficulty observed that this amendment where the term 'value ' has now been inserted is merely explanatory and that was what was also contended by learned counsel for the respondents. It is not in dispute that a penal provision has to be strictly construed and reading Sec. 111(m) before the amendment it is not possible to draw an inference that any difference in material particulars may be referable to 'value '. This argument therefore can not be accepted. The scheme of Sec. 111(m) as it stood then nowhere referred to the difference of value as one of the ingredients which may attract this provision. In such a situation therefore if it was not the specific intention of the provision, a difference in respect of value therefore could not be said to attract this provision and on that basis no penalty could be imposed. 704 The appeal is allowed and the orders passed by the Collector, Board, Central Government and the High Court are hereby set aside. The penalty imposed on the appellants under Sec. 111(m) read with Sec. 112 is hereby quashed. The appellant shall be entitled to get refund of the penalty if already deposited. No order as to costs. A.P.J. Appeals allowed.

The appellants, owners of a hosiery factory, imported 27 knitting machines in 1972 under the import licence held by them. According to the Customs authorities the machinery was not new as the licence permitted to import, but was old reconditioned, and that the price shown was much lower than the actual value. After hearing the appellants, the Collector of Customs found that the appellants had committed breach of section l l l(d) and also of section l ll(m) of the and for both the counts he imposed the penalty, which was maintained by the Board. On revision the Central Government reduced the penalty from Rs. 1,47,000 to Rs. 1,00,000 which had been imposed for breach of section 111 (m). A writ petition filed by the appellants was dismissed by the High Court. In the appeal to this Court, on behalf of the appellants it was contended that a penal provision has to be construed strictly and in absence of specific words requiring 'value ' to be mentioned, it could not be inferred that any difference in value could be made the basis of penalty. On behalf of the respondents it was contended that although the term 'value ' was not in section 1 l l(m) before the 1973 amendment but that will make no difference as even without the term 'value ' a mis description could be interpreted to be a mis description on the basis of value stated and ultimately the goods found to be of a higher value. By the amendment the Legislature had only tried to explain or clarify the position. 698 Allowing the Appeals, the Court, ^ HELD: 1. The impugned orders are set aside and the penalty imposed on the appellants under section Ill(m) read with section 111(d) of the is quashed. [704A B] 2. Before the amendment in 1973, section 111(m) did not contemplate any difference in material particulars in respect of value but it referred matters other than the value. [703B C] 3. Unamended section 111(m) indicated that wherever goods actually imported are different in material particulars than the goods which were shown in the bill of entry or a declaration as contemplated in section 46 then it will be a breach of section 11 l(m). The difference in particulars could be in respect of anything but value, as this sub clause clearly shows that the difference in value could not be made the basis of breach of this sub clause before the amendment of 1973, when the term 'value ' has been introduced into this sub clause. [70 1 B C ] 4. In order to interpret a particular provision and to infer the intention of the Legislature, the objects and Reasons stated in the Bill, when it is presented to the Legislature, could be used. [703B ] 5. The amendment inserting the term 'value ' in section 111(m) cannot be said to be explanatory. [703Fl Union of India & ors. vs M/s. Rai Bahadur Shree Ram Durga Prasad (P) Ltd. & ors. ; , , relied upon.

N: Criminal Appeal No. 611 of 1982. From the Judgment and order dated the 5th November, 1982 of the Allahabad High Court in Criminal Contempt Case No. 144/81. N.N. Sharma, Mrs. Pankaj Verma & Mrs. Vijay Gupta for the Appellant. Dalveer Bhandari for the Respondent. The Judgment of the Court was delivered by 835 THAKKAR, J. We are sorry to say we cannot subscribe to the 'slap say sorry and forget ' school of thought in administration of contempt jurisprudence, Saying 'sorry ' does not make the slapper poorer. Nor does the cheek which has taken the slap smart less upon the said hypocritical word being uttered through the very lips which not long ago slandered a judicial officer without the slightest compunction. An Advocate whose client had been convicted by the learned Special Judge, Dehradun, was required to appear before the learned Judge to make his submissions on the question of 'sentence ' to be imposed on the accused upon his being found guilty of an offence under Section 5(2) of the Prevention of Corruption Act by the Court The learned Advocate appeared in a shirt and trouser outfit in disregard of the rule requiring him to appear only in Court attire when appearing in his professional capacity, The learned Judge asked him to appear in the prescribed formal attire for being heard in his professional capacity. The learned Advocate apparently took umbrage and left the Court. Some other Advocate appeared on behalf of accused who had been found guilty of a charge of corruption. The learned Judge imposed a sentence of 4 years ' R.I. which may have been considered to be on the high side. The matter in that case could have been carried to the High Court by way of an appeal, both, on the question of conviction as also, on the question of sentence. But so far as the Court of the Special Judge was concerned, as the judgment had been pronounced and nothing more remained to be done by that Court, the matter should have rested there. The appellant, a senior Advocate of long standing (not an immature inexperienced junior), however made a written application to the learned Special Judge couched in scurrilous. language making the imputation that the Judge was a "corrupt Judge" and adding that he was " contaminating the seat of justice". A threat was also held out that a complaint was being lodged to higher authorities that he was corrupt and did not deserve to be retained in service. The offending portion may better be quoted: "I am making a complaint against you to the highest authorities in the country, that you are corrupt and do not deserve to be retained in service. The earlier people like you are bundled out the better for us all. As for quantum of sentence, I will never bow down before you. You may award the maximum sentence. Any 836 way, you should feel ashamed of yourself that you are contaminating the seat of justice " There is no known provision for making such an application after a matter is disposed of by a Judge. Nor was any legal purpose to be served by making such an application. Obviously application was made to terrorize and harass the Judge for imposing a sentence which perhaps be considered to be on the high side whether or not it was really so was for the higher Court to decide. As pointed out earlier, it was however not permissible to adopt a course of intimidation in order to frighten the Judge. His malicious purpose in making the application is established by another tell tale circumstance by forwarding copy of this application, without any occasion or need for it, to several authorities and dignitaries. Administrative Judge, Allahabad for favour of requisitioning case file S.T. No. 2 from Dehradun and scanning through the fasts. Chief Secretary, Uttar Pradesh Government Lucknow. Director, Vigilance Commission, U.P., Lucknow. Prime Minister, Secretariat, Delhi. State Counsel, Shri Pooran Singh, Court of Shri V.K. Agarwal, Dehradun. Shri D. Vira, I.C.S., Chairman, Indian Police Commission, Delhi. President, Bar Association, Dehradun 8. The Hon 'ble Chief Justice of Bharat. The High Court of Allahabad initiated contempt proceedings, found the appellant guilty of having committed criminal contempt under Section 2(c)(1) of the , after affording him full opportunity of hearing and imposed a sentence of S.I for 1 week and a fine of Rs. 500/ (in default to undergo a further term of S.I. for 1 week). Hence this appeal. Before the High Court the appellant sought to justify his conduct on the ground of the treatment alleged to have been meted 837 out to him by the learned Judge. No remorse was felt. No sorrow was expressed. No apology was offered. Only when the appellant approached this Court he expressed his sorrow before this Court saying that he had lost his mental balance. Upon finding that this Court was reluctant to hear him even on the question of sentence, as he had not even tendered his apology to the learned Judge who was scandalized, he prayed for three weeks ' time to give him an opportunity to do so. His request was granted. He appeared before the learned Judge and tendered a written apology wherein he stated that he was doing so "as directed by the Hon 'ble Supreme Court. " This circumstance in a way shows that it was a 'paper ' apology and the expression of sorrow came from his pen, not from his heart. For, it is one thing to "say" sorry it is another to "feel" sorry. It is in this context that we have been obliged to make the opening remarks at the commencement of this judgment. We do not think that merely because the appellant has tendered his apology we should set aside the sentence and allow him to go unpunished. Otherwise, all that a person wanting to intimidate a Judge by making the grossest imputations against him has to do, is to go ahead and scandalize him, and later on tender a formal empty apology which costs him practically nothing. If such an apology were to be accepted, as a rule, and not as an exception, it would in virtually be tantamount to issuing a 'licence ' to scandalize courts and commit contempt of court with impunity. It will be rather difficult to persuade members of the Bar, who care for their self respect, to join the judiciary if they are expected to pay such a price for it. And no sitting Judge will feel free to decide any matter as per the dictates of his conscience on account of the fear of being scandalized and persecuted by an Advocate who does not mind making reckless allegations if the Judge goes against his wishes. If this situation were to be countenanced, advocates who can cow down the Judges, make them fall in line with their wishes, by threats of character assassination and persecution, will be preferred by the litigants to the advocates who are mindful of professional ethics and believe in maintaining the decorum of Courts. No Judge can take a decision which does not displease one side or the other. By the very nature of his work he has to decide matters against one or other of the parties. If the fact that he 838 renders a decision which is resented to by a litigant or his lawyer were to expose him to such risk, it will sound the death knell of the institution line has therefore to be drawn somewhere, some day, by some one. That is why the Court is impelled to act (rather than merely sermonize), much as the Court dislikes imposing punishment whilst exercising the contempt jurisdiction, which no doubt has to be exercised very sparingly and with circumspection. We do not think that we can adopt an attitude of unmerited leniency at the cost of principle and at the expense of the Judge who has been scandalized. We are fully aware that it is not very difficult to show magnanimity when some one else is the victim rather than when oneself is the victim. To pursue a populist line of showing indulgence is not very difficult in fact it is more difficult to resist the temptation to do so rather than to adhere to the nail studded path of duty. Institutional perspective demands that considerations of populism are not allowed to obstruct the path of duty. We, therefore, cannot take a lenient or indulgent view of this matter. the day must be dreaded when a Judge cannot work with independence by reason of the fear that a disgruntled member of the Bar can publicly humiliate him and heap disgrace on him with impunity, if any of his orders, or the decision rendered by him, displeases any of the Advocates appearing in the matter. We firmly believe that considerations regarding maintenance of the independence of the judiciary and the morale of the Judges demand that we do not allow the appellant to escape with impunity on the mere tendering of an apology which in any case does not wipe out the mischief. We are of the opinion that the High Court was therefore justified in imposing a substantive sentence. And the sentence imposed cannot be said to be excessive or out of proportion. Appeal is accordingly dismissed. N.V.K. Appeal dismissed.

The appellant was a senior. advocate. He was required to appear before the Special Judge to make his submission on the question of sentence to be imposed upon his client who was convicted for an offence under s.5(2) of the Prevention of Corruption Act, 1947. As he appeared in a shirt and trouser outfit and not in Court attire, the Judge asked him to appear in the prescribed formal attire for being heard in his professional capacity. The appellant took umbrage and left the Court. Some other advocate appeared in the matter and the accused having being found guilty of the charge of corruption the Judge imposed a sentence of four years R.I. The appellant made a written application to the Judge couched in scurrilous language making the imputation that the Judge was a 'corrupt Judge ' and added that he was 'contaminating the seat of justice '; and forwarded copies of the application, without occasion or need to the Administrative Judge, Chief Secretary and other authorities. The High Court initiated contempt proceedings, found the appellant guilty of having committed criminal contempt under section 2(c)(1) of the and after affording full opportunity of hearing, imposed a sentence of simple imprisonment for one week and a fine of Rs. 500. Dismissing the Appeal, ^ HELD: 1. Considerations regarding maintenance of the independence of the judiciary and the morale of the Judges demand that the appellant should not escape with impunity on the mere tendering of an apology which in any case. does not wipe out the mischief. If such a apology were to be accepted, as a rule, and not as an exception, it would virtually be tantamount to issuing a 'licence ' to scandalize courts and commit contempt of court with impunity. The High Court was justified in imposing a substantive sentence and the said sentence cannot be said to be excessive or out of proportion.[838E; 837E, 838F] 834 No Judge can take a decision which does not displease one side or the other. By the very nature of his work he has to decide matters against one or other of the parties. If the fact that he renders a decision which is resented to by a litigant or his lawyer were to expose him to such a risk, it will sound the death knell of the institution. The day must be dreaded when a Judge cannot work with independence by reason of the fear that a disgruntled member of the Bar can publicly humiliate him and heap disagree on him with impunity, if any of his orders, or the decision rendered by him displeases any of the Advocates appearing in the matter. A line has therefore to be drawn some where, some day, by some one. That is why the Court is impelled to act (rather than merely sermonise) much as the Court dislikes imposing punishment whilst exercising the contempt jurisdiction, which no doubt has to be exercised very sparingly and 'with circumspection. [837H; 838A B] 2. An attitude of unmerited leniency cannot be adopted at the cost of principle and at the expense of the Judge who has been scandalized. To pursue a populist line of showing indulgence is not very difficult in fact it is more difficult to resist the temptation to do so rather than to adhere to the mail studded path of duty. Institutional perspective demands that considerations of populism are not allowed to obstruct the path of duty. [338C] In the instant case, the appellant sought to justify his conduct before the High Court on the ground of the treatment alleged to have been meted out to him by the Special Judge. No remorse was felt. No sorrow was expressed. No apology was offered: He expressed his sorrow only before this Court, saying that he had lost his mental balance, and was granted an opportunity to tender an apology. He appeared before the Special Judge and tendered a written apology indicating that he was doing so: "as directed by the Hon 'ble Supreme Court. " This circumstance shows it was a 'paper ' apology, and that the expression of sorrow came from his pen, not from his heart. It is one thing to "say" sorry it is another to "feel" sorry. This Court cannot subscribe to the 'slap say sorry and forget ' school of thought in administration of contempt jurisdiction. [886H; 837A C]

ivil Appeal Nos. 2366 67 of 1988 etc. From the Judgment and order dated 21.2.1985 of the Punjab and Haryana High Court in C.W.P. No. 5353 of 1984. Pankaj Kalra, B.S. Gupta, P.C. Kapur and section Mitter for the Appellants. Rajinder Sachar, D.K. Garg, Mahabir Singh and A.K. Goel for the Respondents. The Judgment of the Court was delivered by PATHAK, CJ. Special leave to appeal is granted in both the special leave petitions. The petitioners are teachers employed in various recognised aided private schools in the State of Haryana. The schools are maintained under private management. They receive financial aid from the State Government. The petitioners have come to Court alleging that teachers employed in Government aided private schools are entitled to parity with the teachers employed in Government schools in the matter of pay scales and other emoluments such as Dearness Allowance, House Rent Allowance, City Compensatory Allowance, 684 Medical Reimbursement and Gratuity, etc. It appears that prior to A 1967 there was considerable disparity in the emoluments of teachers employed in the same State, and the Government of India appointed the Kothari Commission to examine the conditions of service of teachers with the object of improving the standards of education in the country. Among other things, the Kothari Commission recommended that the scales of pay of school teachers belonging to the same category but working under different managements such as Government, local bodies or private organisations should be the same. Almost all the States, including the State of Haryana, decided to implement the recommendations of the Kothari Commission. The State of Haryana declared in January, 1968 that the revised rates suggested by the Kothari Commission would be made effective from 1 December, 1967, and that the grades of teachers of privately managed schools would be revised on the pattern of the grades of teachers working in Government schools. As the deficit between the original grades and the revised grades was found too burden some for the managements of the aided schools to bear, the State decided to meet the increased expenditure entirely in regard to Pay and Dearness Allowance. The State Government followed the principle of parity between the teachers working in aided schools and Government schools until 1979. In 1979, the pay scale of teachers in Government schools was revised by the State after the report of the Pay Commission, but in the case of the teachers of aided schools the revision was effected two years later. The petitioners allege that the salary and other emoluments paid to the teachers of aided schools have fallen far behind the emoluments paid to the teachers in Government schools and this Court should interfere in order to remove such discrimination. We are told that there are about sixty thousand teachers in Government schools while a mere four thousand teachers are employed in aided schools. According to the petitioners, to provide education in schools is the constitutional responsibility of the Government, and this is reflected in the deep and pervasive control exercised by the Government over the running of aided schools. It is pointed out that the control is exercised over almost all areas of management. The Committee of management has to be approved by the State Government, so have the strength of the teaching and the other staff as well as the qualifications and other conditions of eligibility for appointment to the staff. The mode of selection and the determination of seniority are subject to the directions of the State Government and teachers cannot be dismissed, removed or reduced in rank without the prior approval of the State authorities. The tuition fee, as well as free ships, concession and scholarships are fixed by the State Government, which is also empowered to give instructions in 685 regard to the time table, working hours, pupil ratio, attendance and workload. The financial resources and the heads of income and expenditure are indicated by the State Government. We have heard learned counsel for the parties at considerable length, and we find general agreement between the parties that there is no reason for discrimination between the teachers employed in aided schools and those employed in Government schools so far as the salaries and Additional Dearness Allowances are concerned. The State Government does not accept the claim to parity in respect of other heads of allowance put forward by the petitioners. We were at one time disposed to ruling on the question whether the responsibility for providing education in schools belongs to the State Government, and therefore whether there is a corresponding responsibility on the State Government to ensure that in aided schools the teachers are entitled to the same emoluments as are provided for teachers in Government schools. We do not, however, propose to enter upon this question in these cases as we are satisfied from the developments which have followed after the hearing on the merits that it would be more appropriate to dispose of these cases by a short order. The State Government has expressed its readiness to reimburse the payment of ten instalments of the Additional Dearness Allowance, but not the twenty five Additional Dearness Allowance instalments released after 1 April, 1981. It appears that the grant in aid given by the State Government to these aided schools covers the deficit to the extent of seventy five per cent of the approved expenditure. The approved expenditure extends to the salaries paid to the teaching and non teaching staff, which includes the Pay and Dearness Allowance and Interim Relief before 1 April, 1981 and the Pay and Additional Dearness Allowance beyond 1 April, 1981, the deficit expenditure minus income and certain other items, but does not include House Rent Allowance, Medical Allowance, City Compensatory Allowance and the other heads claimed by the petitioners. In our opinion, the teachers of aided schools must be paid the same pay scale and Dearness Allowance as teachers in Government schools for the entire period claimed by the petitioners, and that the expenditure on that account should be apportioned between the State and the Management in the same proportion in which they share the burden of the existing emoluments of the teachers. The State Government meets the Dearness Allowance liability to the extent of seventy five per cent of the amount. Ten instalments representing the State Government 's liability shall be paid by the State Government in two equal parts, the first part being payable within three months from today and the remaining part being pay 686 able by 31 March, 1989. The State Government shall also pay the remaining twenty five instalments, the entire amount being payable in five equal parts, each part being paid every six months, the first such part being payable by 30 September, 1989. The State Government shall not be liable to pay for the period covered by these 35 instalments any amount on account of House Rent Allowance, City Compensatory Allowance and the other allowances claimed by the petitioners. The State Government will also take up with the managements of the aided schools the question of bringing about parity between the teachers of aided schools and the teachers of Government schools for the period following that to which the aforesaid thirty five instalments relate, so that a scheme for payment may be evolved after having regard to the different allowances claimed by the petitioners. In the case of teachers who have retired or who have died in service during the pendency of these cases, payment of the first ten instalments shall be made to the retired teachers and to the legal representatives of the deceased teachers within three months from today. The appeals and the writ petitions are disposed of accordingly. H.L.C. Appeals & Petitions disposed of.

The Kothari Commission appointed by the Government of India to examine the conditions of service of teachers with the object of improving the standards of education in the country recommended inter alia that the scales of pay of school teachers belonging to the same category but working under different managements such as Government, local bodies or private organisations should be the same, and, falling in line with other States, the State of Haryana decided to implement the same with effect from 1 December, 1967. As the deficit between the original grades and the revised grades was found too burdensome for the managements of the aided schools to bear, the State decided to meet the increased expenditure entirely in regard to Pay and Dearness Allowance. The State Government followed the principle of parity between the teachers working in aided schools and Government schools until 1979. In 1979, the pay scale of teachers in Government schools was revised by the State after the report of the Pay Commission, but in the case of the teachers of aided schools the revision was effected two years later. The appellants and the writ petitioners, who were teachers employed in various recognised aided private schools, alleged that the salary and other emoluments such as Dearness Allowance, House Rent Allowance, City Compensatory Allowance, Medical Reimbursement, Gratuity, etc., paid to them had fallen far behind the emoluments paid to the teachers in Government schools and this Court should interfere in order to remove such discrimination since the constitutional responsibility of providing education in schools devolved on the Government and it exercised deep and pervasive control over the running of aided schools. Disposing of the appeal and petitions, ^ HELD: There is general agreement between the parties that there is no reason for discrimination between the teachers employed in aided 683 schools and those employed in Government schools far as the salaries and Additional Dearness Allowances are concerned. The State Government has expressed its readiness to reimburse the payment of ten instalments of the Additional Dearness Allowance, but not the twenty five Additional Dearness Allowance instalments released after 1 April, 1981. In our opinion, the teachers of aided schools must be paid the same pay scale and Dearness Allowance as teachers in Government schools for the entire period claimed by the petitioners, and that the expenditure on that account should be apportioned between the State and the Management in the same proportion in which they share the burden of the existing emoluments of the teachers. [685B C, E G] The State Government will also take up with the managements of the aided schools the question of bringing about Party between the teachers of aided schools and the teachers of Government schools so that 9 scheme for payment may be evolved after having regard to the different allowances claimed by the petitioners. [686C]

Civil Appeal No. 95 of 1964. Appeal from the judgment and order dated April 14, 1961 of the Punjab High Court in Income tax Reference No. 23 of 1958. section T. Desai, R. Ganapathy Iyer, Gopal Singh, B.R.G.K. Achar and R. N. Sachthey, for the appellant. A. V. Viswanatha Sastri, T. A. Ramachandran, O. C. Mathur for the respondent. The Judgment of the Court was delivered by Shah, J. Hakam Mal Tani Mal a Hindu undivided family was assessed to tax under the Indian Income tax Act, 1918, in respect of income from business, inter alia, in timber at Abdullapur. In 1934 there was a partition of the Hindu undivided family, and five members of that family entered into a partnership to carry on in the name of M/s Hakam Mal Tani Mal the business which was originally carried on by the undivided family. Accounts of this firm were settled till March 31, 1939, and the firm was dissolved. The timber business of the firm was taken over by two partners of the firm Gajjan Mal and Jodha Mal, who entered into an agreement of partnership to carry on the business in the name of R. B. Jodha Mal Kuthiala hereinafter called 'assessee '. An instrument of partnership recording the terms of the partnership and reciting the dissolution of the earlier partnership was executed on June 29, 1939. The assessee was dissolved in March 1943. In assessment proceedings for 1943 44 the assessee contended that the firm Messrs Hakam Mal Tani Mal was dissolved on March 31, 1939, before the Income tax (Amendment) Act 7 of 1939 had come into force and the first succession to the business after April 1, 1939 was in March 1943, when the assessee was dissolved and on that account the assessee was entitled to relief under section 25(3), or in the alternative under section 25(4) of the Indian Income tax Act, 1922. The Income tax Officer completed the assessment without giving to the assessee the benefit of sub sections (3) or (4) of section 25 of the Indian Income tax Act, 1922. The Appel 647 late Assistant Commissioner confirmed the order holding that succession to the family firm Messrs. Hakam Mal Tani Mal took place on April 1, 1939, and that firm alone was entitled to relief under section 25(4) and to the second succession which took place on April 1, 1943, after Act 7 of 1939 was brought into force relief under section 25(4) was not admissible. The Income tax Appellate Tribunal agreed with the view of the Appellate Assistant Commissioner. Thereafter as directed by the High Court of Punjab under section 66(2) of the Indian Income tax Act, 1922, the Tribunal drew up a statement of the case and submitted the following ques tion of law for the opinion of the High Court : "Whether in the facts and the circumstances of the case, the Tribunal is correct in law in holding that the assessee firm (R. B. Jodha Mal Kuthiala, Abdullapur Depot, Simla) was not entitled to the benefit provided in Section 25 (3) or 25 (4) of the Income tax Act, in relation to the assessment in question ?" The High Court held that the assessee was carrying on business when Act 7 of 1939 was brought into operation and was on that account entitled to the benefit of section 25 (4) of the Act. With certificate granted by the High Court, this appeal has been preferred. Sub section (4) was inserted in section 25 of the Indian Incometax Act, 1922, by the Income tax (Amendment) Act 7 of 1939. It provides : "Where the person who was at the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income tax Act, 1918, is succeeded in such capacity by another person, the change not being merely a change "in the constitution of a partnership, no tax shall be payable by the first mentioned person in respect of the income, profits and gains of the period between the end of the previous year and the date of such succession, and such person may further claim that the income, profits and gains of the previous year shall be deemed to have been the in come, profits and gains of the said period. Where any such claim is made, an assessment shall be made on the basis of the income, profits and gains of the said 648 period, and, if an amount of tax has already been paid in respect of the income, profits and gains of the previous year exceeding the amount payable on the basis of such assessment, a refund shall be given of the difference : Provided. . . There is no dispute that the Hindu undivided family of Hakam Mal Tani Mal was taxed under the Indian Income tax Act, 1918, in respect of the, timber business and Messrs. Hakam Mal, Tani Mal succeeded to that business in 1934. Accounts of Messrs. Hakam Mal Tani Mal were settled on March 31, 1939, and the business in timber which was carried on by that firm was taken over by the assessee. The departmental authorities held that the assessee was at the commencement of the Indian Incometax (Amendment) Act 7 of 1939 not carrying on business, and that it succeeded to the business on April 1, 1943. The High Court disagreed with that view and opined that the assessee was at the commencement of Act 7 of 1939 carrying on business, and correctness of that opinion is challenged in this appeal. The Indian Income tax (Amendment) Act 7 of 1939 was brought into force on April 1, 1939. Section 5 (3) of the General Clauses Act 10 of 1897 provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement. Act 7 of 1939 must therefore be deemed to have come into operation at a point of time immediately on the expiration of March 31, 1939. The assessee contends, and the contention has found favour with the High Court, that the assessee was carrying on business at the commencement of the Indian Income tax (Amendment) Act 7 of 1939. In support of the plea of the assessee reliance was placed only upon the instrument of partnership which was executed on June 29, 1939. The question in dispute must, therefore, be determined on a true interpretation of the terms of the instrument of partnership. Insofar as it is material, the instrument recites : "We, R. B. Jodha Mal Kuthiala son of Lala Gopi Mal Sahib Sud of the one part and Gajjan Mal Kuthiala son of Lala Hakam Mal Sahib Sud Kuthiala of the other part, residents of Haroli, District Hoshiarpur. and presently of Simla. 649 Whereas we, the deponents, were partners and shareholders in the firm of Lala Hakam Mal Tani Mal Simla and all the partners of firm Lala Hakam Mal Tani Mal understood and settled their accounts upto the 31st of March 1939, on the 31st of March, 1939, and all the partners have become separate from the 1st of April, 1939, and the business at Abdullapur in the name of firm Hakam Mal Tani Mal and R. B. Jodha Mal Kuthiala has fallen to our share to run which we have by means of an oral agreement constituted a separate partnership styled R. B. Jodha Mal Kuthiala,, Abdullapur from the 1st of April, 1939. Now the said oral (agreement) is being reduced to writing and we agree that :" The instrument of partnership in the first instance recites that the accounts of Messrs. Hakam Mal Tani Mal were settled on March 31, 1939 and upto March 31, 1939. It is then recited that all the partners had become separate from April 1, 1939. This is an ambiguous recital : it may mean that the dissolution had taken place on April 1, 1939 i.e., the business had continued for the whole or a part of the day on April 1, 1939, or it may mean that from the end of March 31, 1939, there had been separation. When a deed recites that a transaction is effective from a particular date it has to be determined in the context in which that expression occurs, whether the date mentioned has to be excluded or to be included. The recitals in the instrument that the accounts were settled upto March 31, 1939, and that the partners had become separate, would imply that the firm of Messrs Hakam Mal Tani Mal did not do business after March 31, 1939. no date of the oral agreement constituting a separate partnership of the assessee is not set out in the instrument, and there is no other evidence in that behalf. But the assessee was constituted to carry on the timber business allotted to it at the time of dissolution from April 1, 1939. The timber business was an old and a running business, and an intention to maintain continuity of the business and its transactions may reasonably be attributed to the assessee. It must therefore be held that the assessee commenced doing business immediately after the dissolution of the firm Messrs Hakam Mal Tani Mal become effective. In the absence of other evidence, it may be held that the business of Messrs. Hakam Mal Tani Mal continued till the midnight of March 31, 1939, and immediately thereafter the business of the assessee commenced. 650 The partnership therefore came into being at the precise point of time at which the Indian Income tax (Amendment) Act 7 of 1939 came into force and it could not be said that the assessee was not carrying on business at the commencement of the Indian Income tax (Amendment) Act 7 of 1939. The High Court was, therefore, in our judgment, right in holding that the assessee was entitled on the dissolution of that firm in March 1943 to the benefit of section 25(4) of the Indian Income tax Act. The appeal fails and is dismissed with costs. Appeal dismissed.

A Hindu undivided family was assessed to tax under the Indian Income tax Art 1918 in respect of its business, inter alia, in timber. In 1934 there was dissolution of the family and five of its members entered into a partnership to carry on the business. Ibis firm was dissolved on March 31, 1939 and its accounts were settled on and up to that date. The timber business of the dissolved firm was taken over by the assessee firm. An instrument of partnerhip for the new firm was drawn up on June 29, 1939 in which the facts relating to the dissolution of the earlier firm were also recited. The new firm the assessee was also dissolved in March 1943. In assessment proceedings for 1943 44 the assessee claimed benefit under section 25(3) or in the alternative section 25(4) of the Indian Income tax Act, 1922. The claim was rejected by the assessing and appellate authorities but in reference, the High Court allowed the claim under section 25(4). The Commissioner of Income tax, with certificate, appealed to the Supreme Court. The material question for determination was whether the assessee was carrying on business at the commencement of Act 7 of 1939 so as to be entitled to the benefit under section 25(4). HELD: The Indian Income tax (Amendment) Act 7 of 1939 was brought into force on April 1. 1939. Section 5(3) of the General Clauses Act (10 of 1897) provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into being on the expiration of the day preceding its commencement. Act 7 of 1939 must therefore be deemed to have come into operation at a point of time immediately on the expiration of March 31, 1939. [648 D E] Whether the assessee was carrying on business at the point of time which Act 7 of 1939 came into force had to be decided from the recitals in the partnership deed executed by the respondents on June 29, 1939. The recitals in the instrument that the accounts were settled up to March 31, 1939 and that the erstwhile partners had become separate would imply that the firm formed in 1934 did not do business after March 31, 1939, the assessee was constituted to carry on the timber business allotted to it at the time of dissolution from April 1, 1939. The timber business was an old and running business and an intention to maintain continuity of the business and its transactions may reasonably be attributed to the assessee. It must therefore be held that the assessee commenced doing business immediately after the dissolution of the firm of 1934 become effective. The business of that firm continued up to the midnight of March 31, 1939, and immediately thereafter the business of the assessee commenced. [649 E H; 650 A] 646 The new partnership therefore came into being at the precise period of time at which Act 7 of 1939 came into force and it could not be said that the assessee was not carrying on business at the commencement of the Act. The High Court was therefore right in holding that the assessee was entitled on the dissolution of the firm in March 1943 to the benefit of section 25(4) of the Indian Income tax Act, 1922.

ivil Appeal No. 3237 of 1991. From the Judgment and Order dated 10.10.1990 of the Delhi High Court in C.W. No. 3204 of 1990. Soli J. Sorabjee, S.V. Deshpande and C.L. Sahu, Advs. for the Appellant. Dr. Y.S. Chitale, and S.K. Sinha for the Respondents. The Judgment of the Court was delivered by VERMA, J. Leave is granted. Respondent No. 6, Jupiter Cooperative Group Housing Society Limited, was formed in 1979 for providing houses to its 130 members including the appellant Prem Jeer Kumar. The appellant was earlier the Secretary and then the President of the Society till 1985, by which time substantial con struction had been completed. The members were allotted three room flat for a sum of Rs. 1, 10,000. In August, 1985, Respondent No. 3, Registrar, Delhi Cooperative Societies, appointed 784 an Administrator to look into the affairs of the Society since the appel. lant and other office bearers had held the office for more than two terms. The controversy giving rise to this proceeding relates to the alleged discrepancy re garding purchase of some building material in January, 1984, for the construction of flats for members of the Society in Vikas Puri at New Delhi. The New Managing Committee of the Society formed in September, 1986, complained to the Regis trar, COoperative Societies alleging irregularities by the previous Managing Committee of which the appellant was the President. This matter was referred to arbitration by order dated 12.10.1989 passed by the Joint Registrar (Arbitration) Cooperative Societies, Delhi Administration. Respondent No, 1, Surender Gandotra was appointed the Arbitrator, who gave his AWard on 1.5. 1990. The relevant portion of the Award is as under: "It is also interesting to discuss the conduct of these two respondents of this case, Shri Poonam Dhand and Shri P.J. Kumar as they have been moving applications after applications in this court raising vicious and frivolous grounds just to delay the delivery of justice in this case. The miscellaneous applications relating to the dispute of juris diction of this court and then that since criminal proceedings are pending with the Delhi Police, proceedings in this Court should be kept pending till final decision in the criminal proceedings. All these applications were properly attended, scrutinized and dis posed of legally. It is also interesting that despite number of chances/opportunities having been given to the respondent to file reply to the main points of the claimant society, the defendants S/Shri Poonam Dhand and Shri P.J. Kumar did not file any reply and followed delaying and dilatory tactics and to defeat the ends of justice. Even today 30th April, 1990, fixed for hearing none came from the side of S/Shir Poonam Dhand, P.J. Kumar either presonally or through Advocate. The advocate of the claimant society Shri Tomar argued that ex parte proceedings may be initiated against the respondents who have absented from these proceedings. In view of these cricumstances, and the conduct of 'respondents in this case 0right from the very inception of this case, there is no other alternative left for me but to proceed ex parte against the respondents S/Shri Poonam Dhand and P.J. Kumar. Ex parte award is announced with the following details; . 785 Principal amount to be paid by the respon dents to the Jupiter Cooperative Societies Limited, Vikas Puri, New Delhi. Rs 1,46,2 10.20 Interest at the rate of 18% from 17.4.1985 till all the dues are cleared by the respond ents. Cost allowed Rs.5,000.00 With the above observations, ex parte award is given against the respondents S/Shri Poonam Dhand, P.3, Kumar who are jointly and severally responsible to pay the Jupiter Cooperative Group Housing Society Limited, Vikas Puri, New Delhi, principal amount of Rs. 1,46,210.00 NPS plus 18% interest from 17.4.1985 till all the dues are cleared and costs of Rs.5,000. " , The appellant then filed an appeal under section 76 of the Delhi Cooperative Societies Act, 1972 (hereinafter referred to as 'the Delhi Act ') in the Delhi Cooperative Tribunal (Respondent No. 2) challenging the Award dated 1.5.1990. The Tribunal held that the Arbitrator 's act of proceeding ex parte against the appellant is justified and taking the view that the appeal had no merit, dismissed the same. The appellant then filed a writ petition in the High Court challenging the Award and dismissal of his appeal by the Tribunal on 3.7.1990. The said writ petition has been dismissed by the High Court on 10.10.1990. It is in these circumstances that the appellant assails the Award, dismiss al of the appeal and then the .writ petition. The argument of Shri Sorabjee, learned counsel for the appellant, is that it is section 59 and not section 60 of the Delhi Act which applies to the present case. In reply, Dr. Chitale on behalf of the contesting respondents contended that section 60 relating to arbitration and not section 59 pertaining to surcharge applies to the present case. Sections59 and 60 of the Delhi Act, insofar as relevant, are quoted hereinbelow: "59. Surcharge (1) If in the course of an audit, inquiry, inspection or the wind ing up of a cooperative society, it is found that any person, who is or was entrusted with the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment contrary to this Act, the rules or the bye laWs or has caused any deficiency in the assets of the society by breach of trust or wilful negligence or has misappropriated or fraudulently retained any money 786 or other property belonging to such society, the Registrar may, of his own motion or on the application of the committee, liquidator or any creditor, inquire himself or direct any person authorised by him, by an order in writing in this behalf, to inquire 'into the conduct of such person; Provided that no such inquiry shall be held after the expiry of six years from the date of any act or omission referred to in this sub section. (2) Where an inquiry is made under sub section (1), the Registrar may, after giving the person concerned an opportunity of being heard, make an order, requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Registrar may consider just and equitable." "60. Disputes which may be referred to arbitration(1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitu tion, management or the business of a coopera tive society other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society arises (a) among members, past members and persons claiming through members, past members and deceased members, or (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its com mittee or any officer, agent or employee of the society or liquidator, past or present, or (c) between the society or its commit tee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or (d) between the society and any other cooperative society, between a society and liquidator of another society 787 or between the liquidator of another society. such disputes shall be referred to the Regis trar for decisior and no court shall have jurisdiction to entertain any suit other proceedings in re spect of such dispute. (2) For the purposes of sub section (1), the following shall be deemed to be disputed touching the constitution management or the business of a cooperative society namely (a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal rep resentatives of a deceased member, whether such debt of demand is admitted or not; (b) a claim by a surety against the principal debtor where the society has recov ered from the surety any amount in respect of any debt or demand due to it from the princi pal debtor as a result Of the default of the principal debtor, whether such debt or demand is admitted or not; (c) any dispute arising in connection with the elec tion of any officer of a society other than a society mentioned in sub section (1) of section 31. (3) If any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the consitution, management or the business of cooperative society, the decision thereon of the Registra shall be final and shall not be called in question in an court. i (4) . . . ." In substance the contention of the learned counsel for the appeal lant is that the proper action to take in such a case is to resort to section 59 dealing with surcharge and not to settlement of dispute by arbitration since it is not one of the disputes which may be referred to arbitration in terms of section 60 of the Delhi Act. It was argued that sub section (2) of section 60 is exhaustive and not merely illustrative, which shows that the present dispute does not fall within the ambit 0 section 60. Dr. Chitale, on the other hand, asserted that it is sub 788 section (1) of section 60 which indicates the true scope of section 60 while sub section (2) is merely illustrative and no exhaustive. It was urged that clause (c) of sub section (1) of section 60 expressly provides that if any dispute touching the constitution, ' management or the business of the cooperative society arises between the society or its committee and any past committee, any officer, agent or employee or any past officer of the society, the dispute shall be refered to arbitration. Reliance is placed on behalf of the appellant on Chander Nagar Cooperative House Building Society Ltd. and Anr. vs Ashok Ohri, A. 1. R. 1976 63 Delhi 299 wherein the learned Single Judge took the view that sub section (2) of section 60 of the Delhi Act is exhaustive and not merely illustra tive. That decision overlooks the decision of this Court in Srirakulu referred hereafter and conflicts with it. Further consideration of the same is, therefore, not necessary. Dr. Chitale placed reliance in Pentakota Srirakulu vs The Cooperative Marketing Society Ltd.; , to contend that this point was concluded against the appellant. In our opinion, the contention of Dr. Chitale has to be accepted. The decision of this Court in Srirakulu was ren dered 'with reference to the Madras Cooperative Societies Act, 1932 (hereinafter referred to as 'the Madras Act ') wherein section 51 relating to settlement of disputes by arbitration was the provision corresponding to section 60 of the Delhi Act Clause (c) of sub section (L) of section 51 of the Madras Act was substantially the same as clause (c) of sub section (1)of section 60 of the Delhi Act. The explana tion in sub section (1) of section 51 of the Madras Act was substantially similar to clause (a)of sub section (2) of section 60 of the Delhi Act. The material part of section 51 of the Madras Act, on the basis of which the decision was endered in Srirakulu quoted therein is as under " section 51 Arbitration: Disputes: 51. (1) If any dispute touching the business of a registered society (other than a dispute regarding disciplinary action taken by the society or its committee against a paid servant of the society) arises (a) . . . . . . . (b) . . . . . . 789 (c) between the society or its com mittee and any past committee, any officer, agent or servant, or any past officer, past agent or past servant, or the nominee, heirs or legal representatives of any deceased officer, deceased agent or deceased servant, of the society, or (d) . . . . . . Explanation A claim by a registered society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member, whether such debt or demand be admitted or not, is a dispute touching the business of the society within the meaning of this sub sec tion. " In the Madras Act, section 49 was the provision correspond ing to section 59 of the Delhi Act. It was, therefore, on the basis of similar corresponding provisions that the question arose for decision of this Court in Srirakulu. In Srirakulu also the facts disclosed in the inquiry that certain loss was caused to the society by the acts of past Managing Committee and, therefore, a special officer ap pointed to look into the affairs of the society made a claim under section 51 of the Madras Act before the Registrar against the past President of the Society: It was held that the Registrar 's order under section 51 of the Madras Act could not be challenged. We do not find any significant difference between the provisions of the Madras Act which form the basis .of this Court 's decision in Srirakulu and sections 59 and 60 of the Delhi Act with which we are con cerned to justify taking a different view as suggested by learned. counsel for the appellant. Following the view taken in Srirakulu, this appeal must fail. Consequently, the appeal is dismissed with costs quantified at Rs.5,000. N.P.V. Appeal dis missed.

On a complaint made by the Managing Committee of the 6th respondent Cooperative Housing Society, the third respond ent, Registrar, Cooperative Societies, referred the dispute relating to irregularities in the purchase of building material for construction of flats for members of society by the past Managing Committee, of which the appellant was the President at the relevant time, to arbitration. The first respondent Arbitrator, gave his ex parte award, on the failure of the appellant and another person to file their reply to the claim of the claimant society, and directed the appellant and the other person to pay the society certain sum with interest thereon. The appellant challenged the award before second re spondent, the Delhi Cooperative Tribunal, which dismissed the same holding that the Arbitrator 's act of proceeding ex parte was justified and that the appeal had no merit. The appellant 's writ petition was also dismissed by the High Court. In the appeal before this Court on behalf of the appel lant it was contended that it was Sec. 59 dealing with surchage which was applicable to the instant case and not Section 60, which pertained to settlement of disputes by arbitration since the dispute in question was one which could not be referred to arbitration in terms of Section 60 of the Act. On behalf of the contesting respondents it was submitted that it was Section 60, which was applicable and not Section 59. Dismissing the appeal, this Court, HELD: 1.1 Sub Section (1) of Section 60 of the Delhi Co operative 783 Societies Act, 1972 indicates the true scope of the Section 60, while sub section (2) is merely illustrative, and not exhaustive. Clause (c) of sub section (1) expressly provides that if any dispute touching the constitution/management or the business of the cooperative society arises between the society or its committee and any past committee. any offi cer, agent or employee or any past officer of the society, the dispute should be referred to the arbitration. [787H, 788A B, D] 1.2 In the instant case, the dispute, viz. irregulari ties in the purchase of building material for construction of flats for the members of the Society by the previous Managing Committee, touches the management of the Society and fails within the ambit of Section 60 of the Act. The third respondent, Registrar, Cooperative, Societies was, therefore, right in referring the dispute to arbitration. [789D F] Pentakota Srirakulu vs The Cooperative Marketing Society Ltd. ; , followed. Change Nagar Cooperative House Building Society Ltd. and Anr. Ashok Ohri, AIR 1976 63 Delhi 239, disapproved.

iminal Appeal No.166 of 1967. 2 Appeal by special leave from the judgment and order dated November 28, 1966 of the Mysore High Court in Criminal Peti tion No. 610 of 1966. V. K. Sanghi and M. section Narasimhan, for the appellant. section section Javali and M. Veerappa, for respondents Nos. 1 and 2. R. Gopalakrishnan, for respondent No. 3. section P. Nayar, for respondent No. 4. The Judgment of the Court was delivered by Hidayatullah, C.J. This is an appeal by special leave against the judgment and order of the High Court of Mysore dated November 28, 1966 in Misc. Criminal Petition No. 610 of 1966. By that order the High Court held that the present appellant Bhimappa had no locus standi to invoke section 417(3) of the Code of Criminal Procedure and to ask for special leave to file an appeal against the acquittal of the respondent. The appellant questions the correctness of the order. Bhimappa (appellant) had a house at Athni, Taluka Belgaum District. It stood in the name of his eldest son and his two other sons lived in one part of the house and the other part was let out to the first respondent Laxman who ran a boarding house and also lived there with his wife and children and his mistress Champevva, the second respondent. No rent was fixed but the sons of Bhimappa used to have their meals with respondents Nos. 1 and 2. Bhimappa asked his tenant to vacate the house as he wanted to reside in it himself and his son Yamnappa (P.W. 14) wanted space for a godown for 400 bags of groundnut purchased by him. The first respondent was asked to vacate a portion of the house but was reluctant. It is not necessary to give the details of what happened further. Suffice it to say that the house was set on fire to cause loss to Bhimappa. All efforts to save the house failed and it was burnt down. Yamanappa then filed a report in the police station. The police arrested respondents Nos. 1 and 2 and submitted a charge sheet against them in the court of Junior Magistrate, Athni. Bhimappa was dissatisfied that the police had not prosecuted Mallappa, respondent No. 3 also and he filed a complaint against him in the same court. The magistrate inquired into the two cases together and finding a prima facie case established committed the first two respondents and the third respondent separately to the Court of Sessions. The three respondents asked that the two cases be consolidated and a combined charge be framed in the case. 3 The two sessions cases were numbered as Sessions Trials Nos. 79 80 of 1965. They were tried together and the Sessions Judge, Belgaum by his judgment, July ' 13, 1966 held the respondents not guilty and acquitted them. The appellant then applied to the High Court of Mysore under section 417(3) of the Code of Criminal Procedure for special leave to appeal against the acquittal of the three respondents. With the petition he filed a memorandum of appeal. The High Court held ' on November 28, 1966 as follows : "The petitioner has no locus standi to prefer an appeal when the State had prosecuted the respondent in the Sessions Court. This petition is dismissed. Sd/ H. Hombe Gowda, Chief Justice, Sd/ M. Santhosh," Bhimappa filed also a revision application, which was dismissed on December 5, 1966 by C. Honniah J. Bhimappa 's request for a certificate was also rejected. He now appeals to this Court. His contention is that he had a right to move the High Court unders. 417(3) of the Code of Criminal Procedure for special leave as the order of 'acquittal was passed in a case instituted upon his complaint. The High Court could not, therefore, hold that he, had no standing to move the High Court under section 417(3) of the Code of Criminal Procedure. Sub section 3 of section 417 as an amendment was introduced by Act XXVI of 1955. Previously the right of appeal against acquittal belonged only to the State Government. By the amendment this right is also conferred on a complainant if the order of ' acquittal is passed in any, case instituted upon complaint. The sub section may be read here "3. If such an order of acquittal is passed in any case instituted upon complaint and the High Court, on an application made to it by the complainant in this behalf, grants special leave to appeal from, the order of acquittal, the complainant may present such an appeal to the High Court. " Under sub section 4 the application has to be made within 60 days from the date of the order of acquittal while under sub section 5 it the application under sub section 3 for the grant of special leave to appeal from the order of acquittal is refused, no appeal from that order of acquittal shall lie at the instance of the State Government. 4 The short question in this case is whether the sessions case .Started on the complaint of Bhimappa entitles him to move the High Court for special leave (a) against all the three respondents ,or (b) at least against respondent No. 3. The answer to this question depends upon whether we can say that there was a case instituted upon a complaint by Bhimappa in which an acquittal was recorded, for these are the words of the sub section and also the condition precedent to the right. The word 'case ' is not defined by the Code but its meaning is well under stood in legal circles. In criminal jurisdiction means ordinarily a proceeding for the prosecution of a person alleged to 'have committed In offence. In other contexts the word may represent other kinds of proceedings but in the context of the sub section it must mean a proceeding which at the end results either in discharge, conviction, or acquittal of an accused person. What is meant by 'instituted ' may next be explained. There are three different ways in which cognizance is taken by Magistrates of offences. This is stated in section 190 of the Code. They are "(a) upon receiving a complaint of the facts which constitute an offence; (b) upon a report in writing of such facts made by any police officer; and (c) upon information received from any person other than a police officer, or upon his own knowledge or suspicion, that such offence has been committed. " The third sub section, therefore, obviously refers to a case in which cognizance is taken upon a complaint of facts constituting an offence. The word 'complaint ' has been defined in section 4(1)(h) ,and means an allegation made orally or in writing to a Magistrate, with a view to his taking action, under the Code, that some person, whether known or unknown, has committed an offence, but it does not include the report of a police officer. The word 'complaint ' has a wide meaning since it includes even an oral allegation. It may, therefore, be assumed that no form is prescribed which the complaint must take. It may only be said that there must be an allegation which prima facie discloses the commission of an offence with the necessary facts for the Magistrate to take action. Section 190(1)(a) makes it necessary that the alleged facts must disclose the commission of an offence. The Code then proceeds to provide different procedures for different cases arising under section 190 and also in relation to the 5 seriousness of the offence. Chapter XVI deals with proceedings instituted upon a complaint, Chapter XVIII with inquiries into cases triable by the Court of Session or the High Court, Chapter XX with the trial of Summons cases by Magistrates, Chapter XXI with the trial of Warrant cases by Magistrates, Chapter XXII with summary trials and Chapter XXIII with trial before High Courts and Courts of Sessions. The offence here was mischief by fire with intent to destroy a house etc. punishable under section 436 I.P.C. This offence is triable7 exclusively by the Court of Session. Section 207 of the Code of Criminal Procedure provides : "Procedure in inquiries preparatory to commitment In every inquiry before a Magistrate where the case is triable exclusively by a Court of Session or High Court, or in the opinion of the Magistrate, ought to be tried by such Court, the, Magistrate shall (a) in any proceeding instituted on a police report, follow the procedure specified in section 207A; and (b) in any other proceeding, follow the procedure specified in the other provisions of this Chapter." Under section 206 the Magistrate is required to commit an accused to the Court of Session for trial. In cases triable by the Magistrate himself he has to follow the procedure for trial of cases according to the other procedures mentioned earlier by us. As this was a case for the application of sections other than section 207 A it fell under section 208. That section provides for cases of complaint and the is complainant has to be heard when the accused appears or brought before the Magistrate who has to take such evidence as may be produced in support of the prosecution or in behalf of the accused, or as may be called by the Magistrate. Then under section 209 the accused may be discharged unless the Magistrate con siders it necessary that the person should be tried before himself or some other Magistrate in which case he shall proceed accordingly. If he considers that there are reasons to commit the accused, he shall frame a charge, explain it to the accused, obtain from the accused a list of his defence witnesses. The Magistrate may in his discretion examine any of these witnesses and then commit the accused to stand his trial before the Court of Session or if satisfied that there are no grounds for committing the accused. , he may cancel the charge and discharge the accused. It will be noticed that in a case involving an offence triable exclusively by the Court of Session the procedure under sections 206 220 6 has to be followed if the complaint is filed initially. There are other sections in the Chapter and other Supplementary provisions Which are not relevant to the discussion and, therefore, reference .to them is omitted here. The position regarding other cases triable by the Magistrate himself or by another magistrate are laid down in Chapter XVI. There the magistrate shall examine the complainant and the witnesses present, if any. The Magistrate may even send the case to the police for investigation under section 156(3) if he is empowered to act under section 190. This procedure of course does not arise in cases in which the trial is of an offence triable by the Court of Session. As we are not concerned with the problems arising under Chapter XVI we refrain from expressing an opinion on the various aspects of the problem arising under that Chapter. For that reason we do not refer to cases which were mainly concerned with trials before Magistrate. In the present case the police had put up a chargesheet against two respondents only. Bhimappa filed a complaint in which he charged these two respondents and respondent No. 3 with the same offence of mischief by fire but with the aid of section 34 I.P.C. As he had charged the three respondents with having entered into :a Criminal Conspiracy a charge under section 120 B I.P.C. was also framed while committing the accused to the Court of Session. Mallappa was also charged under section 436 read with section 109 I.P.C. for abetment of the offence by the other accused. The two cases in the Magistrate 's Court were registered under their own numbers but were tried together and were committed separately. In the Court of Session they were also registered separately and bore numbers Sessions Cases Nos. 79 and 80 of 1965. Both the cases ,ended in acquittal. Bhimappa applied for special leave in both cases to file an 'appeal under section 417(3). His right to ask for special leave was not accepted in the High Court. Now there can be no manner of doubt that one of the cases was instituted on the report of a police officer and the other on the complaint of the complainant. There can be no question of merger because the identity of the two cases is maintained right up to the end of the Sessions trial. The case of Bhimappa proceeded on its own number and although evidence was led in both the cases together, the acquittal was recorded in each of the two cases. The police did not present a charge sheet against Mallappa and the trial of Mallappa can be said to be in the other case and not in the case filed by the police. In this view of the matter it is quite plain that Bhimappa was entitled to move the High 7 Court for special leave in his own case. The order saying that he had no standing cannot, therefore, be sustained. Bhimappa had also applied for revision and his application was rejected. He applied for special leave against that order but leave was refused by this Court. It was argued that that must conclude the matter. We do not agree. Bhimappa 's statutory right to move the High Court could not be lost by reason of the revision. The result of the revision, therefore, had no bearing upon the matter. Bhimappa was thus entitled to have a hearing of his petition for special leave under section 417 (3) of the Code. Whether he could ask for leave against Malappa alone.or against the other two because the charge under section 120 B I.P.C. was framed against all the three respondents on his complaint is a point which we do not decide because it will be for the High Court to consider the matter when his petition is considered and only if it is allowed. We accordingly set, aside the order of the High Court and remit the case for consideration of the petition under section 417(3) filed by Bhimappa. R.K.P.S. Appeal allowed.

The appellant 's house was set on fire and burnt down. As a result of a report filed by his son the police arrested Respondents 1 and 2 and submitted a charge sheet against them. The appellant was dissatisfied that the police had not prosecuted Respondent No. 3 also and he filed a complaint against him, in the same Court. The Magistrate inquired into the two cases together and committed separately the first two respondents and the third respondent separately to the Court of Sessions. After the Sessions Judge had held all the three respondents not guilty and acquitted them, the appellant applied under section 417(3) Cr. P.C., for special leave to appeal against the acquittal of the three respondents; but this petition was dismissed by the High Court on the ground that the petitioner had no locus standi to prefer an appeal when the State had pro secuted the respondents in the Sessions Court. A revision application filed by the appellant was also rejected. On appeal to this Court, HELD : The appellant was entitled to have a hearing of his petition for special leave under section 417(3) and the case must therefore be remitted to the High Court for this purpose. The answer to the question whether the appellant had a right to move the High Court for special leave under section 417(3) depended upon whether there was a case instituted by him upon a complaint in which an acquittal was recorded, for this is the requirement of the special section and also the condition precedent to the right. [4 B]. On the facts, there could be no doubt that one of the cases was instituted on the report of a police officer and the other on the complaint of the complainant. There could be no question of merger because the identity of the two cases was maintained right upto the end of the Sessions Trial. The case of the appellant proceeded on its own number and although evidence was led in both cases together, the acquittal was recorded separately in each of the two cases. The appellant was therefore entitled to move the High Court for special leave in his own case. [6 G] The fact that the appellant had also applied for revision which was rejected and had applied for special leave against that order which was refused by this Court, did not mean that that must conclude the matter. The appellant 's statutory right to move the High Court could not be lost by reason of the revision and the result of the revision, had no bearing upon the matter.

Criminal Appeals Nos. 15659 of 1973. (Appeals by special leave from the Judgment and Order dated 3 3 1971 of the Bombay High Court in Criminal Appeals Nos.1475/ 69 and 370 372 of 70). M.N. Phadke, and M.N. Shroff, for the appellant in all appeals. Y.S. Chitale, M. Mudgal and Rameshwar Nath, for respond ent in Crl. A. No. 158/73. Rameshwar Nath, for respondent in Crl. A. No. 159/73). The Judgment of the. Court was delivered by CHANDRACHUD, J. These four appeals arise out of four prosecutions which were disposed of by a common judgment by the learned Presidence Magistrate, 25th Court, Mazgaon, Bombay. The facts leading to the prosecution are not in all respects identical in the four 80 cases but it is obvious from the judgments under considera tion that the cases were heard and disposed of on the basis that the variation in the facts would not make difference to the result. The four respondents in these appeals are shopkeepers in Bombay some run grocery shops while some deal only in oils of different varieties. The charge against the respondents .is that they failed to display prices of 'vanaspati ' which they were selling in their shops in tinned and loose form. Section 3 of the , 10 of 1955, empoWers the Central Government, by order, to provide for regulating or prohibiting the production, supply and distri bution or trade and commerce in any essential commodity for the purposes mentioned in sub section (1) thereof. Sub section (2) of s.3 specifies various matters in regard to which the Central Government may pass orders contemplated by sub s.(1). The power conferred by s.3 was delegated by the Central Government to the State Governments in pursuance of the provision contained in section 5. Section 7 provides for punishment for contravention of an order made under section 3. In exercise of the powers conferred by section 3 read with section 5 of the the Government of Maharashtra issued the Maharashtra Scheduled Articles (Display and Marking of Prices) Order, 1966". Clause 3(a) of that order provides that every dealer shall, in respect of the articles specified in Schedule I display a list of prices in the form prescribed in that schedule. We are concerned with items 15 and 16 of the Schedule which read: "15. Vanaspati, Tinned" and "16. Vanaspati, Loose. " Stated broadly, the defence of the respondents to the charge is that they were selling hydrogenated oils or vege table ghee or vegetable oils and not vanaspati '. The learned Magistrate acquitted the respondents in all the four cases holding that even if the word 'vanaspati ' may have acquired a local meaning, it could not be said that the order used the word 'vanaspati ' to include hydrogenated oils. Since the respondents, according to the learned Magis trate, could not be expected to know that they were bound to disclose the prices of hydrogenated oils also and since hydrogenated oils were not included in Schedule I the charge was unsustainable. The appeals filed by the State of Maharashtra against the orders of acquittal were heard and disposed of by a common judgment dated March 3, 1971 by a learned Single Judge of the High Court. Observing that there was considera ble force in the contention of the State Government that 'vanaspati ' would include hydrogenated oils also, the learned Judge felt that it was unnecessary to go into that question since the prosecution was not maintainable for another reason. That reason, according to the learned Judge, was that legislative draftsmen always made a distinc tion between 'contravention ' of law and 'failure to comply or non compliance ' with it. If the Court is called upon to decide, says the learned Judge, whether a particular contra vention is 81 an offence, it was bound to enquire whether mere non com pliance was also intended to be punished. Guided by that principle, the learned Judge came to the conclusion that the duty to display prices was "a subsidiary matter to the prohibition which is contained in clause 4 which prohibits a dealer from selling an article at a price higher than the price displayed or from refusing to sell or from withholding from sale such articles at the price displayed or marked. " The substance of the order was thus thought to be contained in. clause. 4 and accordingly, the judgment proceeds; "Mere non compliance of clause 3 cannot be an offence punishable as contravention unless there is a contravention of clause 4." Since the intention was said to be to punish contraven tion of clause 4 and not of clause 3 simpIiciter, the learned Judge held that the prosecution was not maintainable and the accused were entitled to an acquittal. These appeals by special leave are directed against the correct ness of the High Court 's judgment. It is necessary in the larger public interest to dispel the misunderstanding regarding the true meaning and intend ment of clauses 3 and 4 of the 1966 Order. We will there fore deal first with the reasoning of the High Court that a mere contravention of clause 3 without the contravention of clause 4 is not contravention within the meaning of section 7 of the and cannot therefore be punished. As stated earlier, clause 3(a) of the Order of 1966 imposes an obligation on every dealer to display a list of prices of the article specified in Schedule I. Clause 4 of the Order provides that no dealer shah (a) sell or agree or offer for sale any article at a price higher than the price displayed or (b) refuse to sell or withhold from sale such articles to any person at the price displayed or marked. We find ourselves totally unable to appreciate that there can be no contravention of clause 3(a) unless there is a contravention of clause 4 also. The two clauses deal with different matters because whereas clause 3 imposes an obli gation on a dealer to display the prices of articles speci fied in Schedule I, clause 4 prohibits him from selling an article at a price higher than the one displayed or from refusing to sell it at the price displayed. A contravention of clause 3(a) is full and complete by mere reason of the fact that the dealer has failed to display the prices of articles specified in Schedule I. That contravention does not depend on the consideration whether he has charged a higher price than the price marked or whether he has refused to sell an article at the price displayed. In other words, the first step which a dealer has to take is to display the prices of articles specified in Schedule I; if he fails to do that, he is guilty of contravention of clause 3(a) which is punishable under section 7(1) of the . The additional obligation which the dealer has to discharge is to be ready and willing to sell the articles at ,the prices disp1ayed; failure to do so is a different and distinct contravention which also attracts the applica tion of section 7(1). We find it impossible to subscribe to the view that clauses 3 and 4 of the Order of 1966 are so interlinked that the legislature did not intend to punish the contravention of the former unless such contravention was accompanied by a contravention of the latter provision. The wedding of 82 the two clauses in this _fashion is entirely unwarranted. The ground. on which the High Court has acquitted the re spondents iS therefore untenable and we reject the reasoning in that behalf as unsustainable. Were we satisfied that the respondents were selling `vanaspati ', tinned or loose, we would have had no hesitation in setting aside the order of acquittal and in convicting the respondents, since the non display of prices is admitted. That raises the question whether there is evidence to hold that the respondents were dealing in 'vanaspati '. The evidence on this question is woefully inadequate and we regret to notice that no serious attempt was made by the prosecution to establish the charge. The articles of which the prices were not displayed were not properly inventoried, which makes it difficult to predicate that the articles bore any particular description. Panchanamas were made of the articles but except in one case, where the panchanama was exhibited by consent, the panchas were not examined with the result that the panchanama 's remained unproved and therefore unexhibited. In none of the cases was even a sample taken of the articles displayed for sale. If that were done, the nature, quality and components of the goods could easily have been proved by analysing the sample chemically. One could then have ' said with easy facility that what was being sold was 'vanaspati '. Instead of doing what .was easy and necessary to do, the prosecution offered, as a substitute for its plain duty, the vague recollections of a Rationing Inspector and a Sub Inspector of Police as .to what was being sold by the respondents in their shops. For illustrating how cavalierly the prosecution ap proached its task, we will take the facts of appeal No. 156 of 1973 in which the respondent is one Hansraj Depar. The charge framed by the learned Magistrate alleges that the respondent had failed to display the price list of 'vanas pati ghee '. The charge should have been not in respect of any type of ghee but in respect of 'vanaspati ' which is the item mentioned in Schedule I. The Rationing Inspector, K.N. Joshi (P.W. 1), stated in his evidence that the respondent had not exhibited the price of 'vanaspati ghee ' which again is beside the point. Nothing at all, not even a sample of the articles alleged as vanaspati, was taken charge of from the shop and the witness admitted that he did not remember what variety of articles were sold in the shop and as to how many tins of what is said to be vanaspati ghee were found therein. The other witness, Sub Inspector Kurdur (P.W. 2) does say that the respondent was selling vanaspati as also oil and that there were in his shop "3 K.O. tins of Ravi Vanaspati, 2 K.O. tins of prabhat Vanaspati and one loose tin of Malali Vanaspati". In view of the challenge that what was being sold was not vanaspati and that the tins did not contain vanaspati within the meaning of items 15 and 16 of Schedule I, the prosecution should have led evidence to show that the tins in fact contained vanaspati in the sense in which that expression is used in the Scheduled. The ipsc dixit of the Sub Inspector who had merely assisted the Rationing Inspector in effecting. the raid cannot establish the charge which involves a punishment of as long 83 a term as seven years and normally of not less than three months, as provided in section 7(1)(a)(ii) of the . The prosecution did not make any attempt to establish as to what is the true ,meaning and connotation of the expres sion 'vanaspati ' and what kind 'of articles or goods are comprehended within the scope of that expression. The witnesses did not even say in their evidence, perfunctory as it is, that the ' word had acquired a popular meaning and was understood locally in a certain sense. Neither the Act of 1955 nor the Order of 1966 defines the expression 'vanas pati ' and it was beside the point to say that 'vanaspati ' is defined in the Bombay Sales Tax Act and the Prevention of Food Adulteration Rules, 1965 to include hydrogenated oil. The purpose of the Sales Tax Act is to bring within the tax not as large a number of articles as possible, that. of the Prevention of Food Adulteration Act and the Rules thereunder is to ensure that the health of the community is not endan gered by adulterated or spurious articles of food while that of the Essential Commodities 'Act with which we are concerned in the instant case is to ensure the. availability of essential goods to the community at a proper price. This last Act was passed in order "to provide, in the inter ests of the general public, for the control of the: produc tion, supply and distribution of, and trade and commerce in, certain commodities". Sub Inspector Kurdur is no expert for the purposes, of this Act and we cannot, without more, accept the dogmatic assertion made by him in one of these cases that vanaspati and hydrogenated oil "mean the same thing. " Hydrogenation is a specialised process and is described in Encyclopaedia Britannica (1951 ed., Vol 11, p. 978) as "the treatment of a substance with hydrogen so that this combines directly with the substance treated. The term has, however, developed a more technical and restricted sense. It is. now generally used to mean the treatment of an "unsaturated" organic compound with hydrogen, so as to convert it by direct addition to a "saturated" compound. " The witness, excusably, seems unaware of this scientific sidelight and greater the ignorance, greater the dogma. If the witness were right, it is difficult to understand why "groundnut oil, Safflower oil, Sesamen oil and Mustard seed oil" and "coconut oil" find a separate and distinct place in Schedule 1 at items 5 and 6. , Perhaps what the witness guessed, science may show to be true but that has ' to be shown, not guessed. In State of Bihar vs Bhagirath Sharma(1) a question arose whether motor car tyres were included within the meaning of the expression component parts and accessories of automobiles ' used in a similar order issued in 1967 by the Bihar Government under the . It was held by this Court that it was not enough that from a broad point of view the tyres and tubes of motor cars may be considered to be covered.by the particular expression. After considering and comparing the various items in the particular schedule it was held ' by this Court that motor car tyres were not comprehended within the expression. It is apposite for our purpose to call at (1) [|973] 3 S.C.R. 937. 84 tention to what the Court said in that case, namely, that according to the fundamental principle of criminal jurispru dence which reflects fair play, a dealer must know with reasonable certainty and must have a fair warning as .to what his obligation is, and what act of commission or omis sion on. his part would constitute a criminal offence. Bearing in mind this principle the State Government ought to have expressed its intention c]early and unambiguously by including hydrogenated oils within items 15 and 16 which refer to `vanaspati '. If that were done, a type of predica ment which arises in this case could easily have been avoid ed, and with profit to the community. We hope this lacuna in the schedule will be rectified expeditiously. It is to be regretted but we are left with no option save to confirm the acquittal, though for entirely different reasons. Therefore, while setting aside the reasoning of the High Court that there can be no contravention of clause 3 unless there is also a contravention of clause 4 of the order of 1966, we dismiss. the appeals and confirm the orders of acquittal on the ground of total lack of evidence showing that the respondents are dealers in 'vanaspati ' and that they had kept 'vanaspati ' for sale in their shops. S.R. Appeals dis missed.

Clause 3(a) of the Maharashtra Scheduled Articles (Display and Marking of Prices) Order, 1966 issued by the Maharashtra Government in exercise of the powers conferred by section 3 read with section 5 of the Essential Commodities Act (Act 10 of 1955) provides that , 'every dealer shall in respect of . the articles specified in Schedule I display a list of prices in the form prescribed in the Schedule", Schedule 1 lists under items 15 and 16 "Vanaspati tinned" and "Vanaspati loose" respectively. Clause (4) of the Order provides that no dealer shall (a) sell or agree or offer for sale any article at a price higher than the price dis played or (b) refuse to sell or withhold from sale of such articles to any person at the price displayed or marked. Section 7 of the Essential Com modities Act provides for punishment for contravention of the order made under section 3. The four respondents, shopkeepers in Bombay some run grocery shops, while some deal only in oils of different varieties were charged for the offence of failure to dis play prices of vanaspati which they were selling in their shops in tinned 'and loose form. The defence of the respond ents to the charge is that they were selling hydrogenated oils or vegetable ghee or vegetable oils and not "vanas pati". The learned Magistrate acquitted the respondents and held that the charge was unsustainable because (1) Even if the word 'vanaspati ' may have acquired a local meaning, it could not be said that the order used the word 'vanaspati ' to include hydrogenated oils. (2) Since hydrogenated oils were not included in Schedule I, the respondents could not be expected to know that they were bound to disclose the prices of hydrogenated oil. Dismissing the States ' appeal, the High Court held, on a different reasoning that the prosecution was not maintainable since non complaiance of clause (3) of the Order 1966; cannot be an offence punisha ble as contravention unless there is a contravention of clause 4, inasmuch as the intention of the Legislature which always made a distinction between contravention of law and failure to comply or non compliance with it, was to punish contravention of clause 4 and not of clause 3 simpliciter. Dismissing the State 's appeal, the Court, HELD: (1) Clauses 3 and 4 of the Maharashtra Scheduled (Display and Marking of Prices) Order, 1966 deal with different matters because whereas clause 3 imposes an obligation on a dealer to display the prices of articles specified in Schedule I clause 4 prohibits him from selling an article at a price higher than the one displayed or from refusing to sell it at the price displayed. A contravention of clause 3(a) is full and complete by mere reason of the fact that the dealer has failed to display the prices of articles specified in Schedule I. That contravention does not depend on the consideration where he has charged a higher price than the price marked or whether he has refused to sell an article at the price displayed. In other words, the first step which a dealer has to take is to display the prices of articles specified in Schedule I; if he fails to do that, he is guilty of contravention of clause 3(a) which is punishable under section 7(1) of the . The additional obligation which the dealer has to discharge is to be ready and willing to sell articles at the prices displayed. Failure to do so is a different and distinct contravention which also attracts the application of section 7(1). The view that clauses 3 and 4 of the Order 1966 are so interlinked that the Legislature did not intend. to punish the contra 79 vention of the former unless such contravention was accompa nied by a contravention of the latter provision is not correct. The wedding of the two clauses in this fasion is entirely unwarranted. [81 E H 82 A] (2) The orders of acquittal, in the instant case, must be confirmed on the ground of total lack of evidence showing that the respondents are dealers in vanaspati and that they had kept vanaspati for sate in their shops. In view of the challenge that what was being sold was not vanaspati and that the tins did not contain vanaspati within the meaning of items 15 and 16 of Schedule I, the prosecution should have led evidence to show that the tins in fact contained vanaspati in the sense in which that expression is used in the Schedule. The mere ipse dixit of the Sub Inspector Who had merely assisted the Rationing Inspector in effecting the raid, without any inventory of the articles of which prices were not displayed, without examining the Panchas and with out any sample of the "Vanaspati" alleged to have been sold being taken, cannot establish the charge which involves a punishment of as long a term as seven years and normally of not less than three months, as provided in section 7(1)(a) (iii) of the . [82 F H, 84 C] (3) Neither the nor the Maharashtra Scheduled Articles (Display and Marking of Prices) Order 1966 defines the expression "Vanaspati" and it was beside the point to say that "Vanaspati"is defined in the Bombay Sales Tax Act and the Prevention of Food Adulter ation Rules. 1965 to include hyarogenated oil since the purposes of these three Acts are quite different. The prosecution has failed to establish as to what is the true meaning and connotation of the expression "Vanaspati" and what kinds of articles are comprehended within the scope of that expression. [83 B H] (4) According to the fundamental principle of criminal jurisprudence which reflects fair play, a dealer 'must know with reasonable certainty and must have a fair warning as to what his obligation is, and what act of com mission or omission on his part would constitute a criminal offence. The State Government ought to have expressed its intention clearly and unambiguously by including hydroge nated oil within items 15 and 16 which refer to "Vanaspati". If that were done, a type of predicament which arises in this case could easily have been avoided with profit to the community. [84 A B] State of Bihar vs Bhagirath Sharma, ; referred to: [The Court expressed its hope that the lacuna in the Sched ule I items 15 and 16 of the Maharashtra Scheduled Articles (Display and Marking of Prices) Order, 1966 would be recti fied expeditiously.]

Civil Appeal No. 1695 of 1968. Appeal by Special Leave from the Judgment and Order dated 4/5 9 67 of the Mysore High Court in W.P. No. 1416/65. V.P. Raman, Addl. , S.K. Mehta and Girish Chandra for the Appellant. H.R. Datar and N. Nettar, for the Respondent. The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave is directed against the judgment of the High Court of Mysore dated September 4/5, 1967. The High Court was moved by the State of Mysore under article 226 of the Constitution for quashing the demand notice dated July 21, 843 1962 issued by the Inspector of Central Excise for the payment of Rs. 2,465.91 as excise duty on the products despatched by the State 's Implements Factory. The demand was made with reference to the newly inserted item 26AA in the First Schedule to the , hereinafter referred to as the Act. That item was added to the Schedule by the Finance Act of 1962, and it was claimed by the Central Excise Department that, on the date of the amendment, the State Government was in possession of some stock of iron and steel products, namely, flats, squares and rods in its factory, which had been obtained from their manufacturers when they were not excisable arti cles. The precise claim of the Excise authorities was that the duty became payable on those articles by virtue of the newly inserted item 26AA because the aforesaid stock of iron and steel products was used for the manufacture of agricul tural implements like 'mamties, pickaxes, 'sledge hammers, shovels and ploughs. The Assistant Collector of Central .Excise explained in his letter dated June 19, 1962, that the agricultural implements which were manufactured in the State 's Implements Factory fell within the purview of item 26AA as they were forged or extruded during the process of manufacturing the agricultural implements. It was con tended that the demand was justified because the aforesaid iron and 'steel products, out of which the agricultural implements were manufactured, had not borne any excise duty at all. An appeal was preferred to the Collector of Central Excise against the demand, but without success. A revision was taken to the Central Government under the provisions of the Act, but it was also dismissed. That was why the State Government applied to the High Court for quashing the demand and for setting aside the appellate order of the Collector and the revisional order of the Central Government. The Central Government traversed the claim of the State Government on the ground that as the rods and bars, which were held in stock by the State 's Implements Factory, were "pre excise stock", and as they were put to further process by forging them into shovels, spades and other agricultural implements, they became liable to duty . until the "pre excise stock" held by the factory on April 24, 1962, was utilised and converted into forged implements and was cleared from the factory. It was also urged that the peti tion was not maintainable in the High Court as it raised a dispute between the Government of India and the State Gov ernment within the meaning of article 131 of the Constitu tion. The High Court rejected both the contentions of the Central Government and quashed the impugned demand notice and the appellate and the revisional orders. That is why the Union of India has preferred the present appeal. It is not in controversy that the claim for the levy of excise duty was based on sub sections (1) and (1A) of sec tion 3 of the Act which read as follows, "3(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced 4 1338SCI/76 844 or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule. (1A) The provisions of sub section (i) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government, as they apply in respect of good 's which are not produced or manufactured by Government. " It is therefore quite clear, and is not in dispute before us, that the claim for the levy of excise duty in question could be justified only if it could be shown that excisa ble goods (other than salt) were produced or manufactured in the Implements Factory of the State Government. It was however admitted in the counter affidavit of the Senior Superintendent of Central Excise as follows, "In the case of the petitioner, since the rods and bars held in stock by the Imple ments. Factory were pre excise stock and since those rods and bars were put to further proc ess by forging the same into shovels, spades and other agriCultural implements etc. , they became liable to duty and therefore, duty was demanded on such forged articles during the period that is till such quantities of the bars and rods as were in stock with the facto ry on 24 4 62 were utilised and converted into forged implements and cleared from the facto ry. " This makes it quite clear that the rods and bars in question were not "produced or manufactured" in the State Govern ment 's implements Factory. They could not therefore be subjected to the levy of excise duty. It is true that the rods and bars were utilised for the manufacture of agricul tural implements like shovels and spades; but those agricul tural implements were not of the description specified in item 26AA of the First Schedule with reference to section 3 of the Act. It is admitted by Mr. Raman that agricultural implements were not included in the First Schedule to the Act and were not excisable articles. This appears to be so because they are the basic tools of trade by which a vast majority of the citizens of the country earn their livelihood. There could therefore be no question of levying any excise duty on shovels and spades or other agricultural instruments 'manu factured by the Implements Factory of the State Government and, as has been shown, the rods and bars which formed the pre excise stock of the factory had not been manufactured by the Implements Factory. Section 3 of the Act could not therefore be invoked to levy excise duty merely on the ground that the "pre excise stock" of rods and bars was utilised for the purpose of manufacturing agricultural instruments. There is therefore nothing wrong with the view which has prevailed with the High Court in this respect. 845 Mr. Raman tried to argue that the High Court erred in not applying article 131 of the Constitution to the contro versy even though the writ petition was barred thereunder as it fell exclusively within the jurisdiction of this Court under article 131 of the Constitution as a dispute between the Government of India and the State of Mysore. The argu ment is however futile because there is nothing on the record to show that there was any such dispute between the Central and the State Governments. As the High Court has pointed out, the Union of India was made a party to the writ petition merely because it had dismissed the revision appli cation of the State Government. There is thus no merit in this appeal anti it is dismissed with costs. M.R. Appeal dis missed.

The respondent State of Mysore runs an implements Factory. The first schedule to the , was amended whereby item No. 26AA was inserted by Finance Act, 1962. On the date when the said amendment came into force the respondent had in his stock, certain iron rods and bars. After ,the amendment, however, the rods and bars were put through a further manufacturing process and were converted into shovels, spades and other agricultural implements which were not covered by schedule 1. The Central Excise Inspector issued a demand notice in respect of the said rods and the bars on the ground that they were excisable. The respondent contended that no excise duty was payable on the said articles because when the amendment came into force, they were already in the stock of the respondent and that they were not manufactured after the amendment came into force. The contention of the respondent was negatived by the authorities under the Act. The Writ Petition filed by the respondent under Article 226, was allowed. Dismissing the appeal by Special Leave, HELD: 1. Under Section 3 of the Act the excise duty is payable on articles produced or manufactured. It was admit ted in the counter affidavit of the appellant that the rods and bars were not produced or manufactured in the implements factory of the respondent. The goods which were made out of the rods and bars were admittedly not excisable goods. The appeal was dismissed as the goods were not liable to excise duty. [844 E H] 2. The contention that the High Court could not have decided the matter in view of the provisions of Article 131 of the Constitution was negatived on the ground that there was nothing on regard to show that there was any dispute between the Central and the State Governments. The Union of India was made a party merely because it had dismissed the revision application of the State Government. [845 A B]

minal Appeal No. 267 of 1968. Appeal from the judgment and order dated September 26, 1968 of the Bombay High Court in Criminal Appeal No. 244 of 1967. 36 A.S.R. Chari, R. Nagaratnam, Janendra Lal and B. R. Agarwal, for the appellant. H. R. Khanna and B. D. Sharma, for the respondent. The Judgment of the Court was delivered by Vaidialingam, J. This appeal by the first accused, on certi ficate, is directed against the judgment of the Bombay High Court dated September 26, 1968, in Criminal Appeal No. 244 of 1967 confirming his conviction and sentence passed against him by the Presidency Magistrate, Mazgaon, Bombay for offences under section 120B I.P.C. read with section 135 of the Customs Act, 1962 (Act 52 of 1962) (hereinafter to be referred as the Act) and also under section 135 of the in respect of the articles claimed to have been recovered from his possession. The short point that arises for consideration in this appeal is whether section 24 of the Evidence Act is a bar to the admissibility in evidence of the statement exhibit T given by the appellant to the Customs Officers on a summons issued to him under section 108 of the Act. The appellant along with six others was charged under the sections mentioned above and after being found guilty was sentenced to undergo one year 's rigorous imprisonment and to pay a fine of Rs. 2,000/ for the charges under section 120B I.P.C. read with section 135 of the Act. He was also sentenced to undergo one year 's rigorous imprisonment and to pay a fine of Rs. 2,000/ for the charge under section 135 of the Act. The sentences were directed to run concurrently. In default of payment of fine, he was also sentenced to undergo further rigorous imprisonment for the period mentioned in the judgment of the Presidency Magistrate. The case against the appellant was that he and several other persons entered into a conspiracy during the period from June, 1963 to the end of December, 1963 to smuggle wrist watches and other luxury goods such as Nylon Textiles, toilet requisites, plying cards, cigarette lighters, saffron etc. from Dubai to India through Mechanized sailing vessel and land the said imported and smuggled goods surreptitiously at any coast near Bombay and then to bring the smuggled goods to Bombay by Motor vehicles. It was further alleged that in pursuance to the said conspiracy such articles were actually smuggled in the month of December, 1963. The various parts played by the appellant along with the other accused had been given in the evidence of the prosecution witnesses. P. W. 19, Inspector in the Rummaging Division Town Intelligence in the Bombay Customs, on receipt of information in or about December 21, 1963 about the smuggling of the goods conducted searches in various places and seized several smuggled articles. 37 During the pendency of the trial, the third and the fifth accused died and the second accused who was present for some time later absconded necessitating separation of his trial. Some other accused could not be traced at all. Therefore, the trial proceeded against the appellant and accused Nos. 4, 6, and 7. It is not necessary to refer to the pleas of accused Nos. 4, 6 and 7 as they have been acquitted of all the charges by the Presidency Magistrate. The appellant had filed a lengthy written statement on October 24, 1966 denying the. charges levelled against him. He had stated that he was not in any manner concerned with any conspiracy. He also denied, that any articles had been recovered by the Customs Officers from the houses mentioned by them and stated that in any event he had nothing to do with any of those articles. He pleaded that his brother Cama was inimical towards him and that the latter in connivance with the Customs authorities had foisted this criminal case against him making false allegations. The appellant alleged that he had left Bombay for Ajmer to pay his respects to the Darga on December 21, 1963 and returned to Bombay on January 2, 1964, when he was apprehended by the Customs authorities and kept in detention, in the first instance, till January 7, 1964. During this period of detention he was conti nuously harassed and interrogated by P. Ws. 5 and 19 and forced to put his signature on January 7, 1964 to a statement already got written and prepared by P. W. 5. He was threatened that if he did not put his signature on the said statement, his mother and another brother will be prosecuted. He further alleged that it was represented to him that the statement to which he was being asked to put his signature was intended only to be used against the second accused and no part of it was meant to be used against him. It may be stated at this stage that the statement recorded from the appellant by P. Ws. 5 and 19, on January 7, 1964 is exhibit T. The statement referes to various matters concerning his relationship with the other accused as well as his connection with several articles which had been seized and which were the subject of the charges. We do not think it necessary to refer to exhibit T in any great detail nor to the various seizures of articles made by the Customs authorities. It is enough to state that the conviction of the appellant has been substantially, based on the confessional statement exhibit T after finding independent corroboration furnished by other evidence on record in respect of the statements contained in exhibit T. Objections were taken to the admissibility in evidence of exhibit T. on the ground that it is hit by article 20(3) and sections 24 and 25 of the Evidence Act. All these objections were overruled both by the Presidency Magistrate as well as the High Court. The findings of the Presidency Magistrate and accepted by the High Court are 38 that exhibit T is a voluntary statement and it was a true disclosure made by the appellant. The allegation of the appellant that he was forced to Put his signature to exhibit T which had already been prepared by P. Ws. 5 and 19 and that he was induced to put his signature on the representation that it will be used only against. the second accused and not against the appellant, was rejected. The further findings are that exhibit T was a voluntary statement made by the appellant and that his plea that he was kept under illegal, detention from January 2, 1964 to January 7, 1964 was false. It has also been found that exhibit T is not hit either by article 20(3) or by sections 24 and 25 of the Evidence Act. The only contention that has been raised before us by Mr. A.S. R. Chari, learned counsel for the appellant, is, that in view of section 24 of the Evidence Act, exhibit T, the statement of the appellant recorded by the Customs authorities under the Act, is not admissible in evidence at the trial for the offences in respect of which the appellant was charged and tried. His further contention is that as the conviction has been based substantially on the state ments contained in exhibit T, the conviction is illegal. The other contentions based on article 20(3) and section 25 of the Evidence Act which were taken in the High Court have not been taken before us. In fact those contentions are no longer available to the appellant in view of the decisions of this Court. According to Mr. Chari when the statement exhibit T was recorded by the Customs officials, the appellant was in the position of an accused. It is in evidence that P. W. 5, who recorded the statement warned the appellant that he was bound to state the truth as the officer was conducting a judicial proceeding to which the provisions of sections 193 and 228 1. P. C. apply. This, according to the learned counsel, amounts to a threat and as the statement exhibit T has been procured on the basis of such a threat, it is inadmissible in evidence. On the other hand, Mr. H. R. Khanna, learned counsel for the State has referred us to the findings recorded by the Presidency Magistrate and accepted by the High Court regarding voluntary nature of exhibit T. The counsel also pointed out that the fact that P. W. 5, who recorded the statement exhibit T from the appellant, informed him that he was bound to speak the truth as it was a# judicial proceeding to which section 1931. P. C. applies, does not amount to any threat in law so as to attract section 24 of the Evidence Act. We will now reter to the circumstances under which exhibit T was recorded as found by both the Courts. Consequent on in formation received by the Customs authorities, several raids were conducted from December 21, 1963. The appellant went to the Customs House at about 8 A.M. on January 7, 1964. By about 39 8.30 A.M. summons under section 108 of the Act was served on him. From 11.30 A.M. onwards to about 8.30 P.M. the process of recording of the statement exhibit T. from the appellant continued excepting for a short break of about 21 hours for lunch, tea and other requirements. The appellant was arrested immediately after his statement exhibit T was completed. The seizures of the entire contraband goods were completed by about December 25, 1963. Though the attention of the appellant was drawn to sub section 4 of section 108 of the Act, he was not informed or warned that his statement was likely to be used in the event of any prosecution against him for the said offence. Undoubtedly exhibit T contained various incriminating facts regarding the complicity of the appellant with the offences alleged against him. The Inspector of Customs, P. W. 5, who recorded the statement exhibit T and P. W. 19, have both admitted that they questioned the appellant till the statement exhibit T was finally completed at 8.30 P.M. on January 7, 1964. Both of them have also asserted that they had not given any threat or ,offered any inducement to the appellant before the statement exhibit T was made. P. W. 5 has deposed that he drew the attention of the appellant to the last paragraph of the summons issued under section 108 of the Act. In fact in exhibit T the appellant states that he had received summons No. 3 of 1964 dated January 7, 1964 issued to him under section 108 of the Act. He has further stated that he had read the summons and that he had further understood that giving false evidence is an offence punishable under section 193 of the Indian Penal Code. P. W. 5 has further deposed that he had explained to the appellant the provisions of section 1931. P. C. and that the statement was being recorded as if he was in court and that the appellant was bound to speak the truth and that if he made a false statement he would be prosecuted. Based upon these answers of P. W. 5, Mr. Chari, urged that it is clear that P. W. 5 has administered a threat to the appellant and it was in consequence of such a threat that the appellant gave the statement exhibit T and thereby has placed himself in a grave jeopardy of action being taken against him under the Act. Before we refer to section 24 of the Evidence Act, it is desirable to advert to the relevant provisions of the . Sections 107 and 108 are as follows : "section 107 Power to examine persons Any officer of customs empowered in this behalf by general or special order of the Collector of Customs may, during the course of any enquiry in connection with the smuggling of any goods, (a) require any person to produce or deliver any document or thing relevant to the enquiry; 40 "(b) examine any person acquainted with the facts and circumstances of the case. section 108. Power to summon persons to give evidence and produce documents (1) Any gazetted officer of customs shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making in connection with the smuggling of any goods. (2) A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person summoned. (3) All persons so summoned shall be bound to attend either in person or by an authorized agent, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and pro duce such documents and other things as may be required Provided that the exemption under section 132 of the Code of Civil Procedure, 1908, shall be applicable to any requisition for attendance under this section. (4) Every such enquiry a,, aforesaid shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code. " Section 122 of the Act deals with confiscation of goods and levy of penalty. Section 124 deals with the procedure to be adopted before ordering the confiscation of any goods or imposing any penalty on any person. Section 135 deals with prosecution before a criminal court in the circumstances mentioned in cls, (a) and (b) and that prosecution is without prejudice to any action taken under the Act. This Court had to consider in Romesh Chandra Mehta vs State of West Bengal(1) whether an officer of customs under the was a police officer and whether the statements made to him were hit by article 20(3) of the Constitution and inadmissible in evidence under section 25 of the Evidence Act. A further question also arose whether an officer of customs acting, (1) 41 under the Act is in any event a police officer within the meaning ,of section 25 of the Evidence Act and hence the confessional statements made to him were inadmissible in evidence. After a consideration of the scheme of the , this Court held that a Customs Officer does not exercise, when inquiring into, a .suspected infringement of the , powers of investigation which a police officer may in investigating the commission of an offence and that he is invested with the power to enquire into infringements of the Act primarily for the purpose of adjudicating about forfeiture and penalty. Further it was held that the said officer has no power to investigate an offence triable by a Magistrate and that he can only make a complaint in writing before a competent Magistrate and hence section 25 of the Evidence .Act has no application. It was further held that the steps taken by the Customs Officer are for the purpose of holding an enquiry under the and for adjudging confiscation of ,goods dutiable or prohibited and imposing penalties and that the Customs Officer does not at that stage accuse the person suspected of infringing the provisions of the with the corn.mission of any offence. Finally, it was held that a person examined under section 17 1 A of the does not stand in the character of an accused person inasmuch as there is no formal accusation made against him by any person at that time and hence any statement made by such a person to a, Customs Officer is not hit by article 20(3) of the Constitution. The scheme of the Act was also considered in the said deci sion and some points of difference between the Act and the were noted. But notwithstanding the slight difference in the powers exercised by a, Customs Officer under the Act, it was held that the Customs Officer under the Act is not a police officer within the meaning of section 25 of the Evidence Act. It was emphasized that the proceedings taken by him are for the purpose of holding an enquiry into suspected cases of smugly and that the Customs Officer is for all purposes an officer of the Revenue. It was laid down that as the Customs Officer under the Act is not a police officer, the statement made before him by a person, who is arrested or against whom an enquiry is made, are not covered by section 25 of the Evidence Act. It was further laid down that until a complaint is filed before a Magistrate, the person against whom an enquiry is commenced under the does not stand in the character of a person accused of an offence under section 135. The discussion on this aspect is wound up by this Court as follows : ". . The Customs Officer even under the Act of 1962 continues to remain a revenue officer primarily concerned with the detection of smuggling and enforcement and levy of proper duties and prevention of entry 42 of proper duties and prevention of entry into India of dutiable goods without payment of duty and of goods of which the entry is prohibited. He does not on that account become either a police officer, nor does the information conveyed by him, when the person guilty of an infraction of the law is arrested, amount to making of an accusation of an offence against the person so guilty of infraction. Even under the Act of 1962 a formal accusation can only be deemed to be made when a complaint is made before a Magistrate competent to try the person guilty of the infraction under sections 132, 133, 134 and 135 of the Act. Any statement made under sections 107 and 108 of the by a person against whom an enquiry is made by a Customs Officer is not a statement made by a person accused of an offence. " From this decision it follows that a Customs Officer conduc ting an enquiry under sections 107 or 108 of the Act is not a police officer and the person against whom the inquiry is made is not an accused and the statement made by such a person in that inquiry "is not a statement made by a person accused of an offence". The same position has been reiterated in the latter case of Illias vs Collector of Customs, Madras.(1) Now coming to section 24 of the Evidence Act, it runs as follows "Section 24 : Confession caused by inducement, threat, or promise, when irrelevant in criminal proceeding : A confession made by an accused person is irrelevant in a criminal proceeding, if the making of the confession appears to the Court to have been caused by any inducement, threat or promise having reference to, the charge against the accused person, proceeding from a person in authority and sufficient, in the opinion of the Court, to give the accused person grounds which would appear to him reasonable for supposing that by making it he would gain any advantage or avoid any evil of a temporal nature in reference to the proceedings against him. " To attract the provisions of this section, the following facts have to be established : (a) that the confession has been made by an accused, person to a person in authority; (b) that it must appear to the Court that the confession. has been obtained by reason of any inducement. threat or promise proceeding from a person in authority; (1) (1969] 2 section C. R. 613. 43 (c) that the inducement, threat or promise must have reference to the charge against the accused person; and (d) the inducement, threat or promise, must, in the opinion of the Court, be such that the accused in making the confession believed or supposed that by making it he would pin any advantage or avoid any evil of temporal nature in reference to the proceedings against him. We have already pointed out that when the appellant ap peared, before the Customs Officers on the morning of January 7, 1964, he was served with a summons under section 108 of the Act and that it was after the receipt of the summons, the appellant gave the statement exhibit T. From the decision in Ramesh Chandra Mehta vs State of West Bengal(1), it is clear that when an inquiry is being conducted under section 108 of the Act, and a statement is given by a person against whom the inquiry is being held it "is not a statement made by a) person accused of an offence and the person who gives the statement does not stand in the character of an accused person." Therefore the first essential fact to be established, to attract section 24, referred to above, is lacking in this case, as the appellant was not an "accused person". We have already stated that it has been found by both the Courts that the statement exhibit T is a voluntary statement made by the appellant. Mr. Chari attempted to bring the statement exhibit T under section 24 of the Evidence Act because of P. W. 5 having informed the appellant that the statement was being recorded as if he was a court and that the appellant was bound to speak the truth and that if any false statement is made, he would be prosecuted. P. W. 5 has also stated that he explained section 193 1. P. C. to the appellant. According to the learned counsel this conduct of P. W. 5 clearly amounts to a threat being administered to the appellant. It is not in dispute that P. W. 5, who recorded the confes sion, is a person in authority within the meaning of section 24 of the Evidence Act. But the question is whether, when P. W. 5 drew the attention of the appellant to the fact that the inquiry is a judicial proceeding to which section 1931. P. C. applies and that the appellant must speak the truth, it can be considered to be a threat. . proceeding from a person in authority" under the section. We are not inclined to accept the contention of Mr. Chari that in the circumstances mentioned above any threat has proceeded from a person in authority to the appellant, in consequence (1) 44 of which the statement exhibit T was given. Section 108 of the Act gives power to a Customs Officer of a gazetted rank to summon any person to give evidence in any inquiry in connection with the smuggling of any goods. The inquiry made under this section is by virtue of sub section (4) deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code. A person summoned under section 108 of the Act is bound to appear and state the truth when giving evidence. If he does not answer he would render himself liable to be prosecuted under section 228 1. If, on the other hand, he answers and gives false evidence, he would be liable to be prosecuted under section 193 I. P. C. for giving false evidence in a judicial proceeding. In short a person summoned under section 108 of the Act is told by the statute itself that under threat of criminal prosecution he is bound to speak what he knows and state it truthfully. But it must be noted that a compulsion to speak the truth, even though it may amount to a threat, emanates in this case not from the officer who recorded the statement, but from the provisions of the statute itself. What is necessary to constitute a threat under section 24 of the Evidence Act is that it must emanate from the person in authority. In the case before us there was no such threat emanating from P. W. 5, who recorded the statement of P. W. 19, who was guiding the proceedings. On the contrary the officers recording, the statement were only doing their duty in bringing to the notice of the appellant the provisions of the statute. Even if P. W. 5 had not drawn the attention of the appellant to the fact that the inquiry conducted by him is deemed to be a judicial proceeding, to which section 193 I. P. C. applies, the appellant was bound to speak the truth when summoned under section 108 of the Act with the added risk of being prosecuted, if he gave false evidence. Further, it is to be seen that it is not every threat, inducement or promise even emanating from the person in authority that is hit by section 24 of the Evidence Act. In order to attract the bar, it has to be such an inducement, threat or promise, which should lead the accused to suppose that "by making it he would gain any advantage or avoid any evil of temporal nature in reference to the proceedings against him". In the case before us what is it that the appellant has been told ? He has been told that the law requires him to tell the truth and if be does not tell the truth, lie may be prosecuted under section 193 I. P. C. for giving false evidence. we have held, does not constitute a threat under section 24 of the Evidence Act. The plea of the appellant was that he was compelled to make the statement under the threat that otherwise his mother and another brother will be prosecuted. He has further stated that he was induced to make the statement on the belief that it will be used only against the second accused and not against him. These pleas of the appellant have been disbelieved by both the 45 trial court and the High Court. , Therefore, it follows that even assuming that there was an inducement or threat, the appellant had no basis for supposing that by making the statement he would gain any advantage or avoid any evil with reference to the proceedings in respect of which an inquiry was being conducted by the Customs Officers. Therefore, even on this ground also section 24 of the, Evidence Act has no application. For all the above resons we hold that by the mere fact that the Customs Officer P. W. 5, who recorded the statement exhibit T, explained the provisions of section 193 1. P. C. and informed the appellant that he was bound to tell the truth and that he is liable to be prosecuted if he made a false statement, there was no threat given to the appellant. We accordingly hold that section 24 of the Evidence Act has no application and the statement exhibit T was properly admitted in evidence in the trial of the appellant. Both the Courts have found that there is also independent evidence to corroborate the truth of the statements in exhibit T. The question of admissibility of exhibit T in evidence, having been decided against the appellant, no other point has been argued before us. In the result the appeal fails and is dismissed. K.B.N. Appeal dismissed.

The appellant was convicted for offences under the . He challenged the legality of his conviction on the ground that his statement to the customs authorities made on a summons issued under s, 108 of the Act and on which the conviction was substantially based was not admissible in evidence in view of section 24 of the Evidence Act. It was contended that the statement was procured by threat in as much as the officer who recorded the statement warned the appellant that he was bound to state the truth as the officer was conducting a judicial proceeding to which sections 193 and 228 of the Penal Code applied. Dismissing the appeal, HELD,: (i) A statement by a person against whom an inquiry is being held under section 108 is not a statement made by a person accused of an ,offence. Therefore, the essential ingredient to attract section 24, namely that the confession must be made by an accused person, is lacking in this case.[143 D] Romesh Chandra Mehta vs State of West Bengal, and Illias vs Collector of Customs, Madras ; , relied on. (ii) A compulsion to speak the truth emanates in this case riot from ,the officers who recorded the statement but from the provisions of the statute itself. What is necessary to constitute a threat under section 24 of the Evidence Act is that it must emanate I e from ' the person in authority. The officers recording the statement were only doing their duty in bringing to the notice of the appellant the provisions of the statute. [44 C E] (iii) To be told that the law required him to tell the truth and if he did not tell the truth he was liable to be prosecuted under section 193 Penal ,Code, for giving false evidence did not constitute a threat under section 24 of the Evidence Act. (iv) Even assuming that there was an inducement or threat, the appellant bad no basis for supposing that by making the statement he would gain any advantage or avoid any evil with reference to the proceedings in respect of which an inquiry was being conducted by the customs officers. Therefore, even on this ground section 24 of the Evidence Act has no application. [44 G H]

ON: Criminal Appeal No. 193 of 1974. Appeal by Special Leave from the Judgment and order dated 1 3 1974 of The Delhi High Court in Criminal Appeal No. 119/72. Frank Anthony, N. section Das Bahl and Shushil Kumar for the appellant. E. C. Agarwala and R. M. Sachthey for the Respondent. ii The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The appellant before us was convicted by the learned Special Judge, Delhi of an offence under Section 5(1) (d) read with Section 5(2) of the Prevention of Corruption Act and Section 161 Indian Penal Code, and sentenced to suffer rigorous imprisonment for a period of one year on each count. He was also sentenced to pay a fine of Rs. 100/ . The conviction and sentence were confirmed by the High Court and the appellant has come up in appeal by special leave. The prosecution case briefly was as follows: P.W. 6 Ram Niwas Sharma, an Architect by profession prepared building plans for one M.L. Batla and submitted them to the Delhi Development Authority for sanction. The plans were submitted on 6th May, 1969. They were rejected on 26th May, 1969. Revised plans were thereafter submitted on 16th June, 1969. Certain objections were raised and in order to comply with those objections P.W.6 went to the office of the Delhi Development Authority on 11 7 1969. He met the accused who was overseer Section officer and asked him to be permitted to make necessary corrections in the building plans. Instead of giving the file to P.W.6 the accused demanded a sum of Rs. 30/ as bribe. P.W.6 told him that he did not have the money with him whereupon the accused asked him to come on 14th July, 1969, in the afternoon with the money. On 1 4th July, 1969. P.W.6 went to the AntiCorruption office at about 12 noon and 332 gave a report exhibit P.W.1/A to P.W.9, an Inspector of the Anti Corruption Establishment. P.W.9 sent for P.Ws. 1 and 2 from the Sales Tax office. The report made by P.W.6 was read over to them. Thereafter, P.W.6 produced three ten rupee notes, the numbers of which were noted by P.W.9 in the presence of the Panch witnesses P.Ws. 1 and 2. Thereafter it was arranged that they should all proceed to the office of the Delhi Development Authority. There P.W. 5 was to give the bribe to the accused and on his giving the bribe to the accused, P.W. l was to give a signal to P.W. 9. As arranged P.W.6 went to the office of the Delhi Development Authority alongwith Panch witnesses. The Inspector stopped at the door of the room. P.W.6 went to the table of the accused and asked him for the file for the purpose of making necessary corrections in the building plans. The accused asked him if he has brought the money. On his saying 'yes ' the file was taken out and given to P.W. 6. As there were a number of other files on the table the accused, P.W. 6 took the file to another table at a distance of one or two paces from the table of the accused. After making the corrections P.W. 6 handed over the file to the accused alongwith Its. 30/ . Instead of taking the money the accused asked P.W. 6 to place the money in the file which he accordingly did. The accused ' then took the file and placed it under the table, putting his foot on it. At that stage P.W. 1 gave the agreed signal. P.W. 9 came to the room, disclosed his identity to the accused and questioned him whether he had accepted Rs. 30/ from P.W. 6. The accused was stunned and kept mum. P.W. 9 was then informed by P.W. 6 and the two panch witness that the money was kept in the file under the foot of the accused. P.W. 9 then took out the file and found the sum of Rs. 30/ in the file. The numbers of the currency notes were compared with the numbers earlier noted at the Anti Corruption office. Thereafter, r w. g sent the raid report. On receipt of it, P.W. 7, Deputy Superintendent of Police took over the investigation. After completing the investigation, a charge sheet was laid and the accused was duly tried, convicted and sentenced as aforesaid. The defence of the accused was that P.W. 6 met him on 11th July, 1969 and. wanted to make some corrections. He told him that he should file the original sale deed. P.W. 6 then said that he should come on Monday with the original sale deed. On 14th July 1969, P.W. 6 came to his office and wanted the file for making the necessary. corrections. He took out the file and gave it to P.W 6. P.W. 6 took the file to another table and brought it back to him after Or 3 minutes. According to the accused, P.W. 6 must have put the money into the file when he had taken the file to the other table. When the Police officer came in and questioned him about the receipt of the 333 bribe his straight away told him that he had not taken any money from P.W. 6. According to the accused, P.W. 6 was annoyed with him on 11th July, 1969, as he thought that he (accused) was delaying his work. He also stated that Mr. Batla the owner of the plot had threatened him with dire consequences because he had raised objections to the plans submitted by him. Both the Panch witnesses examined by the prosecution did not fully support the prosecution case. They resiled from the earlier statement made by them during the course of investigation. P.W. 1 stated that when P.W. 6 went into the room where the accused was working there was some talk between P.W. 6 and the accused but he did not hear what it was. He saw the accused taking out the file from the Almirah and giving it to P.W. 6. P.W. 6 took it to another table and was writing something in the file. Then he took back the file to the accused. The accused was busy with his own work. The complainant placed three ten Rupee notes in the file and handed over the file to the accused who placed it under the table near his feet. P.W.6 signalled to him and he gave the agreed signal. The Inspector then entered the room and questioned the accused about the receipt of the bribe. The accused denied the charge. He (P.W.1) then informed the Inspector that the money was in the file. The money was recovered from the file. The prosecution was permitted to cross examine him. In cross examination his earlier statements to the Investigating officer were put to him. He admitted in cross examination that when questioned by the Inspector the accused kept silent for some time as he was perplexed but thereafter told the Inspector that he had not taken any money. The evidence of the other witness P.W. 2 was on the same lines as P.W. 1 except that he stated that when questioned by the Inspector the accused kept mum and was perplexed. P.W. 2 was also cross examined by the prosecution and the statements made by him to the Investigating officer were put to him. Shri Frank Anthony learned Counsel for the appellant submitted that the conviction was based on the uncorroborated testimony of P.W. 6 and that it should, therefore, be quashed. He urged that Batla, Advocate who had employed P.W.6 as an Architect had been convicted in a Criminal case and that the present complaint was inspired by Batla who had previously threatened the accused with direct consequences. He pointed out that P.Ws. 1 and 2 stated in their evidence that Batla was actually present in the Anti Corruption office when they were called there by the Inspector. He invited our attention to the circumstance that some persons were standing near the table of the accused at the time when the bribe was supposed to have been given 334 and argued that it was most unlikely that the accused would have demanded and accepted the bribe when so many people were nearby. 'the learned Counsel further urged that the evidence of P.W.6 that he went to the office of the D.D.A. at 3 or 3.15 p.m. On 11th July, 1969 could not be true as the noting on the file showed that the file was received at 4.45 p.m. It was also contended that the lower Courts had erred in law in relying upon the statements made by P.Ws. 1 and 2 to the Police. It was argued that the evidence of P.Ws. 1 and 2 rendered the evidence of P.W.6 entirely unacceptable. It was further contended that the lower Courts were wrong in treating the conduct of the accused when questioned by the Police officer as a circumstance against him. We are unable to agree with the submission of Shri Anthony that no conviction can ever be based on the uncorroborated testimony of a person in the position of P.W.6 who, for the sake of felicity may be described as a "trap witness '. That a trap witness may perhaps be considered as a person interested in the success of the trap may entitle a Court to view his evidence as that of an interested witness. Where the circumstances justify it, a Court may refuse to act upon the uncorroborated testimony of a trap witness. On the other hand a Court may well be justified in acting upon the uncorroborated testimony of a trap witness if the Court is satisfied from the facts and circumstances of the case that the witness is a witness of truth. Shri Anthony referred us to the decisions of this Court in Ram Prakash Arora vs The State of Punjab,(1) and Darshan Lal vs The Delhi Administration.(3) In the first case Grover, J., observed as follows: "It must be remembered that both Joginder Singh and Dalbir Singh P.Ws. were interested and partisan witnesses. They were concerned in the success of the trap and their evidence must be tested in the same way as that of any other interested witness and in a proper case the court may look for independent corroboration before convicting the accused person". All that Grover J., said was that in an appropriate case corroboration may be sought and not that corroboration should invariably be sought In the particular case it was found that the witnesses could not be implicitly relied upon and, therefore, corroboration was necessary. In the second case a string of circumstances was noticed which made it necessary that evidence of the witnesses who had laid the trap should not be acted upon without independent corroboration. This (1) A.I.R. 1973 S.C. 498. (2) A.I.R. 1974 S.C. 218. 335 decision also does not lay down that the uncorroborated testimony of a trap witness can never be acted upon. That the law did not require any such corroboration was laid down in The State of Bihar. vs Basawan Singh(1), and Bhanuprasad Hariprasad Dave and Anr vs The State of Gujrat (2). In Bhanuprasad 's case it was observed by Hegde J., as follows: (at p. 1326): "Now coming back to the contention that the appellants could not have been convicted solely on the basis of the evidence of Ramanlal and the police witnesses, we are of opinion that it is an untenable contention. The utmost that can be said against Ramanlal, the Dy. S.P., Erulker and Santramji is that they are partisan witnesses as they were interested in the success of the trap laid by them. It cannot be said and it was not said that they were accomplices. Therefore the law does not require that their evidence should be corroborated before being accepted as sufficient to found a conviction". We have carefully gone through the evidence of P.W. 6. After perusing the evidence of P.W. 6 we are left with the impression that P.W. 6 is a truthful witness, an impression which we share with the High Court, the final Court of fact. He has given evidence in a straight forward manner and was unshaken in cross examination. We are unable to discover any reason to discredit his testimony. The suggestion which was made to him was that he was aggrieved with the accused as he thought that he was unnecessarily raising objections, That he had a hot altercation with him and that he went to the Anti Corruption office with the help of Shri Batla. The suggestions are without substance. P.Ws. 1 and 2 no doubt stated that Shri Batla was present in the Anti Corruption office when they were called there by P.W. 9, the Inspector. We do not have the slightest doubt that P.Ws. 1 and 2 are not truthful witnesses and that they have given evidence in order to accommodate the accused. Their evidence on important particulars was contradicted by their earlier statements to the Police. Here we may refer to the grievance of Shri Anthony that the Trial Judge and the High Court treated the statements made by P.Ws. 1 and 2 to the Police as substantive evidence. There is no justification for the grievance. The witnesses, who were treated as hostile by the Prosecution were confronted with their earlier statements to the Police and their evidence was rejected as it was contradicated by their earlier statements. Such use of the statements (1) ; (2) ; 336 is premissible under section 155 of the Evidence Act and the proviso to section 162(1) of the Code of Criminal Procedure read with section 145, Evidence Act. Corroboration to the evidence of P.W. 6, if considered necessary, may be found in the following circumstances: First, his evidence is corroborated by the report Exh. PW. 1/A which he gave to P.W. 9 that day. Second, his evidence is corroborated by the conduct of the accused when he was questioned by P.W. 9. P.W. 6 stated that when P.W. 9 entered the room and questioned the accused whether he had accepted Rs. 30/ from him, the accused was stunned and did not reply. P.W. 9 also stated that the accused kept mum when challenged. P.W. 2 stated that the accused did not reply and kept mum but added that the accused was perplexed. Though P.W. 1 first stated in his chief examination that the accused, when questioned denied having received any bribe, later he reluctantly admitted ill cross examination that the accused kept silent for some time as he was perplexed and then denied that he had received any bribe. The immediate reaction of the accused on being questioned by P.W. 9 is a circumstance which corroborates the testimony of P.W. 6. another a circumstance which corroborates the testimony of P.W. 6 is that the accused was ready with the file and handed it over to P.W. 6 as soon as he asked for it, indicating thereby that the statement of P.W. 6 that the accused had asked him to come on the afternoon of 14th July, 1969, was true. Yet another important circumstance which corroborates the evidence of P.W. 6 is that after P.W. 6 handed over the file to the accused he kept it under the table. It was contended by the learned Counsel for the appellant that the evidence relating to the conduct of the accused when challenged by the Inspector was inadmissible as it was hit by Section 167 Criminal Procedure Code. He relied on a decision of the Andhra Pradesh High Court in D. V. Narasimhan vs State.(1) We do not agree with the submissions of Shri Anthony. There is a clear distinction between The conduct of a person against whom an offence is alleged, which is admissible under Section 8 of the Evidence Act, if such conduct is influenced by any fact in issue or relevant fact and the statement made to a Police officer in the course of an investigating which is hit by Section 162 Criminal Procedure Code. What is excluded by Section 162 Criminal Procedure Code is the statement made to a Police officer in the course of investigation and not the evidence relating to the conduct of an accused person (not amounting to a statement) when confronted or questioned by a Police officer during (1) A.I.R. 1969 A.P. 271. 337 the course of an investigation. For example, the evidence of the circumstance, simpliciter, that an accused person led a Police officer and pointed out the place where stolen articles or weapons which might have been used in the commission of the offence were found hidden, would be admissible as conduct, under Section 8 of the Evidence Act, irrespective of whether any statement by the accused contemporaneously with or antecedent to such conduct falls within the purview of Section 27 of the Evidence Act [vide Himachal Pradesh Administration vs Om Prakash(1). The decision of the Andhra Pradesh High Court on which Shri Anthony placed reliance does not support his contention. 'where the learned Judges were not prepared to go into the question whether the evidence relating to the conduct of the accused was admissible as that question did not directly arise for consideration. On the other hand in Zwinglee Ariel vs State of Madhya Pradesh(2), this Court appeared to be inclined to hold that evidence to the effect that the accused started trembling and showed signs of being frightened on being;, questioned by the Police officer, if proved, was admissible, and, in Rao Shiv Bahadur Singh and Anr. vs State of Vindhya Pradesh(3), and, State of Madras vs A. Vaidyanatha Iyer(4), this Court actually relied on evidence relating to the conduct on the accused on being confronted by the Police officer with the allegation that he 'had received a bribe. In Rao Shiv Bahadur Singh case the evidence relating to conduct on which reliance was placed was to the effect that the accused was confused and could furnish no explanation when questioned by the Police officer. In Vaidyanatha Iyer 's case also evidence to the effect that the accused was seen trembling and that he silently produced the notes from the folds of his dhoti was acted upon. We, therefore, do not see any reason to rule out the evidence relating to the conduct of the accused, which lends circumstantial assurance to the testimony of P.W. 6. On a consideration of the entire evidence we arc satisfied that the appellant was rightly convicted. The other points mentioned by Shri Anthony are of a minor character and do not warrant any interference under Article 136 of the Constitution. The appeal is accordingly dismissed. M.R. Appeal dismissed. (1) ; (2) A.I.R. 1954 S.C. 15.

Prakash Chand an overseer Section officer in the Delhi Development Authority office, was charged under section 5(1)(d) read with 8. 5(2) of the Prevention of Corruptions Act and section 161 IPC, for demanding and accepting Rs. 30/ bribe from the trap witness Ram Niwas Sharma. an architect, for permitting him to make some necessary corrections in the building plans submitted by him to comply with certain objections raised by the D.D.A. On a report by Shri Sharma, an Inspector of Anti Corruption Establishment, accompanied him to the D.D.A office, with two panch witnesses and on receiving a pre arranged signal, entered the room and challenged the accused who was stunned and kept mum. Then three pre marked ten rupees notes were found in the file dealing with Sharma 's matter, the file was found under the table and the accused had his foot on it. The panch witnesses did not fully support the prosecution csse. They resiled from their earlier statements made in the course of investigation were treated as hostile by the prosecution, and were disbelieved by the Court. The accused was duly tried, convicted and sentenced, and the conviction was upheld by the High Court. It was contended that the uncorroborated testimony of a trap witness was not sufficient to found the conviction? and also that the evidence relating to the conduct of the accused when challanged by the police inspector was excluded by. section and was inadmissible in evidence. Dismissing the appeal, the Court ^ HELD: (1) We are unable to agree that no conviction can ever be based on the uncorroborated testimony of a "trap witness". Where the circumtance justify it, a court may refuse to act upon the uncorroborated testimony of a. trap witness. On the other hand a court may well be justified in acting upon the uncorroborated testimony of a trap witness, if the court is satisfied from the facts and circumstances of the case that the trap witness is a witness of truth. [334C E] The State of Bihar vs Basawan Singh, ; , and Bhanuprasad Hariprasad Dave & Anr. vs The State of Gujarat, ; , applied. Ram Prakash Arora vs The State of Punjab, AIR 1973 SC 498 and Darshan Lal vs The Delhi Administration, AIR 1974 SC, 218; differentiated. The conduct of a person against whom an offence is alleged, is admissible under s.8 of the Evidence Act. What is excluded by s.162 Cr. P.C is the 331 Statement made to a police officer in the course of investigation and not the evidence relating to the conduct of an accused person (not amounting to a statement) when confronted or questioned by a police officer, during she course of an investigation. [336G H, 337A] D. V. Narasimluan vs State, AIR 1969 A.P. 271, held inapplicable. Himachal Pradesh Administration vs Om Prakash, ; and Zwinglee Ariel vs State of M.P., AIR 1954 SC 15; reaffirmed. Rao Shiv Bahadur Singh & Anr. vs State of Vindhya Pradesh, ; and State of Madras v.A. Vaidyanatha Iyer; , , applied.

N: Criminal Appeal No. 349 of 1974. From the Judgment and order dated 24 4 1974 of the Patna High Court in original Crl. No. 7/73. Lal Narayan Sinha, Attorney General, U. P. Singh, B. P. Singh and section N. Jha for the Appellant. Sukumar Ghosh for the Respondent. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The Advocate General of Bihar is the appellant in this appeal under Section 19 of the Contempts of Courts Act, 1971. Respondent No. 1, M/s. Madhya Pradesh Khair Industries, represented by respondent No. 2, Om Prakash Agrawal, were the highest bides at an auction held by the Divisional Forest officer, Garhwa South, of four forest coupes in the State of Bihar. Under the terms of the agreements the respondents were required to deposit 25% of each of the four bids as security. The respondents were, however, able to make the deposit in respect of one coupe only and not in respect of the other three coupes. The respondents requested for time. Thereafter, there was a long course of correspondence with which we are not now concerned. Finally, on January 28, 1970, the Conservator of Forests determined the agreements. On February 28, 1970, respondent No. 1 served a notice on the Divisional Forest officer 1175 Garhwa South, intimating him that they had filed an application under Article 226 of the Constitution in the Calcutta High Court and that section C. Deb, J., had been pleased to issue a rule nisi and also an injunction restraining the Govt. of Bihar and the officials of the Forest Department of the Govt. of Bihar from giving effect to the proceedings by which the leases were determined and further directing them to allow M/s. Madhya Pradesh Khair Industries to carry on the work of cutting and felling of trees and removing the material in the said forest coupes. Alleging that the officers of the Forest Department of the Govt. of Bihar had violated the order of injunction granted against them, the respondents filed an application to commit the Officers for Contempt of Court and in that application they prayed for and obtained an interim order directing the Officers not to interfere in any way with the activities of the respondents in removing the produce of the Khair trees. The State of Bihar preferred an appeal to a Division Bench of the Calcutta High Court and on September 29,1970, the Division Bench passed an order allowing the appeal and directing the respondents to furnish security in a sum of Rs. 1,55,000 if they desired to remove the forest produce. Otherwise, they were restrained from selling the trees and extracting the produce. The respondents offered certain property as security but that was rejected by the Registrar of the Calcutta High Court as the title was found to be defective. At this stage on January 8, 1971, the State of Bihar filed money suit No. 3 of 1971 in the Court of the Subordinate Judge of Palamau to recover a sum of Rs. 1,93,225 as damages. The State of Bihar also filed an application under order 38, Rule 5, Code of Civil Procedure and obtained an order of attachment of the 'Kath ' manufactured by the respondents alongwith utensils, equipment, etc. The respondents were directed to furnish security in a sum of Rs. 2 lakhs and asked to show cause why the interim attachment should not be made absolute. The attachment was effected on January 10, 1971. The respondents appeared before the learned Subordinate Judge and requested that the reduced the amount of security from Rs. 2 lakhs to Rs. 75,000. The learned Subordinate Judge allowed the prayer of the respondents and reduced the amount of security from Rs. 2 lakhs to Rs. 75,000. The State of Bihar preferred an appeal to the Patna High Court and an interim order was made by the High Court, staying the operation of the order of the learned Subordinate Judge but continuing the attachment. On March 29, 1971, after hearing both the parties, the Patna High Court made an order directing the respondents to furnish security of immovable property in a sum of Rs. 75,000 and to deposit cash or furnish bank guarantee in a sum of Rs. 50,000. It was directed that 1176 on such security being furnished the interim attachment would cease and the respondents would be allowed to remove the stock, utensils and equipment. Without complying with the order of the Patna High Court, Respondent No.1 then moved the learned Single Judge of the Calcutta High Court on April 21, 1971, and obtained an order restraining the State of Bihar from continuing the money suit in the Court of the Subordinate Judge, Palamau and further directing the State to take steps to get the attachment vacated if security was furnished by the respondents as directed by the Division Bench of the Calcutta High Court. The State of Bihar filed an appeal against the order of the learned Single Judge and the operation of the order was stayed by an order of January 10, 1972 of the Division Bench. It was directed that the proceedings in the money suit in the Court of the learned Subordinate Judge of Palamau should proceed. In the meanwhile on July 30, 1971, Respondent No. 1 moved another application before the learned Single Judge of the Calcutta High Court offering to deposit Rs. 60,000 in cash and requesting that on such deposit being made, they might be allowed to remove the stock. This application was allowed on July 30, 1971, by the learned Single Judge and the amount was directed to be deposited with the counsel for the State of Bihar. The order was later on modified on December 16, 1972, and the amount was directed to be deposited with the Registrar of the High Court. On November 20, 1972, the State of Bihar filed an application in the Court of the Subordinate Judge, Palamau complaining that the respondents had not furnished security as directed by the Patna High Court and as the attached stock was deteriorating it might be sold by auction. Before anything further could be done Respondent No. 1 filed a petition on 14th December, 1972, and obtained an order from the learned Single Judge of the Calcutta High Court on December 18, 1972, staying the proceedings in the money suit in the Court of the Subordinate Judge, Palamau until the attached goods were released in compliance with the orders dated July 30, 1971 and February 16, 1972. The State of Bihar preferred an appeal against the order of the learned Single Judge and on January 22, 1973, a Division Bench of the Calcutta High Court set aside the order of the learned Single Judge and directed the proceedings in the Court of Subordinate Judge, Palamau, to go on. Vexed by the manner in which the 1st Respondent was filing repeated applications and procuring orders from a learned Single Judge 1177 of the High Court, necessitating the filing of as many appeals to the Division Bench, the State of Bihar filed an application for committing the Respondents for Contempt of Court alleging that, by their conduct the respondents were obstructing the administration of justice and interfering with the due course of judicial proceedings. The Patna High Court held that the respondents ' conduct was most unscrupulous one that there was gross abuse of the process of the Court, which could in certain circumstances amount to contempt of Court. The High Court, however, dismissed the application on the ground that it was barred by limitation as it was filed beyond the period of one year prescribed by section 20 of the . The High Court held, on a reading of the Contempt application, that the material allegation in regard to the contempt committed by the respondents was that relating to the filing of the application dated April 7, 1971, before the Single Judge of the Calcutta High Court to circumvent and nullify the order dated March 29, 1971 of the Division Bench of the Patna High Court. As the contempt application was filed more than a year later it was time barred. In regard to the allegation relating to the filing of the petition dated December 14, 1972, the High Court observed that there was no specific allegation that any Contempt of Court was committed by the filing of this application. We may also mention that the respondents tendered an unconditional apology to the High Court of Bihar. The question of accepting the apology was not considered as the application was found to be beyond time. The Advocate General of Bihar has filed this appeal against the judgment of the Patna High Court. Before we consider the merits of the appeal we may mention here that the learned Single Judge who made the several orders in favour of the respondents was himself compelled in a later order dated August 13, 1973 to state that the respondents had suppressed material facts and misled him on various occasions and obtained orders from him. Section 2(c) of the defines Criminal contempt as follows: "(c) 'Criminal Contempt ' means the publication (whether by words, spoken or written, or any signs, or by visible representations, or otherwise) of any matter or the doing of any other act whatsoever which (i) scandalises or tends to scandalise, or lowers or tends to lower the authority of any court; or (ii) prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or 1178 (iii) Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner". While we are conscious that every abuse of the process of the Court may not necessarily amount to Contempt of Court, abuse of the process of the Court calculated to hamper the due course of a judicial proceeding or the orderly administration of justice, we must say, is a contempt of Court. It may be that certain minor abuses of the process of the Court may be suitably dealt with as between the parties, by striking out pleadings under the provisions of order 6, Rule 16 or in some other manner. But, on the other hand, it may be necessary to punish as a contempt, a course of conduct which abuses and makes a mockery of the judicial process and which thus extends its pernicious influence beyond the parties to the action and affects the interest of the public in the administration of justice. The publice have an interest, an abiding and a real interest, and a vital stake in the effective and orderly administration of justice, because, unless justice is so administered, there is the peril of all rights and liberties perishing. The Court has the duty of protecting the interest of the public in the due administration of justice and, so, it is entrusted with the power to commit for Contempt of Court, not in order to protect the dignity of the Court against insult or injury as the expression "Contempt of Court" may seem to suggest, but, to protect and to vindicate the right of the public that the administration of justice shall not be prevented, prejudiced, obstructed or interfered with. "It is a mode of vindicating the majesty of law, in its active manifestation against obstruction and outrage".(1) "The law should not be seen to sit by limply, while those who defy it go free, and those who seek its protection lose hope".(2) In Halsbury 's Laws of England (4th Edn Vol. 9, paragraph 38), there is a brief discussion of when abuse of the process of the Court may be a punishable contempt. It is said: "38. Abuse of process in general. The Court has power to punish as contempt any misuse of the court 's process. Thus the forging or altering off court documents and other deceits of like kind are punishable as serious contempts. Similarly, deceiving the court or the court 's officers by deliberately suppressing a fact, or giving false facts, may be a punishable contempt. 1179 Certain acts of a lesser nature may also constitute an abuse of process as, for instance, initiating or carrying on proceedings which are wanting in bona fides or which are frivolous, vexatious, or oppressive. In such cases the court has extensive alternative powers to prevent an abuse of its process by striking out or staying proceedings or by prohibiting the taking of further proceedings without leave. Where the court, by exercising its statutory powers, its powers under rules of court, or its inherent jurisdiction, can give an adequate remedy, it will not in general punish the abuse as a contempt of court. On the other hand, where an irregularity or misuse of process amounts to an offence against justice, extending its influence beyond the parties to the action, it may be punished as a contempt". In the present case, the respondents began 'the game ' by filing an application under article 226 of the Constitution in the Calcutta High Court, whereas in the normal course one would expect such as application to be filed in the Patna High Court within whose jurisdiction the subject matter of the dispute was situate. For some mysterious reasons which nobody has been able to explain to us, the writ application was filed in the Calcutta High Court. A justifiable prima facie inference from this circumstance may be that the application was not bona fide but intended to harass and oppress the opposite parties. We do not want to say anything more about this aspect of the case as we are told that this is a failing of the respondents which they shared with several others. Perhaps, as we had occasion to remark during the course of the hearing, some parties are unable to reconcile themselves to the fact that the Calcutta High Court has long since ceased to have jurisdiction over the area comprising the State of Bihar which it had several decades ago. The 'game ' proceeded further. Application after application was filed before the learned Single Judge, everyone of them designed to circumvent, defeat or nullify the effect of the orders of the Division Benches of the Calcutta High Court and the Patna High Court. The order of the Division Bench of the Calcutta High Court directing the respondents to furnish security in a sum of Rs. 1,55,000 was never complied with. The order of the Division Bench of the Patna High Court directing the respondents to furnish security of immovable property in a sum of Rs. 75,000 and to deposit cash or furnish bank guarantee in a sum of Rs. 50,000 was also never complied with. 1180 Instead, an order was obtained from the Single Judge of the Calcutta High Court restraining the State of Bihar from continuing the money suit in the Court of the Subordinate Judge, Palamau. When this order was set aside by the Division Bench, an attempt was made to circumvent all earlier orders by obtaining an order from the Single Judge that they may be allowed to deposit Rs. 60,000 in cash and permitted to remove the stock from the forest coupes. When the State of Bihar moved the learned Subordinate Judge, Palamau for a direction to auction the attached stock, the respondents moved an application on December 14, 1972, and obtained an order from the Single Judge of the Calcutta High Court staying the proceedings in the money suit in the Court of the Subordinate Judge, Palamau. In considering the question whether the filing of the application dated December 14, 1972, amount to a Contempt of Court, the Court must take into account the whole course of the continuing contumacious conduct of the respondents from the beginning of the "game". Clearly, not a single application made to the Single Judge was bona fide. Every application was a daring 'raid ' on the Court and each was an abuse of the process of the Court. The application dated December 14, 1972 praying that the proceedings in the money suit in the Court of the Subordinate Judge should be stayed was made despite the fact that earlier, on January 10, 1972, the Division Bench of the Calcutta High Court had expressly permitted the proceedings in the money suit to go on. The application of the respondents clearly showed that they were intent upon obstructing the due course of the proceedings in the money suit in the Court of the Subordinate Judge, Palamau and to obstruct the administration of justice by abusing the process of the Court. The High Court expressed the view that there was no specific allegation that any contempt of Court had been committed by the filing of the application dated December 14, 1972. We are unable to agree with the view of the High Court. Paragraph 29 of the application to commit the respondents for Contempt expressly refers to the application dated December 14, 1972 and paragraph 31 states that all the facts and circumstances enumerated in the petition established that the respondents were obstructing and interfering with the due course and administration of justice. It was not necessary that every allegation made should be followed then and there by the statement that the allegation established a Contempt of Court. We are satisfied that the filing of the application dated December 14, 1972, was an abuse of the process of the Court, calculated to obstruct 1181 the due course of a judicial proceeding and the administration of justice and was, therefore, a Criminal Contempt of Court. The respondents had expressed an unconditional apology to the Patna High Court, but we are convinced that the conduct of the respondents is so reprehensible as to warrant condemnation by the imposition of a sentence. We accordingly allow the appeal and sentence each of the respondents to pay a fine of Rs. 500/ , in default to undergo simple imprisonment for a period of two weeks. V.D.K. Appeal allowed.

The respondents were the successful bidders at an auction of forest coupes in the State of Bihar. As they defaulted in making the security deposit in respect of three coupes, the agreements with them were determined by the Conservator of Forests. The respondents thereupon filed a writ petition in the Calcutta High Court instead of in the Patna High Court and followed it up with several applications one after another both in the Calcutta and Patna High Courts towards the forest department from preventing unauthorised removal of forest produce by the respondents. Vexed by the manner in which the respondent was filing repeated applications and procuring orders of a learned single judge of the High Court necessitating the filing of as many appeals to the Division Bench, the State of Bihar moved an application for committing the respondents for contempt of court, alleging that, by their conduct the respondents were obstructing the administration of justice and interfering with the due course of judicial proceedings. The Patna High Court held that the respondent 's conduct was most unscrupulous and that there was gross abuse of the process of the Court, which could in certain circumstances amount to contempt of Court. However, the High Court dismissed the application on the ground that it was barred by limitation as it was filed beyond the period of one year prescribed by section 20 of the Contempt of Courts Act. The High Court held, on a reading of the contempt application that the material allegation in regard to the contempt committed by the respondents was that relating to the filing of the application dated April 7, 1971 before the single judge of the Calcutta High Court to circumvent and nullify the order dated March 29, 1971 of the Division Bench of the Patna High Court. As the contempt application dated 18 7 73 in OCM 7/73 was filed more than a year later, it was timeshared. In regard to the allegation relating to the filing of the petition dated December 14, 1972, the High Court observed that there was no specific allegation that any contempt of court was committed by the filing of this application. Though the respondents tendered an unconditional apology, its acceptance was not considered as the application was found to be beyond time. Hence the appeal under section 19 of the . Allowing the State appeal, the Court ^ HELD: 1. Every abuse of process of the court may not necessarily amount to contempt of Court. Abuse of process of the Court calculated to hamper the due course of a judicial proceeding or the orderly administration of justice is a contempt of Court. [1178A B] 2. It may be that certain minor abuses of the process of the court may be suitably dealt with as between the parties by striking out pleadings under the 1173 provisions of order 6, Rule 16 C.P.C. or in some other manner. But on the other hand, it may be necessary to punish as a contempt, a course of conduct which abuses and makes a mockery of the judicial process and which thus extends its pernicious influence beyond the parties to the action and affects the interest of the public in the administration of Justice. [1178B C] 3. The public have an interest, an abiding and a real interest and a vital stake, in the effective and orderly administration of justice, because, unless justice is so administered, there is the peril of all rights and liberties perishing. The Court has the duty of protecting the interest of the public in the administration of justice and, so, it is entrusted with the power to commit for contempt of Court, not in order to protect the dignity of the Court against insult or injury as the expression "Contempt of Court" may seem to suggest, but to protect and to vindicate the right of the public that administration of justice shall not be prevented, prejudiced, obstructed or interfered with. [1178C E] Offutt vs U.S.p.11, quoted with approval. It is not necessary that every allegation made should be followed then and there by the statement that the allegation established a contempt of Court Paragraph 29 of the application to commit the respondents for Contempt expressly referred to the application dated December 14, 1972 and paragraph 31 state that all the facts and circumstances enumerated in the petition established that the respondents were obstructing and interfering with the due course of administration of justice. [1180F H] In the instant case: (a) the respondents began the "game" by filing an application under article 226 of the Constitution of India in the Calcutta High Court, whereas in the normal course one would expect such an application to be filed in the Patna High Court within whose jurisdiction the subject matter of dispute was situate. A justifiable prima facie inference from this circumstance may be that the application was not bonafide but intended to harass and oppress the opposite party. [1179C E] (b) Thereafter application after application was filed before the learned single Judge, everyone of them designed to circumvent, defect or nullify the effect of the orders of the Division Benches of the Calcutta High Court and Patna High Court. The order of the Division Bench of the Calcutta High Court directing the respondents to furnish security in a sum of Rs. 1,55,000/ was never complied with. The order of the Division Bench of the Patna High Court directing the respondents to furnish security of immovable property in a sum of Rs. 75,000/ and to deposit in cash or furnish bank guarantee in a sum of Rs. 50,000/ was also never complied with. Instead, an order was obtained from the single Judge of the Calcutta High Court restraining the State of Bihar from continuing the money suit in the Court of the Subordinate Judge, Palamau. When this order was set aside by the Division Bench, an attempt was made to circumvent all earlier orders by obtaining an order of the single Judge that they may be allowed to deposit a sum of Rs. 60,000/ in cash and permitted to remove the stock from the forest Coupes. When the State of Bihar moved the learned Subordinate Judge, Palamau for a direction to auction the attached stock, the respondents moved an application on December 14, 1972, and obtained an order from the Single Judge of the Calcutta High Court staying the proceedings in the 1174 money suit in the Court of the Subordinate Judge, Palamau. In considering the question whether the filing of the application dated December 14, 1972, amounts to a Contempt of Court, the Court must take into account the whole course of the continuing contumacious conduct of the respondents from the beginning of the 'game '. Clearly, not a single application made to the Single Judge was bonafide. Every application was a daring 'raid ' on the Court and each was an abuse of the process of the Court. The application dated December 14, 1972 praying that the proceedings in the money suit in the Court of the Subordinate Judge should be stayed was made despite the fact that earlier, on January 10, 1972 the Division Bench of the Calcutta High Court had expressly permitted the proceedings in the money suit to go on. The application of the respondents clearly showed that they were intent upon obstructing the due course of the proceedings in the money suit in the Court of the Subordinate Judge, Palamau and to obstruct the administration of justice by abusing the process of the Court. [1179GH, 1180A E] (c) The application dated December 14, 1972 was an abuse of process of the Court, calculated to obstruct the due course of a judicial proceeding and the administration of justice and was therefore, a criminal contempt of Court; [1180H, 1181A] (d) though the respondents had expressed an unconditional apology to the Patna High Court, the conduct of the respondents is so reprehensible as to warrant condemnation by the imposition of a sentence. [1181A]

ion No. 200 of 1963. Petition under article 32 of the Constitution of India for the enforcement of the fundamental rights. K. P. Bhandari and R. Gopalakrishnan, for the petitioner. and R. N. achthey, for the respondents. April 1, 1964. The Judgment of the Court was delivered by GAJENDRAGADKAR, C. J. This petition which has been filed by the petitioner section Gurdev Singh Sidhu under Art 32 of the Constitution, challenges the validity of article 9(1) of the Pepsu Services Regulations, Volume 1, as amended by the Governor of Punjab by the notification issued by him on the 19th January, 1960 in exercise of the powers conferred on him by the proviso to article 309 of the Constitution and all other powers enabling him in that behalf. The petitioner 's contention is that the said article contravenes the constitutional right guaranteed to the persons employed in civil capacities either under the Union or the State, by article 311. The petitioner was appointed as Assistant Superintendent of Police in the erstwhile Patiala State by His Highness Maharaja Adhiraj of Patiala on the 4th of February, 1942. The conditions of his service were governed by the Patiala State Service Regulations which had been issued by the Ruler of Patiala State who was at the relevant time the sovereign legislature of the State. Later, the petitioner was confirmed in the rank on the occurrence of a regular vacancy after he had undergone practical district training courses in the Punjab in 1947. On the formation of Patiala and East Punjab States Union on the 20th August, 1948, the petitioner was integrated in Pepsu Police Service. In due course, he was promoted to officiate as Superintendent of Police in February, 1950 by His Highness the Rajpramukh of the erstwhile State of Pepsu. 589 On the 25th March, 1963, respondent No. 2 section Gurdial Singh, Inspector General of Police & Joint Secretary to the Government of Punjab, issued a notice against the petitioner purporting to act under the second proviso to article 9.1 of the Pepsu Services Regulations to show cause why he should not be compulsorily retired. The petitioner alleges that the second proviso to article 9.1 under which the said notice has been issued against him, is invalid, and so, he has moved this Court under article 32 for quashing the said notice on the ground that the article on which it is based is itself ultra vires and inoperative. Respondent No. 1, the State of Punjab, and respondent No. 2 have by their counter affidavit denied the petitioner 's contention that the impugned article 9.1 is constitutionally invalid and they have resisted his claim for quashing the notice issued by respondent No. 2 against the petitioner. That is how the only point which arises for our decision in the present petition is whether the impugned article is shown to be constitutionally invalid. Before dealing with this point, it is necessary to read the said article: "The following shall be added after the first proviso to clause (1) of article 9.1 of the said regulations: (ii) "Provided further that Government retains an absolute right to retire any Government servant after he has completed ten years qualifying service without giving any reason and no claim to special compensation on this account will be entertained. This right will not be exercised except when it is in public interest to dispense with the further services of a Government servant such as on account of inefficiency, dishonesty, corruption or infamous conduct. Thus the rule is intended for use: (a) against a Government servant whose efficiency is impaired but against whom it is not desirable to make formal charges of inefficiency or who has ceased to be fully efficient, (i.e. when a Government servant 's value is clearly incommensurate with the pay which he draws), but not to such a degree as to warrant his retirement on a compassionate allowance. It is not the intention to use the proviso as a financial weapon, that is to say the proviso should be used only in the case of Government servants who are considered unfit for retention on personal as opposed to financial grounds; 590 (b) in cases where reputation for corruption, dishonesty or infamous conduct is clearly established even though no specific instance is likely to be proved under the Punjab Civil Services Punishment and Appeal Rules) Appendix 24 of Volume 1, Part 11 or the Public Servants (Inquiries Act XXXVII of 1850). The word 'Government ' used in this proviso should be given a reasonable opportunity to show causethe power of removing the Government servant concerned from service under the Civil Services (Punishment and Appeal) 'Rules". (iii) Provided further that Government servant should be given a reasonable opportunity to show cause against the proposed action under the rule. No Gazetted Government servants shall, however, be retired without 'the approval of the Council of Ministers. In all cases of compulsory retirement of gazetted Government servants belonging to the State Services, the Public Service Commission shall be consulted. In the case of non gazetted Government servants the Heads of Departments should effect such retirement with the previous approval of the state Government". This article clearly shows that the absolute right retained by respondent No. 1 to deal with public servants can be used against them if it appears to respondent No. 1 that the said public servants suffer from inefficiency, dishonesty, cor ruption, or infamous conduct. It is also clear that one of the reasons for making the amendment in the Pepsu Services Regulations was to use the power thereby conferred on res pondent No. 1 in case where reputation for corruption, dis honesty or infamous conduct may be established to the satis faction of respondent No. 1 even though no specific instance is likely to be proved under the Punjab Civil Services (Punishment and Appeal) Rules. This power was likewise intended for use in cases where the incompetence of the Government servant may not be of such an extent as to warrant his retirement on a compassionate allowance. The only safeguard provided by the amended article is that it was not contemplated to use the power conferred by it on financial grounds. Grounds on which the said power was intended to be used were all grounds personal to the Government servant against whora the said power was exercised. Bhandari for the petitioner contedns that the point raised by the petitoner in this petition is, in substance, concluded by a recent decision of this Court in Moti Ram Deka, 591 etc. vs The General Manager, North East Frontier Railway,(1) etc. His argument is that the trend of the majority, judgment in that case clearly indicates that the impugned Rule is inconsistent with article 311(2) of the Constitution, and as such, must be struck down as being invalid. It is, therefore, necessary to examine briefly the effect of the said judgment. In that case, this, Court was called upon to consider the validity of Rules 148(3) and 149(3) of the Railway Rules. These Rules authorised the termination of services of the railway employees concerned by serving them with a notice for the requisite period or paying them their salary for the said period in lieu of notice. Dealing with the question about the validity of the said Rules, the majority judgment observed that a person who substantively holds a permanent post has right to continue in service subject to two exceptions. The first exception was in relation to the rule of superannuation, and the second was in regard to the rule as to compulsory retirement. The majority judgment accepted the position that a rule fixing the age of superannuation which is applicable to all Government servants falling in a particular category was perfectly constitutional because it applies uniformly to the public servants who fall within its scope and it is based ,on general considerations like life expectation, mental capacity of the civil servants having regard to the climatic condilions under which they work and the nature of the work they do. They are not fixed on any ad hoc basis and do not involve the exercise of any discretion. The second exception was ,affirmed by the majority judgment with the reservation that rules of compulsory retirement would be valid if having fixed a proper age of superannuation, they permit the compulsory retirement of the public servant, provided he has put in a minimum period of service; and while affirming this rule, an express reservation was made that in case a rule of compulsory retirement permitted the authority to retire a permanent servant at a very early stage of his career, the question as to whether such a rule would be valid may have to be considered on a proper occasion. In other words, the acceptance of the ,doctrine that rules for compulsory retirement were valid and constituted an exception to the general rule that the termination of the services of a permanent servant means his removal within the meaning of article 311(2), was not absolute but qualified. At this stage, it is necessary to explain why this, reser vation was made in the majority judgment. The question which fell to be decided in the case of Moti Ram Deka(1) bad no reference to the rule of compulsory retirement; but the argument in support of the validity of the rule proceeded (1) ; 592 on the basis that the previous decisions of this Court in which the validity of the relevant rules of compulsory retirement had been upheld logically supported the contention that the impugned Rules 148(3) and 149(3) were also valid, and this argument made it necessary for this Court to examine the said decisions and to decide whether the observations made in the course of those decisions supported the contention that Rules 148(3) and 149(3) were valid. Let us briefly refer to some of these decisions. In Shyam Lal, vs The State of U.P. and the Union of India(1) the article which was examined was 465 A of the Civil Service Regulations. Note 1 to the said article gave the Government an absolute right to retire any officer after he has completed 25 years of service without giving any reasons, and provided that no claim to special compensation can be entertained from the public servant who has been compulsorily retired under it; this article was held to be valid. In the State of Bombay vs Saubhag Chand M. Deshi,(2) the rule which was considered was 165 A of the Bombay Civil Services Rules as amended by the Saurashtra Government. This rule gave the Government a similar right to retire a Government servant after he has completed 25 years of qualifying service or 50 years of age, and it permitted the Government to ask the Government servant to retire compul sorily without giving any reason and without giving him the right to claim special compensation. The rule further made it clear that the right conferred by it will not be exercised except when it is in the public interest to dispense with the further services of a Government servant such as on account of inefficiency or dishonesty. This rule was also upheld. Reverting then to the argument which was urged in support of the validity of the Railway Rules challenged in the case of Moli Ram Deka(3) the position taken by the learned Additional Solicitor General was that in upholding the impugned rules, the earlier decisions had substantially pro ceeded on the basis that the premature termination of the services of a permanent Government servant would not in every case amount to his removal within the meaning of article 311(2) of the Constitution, and that is how it became necessary to refer to the said decisions which dealt with the question of compulsory retirement, though the problem of compulsory retirement did not fall for the decision of the Court in Moti Ram Deka 's(3) case. The approach adopted by the majority decision in Moti Ram Deka 's(3) case indicates that the Court was not prepared (1) [1955] 1.S.C.R. 26 (2) ; (3) ; 593 to examine the question as to whether the relevant Rules in respect of compulsory retirement which had been upheld were valid or not. The trend of the majority judgment shows that logically, it would be consistent to hold that the premature termination of the services of a permanent Government servant would not amount to hi; , removal under article 311(2) only where such termination is the result of the fixation of a general rule of superannuation. In all other cases where a permanent Government servant is asked to retire compulsorily whether on account of his incompetence, inefficiency, or dishonesty, it may, logically, be open to be suggested that such compulsory retirement is removal within article 311(2). But since 1953, when the case of Satish Chandra Anand vs The Union of India(1) was decided by this Court there appeared to be a consistent course of decisions which had upheld the validity of the rules in regard to compulsory retirement. No doubt, the case of Satish Chandra Anand was one where a person had been employed by the Government of India on a five year contract in the Re ,settlement and Employment Directorate of the Ministry of Labour; but some observations were made in that judgment and similar observations were made in subsequent decisions dealing with the question of compulsory retirement. The majority judgment in Moti Rai Deka 's(2) case took the view that it would be inappropriate and inexpedient to reopen an issue which was covered by several prior reported decisions of the Court. Besides, the point covered by the said decisions did not directly arise in the case of Moti Ram Deka. Even so, the majority judgment took the precaution of adding a note of caution that if a rule of compulsory retirement purported to give authority to the Government to terminate the services of a permanent public servant at a very early stage of his career, the question about the validity of such a rule may have to be examined. That is how in accepting the view that a rule of compulsory retirement can be treated as valid and as constituting an exception to the general rule that the termination of the services of a permanent public servant would amount to his removal under article 311(2), this Court added a rider and made it perfectly clear that if the minimum period of service which was prescribed by the relevant rules upheld by the earlier decisions was 25 years, it could not be unreasonably reduced in that behalf. In other words, the majority judgment indicates that what influenced the decision was the fact that a fairly large number of years had been prescribed by the rule of compulsory retirement as constituting the minimum period of service after which alone the said rule could be invoked. Therefore, it seems to us that Mr. Bhandari is right when he contends that the present (1) ; (2) ; 594 article which reduces the minimum period of service to 10 years, is open to challenge in the light of the majority decision pronounced in the case of Moti Ram Deka(1). In this connection, it is hardly necessary to emphasise that for the efficient administration of the State, it is abso lutely essential that permanent public servants should enjoy a sense of security of tenure. The safeguard which article 311(2) affords to permanent public servants is no more than this that in case it is intended to dismiss, remove or reduce them in rank, a reasonable opportunity should be given to them of ,showing cause against the action proposed to be taken in regard to them. A claim for security to tenure does not mean security of tenure for dishonest, corrupt, or inefficient public servants. The claim merely insists that before they are removed, the permanent public servants should be given an opportunity to meet the charge on which they are sought to be removed. Therefore, it seems that only two exceptions can be treated as valid in dealing with the scope and effect of the protection afforded by article 311(2). If a permanent public servant is asked to retire on the ground that he has reached the age of superannuation which has been reasonably fixed, article 31](2) does not apply, because such retirement is neither dismissal nor removal of the public servant. If a permanent public servant is compulsorily retired under the rules which prescribe the normal age of superannuation and provide for a reasonably long period of qualified service after which alone compulsory retirement can be ordered, that again may not amount to dismissal or removal under article 31](2) mainly because that is the effect of a long series of decisions of this Court. But where while reserving the power to the State to compulsorily retire a permanent public servant, a rule is framed prescribing a proper age of superannuation, and another rule is added giving the power to the State to compulsorily retire a permanent public servant at the end of 10 years of his service, that cannot, we think, be treated as falling outside article 311(2). The termination of the service of a permanent public servant under such a rule, though called compulsory retirement, is, in substance, re moval under article 311(2). It is because it was apprehended that rules of compulsory retirement may purport to reduce the prescribed minimum period of service beyond which compulsory retirement can be forced against a public servant that the majority judgment in the case of Moti Ram Deka(1) clearly indicated that if. such a situation arose, the validity of the rule may have to be examined, and in doing so, the impugned rule may not be permitted to seek the protection of the earlier decisions of this Court in which the minimum (1) ; 595 qualifying period of service was prescribed as high as 25 years, or the age of the public servant at 50 years. We are, therefore, satisfied that Mr. Bhandari is right in contending that the effect of the majority decision in the case of Moti Ram Deka(1) clearly is that the impugned article 9.1 contravenes Article 311(2) of the Constitution and must be struck( down as invalid. The result is, the petition succeeds and article 9.1 as amended by the Governor of Punjab by a notification issued on the 19th January, 1960, is struck down as invalid. In consequence, the notice issued by respondent No. 2 against the petitioner on the 25th March, 1963 must be cancelled. Before we part with this petition we ought to add that the respondents did not urge before us that the writ petition was not competent under article 32 and that the proper remedy available to the petitioner was a petition under article 226 of the Constitution to the Punjab High Court; that is presum ably, because the respondents were anxious to have a decision from this Court on the question about the validity of the impugned article in the Regulations in question. We would, therefore, make it clear that our decision in the present writ petition should not be taken to mean that we have held that a petition like the present is competent under article 32 of the Constitution. In the circumstances of this case, the petitioner is entitl ed to his costs from respondents 1 and 2. Petition allowed.

The petitioner was appointed as Assistant Superintendent of Police in 1942 in the former Patiala State. In 1948 on the formation of Patiala and East Punjab States he was integrated in Pepsu Police Service. He was promoted to officiate as Superintendent of Police in 1950 by the Rajpramukh of Pepsu. On March 25, 1963, respondent No. 2, the Inspector General of Police and Joint Secretary to the Government of Punjab, issued a notice upon the petitioner under the second proviso to article 9.1 of the Pepsu Services Regulation as amended by the Governor by his notification dated January 19, 1960, to show cause why he should not be compulsorily retired. The petitioner moved this Court under article 32 of the Constitution for quashing the said notice on the ground that the said proviso was ultra vires and inoperative by reason of contravention of article 311(2) of the Constitution and relied on the decision of Frontier Railway; , The said proviso was as follows, " * * * that Government retains an absolute right to retire any Government servant after he has completed ten years qualifying service without giving any reason and to claim to special compensation on this account will be entertained. This right will not be exercised except when it is in public interest to dispense with the further services of a Government servant such as on account of inefficiency, dishonesty, corruption or infamous conduct * * *". Held: Article 9.1 of 'the Pepsu Services Regulation in prescribing a minimum period of ten years of service for the purpose of compulsory retirement contravened article 311(2) of the Constitution and must be struck down. The only two valid exceptions to the protection afforded by article 311(2) were, (1) where a permanent public servant was asked to retire on the ground that he had reached the age of superannuation which was reasonably fixed; (2) that he was compulsorily retired under the Rules which prescribed the normal age of superannuation and provided a reasonably long period of qualified service after which along compulsory retirement could be valid. The first would not amount to dismissal or removal from service within the meaning of article 311(2) and the second would be justified by the view taken by this Court in a long series of decisions. 588 It is not permissible for a State while reserving to itself the power of compulsory retirement by framing a rule pres cribing a proper age of superannuation to frame another giving it the power to compulsorily retire a permanent public servant at the end of ten Years of his service, for that rule cannot fall outside article 311(2) of the Constitution. Moti Ram Deka etc. vs General Manager, North East Frontier Railway etc. ; , applied Shyam Lal vs State of U.P. and Union of India, ; and State of Bombay vs Saubhag Chand M. Doshi, [1958] S.C.R. 571, referred to. This decision should not be taken to mean that a petition like the present one was competent under article 32 of the Con stitution.

Appeal No. 464 of 1964. Appeal by special leave from the Award dated the September 29, 1962 of the Third Industrial Tribunal in Case No. VIII 197 of 1960. A. V. Viswanatha Sastri, Anand Prakash and D. N. Gupta, for the appellant. N. C. Chatterjee, D. L. Sen Gupta and Janardan Sharma, for the respondent. 140 The Judgment of the Court was delivered by Hidayatullah, J. The Dunlop Rubber Co. Ltd. was granted on January 21, 1963 special leave to appeal against the award of the Third Industrial Tribunal, West Bengal dated September 29, 1962. By that award the Tribunal set aside the dismissal from service of twelve workmen of the Company and ordered their reinstatement with continuity of service but awarded only 25 per cent of the back wages etc. during the period they were out of employment treating the period as leave. This dispute was referred by the Government of West Bengal on July 20, 1960 under section 10 of the . The workmen were dismissed after a domestic enquiry commenced on February 4, 1960 which was carried on exparte because these workmen did not choose to be present. The Tribunal held that the enquiry was not proper and some of the witnesses were re examined before the Tribunal whose verdict was against the Company and hence this appeal. Eleven of these workmen belonged to what is known as the Dual Auto Mill and the twelfth was working on what is described as the Baby Mill. These workmen and several others stopped work from January 21, 1960 and they were placed under suspension on 25/27th January. Ten other workmen were also dismissed but they were taken back on the intercession of the Government of Bengal. The incident arose in the following circumstances : In the processing of rubber which is used in the manufacture of rubber goods by the Company, a number of departments have to work in sequence. The Banbury Section prepares a mixture of rubber and chemicals and it is passed on to the Dual Auto Mill which, after further processing, turns out blocks of rubber called "batches". Each batch is of about 1250 lbs. There were at the material time two Dual Auto Mills and they were working in three shifts and as each auto mill required the attendance of two workmen, twelve such workmen were employed to look after the two mills. Each shift was of 8 hours with half an hour 's rest for meals and an extra 20 minutes for emergencies. It was expected to produce and was, in fact, producing 17 batches till January 12, 1960. There was another mill called the Baby Mill but what it was used for is not quite clear on the record of the case. One of the dismissed workmen (section R. Sen Gupta Check No. 252 was working on the Baby Mill and he was a protected worker. The workmen in this Company are grouped under three Unions : the most numerous is Union No. 4145 which goes under the name of Dunlop Workers ' Union. This Union was registered 141 but it was not recognised by the Company. Another Union which bears No. 729 and goes under the, name of Dunlop Rubber Factory Labour Union was recognised by the Company. We need not refer to the third Union which does not figure in these proceedings. It appears that Union No. 4145, which came into existence in 1957, managed to capture all the elective seats open to the workmen by defeating the candidates set up by Union No. 729. There was great rivalry between the two Unions and the dismissed workmen belonged to Union No. 4145. It appears that Union No. 4145 had raised a demand for revision of wages etc. which was being resisted by the Company. The Baby Mill, the Banbury Mill and the Dual Auto Mills were manned by the workmen belonging to Union No. 4145, except one Raghunandan Das, Check No. 100, who belonged to Union No. 729 and was teamed with Chandramma Chaube one of the dismissed workmen. Raghunandan Das was absent on leave from January 12 to January 19, 1960. From January 12, there was a fall in the output of the Dual Auto Mills at all the three shifts. The number of batches fell from 17 to 15 and later still further. On January 15, 1960 warnings were issued to these workmen that they were going slow and that "go slow" action was misconduct under cl. 10(XVI) of the Company 's Standing Orders for operators and under cl. 18(C) of the Labour Union Agreement for operators. They were told that if they did not immediately return to their normal output the Company would be forced to take disciplinary action against them. All the workmen were served with such letters. On January 19, Raghunandan Das joined his duties and was teamed again with Chandramma Chaube. It seems that Raghu nandan Das found that Chandramma Chaube was not giving the full output and was taking more than the required time over the mixing operations. Chandramma Chaube 's case, on the other hand, was that Raghunandan Das was not allowing sufficient technical time for the mixtures and he (Chandramma Chaube) was objecting to it. It may be pointed out that the workmen were. paid extra if they turned out more than the expected quota of batches and Raghunandan Das was anxious to earn more, if possible. Be that as it may, it seems that these two workmen quarreled on January 21 and Raghunandan Das abused Chandramma Chaube and also Union No. 4145. Immediately the members of 4145 Union threatened to stop work unless Raghunandan Das was removed from the Dual Auto Mill and transferred to another Department. The officers of the Company promised an enquiry 142 but asked the workmen to go back to work. The workmen belonging to the 4145 Union refused to do this. As a result the Dual Auto Mills either remained closed or worked much below their capacity. The workmen were again and again requested and ultimately on 25/27th January they were called to the office so that they could be served with charge sheets. They declined to accepted the charge sheets and were there and then placed under suspension. The suspended workmen included these twelve workmen and ten others as already stated. One Mr. P. K. Maitra commenced enquiry into the charges in the presence of Mr. R. M. Bhandari, an observer. At the commencement of the enquiry each of the workmen asked for a representative of Union No. 4145 who was "conversant with the art of cross examination" to be present. Under the Standing Orders of this Company representation could only be by a member of a recognised Union but as Union No. 729 was anathema to the members of Union No. 4145 they would not avail of the services of any member of that Union. They elected to remain absent except section R. Sen Gupta who, though their leader, appeared at the enquiry against himself and made a statement clearing himself but took no further part in the enquiry. As a result of the enquiry, which was ex parte, Mr. Maitra held that these workmen were going slow and that they were guilty of the charge brought against them. He recommended the punishment of dismissal. The Company accordingly ordered their dismissal seeking at the same time the permission of the Tribunal under section 33 of the and tendering one month 's wages to each workman. Later, the Government of West Bengal took interest in the matter and at the intercession of the Government the Company agreed to take back 10 of the workmen leaving it to Union No. 4145 to select the persons who should be taken back. All the workmen of the Banbury Mill were taken back and the 1 1 workmen of the Dual Auto Mill and Sen Gupta of the Baby Mill remained dismissed. The Tribunal in reaching the conclusion that the dismissal was improper and that the workmen should be reinstated held that the Company had not really charged the workmen with "go slow" action but had found them guilty of that charge. It held that the Company was showing favours to Union No. 729 and was trying to put down the Union of the dismissed workmen. The Tribunal, however, held that the stoppage of work by the workmen amounted to strike as there were proceedings pending before the Tribunal, but since the strike was peaceful and non 143 vident it was only technically illegal. The Tribunal blamed the Company for contributing to the strike by its refusal to shift Raghunandan Das from his place of work. In view of these findings the Tribunal held that the punishment of dismissal was not justified and the order now impugned was accordingly passed. The Tribunal was wrong in almost all its conclusions. It was wrong in holding that the workmen were not charged with "go slow" action and therefore could not be dismissed on the finding that they were guilty of "go slow". Under the Standing Orders of the Company "go slow" is a major misconduct. Clauses (VIII) and (XVI) of Standing Order 10 deal with insubordination or disobedience or failure whether alone or in combination with others, to carry out any lawful and reasonable or proper order of a Superior (cl. VIII) and engaging or inciting others to engage in irregular or unjustified or illegal strikes; malingering or slowing down of work (cl. XVI). The charge sheet stated as follows : "You are hereby asked to show cause why disciplinary action should not be taken against you for the following misconduct under Operators Standing orders Clauses 10(VIII) and (XVI). The two clauses of Standing Order 10, as pointed out above, deal with insubordination and inter alia with going slow. It was contended before us that the words "go slow" did not figure in this charge as they did in the charges against workmen in the Banbury AM. It is to be remembered that on January 15, 1960 these workmen had been expressly warned that they were going slow and that "go slow" action was misconduct under cl. 10(XVI) of the Company 's Standing Orders for Operators. No doubt Mr. Lobo, who drew up the charge, had not mentioned go slow in these charges as he had done in the charges framed against the workmen of the Banbury Mill, but it is nevertheless clear that these charges refer to go slow and indeed the workmen in their replies to the charge denied that they were going slow. It may be pointed out that Mr. Lobo had stated before the Enquiry Officer that the charge was "go slow". The log books also showed that from January 12, 1960 against the Dual Auto Mills the remark was "slow work". It is clearly established by the records produced that instead of 17 batches 15 batches or less were turned out at each shift. This proves that there was a deliberate "go 144 slow" no sooner Raghunandan Das left on leave and the Dual Auto Mills came into the exclusive hands of Union No. 4145. This Union thought that the opportunity was too good to be wasted to force their demand for increase of wages by the tactics of "go slow". The explanation of the workmen that the mixture received from the Banbury Mill was too cold and had to be reheated before it could be processed in the Dual Auto Mills was false. They attributed the cooling of the mixture to the working of a new machine called the festooner from the 12th of January. It is clear that this machine was tried for three months before it was put into operation and had worked for three months prior to January 12, 1960 and so such complaint had been made by the workmen. It is possible that the Banbury Mill operators, who were also suspended and dismissed, were cooling the mixture unduly by means of their blower to delay operation. But whether the Banbury Mill cooled it and the Dual Auto Mills were required to reheat it or the Dual Auto Mills delayed the operations, it is clear that the motivating force behind it was the action of Union No. 4145 to force the hands of the Company in support of their demands. It is sufficient to say that after the new workmen had got trained in the working of the Dual Auto Mills the production again reached the same number of batches and after the figure was even better though the festooner continued in operation. We are satisfied that the workmen were going slow from January 12, 1960, that the charge of "go slow" was incorporated in the charge sheet read with the warning letter and that it was fully substantiated. This amounted to misconduct under Standing Order No. 10 and was not a minor offence as contended before us by their learned counsel. The minor offences deal with conduct of a very different kind. The Tribunal was also wrong in thinking that there was a denial of natural justice because the workmen were refused the assistance of a representative of their own Union. Under the Standing Orders it is clearly provided that at such enquiries only a re presentative of a Union which is registered under the Indian Trade Union Act and recognised by the Company can assist. Technically, therefore, the demand of the workmen that they should be represented by their own Union could not be accepted. It has been ruled by this Court in Kalindi & Ors. vs Tata Locomotive & Engineering Co. Ltd.(1) and Brook Bond India (P) Ltd. vs Subba Raman(2) that there is no right to representation as such unless the Company by its Standing Orders recognises such a right. (1)[1960] 3 S.C.R. 407. (2) 145 Refusal to allow representation by any Union unless the Standing Orders confer that right does not vitiate the proceedings. It is true that only the rival Union was recognised and there was hostility between the two Unions. The quarrel itself which sparked off the strike was also between two representatives of the rival Unions. In such circumstances it is idle to expect that these workmen would have chosen to be represented by a member of the rival Union and the Company might well have considered their demand to be represented by any other workman of their choice. The workmen, however, insisted that the representation should be in the capacity of a representative of their own unrecognised Union. In other words, they were desiring recognition of their Union in an indirect way. The dispute, therefore, was carried on by these workmen with the twin object of achieving their demand for increased wages and also for the recognition of their Union. The implication of their demand that they should be represented by a member of their own Union was not lost upon the Company and the refusal to allow representation on these terms cannot be characterised as a denial of natural justice or amounting to unfair play. If the Company had been asked that the workmen wished to be represented by a workman of their own choice without the additional qualification about Union No. 4145 it is possible that the Company might have acceded to the request. We think, the Company might have asked the workmen to delete all reference to Union No. 4145 and allowed them to have a representative of their own choice in the special circumstances of this dispute. But we cannot say that the action of the Enquiry Officer was for that reason illegal or amounted to a denial of natural justice. In this connection, we have repeatedly emphasised that in holding domestic enquiries, reasonable opportunity should be given to the delinquent employees to meet the charge framed against them and it is desirable that at such an enquiry the employ should be given liberty to represent their case by persons of their choice, if there is no standing order against such a course being adopted and if there is nothing otherwise objectionable in the said request. But as we have just indicated, in the circumstances of this case, we have no doubt that the failure of the Enquiry Officer to accede to the request made by the employees does not introduce any serious defect in the enquiry itself, and so, we have no hesitation in holding that the result of the said enquiry cannot be successfully challenged in the present proceedings. 146 It follows that the two main reasons for interfering with the order of dismissal do not really exist. The charge was under cls. (VIII) and (XVI) of Standing Order No. 10. It said so and its meaning was quite clear to the workmen who, according to plan, were definitely going slow from January 12, 1960 when the Dual Auto Mills passed into the control of workmen belonging to Union No. 4145. The demand of the workmen, couched as it was, could not be granted by the Enquiry Officer, because the Standing Orders did not permit representation by a member of any but a recognised Union. The additional reasons given by the Tribunal that later the demands of this Union were accepted in respect of wages can hardly justify the action of these workmen in going on an illegal strike and in declining to resume work unless what they demanded was done. There was thus justification for the order passed by the Company. It is on record that the Dual Auto Mills perform a key operation and no rubber goods can be produced without the batches being available. By their action these workmen slowed down production of every category and by their refusal to work when asked to g0 back to work cause enormous loss to the Company. The motive underlying the action is more deep seated than a mere quarrel between Chandramma Chaube and Raghunandan Das or the abuses which Raghunandan Das is alleged to have showered on Chandramma Chaube and his Union. It is contended that there was discrimination between the Banbury Mill and the Dual Auto Mills because workmen of the Banbury Mill were reinstated but not the workmen of the Dual Auto Mills. The discrimination, if any, was made by Union No. 4145 which nominated those who should be taken back in service. There must be some reason why the Banbury Mill workmen were treated differently and if we are to hazard a guess, it seems that those workmen were not sending out a cold mixture as alleged but that the Dual Auto Mill workmen were taking more time on their own operation. The production was slowed down not by the Banbury Mill operators but by the Dual Auto Mill operators. In other words, the Banbury Mill workmen, though they joined in the strike, did not probably join in the "go slow", but the Dual Auto Mill workmen not only started "go slow" but also led the strike affecting a large number of workmen. In any event the workmen chosen for reinstatement '. were chosen by their own Union and it cannot be said that the Company made any discrimination. We are satisfied that in this case the Tribunal was not justified in interfering. It has acted as a court of appeal in scrutinizing the evidence and in reaching conclusions of its own. We are also 147 satisfied that the conclusions reached by it were not justified on the evidence in the case. In these circumstances, we think that the order passed by the Tribunal should be vacated and the order passed by the Company ought to be accepted. It is a pity that these workmen, who, on their own admission were better paid than in any other Organisation should lose their job in an attempt to get an indirect recognition of their Union. But it cannot be helped because the Company must have a free hand in the internal management of its own affairs. No outside agency should impose its will unless the action of the Company is lacking in bona fides or is manifestly perverse or unfair. There is nothing to indicate this. At the same time we must say that existence of Union No. 4145 which has a larger membership than Union No. 729 which is the only recognised Union, has in a great measure contributed to this dispute. We have often noticed that Companies favour one Union out of several and thus create rivalry which disturbs industrial peace. It often turns out that this has adverse effect on Company itself. Since Union No. 729 was formed in 1950 and Union No. 4145 in 1957 we cannot say that the non recognition of Union No. 4145 was deliberate. But as that Union seems to be the stronger of the two Unions the Company should seriously consider whether Union No. 4145 should not also be recognised. The appeal must succeed. It will be allowed but we make no order about costs. Appeal allowed.

The appellant company dismissed some workmen after a domestic enquiry holding them guilty on a charge of 'go slow ' action. The respondents raised an industrial dispute. The Industrial Tribunal found that the dismissal of the respondents could not be sustained as there was no specific mention of 'go slow ' in the charge. Further it found that there was denial of natural justice at the enquiry as the workmen were not allowed to be represented by a person of their choice. The Tribunal set aside the dismissal of the respondents and ordered their reinstatement. The company appealed to the Supreme Court by special leave. HELD : (i) The charge specified cls. 10(vii) and (xvi) of the Operators Standing Orders. These clauses deal with insubordination and, inter alia, with 'go slow '. The workmen had been expressly warned by notice that they were "going slow" and in their reply to the charge they denied that they were going slow. The Tribunal was thus wrong in holding that the workmen were not charged with 'go slow ' action and could not be found guilty of that charge. [143 B C, G H] (ii) 'Mere was no denial of natural justice because the workmen asked to be represented by a member of a union which was not recognised The Standing Orders clearly provided that only a representative of a union which is registered under the Trade Union Act and recognised by the company can assist. 'Mere was no right to representation as such unless the company by its Standing Order recognised such a right. [144 F G, H] Kalindi & Ors. vs Tata Locomotives & Engineering Co. Ltd.[1960]3 S.C.R. 407 and Brook Bond India (P) Ltd. vs Subba Raman , relied on.

No. 429 of 1974. Under article 32 of the Constitution of India. Shiv Pujan Singh, for the petitioner. G. section Chatterjee, for the respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. Shri section P. Singh, appearing as amicus curiae has urged a few points in support of his submission that the petitioner detenu, very poor and not fallen into criminal company, is entitled to be set free, the order being illegal. The obnoxious acts, with futuristic import, relating to the detention, have been set out in the grounds annexed to the order and are repeated in the affidavit of the Deputy Secretary, Home (Special) Department, Government of West Bengal, based on the records available in the Secretariat. The District Magistrate of Purulia, nearly three long years ago, passed the order of detention against the petitioner on February 2, 1972 on receipt of materials regarding the pre judicial activities of the detenu and on being subjectively satisfied of the need for the detention under s.3 of the Maintenance of internal Security Act, 1971 (Act of 1971) (her r called the MISA, for short). 293 The two criminal adventuress of the petitioner which persuaded the District Magistrate to prognosticate about his prejudicial activities were allegedly indulged in on September 3, 1971. The grounds of detention are that on that date, in two separate dramatic sallies, the detenu and his associates went armed with hacksaws, lathis etc., and what not, committed theft of overhead copper catenary wires and certain other items from a place between Anaka and Bagalia railway stations. On the first occasion, which was during broad daylight, the miscreants were challenged 'by the R. section Members ' but were scared away by the petitioner and his gang repeated the theft of traction wire etc. , at stone throw. On the second occasion, which was at about mid night about the same spot 'When resisted by the duty RPF Rakshaks with the help Of villagers, ballasts were pelted at them by the violent in uders who made good their escape with the gains of robbery. on these two frightful episodes, the detaining authority came to the requisite conclusion about danger to the community, which is recited in the order. The question is whether, in the facts and circumstances of the case, the order can be impugned as colorable or exercise of power based on illusory or extraneous circumstances and therefore void. An examination of the surrounding set of facts, serving as backdrop or basis, becomes necessary to appreciate the argument that the subjective satisfaction of the authority did not stem from any real application of his mind but as a ritualistic recital in a routine manner. It is admitted in paragraph 6 of the counter affidavit that the two incidents were investigated as GRPS Case No. 1 and No .2. The petitioner was arrested in connection with the said cases on September 9. 1971 and the police submitted a final report in both the cases on January 6, 1972 and February 9, 1972 respectively, 'not because there was no evidence against the petitioner but because the detenu petitioner being a dangerous person, witnesses were afraid to depose against him in open Court '. It may be mentioned here that the petitioners name was not in the FIR but is alleged to have been gathered in the, course of the investigation. However, be was discharged from the two cases on February 9, 1972 but was taken into custody the same day pursuant to the detention order. Thereafter the prescribed formalities were followed and there is no quarrel about non compliance in this statutory sequence. The crucial submission that deserves close study turns on the colorable nature or mindless manner of the impugned order. What are the facts germane to this issue? It is seen that the petitioner 's name is not in the first information statements. Had a court occasion to adjudge the guilt of an accused person charged with serious crime committed in the presence of quasi police officers and his name is not seen in the earliest report, to the police, that would have received adverse notice unless explained. Likewise, the circumstance that the final report to the Court terminated the criminal proceedings may, unless other reasons are given, militate against the implication of the petitioner since section 169 Cr. P.C. refers to two situations one of which at least nullifies possible inference of incrimination i.e., that 294 there is no 'reasonable ground of suspicion to justify the forwarding of the accused to a magistrate '. It behoves the detaining authority to tell this Court how he reached his mental result in the face of a 'release report ' by the police. For, the legal label that the satisfaction of the executive authority about potential prejudicial activity is 'subjective ' does not mean that it can be irrational to the point of unreality. Subjective satisfaction is actual satisfaction, nevertheless. The objective standards which courts apply may not be applied, the subject being more sensitive; but a sham satisfaction is no satisfaction and will fail in court when challenged under article 32 of the Constitution. If material factors are slurred over, the formula of 'subjective, satisfaction ' cannot salvage the deprivatory order. Statutory immunology hardly saves such invalidity. After all, the jurisprudence of 'detention without trial is not the vanishing point of judicial review. The area and depth of the probe, of course, is conditioned by the particular law, its purpose and language. But our freedoms axe not wholly free unless the judiciary have a minimal look at their executive deprivation, even though under exceptional situations. We may here refer to what a bench of five Judges of this Court observed in the vintage ruling Rameshwar Shaw(1) : "It is however necessary to emphasise in this connection that though the satisfaction of the detaining authority contemplated by section 3 (1) (a) is the subjective satisfaction of the said authority, cases may arise where the detenu may challenge the validity of his detention on the ground of mala fides and in support of the said plea urge that along with other which show, mala fides, the Court may also consider his grievance that the grounds served on him cannot possibly or rationally support the conclusion drawn against him by the detaining authority. It is only in this incidental manner and in ' support of the plea of malafides that this question can become justiciable; otherwise the reasonableness or propriety of the said satisfaction contemplated by section 3 (1) (a) cannot be questioned before the Courts. " Back to the facts. Of course, the mere circumstance that the aim of the petitioner was gathered in the course of the investigation is neither here nor there and cannot help him in the tall contention that for that reason the order of detention is a make believe. The conspectus of circumstances placed before the authority and his rational response, having regard to the duty to immobilise dangerous delinquents from molesting the community these are pertinent factors to decode the responsible reality of the satisfaction, although not the plenary rightness of the detention order. There are a few vital facts which loom large in this context. One is that court discharged the accused, the reason alleged in the counter being that ; , 926. 295 "The police submitted final report in those cases on 6 1 72 and 9 2 72 respectively not because there was no facts which show malafides, the Court may also consider his evidence against the petitioner but because the detenu petitioner being a dangerous person witnesses were afraid to depose against him in open court. " What is the impact of a discharge of the accused by the criminal court based on police reports on the validity of the detention order against the same person based on the same charge in the context of a contention of a non application of the authority 's mind ? The two jurisdictions are different, the two jurisprudential principles diverge, the objects of enquiry and nature of mental search and satisfaction in the two processes vary. The argument that detention without trial, for long spells as in this instance, is undemocratic has its limitations in modern times when criminal individuals hold the community to ran som, although vigilant check of executive abuse becomes a paramount judicial necessity. We, as judges and citizens, must remember that, in law as in life, the dogmas of the quiet past are not adequate to the demands of the stormy present and the philosophy and strategy of preventive detention has come to stay. We may merely observe that we are not legally impressed with counsel 's persistent point that solely or mainly because the petitioner has been discharged in the two criminal cases he is entitled to be enlarged from preventive captivity. Even so, it does not follow that the extreme view propounded by the counsel for the State that the termination of the proceedings in a criminal case on identical facts is of no consequence is sound. In this connection, we may draw attention to a few decisions of this Court cited at the bar. Chandrachud J., speaking for the Court, recently observed in Srilal Shaw vs The State of West Bengal(1), dealing with a situation somewhat like the one in this case, thus): "This strikes us as a typical case in which for no apparent reason a person who could easily be prosecuted under the punitive laws is being preventively detained. The Railway Property (Unlawful Possession) Act, 29 of 1966, confers extensive powers to bring to book persons who are found in unlawful possession of railway property. The first offence is punishable with a sentence of five years and in the absence of special and adequate reasons to be mentioned in the judgment the imprisonment shall not be less than one year. When a person is arrested for an offence punishable under that Act, officers of the Railway Protection Force have the power to investigate into the alleged offence and the statements recorded by them during the course of investigation do not attract the provisions of section 162, Criminal Procedure Code. (See Criminal Appeal No. 156 of 1972 decided on 23 8 1974). If the facts stated in the ground are true, this was an easy case to take to a successful termination. We find it impossible of accept that the prosecution could not be proceeded with as the witnesses (1) Writ Petition No. 453 of 1974, decided on 4 12 74. 296 were afraid to depose, in the public against the petitioner. The Sub inspector of Police who made the Panchnavna, we hope, could certainly not be afraid of giving evidence against the petitioner. He had made the Panchnama of seizure openly and to the knowledge of the petitioner. Besides, if the petitioner 's statement was recorded during the course of investigation under the Act of 1966, that itself could be relied upon by the prosecution in order to establish the charge that the petitioner was in unlawful possession of Rail , way property." (emphasis ours) Again, in Noorchand 's case(1) Gupta J., delivering judgment for Court, held: "We do not think it can be said that the fact that the petitioner was discharged from the criminal cases is entirely irrelevant and of no significance; it is a circumstance which the detaining authority cannot altogether disregard. In the case of Bhut Nath Mate vs State of West Bengal ; this Court observed: ". detention power cannot be quietly used to subvert, supplant or to substitute the punitive law of the Penal Code. The immune expedient of throwing into a prison cell one whom the ordinary law would take care of, merely because it is irksome to undertake the inconvenience of proving guilt in court is unfair abuse. " If as the petitioner has asserted, he was discharged because t 'here was no material against him and not because witnesses were afraid to give evidence against him, there would be apparently no rational basis for the subjective satisfaction of the detaining authority. It is for the detaining authority to say that in spite of the discharge he was satisfied, on some valid material, about the petitioner 's complicity in the criminal acts which constitute the basis of the detention order. But, as stated already, the District Magistrate Malda, who passed the order in this case, has not affirmed the affidavit that has been filed on behalf of the State. " There was reference at the bar to the ruling reported as Golam Husvain vs Commissioner of Police(2) where the Court clarified that there was no bar to a detention order being made after the order of discharge by the criminal court, but emphasized the need to scan the ,order to prevent executive abuse in the following words: "Of course, we can visualise extreme cases where a Court has held a criminal case to be false and a detaining authority with that judicial pronouncement before him may not reasonably claim to be satisfied about prospective prejudicial activities based on what a Court has found to be baseless. " (1) A.I.R. 1974 S.C. 2120. (2) [1974]4 S.C.C. 530. 297 Maybe, we may as well refer to the, vintage ruling in Jagannath 's care(1) where Wanchoo J., (as he thn was) spoke for a unanimous Court : order of detention should show that it had acted with all due care and caution and with the sense of responsibility necessary when a citizen is deprived his liberty without trial. We have therefore to see whether in the present case the authority concerned has acted in this manner or not. If it has not so acted and if it appears that it did not apply its mind properly before making the order of detention the order in question would not be an order under die Rules and the person detained would be entitled to release. " The precedential backdrop help crystallize the jurisprudence of, preventive detention, an odd but inevitable juridical phenomenon, in a suicide manner and to the extent relevant to the case. Although. the circumstances of each case will ultimately demarcate the callous, or colorable exercise of power from the activist or alert application of the executive 's mind in making the impugned order, some clear. guidelines, though overlapping, help application of the law: (1) The discharge or acquittal by a criminal court is not necessarily a bar to preventive detention on the same facts for 'security ' purposes. But if such discharge or acquittal proceeds on the footing that the charge is false or baseless, preventive detention on the same condemned facts may be vulnerable on the ground that the power under the MISA has been exercised in a malafide or colorable manner. (2) The executive may act on subjective satisfaction and is immunised from judicial dissection of the sufficiency of the material. (3) The satisfaction, though attenuated by 'subjectivity ' must be real and rational, not random divination, must flow from an advertence to relevant factors, not be a mock recital or mechanical chant of statutorily sanctified phrases. (4) The executive conclusion regarding futuristic prejudicial activities of the detenu and its nexus with his past conduct is acceptable but not invulnerable. The court can lift the verbal veil to discover the true face. (5) One test to check upon the recolourable nature or mindless mood of the alleged satisfaction of the authority is to see if the articulate 'grounds ' are too groundless to induce credence in any reasonable man or to frivolous to be brushed aside as fictitious by a (1) ; ,138. 298 responsible instrumentality. The court must see through mere sleights of mind played by the detaining authority. ' (6) More concretaly, if witnesses are frightened off by a desperate criminal, the court may discharge for deficient evidence but on being convinced (on police or other materials coming within his ken) that witnesses had been scared of testifying, the District Magistrate may still invoke his preventive power to protect society. (7) But if on a rational or fair consideration of the police version or probative circumstances he would or should necessarily have rejected it, the routinisation of the satisfaction, couched in correct diction, cannot carry conviction about its reality or fidelity, as against factitious terminological conformity. And on a charge of malafides or misuse of power being made, the court can go behind the facade and reach at the factum. So viewed, how does the petitioner 's case stand? The petitioner 's identity and involvement must, in some manner, brought home, sufficient for the subjective satisfaction of a responsible officer not merely for his hunch or intuition. Let us assume in favour of the officer that such material was present before him when he passed the order of detention. This should be revealed to the court hearing the habeas corpus motion, in a proper return in the shape of an affidavit. While we agree that the detainer 's own oath is not always insisted on as the price for sustaining the order, subjective satisfaction, being a mental fact or state is best established by the author 's affidavit, not a stranger in the Secretariat familiar with papers, but the mind of the man who realised the imperativeness of the detention. This is not a formality when the subject matter is personal liberty and the more 'subjective ' the executive 's operation the more sensitive is procedural insistence. Here the District Magistrate 's affidavit is unavailable. Another obstacle in the way of the State, which has to be surmounted, consists in the circumstances that both the criminal occurrences took place in the presence of public servants, members of the para police forces attached to the railway administration. Indeed, the case is that some of these officials were terrorized and over awed before the stolen articles were removed. Naturally, one would expect a serious crime like railway property being removed by show of violence being the subject matter of the prosecution. In the present case. the District Magistrate does not swear an affidavit himself and what is stated is that he is now posted in Sikkim and is not 'presently available for affirming the affidavit '. In a case where a personal expla nation is necessary, Sikkim is not too distant and so we have to see Whether the District Magistrate has, in the instant case, to show why, 299 when the cases were discharged by the trying magistrate, he thought there was enough material for preventive detention. True, the Home Department official, informed by the records, has sworn that the police report for non prosecution was 'not because there was no offence against the petitioner but because the detenu petitioner being a Jangerous person witnesses were afraid to depose against him in open court '. Maybe this is true, but the subjective satisfaction of the District Magistrate must be spoken to by him, particularly in a situation where the circumstances of the non prosecution strongly militate against the reality of the petitioner 's involvement in the occurrence. After all, merely to allege that witnesses were panicked away from Testifying to truth cannot be swallowed gullibly when the witnesses Themselves are members of a railway protection force and the offenses against public property are of a grave, character. The observations of Chandrachud J. in Srilal Shaw, quoted earlier, are in point. In the case of non officials, maybe they are afraid to give evidence against dangerous characters for fear of their life but such an excuse or alibi is ordinarily unavailable where the witnesses are para police public servants. If the District Magistrate had sworn an affidavit that he identity of the petitioner, as participant in the crime, was not known of the railway protection force and that other villagers made them out is the gang was decamping with the booty, something may be said for he plea. There is no such averment in the counter affidavit and the pare ipse dixit of the Deputy Secretary in the Home Department that witnesses were afraid to depose is too implausible and tenuous to be acceptable even for subjective satisfaction. After all, freedom is not bubble to be blown away by executive whif or whim. For, as pointed put by Gajendragadkar J. (as he then was) in Rameshwar Shaw (supra) it p. 930 : "At the point of time when an order of detention is going to be served on a person, it must be patent that the said person would act prejudicially if he is not detained and that is a consideration which would be absent when the authority is dealing with a person already in detention. " Had the statement been of the detaining authority, had the deponent furnished some fact which would or could make any reasonable man believe that the witnesses were likely to shy away from the court for far of the petitioner, bad the affidavit thrown some light on the dark lint behind the non prosecution in court due to non disclosure of evidence or to indicate that the final report of investigation was not on account of the absence of any reasonable suspicion but because of the deficiency of evidence (section 169 Cr. P.C. contemplates both types of situations and the copy of the report was easy to produce), we might have upheld the detention. In Dulat Roy vs The District Magistrate Burdwan(1) this question has been dealt with in some detail. The flaw in the order flows from non explanation of how the District Magistrate has made his inference in the circumstances indicated. (1) ; 300 Without more, we are inclined to the view that the observations of Wanchoo J. (as he than was) in Jagannath (supra), at p. 138, applies "This casualness also shows that the mind of the authority concerned was really not applied to the question of detention of the petitioner in the present case. In this view of the matter we are of opinion that the petitioner is entitled to release as the order by which he was detained is no order under the Rules for it was passed without the application of the mind of the authority con In the present case, on account of the special reasons set out above, who are far from satisfied that the detention order is not a cloak to avoid the irksome procedure of a trial in Court. There are two social implications of dropping prosecutions and resorting to substitutive detentions which deserve to be remembered. Where a grievous crime against the community has been committed, the culprit must be subjected to condign punishment so that the penal law may strike a stem blow where it should. Detention is a softer treatment than stringent sentence and there is no reason why a dangeral should get away with it by enjoying an unfree but unpaid holiday. Secondly, if the man is innocent, the process of the law should give him a fair chance and that should not be scuttled by indiscriminate resort to easy but unreal orders of detention unbound by precise time. That is a negation of the correctional humanism of our system and breeds bitterness, alienation and hostility within the cage. We accordingly allow me writ petition, make the rule absolute and ' direct that the petitioner set free. V.P.S. Petition allowed.

The petitioner was detained under section 3 of the . The grounds of detention were that twice on the same day he and his associates, armed with dangerous weapons, committed thefts of overhead copper wire, the first time in broad day light and then at about mid night. On both occasions they were challenged by public servants, members of the para police force, attached to the railway administration but the petitioner and his associates escaped after attacking the members of the Railway Police Force. The petitioner was arrested in connection with the two incidents. His name was not in the F.I.R. but was gathered in the course of investigation. The police, how ever reported that the petitioner being a dangerous person, witnesses were afraid to depose against him in open court and so he was discharged. He was, however, taken into custody the same day of discharge pursuant to the detention order. Allowing the petition challenging the detention. HELD : 1(a) The discharge or acquittal by a criminal court is not necessarily a bar to preventive detention on the same facts for 'security ' purposes. But if such discharge or acquittal proceeds on the footing that the charge is baseless or false, preventive detention on the same condemned facts may be vulnerable on the ground that the power of detention has been exercised in a mala fide or colorable manner. (b) The executive authority may act on subjective satisfaction and is immunised from judicial dissection of the sufficiency of the material. But the executive conclusion regarding futuristic prejudicial activities of the detenu and its nexus with his past conduct though acceptable is not invulnerable. (c) The satisfaction though attenuated by 'subjectivity ' must be real and rational, must flow from an advertence to relevant factors, and not be a mockery or mechanical chant of statutorily sanctified phrases. The subjective satisfaction must be actual satisfaction. (d) One test to check upon the colorable nature or mindless mood of the alleged satisfaction of the authority,is to see if the articulated 'grounds ' are too groundless to induce credence in any reasonable man or too frivolous to be brushed aside as fictitious by a responsible instrumentality. (e) If witnesses are frightened off by a desperate criminal, the court may discharge for deficient evidence but on being convinced (on police or other materials coming within his ken) that witnesses had been scared of testifying, the District Magistrate may still invoke his preventive power to protect society. (f) But if on a rational or fair consideration of the police version or probative circumstances he should have rejected it the routinisation of the satisfaction, couched in correct diction. cannot carry conviction about its reality and on a charge of mala fides or misuse of power being made, the court can examine the circumstances. [297 D 298 C] (2) Merely to allege that witnesses were panicked away from testifying to truth cannot be swallowed gullibly when the witnesses are members of the Railway Protection Force and the offenses against public property were of grave character. [299 B C] 292 (3)In a case like the present, where the circumstances Of the non prosecution strongly militate against the reality of the petitioner 's involvement in the occurrence, the subjective satisfaction of the District Magistrate must be spoken to by him. While the detainer 's on oath is not always insisted on as the price for sustaining the order, subjective satisfaction, being a mental fact or state is best established by the author 's affidavit and not that of a stranger in the secretariat familiar with the papers. But in the present case, the District Magistrate 's affidavit is not available and the reason given for his not filing his affidavit is not convincing. If the District Magistrate had sworn an affidavit that the identity of the petitioner as participant in the two incidents was not known to the Railway Protection Force and that other villagers made them out as the gang was decamping with the booty, the detention might have been upheld. But there is no such averment and the bare ipse dixit of the Deputy Secretary in the Home Department that witnesses were afraid to depose is too implausible and tenuous to be acceptable even for subjective satisfaction. [298 E F; 299 A B, C E] [Were a grievous crime against the community has been committed the culprit must be subjected to condign punishment so that the penal law may strike a stern blow where it should. Detention is a softer treatment. Further, if the is innocent the process of the law should give him a fair chance and that should not be scuttled by indiscriminate to easy but unreal orders of detention un bound by precise time.]. [300 C E] Srilal Shaw vs The State of West Bengal Writ Petition No. 453 of 1974. decided on 4 12 74 and Jaganath 's case ; and 138, followed. Rameshwar Shaw ; 926. Hoorchand 's cast A.I.R. 1974 S.C. 2120; Golam Hussain vs Commissioner of Police ; , 534 and Dulal Roy vs The District Magistrate, Burdwan ; referred to.

Civil Appeal No. 212 (NCE) of 1975. From the Judgment and Order dated 26.6.1974 of the Kerala High Court in A.S. No. 510 of 1972. V.C. Mahajan and C.V. Subba Rao for the Appellants. T.S. Krishnamurthy and N. Sudhakaran for the Respondent. The Judgment of the Court was delivered by: K. JAGANNATHA SHETTY, J. This appeal by special leave is against a judgment and decree of a Division Bench of the High Court of Kerala. PG NO 1076 Short factual background is this. The respondent was appointed on October 15 1951 as an ordinary industrial labourer at Naval Base Cochin. He was October 25 1968 his services however were terminated under Article 310 of the Constitution. No reason was assigned. He instituted a suit in forma pauperise for declaration that the termination of his service was illegal and void ab initio. In the alternative he claimed damages or compensation of Rs.75 000 for illegal termination. The trial court awarded him Rs.25 000 as damages together with interest at 6 per cent per annum for the illegal termination of his services. That decree was confirmed by the High Court of Kerala. This appeal is directed against that Judgment of the High Court. On July 30, 1976 a Bench of this Court dismissed the appeal on merits. But upon review that judgment was set aside and the appeal was ordered to be listed for fresh disposal. So the matter has come up before us. There is no dispute on the material facts. There is no challenge that the respondent was a permanent and confirmed civilian worker in the Defence Department. In fact. it is all admitted position between the parties. He had a right to continue till he attained the age of 60 years. Article 459(b) of the Civil Service Regulations provides for that. It reads: "(b) A workman who is governed by these Regulations shall be retained in service till the day he attains the age of sixty years. In this clause ' a workman ' ' means a highly skilled. skilled. semi skilled or unskilled artisan employed on a monthly rate of pay in an industrial or a work charged establishment . The courts below have proceeded on the basis that Article 311 (2) of the Constitution was not applicable to the respondent but the Central Civil Services (Classification Control and Appeal) Rules 1965 (for short " 1965 Rules ' ') were however. applicable. Mr. Mahajan for the appellants contends that the reasoning of the Courts below is untenable and uncalled for. We think that the counsel is on terrafirma. There cannot be any dispute as to the non applicability of Article 311(2) to PG NO 1077 the case of respondent. A civilian employee in Defence Service who is paid salary out of the estimates of the Ministry of Defence does not enjoy the protection of Article 311(2). In L.R. Khurana vs Union of India, ; at 911, this Court observed: "The question whether the case of the appellant was governed by Article 311 of the Constitution stands concluded by two decisions of this court. In Jagatrai Mahinchand Ajwani vs Union of India, C.A. 1185 of 1965 dated 6.2.1967 it was held that an Engineer in the Military Service who was drawing his salary from the Defence Estimates could not claim the protection of Article 311(2) of the Constitution. In that case also the appellant was found to have held a post connected with Defence as in the present case. This decision was followed in section P. Behl vs Union of India, C.A. 1918 of 1966 dated 8.3.1968. Both these decisions fully cover the case of the appellant so far as the applicability of Article 311 is concerned. ' ' Now the only question is whether the 1965 Rules framed under the proviso to Article 309 of the Constitution proprio vigore apply to the respondent or become inoperative in view of article 310 of the Constitution? Article 310(1) deals with the tenure of office of persons serving the Union or the State. It provides: "Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service of the Union or of an all lndia service or holds any post connected with defence or any civil post under the Union, holds office during the pleasure of the President, and every person who is a member of a civil service of a State or holds any civil post under a State holds office during the pleasure of the Governor of the State." The article 310(2) deals with cases of persons appointed under contract. The doctrine of pleasure of the President is thus embodied under Article 310( l). The scope of this Article coupled with Article 309 has been explained in Ramanatha Pillai vs The State of Kerala, [l974] SCR 515 at 52l, where this Court observed: Article 309 provides that subject to the provisions of the Constitution, Acts of the appropriate Legislature may PG NO 1078 regulate the recruitment and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State. Therefore, Acts in respect of terms and conditions of service of persons are contemplated. Such acts of Legislature must however be subject to the provisions of the Constitution. This attracts Article 31()(1). The proviso to Article 309 makes it competent to the President or such person as he may direct in the case of services and posts in connection with the affairs of the Union and for the Governor of a State or such person as he may direct in the case of services or posts in connection with the affairs of the State, to make rules regulating the recruitment and the conditions of service of persons appointed, to such services and posts under the Union and the State. These Rules and the exercise of power conferred on the delegate must be subject to Article 310. The result is that Article 309 cannot impair or affect the pleasure of the President or the Governor therein specified. Article 309 is, therefore, to be read subject to Article 3l0. The operation of Rules made under the proviso to Article 309 on the pleasure doctrine embodied under Article 310(1) has been considered by this Court in Union of India vs Tulsi Ram, ; where it was observed at 483: "The opening words of Article 309 make that article expressly 'Subject to the provisions of this Constitution '. Rules made under the proviso to Article 309 or under Acts referable to that article must, therefore, be made subject to the provisions of the Constitution if they are to be valid. Article 3 lO( 1) which embodies the pleasure doctrine is a provision contained in the Constitution. Therefore, rules made under the proviso to Article 309 or under Acts referable to that article are subject to Article 310(1). By the opening words of Article 310(l) the pleasure doctrine contained therein operates ' Except as expressly provided by this Constitution". Article 31l is an express provision of the Constitution. Therefore, rules made under the proviso to Article 309 or under Acts referable to Article 309 would be subject both to Article 3l0(1) and Article 311. This position was pointed out by Subba Rao, J. as he then was. in his separate but concurring judgment in Moti Ram Deka. case PG NO 1079 ; at 734, namely. that rules under Article 309 are subject to the pleasure doctrine and the pleasure doctrine is itself subject to the two limitations imposed thereon by Article 311. In Tulsi Ram case, the decision in Challappan 's case (Divisional Personnel Officer, 5.Rly. Y. 1.R. Challappan, [1976l l SCR 783) which had taken a contrary view. has been expressly overruled on the ground that rules cannot do what the second proviso to Article 311(2) denies. " By virtue of Article 311(2), no civil servant can be dismissed, removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being beard in respect of the charges. Article 311(2) thus imposes a letter on the power of the President or the Governor to determine the tenure of a civil servant by the exercise of pleasure. Tulsi Ram case concerned with the exclusion of Article 311(2) by reason of second proviso thereunder. We are also concerned with the exclusion of Article 311(2), if not by second proviso but by the nature of post held by the respondent. We have earlier said that the respondent is not entitled to protection of Article 311(2), since he occupied the post drawing his salary from the Defence Estimates. That being the position, the exclusionary effect of Article 3l1(2) deprives him the protection which he is otherwise entitled to. In other words, there is no letter in the exercise of the pleasure of the President or the Governor. It was, however, argued for the respondent that 1965 Rules are applicable to the respondent, first, on the ground that Rule 3(1) thereof itself provides that it would be applicable, and second, that the Rules were framed by the President to control his own pleasure doctrine. and therefore, cannot be excluded. This contention, in our opinion, is basically faulty. The 1965 Rules among others, provide procedure for imposing the three major penalties that are set out under Article 311(2). When Article 311(2) itself stands excluded and the protection thereunder is withdrawn there is little that one could do under the 1965 Rules in favour of the respondent. The said Rules cannot independently play any part since the rule making power under Article 309 is subject to Article 311. This would be the legal and logical conclusion . The next contention urged for the respondent depends upon the admission made by the appellants before the High Court. The appel lants seem to have admitted before the PG NO 1080 High Court that the 1965 Rules would be applicable to the respondent. Relying on this admission it was argued before us that the decree under appeal should not be set aside. The poverty of the respondent and the long drawn litigation by which the respondent has suffered immeasurably were also high lighted. We gave our anxious consideration to this part of the submission. It is true that the parties appear to have proceeded before the High Court that the 1965 Rules would be attracted to the case of respondent. It might be on a wrong assumption of law. The appellants cannot he estopped to contend to the contrary. They are not bound by such wrong assumption of law. Nor it could be taken advantage of by the respondent. But the submission made before us about the poverty of the respondent and the long drawn litigation seems to be appealing. It is a plus point in his favour under equity. This Court while granting special leave has imposed a condition on the appellants that they will bear the cost of the respondent in any event. That was evidently because of the need to have the law clarified and inability of the respondent to come up to this Court. There cannot be any dispute about the poverty surrounding him. He has instituted the suit as an indigent person. There is yet another aspect. When the respondent commenced the litigation and continued up to the High Court the law on the question was nebulous. It was only thereafter an authoritative pronouncement was made by this Court with regard to the impact of Rules made under the proviso to Article 309 on the pleasure doctrine under Article 310(1). These facts and circumstances therefore call for a sympathetic consideration of the case of respondent. This Court will not deny any equitable relief in deserving cases. The case on hand cannot be an exception to that rule and indeed it is eminently a fit F case. We therefore accept the submission made for the respondent and decline to disturb the decree under appeal. In the result the appellants succeed on the question on law but the respondent retains the decree in his favour purely on compassionate grounds. The appellants also must pay the cost to the respondent as already bound. A.P.J. Appeal allowed.

The respondent was a permanent and confirmed civilian worker in the Defence Department and he had a right to continue till he attained the age of 60 years. His services, however, were terminated under Article 310 of the Constitution without assigning any reason. He instituted a suit for declaration that the termination of his services was illegal and void ab initio. In the alternative, he claimed damages or compensation for the illegal termination. The Trial Court awarded him Rs. 25,000 as damages together with interest at 6 per cent per annum for the illegal termination of his services. That decree was confirmed by the High Court. The Courts below have proceeded on the basis that Article 311 (2) of the Constitution was not applicable to the respondent, but the Central Civil Services (Classification, Control and Appeal) Rules, 1965 were, however, applicable. In the appeal to this Court on behalf of the appellants it was contended that the reasoning of the Courts below is untenable and uncalled for. On behalf of the respondent employee it was contended that the 1965 Rules are applicable to the respondent and that the decree under appeal should not be set aside. The poverty of the respondent and the long drawn litigation by which the respondent was suffered immeasurably were also highlighted. PG NO 1074 PG NO 1075 Allowing the appeal on a question of law this Court HELD: 1. The respondent is not entitled to protection of Article 311(2) since he occupied the post drawing his salary from the Defence Estimates. That being the position, the exclusionary effect of Article 311(2) deprives him the protection which he is otherwise entitled to. In other words there is no fetter in the exercise of the pleasure of the President or the Governor. [1079D E] 2. The 1965 Rules among others, provide procedure for imposing the three major penalties that are set out under Article 311(2). When Article 311(2) itself stands excluded and the protection thereunder is withdrawn there is little that one could do under the 1965 Rules in favour of the respondent. The said Rules cannot independently play any part since the rule making power under Article 309 is subject to Article 311. [1079F G] L.R. Khurana vs Union of India, ; at 911; Ramanatha Pillai vs The State of Kerala, ; at 521 and Union of India vs Tulsi Ram, ; , followed. This Court will not deny any equitable relief in deserving cases. The case on hand cannot be an exception to that rule and indeed. it is eminently a fit case. [1080F]

No. 95 of 1964. Petition under article 32 of the Constitution for enforcement of fundamental rights. T. N. Subramonia Iyer, Arun B. Saharaya and Sardar Bhadur for the petitioner. V. P. Gopala Nambiar, Advocate General for the State of Kerala and V. A. Seyid Muhammad, for the respondent. The Judgment of the Court was delivered by Subba Rao, J. This is a petition under article 32 of the Constitution for issuing an appropriate writ to quash the order and notification dated October 3, 1963, issued by the respondent and to restrain it from interfering with the petitioner 's right in the property comprised in survey Nos. 646 to 650 in Trivendrum City. Kizhakke Kottaram (i.e., Eastern Palace), 2 acres and 57 cents. in extent, comprised in survey Nos. 646 to 650 and consisting of land, trees, buildings, out houses, the surrounding well on all sides, gates and all appurtenant, in the City of Trivendrum originally belonged to His Highness the Maharaja of Travancore, Under a sale deed dated January 7, 1959, the Maharaja sold the same to the petitioner. The petitioner 's case is that the eastern wall now in dispute is a portion of the Palace wall and is situate in survey Nos. 646 to 650 and that since the purchase he has been in possession of the same. On October 3, 1963, the Government of Kerala passed an order, G.O. (MS) No. 661/63/Edn., purporting to be under the provisions of the Travancore Ancient Monuments Preservation Regulation 1 of 1112/M.E. ( 193637 A.D.) Under that order the Government considered the Fort walls around the Sree Padmanabhaswamy Temple as of archaeological importance and that they should be preserved as a protected monument. Under that order the said are described as being situated, among others, in the aforesaid survey numbers also. Pursuant to that order the State Government issued a notification dated October 3, 1963, declaring the said walls to be a protected monument for the purpose of the said Regulation The petitioner, alleging that the part of the said walls situate in the said. survey numbers belonged to him and he was in possession thereof and that the said notification infringed his fundamental right under article 19(1) (f) of the Constitution, filed the present writ petition. 870 The State filed a counter affidavit in which it admitted that the Kizhakke Kottaram was purchased by the petitioner from the Maharaja of Travancore, but contended that the wan which bounded the Kizhakke Kottaram on the east was part of the fort wall which had always remained and continued to remain to be the property of the Travancore Cochin, and later on Kerala, Government. It was further alleged that though the said wan was part of the historic fort wall, the petitioner deliberately "intermeddled" with it. In short, the respondent claimed that the said wall was part of the historic fort wall and, therefore, the said notification was validly issued in order to preserve the same and that the petitioner had illegally encroached upon it. It is not necessary to state the different contentions of the parties at this stage, as we shall deal with them separately. The learned Advocate General of Kerala raised a preliminary objection to the maintainability of the application on the ground that the petition is barred by the principle of res judicata in that a petition for the same relief was filed before the High Court of Kerala and was dismissed. The petitioner filed O.P. No. 1502 of 1960 in the High Court of Kerala at Emakulam for a relief similar to that now sought in this petition. The said petition came up before Vaidialingam, J., who dismissed that petition on the ground that it sought for the declaration of title to the property in question, that the said relief was foreign to the scope of the proceedings under article 226 of the Constitution and that claims based on title or possession could be more appropriately investigated in a civil suit. When an appeal was filed against that order a Division Bench of the High Court, consisting of Raman Nair and Raghavan, JJ., dismissed the same, accepting the view of Vaidialingam, J., that the proper forum for the said relief was a civil Court. It is, therefore, clear that the Kerala High Court did not go into the merits of the petitioner 's contentions, but dismissed the petition for the reason that the petitioner had an effective remedy by way of a suit. Every citizen whose fundamental right is infringed by the State has a fundamental right to approach this Court for enforcing his right. If by a final decision of a competent Court his title to property has been negatived, he ceases to have the fundamental right in respect of that property and, therefore, he can no longer enforce it. In that context the doctrine of res judicata may be invoked. But where there is no such decision at all, there is no scope to call in its aid. We, therefore, reject this contention. 871 The next question is whether the petitioner has any funda mental right in respect of the wall in dispute within the meaning of article 19(1) (f) of the Constitution. The Sale deed under which the petitioner has purchased the Eastern Palace from the Maharaja is filed along with the petition as Annexure A 2. Under the said sale deed, dated January 7, 1959, the Maharaja sold the Eastern Palace situate in survey Nos. 646 to 650, 2 acres and 57 cents, in extent, to the petitioner. The outer compound walls of the said Palace building were also expressly conveyed under the sale deed. In the schedule of properties annexed to the sale deed the eastern boundary is given as a road. Prima facie, therefore, the sale deed establishes that the Maharaja conveyed the eastern wall of the building abutting the road to the petitioner. In the counter affidavit the State, while admitting the title of the Maharaja to the Eastern Palace and the execution of the sale deed by him conveying the said Palace to the petitioner, asserted that the disputed wall is part of the historic Fort wall. According to the State, Sree Padmanabhaswamy Temple is surrounded by the historic Fort wall and the disputed wall is a part of it. In support of this contention, the State has given extracts from the Travancore State Manual, the list of forts furnished to the Government by the Chief Engineer in 1886, the history of Travancore by Sri K. P. Sankunni Menon. , the Memoir of the Survey of Travancore and Cochin States by Lieutenants Ward and Conner, and the Trivendrum District Gazetteer published in 1962. The said extracts describe the history of the Fort wall. It is not possible, without further evidence, on the basis of the affidavits filed by the petitioner and the State to come to a definite conclusion whether the disputed part of the wall is a part of the historic Fort wall. We are, therefore, withholding, our final decision on this point, as we are satisfied that the petitioner has purchased the disputed wall from the Maharaja and is in physical possession thereof. Indeed, the fact that he is in possession has been admitted by the State in its counter affidavit. It is stated therein that the petitioner has "intermeddled" with the wall. The petitioner has possessory title in the wall and is, therefore entitled to be protected against interference with that right without the sanction of law. The next question is whether the Travancore Ancient Monu ments. Preservation Regulation (Regulation 1 of 1112/M.E.) ceased to be law in the State of Kerala and, therefore, the said notification issued thereunder had no legal force. It was contended that Regulation 1 of 1112 M.E. was impliedly repealed by the extension of the Central Act, i.e., the Ancient Monuments Preservation Act, 1904, in the year 1951 to Kerala, as the said Up./65 9 872 Act covered the same field occupied by the State Act, or at any rate the Said Regulation was impliedly repealed by the Ancient and Historical Monuments and Archaeological Sites and Remains (Declaration of National Importance) Act, 1951 (Act LXXI of 1951) and the Ancient and Historical Monuments and Archaeological Sites and Remains Act, 1958 (Act XXIV of 1958). To appreciate this contention it would be convenient at the outset to notice the relevant legislative fields allotted to the Central and State Legislatures by the entries in the three Lists of the Seventh Schedule to the Constitution. The following are the relevant entries in the said Schedule : Entry 67 of List 1 (Union List) Ancient and historical monuments and records, and archaeological sites and remains, declared by or under law made by Parliament to be of national importance. Entry 12 of List II (State List) Libraries, museums and other similar institutions controlled or financed by the State; ancient and historical monuments and records other than those declared by or under law made by Parliament to be of national importance. Entry 40 of List III (Concurrent List) Archaeological sites and remains other than those declared by or under law made by Parliament to be of national importance. It will be noticed that by reason of the said entries Parliament could only make law with respect to ancient and historical monuments and archaeological sites and remains declared by Parliament to be of national importance. Where the Parliament has not declared them to be of any national importance, the State Legislature has exclusive power to make law in respect of ancient and historical monuments and records and both Parliament and the State Legislature can make laws subject to the other constitutional provisions in respect of archaeological sites and remains. Regulation 1 of 1112 M.E. is of the year 1936 A.D. It was a State law and it is not disputed that it was validly made at the time it was passed. After the Travancore Cochin State was formed, under the Travancore Cochin Administration and Application of Law Act, 1125 M.E. (Act VI of 1125 M.E.) (1949 A.D), the existing laws of Travancore were extended to that part of the area of the new State which before the appointed day 873 formed the territory of the State of Travancore. The result was that the said Regulation continued to be in force in the 'Travancore area of the new State. Ile Part B States (Laws) Act, 1951 (Act No. III of 1951) was made by Parliament; and thereunder the Ancient Monuments Preservation Act, 1904, was extended to the new State of Travancore Cochin. A comparative study of the two Acts, i.e., the Ancient Monuments Preservation Act, 1904, and the Travancore Ancient Monuments Preservation Regulation 1 of 1112 M.E., shows that they practically covered the same field. If there was nothing more, it may be contended that the State Act was impliedly repealed by the Central Act. But section 3 of the Part B States (Laws) Act, 1951, made the application of the Central Act to the State subject to an important condition. The said section 3 reads : "The Acts and Ordinances specified in the Schedule shall be amended in the manner and to the extent therein specified, and the territorial extent of each of the said Acts and Ordinances shall, as from the appointed day, and in so far as any of the said Acts or Ordinances or any of the provisions contained therein relates to matters with respect to which Parliament has power to make laws, be as stated in the extent clause thereof as so amended." The condition is that the said Act shall relate to matters with respect to which Parliament has power to make laws. The question, therefore, is whether Parliament can make a law in respect of ancient monuments with respect whereof the State had made the impugned Regulation. As we have pointed out earlier, the Parliament can make a law in respect of ancient and historical monuments and records declared by or under law made by it to be of national importance, but the Central Act of 1904 did not embody any declaration to that effect. Therefore, the Central Act could not enter the field occupied by the State Legislature under List II. If so, it follows that the State Act held the field notwithstanding the fact that the Central Act was extended to the State area. Nor can the learned counsel for the petitioner call in aid the, Ancient and Historical Monuments and Archaeological Sites and Remains (Declaration of National Importance) Act, 1951 (Act LXXI of 1951), to sustain his argument. That Act applied to ancient and historical monuments referred to or specified in Part 1 of the Schedule thereto which had been declared to be of national importance. In Part 1 of the Schedule to the said Act 874 certain monuments in the District of Trichur in the Travancore Cochin State were specified. The monument in question was not included in the said Schedule. The result is that the State Act did not in any way come into conflict with the Central Act LXXI of 1951. The State Act, therefore, survived even after the passing of the said Central Act. The next Central Act is the Ancient Monuments and Archaeo logical Sites and Remains Act, 1958 (Act XXIV of 1958). It repealed the Central Act LXXI of 1951. Under section 3 thereof all ancient and historical monuments declared by Central Act No. LXXI of 1951 to be of national importance should be deemed to be ancient and historical monuments and remained declared to be of national importance for the purpose of the said Act. Section 4 thereof enabled the Central Government to issue a notice of its intention to declare any other monument to be of national importance which did not come under section 3 of the said Act. But the Central Government did not give any notice of its intention to declare the monument in question as one of national importance. If so, that Act also did not replace the State Act in regard to the monument in question. For the aforesaid reasons it must be held that notwithstanding the extension of the Central Act VII of 1904 to the Travancore area and the passing of Central Acts LXXI of 1951 and XXIV of 1958, the State Act continued to hold the field in respect of the monument in question. It follows that the notification issued under the State Act was valid. The next argument of the learned counsel may be briefly stated thus : The disputed wall is not an ancient monument, but an archaeological site or remains; the said matter is covered by entry 40 of the Concurrent List (List 111) of the Seventh Schedule to the Constitution: when Act VII of 1904 was extended by Part B States (Laws) Act III of 1951 to the Travancore area, it occupied practically the entire field covered by the State Act and, therefore, the latter Act was impliedly repealed by the former Act. Assuming that is the legal position, we find it not possible to hold that the Fort wall is not an ancient monument but only an archaeological site or remains. The argument of the learned counsel is built upon the definition of "ancient monument" in the State Act (Regulation 1 of 1112 M.E.) and that in the Central Act of 1904. It is not necessary to express our opinion on the question whether the definition is comprehensive enough to take in an archaeological site or remains, and whether the Acts 875 apply to both ancient monuments strictly so called and to archaeological site or remains. If the definition was wide enough to cover both on which we do not express any opinion that State Act may be liable to attack on the ground that it, in so far as it deals with archaeological site or remains, was displaced by the Central Act. But the State Government only purported to notify the Fort wall as an ancient monument and, therefore, if the State Act, in so far as it dealt with monument is good, as we have held it to be, the impugned notification was validly issued thereunder. The Constitution itself, as we have noticed earlier, maintains a clear distinction between ancient monuments are archaeological site or remains; the former is put in the State List and the latter, in the Concurrent List. The dictionary meaning of the two expressions also brings out the distinction between the two concepts. "Monument" is derived from monere, which means to remind, to warn. "Monu ment" means, among others, "a structure surviving from a former period" whereas "archaeology" is the scientific study of the life and culture of ancient peoples. Archaeological site or remains, therefore, is a site or remains which could be explored in order. to study the life and culture of the ancient peoples. The two expressions, therefore, bear different meanings. Though the demarcating line may be thin in a rare case, the distinction is clear. The entire record placed before us discloses that the State proceeded on the basis that the Fort wall was a monument; the notification dated October 3, 1963, issued by the State Government described the wall as a protected monument. The petitioner questioned the notification on the ground that it was not a monument but a part of the boundary wall of his property. He did not make any allegation in the petition filed in the High Court that it was an archaeological site or remains and, therefore, the Central Act displaced the State Act. Nor did he argue before the High Court to that effect. In the petition filed in this Court he questioned the constitutional validity of the State Act only on the ground that the Ancient Monuments Preservation Act, 1904, impliedly repealed the State Act relating to monuments. He did not allege that the Fort wall was an archaeological site or remains and, therefore, the State Act as well as the notification were invalid. The present argument is only an afterthought. The extracts given in the counter affidavit filed by the State from the relevant Manuals and other books and documents show 876 that the Fort wall was a historical monument and was treated as such, being the wall built around the famous Sree Padmanabhaswami Temple. It is not an archaeological site for exploration and study, but an existing structure surviving from a former period. For the aforesaid reasons we hold that the Fort wall is a monument and the State Government was within its rights to issue the impugned notification under section 3 of the State Regulation 1 of 1112 M.E. We are not deciding in this case whether the wall in dispute is part of the Fort wall. Such and other objections may be raised under the provisions of the Act in the manner prescribed thereunder. In this view, it is not necessary to express our opinion on the question whether article 363 of the Constitution is a bar to the maintainability of the petition. In the result, the petition fails and is dismissed with costs. Petition dismissed.

By a Notification under the Travancore Ancient Monuments Preservation Regulation (1 of 1112/M.E. 1936 37 A.D.), the State Government declared a fort wall, which was within certain property purchased by the petitioner, to be protected monument for the purposes of the Regulation. The petitioner challenged the Notification as infringing his fundamental right under article 19(1) (f). It was contended on behalf of the petitioner that the impugned Notification had no legal force as Regulation 1 of 1112/M.E., though validly made when it was passed, was impliedly repealed by the extension to the State in 1951 of the Ancient Monuments Preservation Act, 1904 (Central Act VII of 1904) as that Act covered the same field occupied by the State Government, and in any event there was an implied repeal of the Regulation by the Central Acts LXXI of 1951 and XXIV of 1958. It was also contended that the disputed wall was not an ancient 'monument ' but fell within the term 'archaeological sites or remains ' and as the latter subject was in the Concurrent List, upon the extension of the Central Act VII of 1904 in 1951 to the State, the Central Act occupied practically the entire field covered by the State Act and thereby implicitly repealed the State Act. HELD:By virtue of Entry 67 of the Union List, Parliament could make a law in respect of ancient and historical monuments declared by or under a law made by it to be of national importance, but the Central Act of 1904 did not embody the requisite declaration. Therefore the Regulation, which fell under Entry 12 of the State List, continued to hold the field despite the extension of the Central Act to the State. [873 F G] Similarly, the Central Acts LXXI of 1951 and XXIV of 1958 applied only to ancient or historical monuments specified in Part 1 of the Schedule to the 1951 Act or expressly notified by the Central Government under section 4 of the 1958 Act. As neither of these Acts covered the monument in question, the State Regulation continued to be applicable in respect of it therefore followed hat the Notification issued under the State Act was valid. [873 H; 874 A E] The contention based on the argument that the disputed wall was not a monument but an archaeological site or remain could not be accepted, because it was clear from the evidence before the court that the Fort wall was not an archaeological site for exploration and study but that it was 869 an existing structure surviving from a former period and, as such, a monument. The State Government was therefore within its rights in issuing the impugned notification under section 3 of Regulation 1 of 11II 12/ M.E. [875 H; 876 A B]

Civil Appeal Nos. 681 and 682 of 1957. Appeals by special leave from the order dated August 2, 1954, of the Income tax Appellate Tribunal of India, Bombay Bench 'A ' in Income tax Appeals Nos. 3756 of 1948 49 and 2161 of 1950 51. R. J. Kolah and I. N. Shroff, for the appellants. H. N. Sanyal, Additional Solicitor General of India, K.N. Rajagopal Sastri and D. Gupta, for the respondent. 238 1959. May 12. The Judgment of the Court was delivered by BHAGWATI J. These two appeals with special leave under article 136 of the Constitution are directed against the order of the Income tax Appellate Tribunal of India, Bombay Bench " A " (hereinafter referred to as " the Tribunal ") dated August 3, 1954, in Income tax Appeals Nos. 3756 of 1948 49 and 2161 of 1950 51 whereby the Tribunal held that the amounts of cheques of Rs.1,98,643 and Rs. 4,96,365 for the assessment years 1943 44 and 1944 45 were received by the appellant from the Government in the taxable territories and were as such liable to tax under section 4(1)(a) of the Indian Income Tax Act (XI of 1922) (hereinafter referred to as "the Act"). At all material times the appellant was a public joint stock company incorporated under the then Baroda State Companies Act and having its registered office at Baroda. The appellant was the owner of a textile mill and carried on business in manufacturing and selling textiles at Baroda. In the accounting years 1942 and 1943 tenders were invited by the Government of India for some of the articles manufactured by the appellant and the appellant submitted its tenders to the Government of India which accepted the tenders and placed orders for supply of goods manufactured by the appellant. These orders were accepted by the appellant at Baroda and the deliveries of the goods manufactured by the appellant and sold by it to the Government of India were pursuant to the said orders to be and were in fact effected F. 0. B. Baroda. In fact so far as the manufacture and sale of the goods supplied to the Government of India were concerned, as also the deliveries thereof, everything took place at Baroda, outside the then British India. According to the conditions of the contracts governing the supplies made by the appellant to the Government, the system of payment was, that unless otherwise agreed upon between the parties, payment for delivery of the goods would be made on submission of the bills in the prescribed form in accordance with 239 the instructions given in the acceptance of the tender by a cheque on a Government Treasury or a Branch of the Reserve Bank of India or the Imperial Bank of ' India transacting Government business. The appellant after effecting deliveries of the goods, submitted bills in the prescribed printed form which contained the sentence that " Government should pay the amount due to the appellant by cheque " but the appellant did not request or write to the Government, in what way the payment by cheque was to be made by Government to the appellant. After submission of the bills the appellant received at Baroda, in payment of its bills cheques through post from the Government drawn on a Government Treasury or on a branch of the Reserve Bank of India or the Imperial Bank of India transacting Government business. The said cheques were received at Baroda by the appellant from the Government, along with a memo stating: " The undersigned has the honour to forward herewith cheque No. dated in payment of the bills noted below." then followed a tabular statement setting out the number, amount and date of the bills. On the top of the memo there was a direction that " it be immediately returned to the Controller of Supplies Accounts, with the acknowledgment form on the reverse duly signed and stamped. " The acknowledgment form was expressed as follows: " The undersigned has the honour to acknowledge cheque No. dated for Rs. in payment of the bills noted in the first column on the reverse. " The payments made by cheques were accepted by the appellant unconditionally and in full satisfaction of its claim for goods supplied to the Government. On receipt _of such cheques, the appellant endorsed the same and sent them either to Bombay or Ahmedabad in the Banking account of the appellant at such places. By his orders dated September 20, 1945, and March 16, 1943, for the assessment years 1942 43 (account year being calendar year 1941) and 1943 44 (account year being calendar year 1942) the Income tax Officer 240 held that the sums of Rs. 1,98,643 and Rs. 4,96,365 being the amounts of the cheques received by the appellant for the goods supplied to the Government of India amounted to receipt of income, profits and gains in British India during the said accounting years inasmuch as the said cheques were drawn on banks in British India and were liable to tax. On appeal to the Appellate Assistant Commissioner from the said orders of the Income tax Officer, the Appellate Assistant Commissioner confirmed the orders of the Income tax Officer and dismissed the appeals. From the said decision of the Appellate Assistant Commissioner the Appellant appealed to the Income tax Appellate Tribunal who, after two remand orders on various points in the case which have no relevance to the question involved in these appeals, finally by its order dated August 3, 1954, held that even though the appellant did not write to the Government saying that the cheques be sent by post, there was an implied request to the Government to send the cheques by post, observing that where a person in Baroda writes to another in Delhi to send the money due to him by a cheque there is an implied request to send the cheque by post. The appellant could not have intended that the cheques would be sent otherwise than by post and it was not the case of the appellant that the cheques received from the Government were delivered by hand on behalf of the Government to the Appellant at Baroda and following the decision of this Court in Commissioner of Income tax Bombay South vs Messrs. Ogale Glass Works Ltd.( '), the Tribunal held that the amounts of the cheques referred to above were received by the appellant in the taxable territories and as such the appellant was liable to tax under section 4(1)(a) of the Act. On December 20, 1954, the appellant applied for special leave to appeal against the said order of the Tribunal under article 136 of the Constitution which leave was granted by this Court by its order dated April 15, 1955. By a further order dated September 19, 1955, both the appeals were consolidated for the purposes of printing of the record and for filing of the (1)[1955] 1 S.C.R. 185. 241 petitions of appeal and the statements of case therein. These appeals have now come up for hearing and final disposal before us. On the facts narrated above it is clear that the mode of payment agreed upon between the appellant and the Government of India, as specified in Cl. 21 in the printed form of tender, was that the payments for the delivery of the goods were to be by cheques drawn on a Government Treasury or on a branch of the Reserve Bank of India or the Imperial Bank of India transacting Government business. The appellant used to submit the bills in the prescribed printed form which mentioned that the Government should pay the amounts due to the appellant by cheque. In payment of these bills the appellant used to receive at Baroda cheques ' drawn by the Government as aforesaid along with a memo of acknowledgment which stated that the cheques mentioned therein were forwarded in payment of the bills noted in the tabular statement setting out the amount, number and date of the bills. The acknowledgmet it form on the reverse was thereafter duly signed and stamped by the appellant acknowledging the receipt of the cheques in payment of the said bills and was despatched by the appellant to the Government. These payments by cheques were accepted by the appellant unconditionally and in full satisfaction of its claims for the goods supplied to the Government. The case of the Revenue in the first instance was that even though these cheques were received by the appellant in Baroda they were sent by the appellant after duly endorsing the same either to Bombay or Ahmedabad in the banking accounts of the appellant at such places and these cheques were cashed and the proceeds thereof were received by the appellant in either Bombay or Ahmedabad and accordingly the income, profits and gains were received by the appellant within the taxable territories. This contention was really of no avail to the Revenue because on the particular facts of the present case it was common ground that the payments made by cheques were accepted by the appellant unconditionally and in full satisfaction of its claims for goods supplied to the 31 242 Government and therefore if the cheques be held to have been received by the appellant in Baroda the income, profits and gains were also received in Baroda which was outside the taxable territories. Even if the receipts of the cheques at Baroda be treated as a conditional payment of the appellant 's claims for the goods supplied to the Government, the position was no better, for the simple reason that the cheques not having been dishonoured but having been duly cashed the payments related back to the dates of the receipts of the cheques and in law the dates of payments were the dates of the delivery of the cheques which was certainly in Baroda out side the taxable territories. In either event, it could not be urged by the Revenue that the income, profits and gains were received by the appellant at any place other than Baroda (Vide the Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. (1), ibid at 196). The position which was, however, taken up by the Revenue subsequently was that the cheques were posted by the Government in Delhi at the implied request of the appellant and therefore the payments must be held to have been received by the appellant at Delhi, the Post Office being thus constituted the agent of the appellant for the purposes of receiving the same. Learned Counsel for the appellant contested this position by urging that the only thing mentioned by the appellant was that the payment for the goods supplied by the appellant to the Government was to be by cheques and there was no request either express or implied emanating from the appellant for the despatch of these cheques by post with the result that if the Government chose to send these cheques by post from Delhi it was not in pursuance of any request express or implied made by the appellant in that behalf but it was so done by the Cxovernment on its own initiative thus constituting the Post Office the agent of 'the Government and there was no receipt of the monies by the appellant until the cheques reached their destination at Baroda. The case of the Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. (1), which was relied upon by Revenue was sought (1)[1955] 1 S.C.R. 18_~. 243 to be distinguished on the ground that in that case the assessee had written on the bill form the words " Kindly. remit the amount by a cheque in our favour on any bank in Bombay " which was an express request conveyed to the Government by the assessee to send the cheque by post thus constituting the Post Office the agent of the assessee. No such words having been used by the appellant in this case the only consequence of the provision contained in the bill form that the payment be made by cheque was that the Government was authorised or entitled to make the payment by cheque; but how to reach those cheques to the appellant was left to the sweet will and discretion of the Government and if the Government chose to send those cheques by post there was no request, express or implied, emanating from the appellant to send the cheques by post so as to constitute the Post Office the agent of the appellant for the purposes of receiving the same. It is true that in the Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. (1), the words " kindly remit the amount by a cheque in our favour on any bank in Bombay " were specifically used by the assessee and these words were construed to be an express request by the assessee to the Government to send the cheques by post. The various authorities which were discussed, viz., Thairlwall vs The Great Northern Railway Co.( '); Badische Anilin Und Soda Fabrik vs The Basle Chemical Works Bind Schedler (3) ; Comber vs Layland ( ')and MitchellHenry vs Norwich Union Life Insurance Society (5), were also cases where the expressions used were construed as words of express request constituting the Post Office the agent of the party receiving the money or the goods and went to support the case made by the Revenue that the post office was constituted the agent of the assessee for the purposes of receiving the cheques when they were posted by the Government in Delhi. Where, however, no such express words were used and the matter rested merely in the stipulation that the payment would be made by cheques, would the mere (1) [1955] 1 S C.R. 185. (3) (2) (4) (5)(19I8] 2 K.B. 67. 244 posting of the cheques in Delhi be enough to constitute the Post Office the agent of the appellant so that the 'income, profits and gains may be said to have been received by the appellant within the taxable territories ? If there was nothing more, the position in law is that the Post Office would not become the agent of the addressee and the mere posting of the cheque would not operate as delivery of the cheque to the addressee so as to pass the title in the cheque to the addressee. (Vide Thorappa vs Umedmalji (1) and the case of Exparte Cote In re Daveza (2). Where, however, on the facts and circumstances of the case an implied request by the creditor to send the cheque by post can be spelt out, the Post Office would be constituted the agent of the addressee for the purposes of receiving such payment. The authority in support of this proposition is to be found in Norman vs Ricketts(3). In that case Madame Phillippe, one of the plaintiffs, carried on business as a milliner in Bondstreet, and one of her customers was the defendant, Mrs. Ricketts. Between March 1884, and March, 1885, goods were supplied by Madame Phillippe to Mrs. Ricketts to the amount of pound 142. Mrs. Ricketts lived in Suffolk, and at the end of March, 1885, Madame Phillippe wrote to her in Suffolk saying, " the favour of a cheque within a week will oblige ". Mrs. Ricketts accordingly, on April 6, sent Madame Phillippe a cheque for the amount by post. The cheque was an open cheque payable to the order of Madame Phillippe. The cheque was stolen in the transit, and Madame Phillippe never received it, but it was paid by Mrs. Ricketts ' bankers to the thief. Madame Phillippe then commenced this action to recover the amount, and Mr. Baron Huddleston who tried the case without a jury, held [(1885) 2 T.L.R. (607)] that the sending of the cheque was payment and gave judgment for the defendant. The plaintiffs appealed and the appeal was dismissed by the Court of Appeal consisting of Lord Esher, M. R., Lindley and Lopes, L. JJ. The Master of the Rolls said that if a debtor had to pay his creditor (1) (2) (3) 245 money, as a general rule the debtor must come and pay his creditor. But if the creditor asked him to pay in a particular way, the debtor might do so. If asked to pay through the post, the putting the letter in the post with the money was a sufficient. The only question here was whether the plaintiffs asked the defendant in effect to send the money through the post. An express request to send through the post was not necessary. If what the plaintiffs said amounted to a request to send the cheque by the post, then there was payment. To answer that question the existing circumstances must be looked at. A milliner in London wrote to a lady in Suffolk asking for a cheque. ]bid that letter reasonably lead the lady to suppose and did she suppose that she might send the cheque by post ? She could not suppose that she was to send a messenger with it or come up to London herself. The only reasonable and proper meaning to be attached to it, whatever Madame Phillippe might have intended, was that she was to send the cheque by post. She, therefore, reasonably believed that she was invited to send her cheque by post, and she did what she was asked to do. Consequently, what she did amounted to payment to the appellant. The Lords Justices concurred with this judgment. Resting itself upon the observations in this case this Court observed in Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. (1) at p. 295: " According to the course of business usage in general to which, as part of the surrounding circumstances, attention has to be paid under the authorities cited above, the parties must have intended that the cheques should be sent by post which is the usual and normal agency for transmission of such articles and according to the Tribunal 's findings they were in fact received by the assessee by post. " Learned Counsel for the appellant particularly drew our attention to the case of Pennington vs Crossley and sons (Limited)( ') a decision of the Court of Appeal consisting of Lord Esher, M.R., A.L. Smith and Rigby, L. JJ., where Norman vs Ricketts (3) was distinguished. In that case the plaintiff sold on December 10, (1) (2) [1897]13T.L.R. 5i3. (3)(1886) 246 1896 the goods in question to the defendants and on the same date an invoice was sent to the defendants under which the defendants were entitled to discount if the payment was made within 14 days. Upon December 24 the defendants posted a cross cheque made payable to the plaintiff or his order; and with the cheque was sent a form of receipt for signature by the plaintiff. The envelope containing the cheque was properly addressed to the plaintiff, but was not registered. There was no express request to send the cheque by post. The cheque was never received by the plaintiff but was cashed by a stranger on the strength of a forged endorsement of the plaintiff 's name thereupon. On an action to recover the price of the goods sold and delivered the defendants contended that the posting of the cheque amounting in law to payment, and gave evidence that for about 20 years before this transaction payments for goods in question; as between the plaintiff and the defendants were always made by cheque sent by post in the form of receipt given above. The learned Judge held that the course of business showed that the parties had agreed that the payment should be made by cheque, and that the posting of the cheque amounted to payment, and accordingly gave judgment for the defendants. The Court of Appeal reversed this decision. The Master of the Rolls in his judgment distinguished the case of Norman vs Ricketts (1), stating that in that case there was what amounted to a request to send a cheque by post and the Court held that the posting of the cheque was payment. There was no such request here. The course of business between the plaintiff and the defendants was not taken to mean that there was a request to the defendants to send the cheque by post and that the plaintiffs would run the risk of the cheques miscarrying in the transit. The defendants sent to the plaintiff cheques by post on the various sales, together with a form of receipt to be signed by him independently of any arrangement. There was nothing in the circumstances to warrant the conclusion that putting the cheque in the post was to ' be taken as the delivery of the cheque to the plaintiff, the only facts (1) 247 being that the defendants always sent cheques by post and that when the plaintiff received them he sent back the receipt duly signed. This case does not militate against the ratio of the decision in Norman vs Ricketts (1), but really confirms the same. If on the facts and circumstances of that case the Court of Appeal had been able to find any request, express or implied, to send the cheques by post the decision would certainly have been confirmed but in so far as there was nothing in the circumstances of the case from which such an inference could be raised the Court of Appeal observed: It would be most monstrous to infer from those circumstances a request to send a cheque by post and that the plaintiff would consider that he had received it as soon as it was posted. " The other Lord Justices delivered judgment to the same effect and the appeal was allowed. The above ratio is really determinative of the question before us. The stipulation in the contract between the appellant and the Government was that the payment would be made by cheques. The Government of India was located in Delhi and the cheques would be necessarily drawn by it from Delhi. Could it be imagined that in the normal course of affairs the cheques thus drawn in Delhi would be sent by a messenger to Baroda so that they may be delivered to the appellant in Baroda? Or that the officer concerned would come to Baroda himself and hand the same over to the appellant in Baroda ? The only reasonable and proper way of dealing with the situation was that the payment would be made by cheques which the Government would send to the appellant at Baroda by post. According to the course of business usage in general which appears to have been followed in this case, the parties must have intended that the cheques should be sent by post which is the usual and normal agency for transmission of such articles. If that were so, there was imported by necessary implication an implied request by the appellant to send the cheques by post from Delhi thus constituting the Post Office its agent for the purposes of receiving those payments. (1) 248 Learned Counsel for the appellant further drew our attention to certain provisions of the Post Office Act, 1898 and the postal regulations framed thereunder and tried to argue that the Post Office was really the agent of the Government and the Government could recall the cheques at any time before they actually reached the appellant at Baroda. All these provisions were discussed by this Court in the Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. (1), and it was held that these provisions did not help the assessee. The position as it obtains was thus summarised at p. 204: " there can be no doubt that as between the sender and the addressee it is the request of the addressee that the cheque be sent by post that makes the post office the agent of the addressee. After such request the addressee cannot be heard to to say that the post office was not his agent and, therefore, the loss of the cheque in transit must fall on the sender on the specious plea that the sender having the very limited right to reclaim the cheque under the Post Office Act, 1898, the post office was his agent, when in fact there was no such reclamation. Of course if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself. " In our opinion the principle which has been enunciated by us in the Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. (1), is applicable to the facts of the present case, even though the words " to remit the amount by cheque " have not been specifically used herein. Non user of those words does not make any difference to the position and it is not possible to distinguish the present case from that case merely on this ground. We are, therefore, of opinion, that the Income tax Appellate Tribunal was right in the conclusion to which it came and these appeals must accordingly be dismissed with costs, one set between the two appeals. Appeals dismissed. (1)[1955] 11 S.C.R. 185.

The appellant company, carrying on business in manufacturing and selling textiles at Baroda, received in the assessment years 1942 43 and 1943 44 payments in cheques from the Government of India for the supply of such goods on bills submitted, as agreed upon in prescribed printed forms which provided that the Government should pay the amount due to the appellant by cheque. The appellant, however, did not request or write to the Government indicating in what way the payment by cheque was 237 to be made. The Government sent the cheques from Delhi by post to the appellant at Baroda and it received and accepted them in Baroda in full and unconditional satisfaction of its claim and cashed them through its bank accounts in Bombay and Ahmedabad. The question was whether the amounts of the cheques were income, profits and gains received by the appellant in the taxable territories and were as such liable to tax under section 4(1)(a) of the Indian Income tax Act. The Income tax Officer held that the amounts were received in British India as the cheques were drawn on banks in British India and the Appellate Assistant Commissioner on appeal affirmed his order. The Income tax Appellate Tribunal on appeal held that even though the appellant did not ask the Government to send the cheques by post, there was an implied request to do so and following the decision of this Court in Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. [1955] I S.C.R. 185, held that the amounts of the cheques were received in the taxable territories and as such the appellant was liable to tax under section 4(1)(a) of the Act. Hence these appeals by special leave. The question for decision was whether in the facts and circumstances of the case the stipulation that payments should be made by cheques implied a request by the appellant to the Government to send the cheques by post so as to constitute the Post Office its agent for receiving such payments. Held, that regard being had to the general course of business usage which was followed in this case, there could be no doubt that the parties intended that the cheques should be sent by post which was the normal agency for transmission of such articles and, consequently, there was an implied request by the appellant to the Government to send the cheques by post so as to constitute the Post Office its agent for the purpose of receiving those payments. Commissioner of Income tax, Bombay South vs Messrs. Ogale Glass Works Ltd. [1955] I S.C.R. 185 and Norman vs Rickets, , applied. Pennington vs Crossley and Sons (Limited), [1879] 13 T.L.R. 513, considered. Thorappa vs Umedmalji and Exparte Cote In ye Deveza, , distinguished.

Appeal No. 213 of 1967. Appeal from the Judgment and order dated February, 17th 1965 of the Patna High Court in First Appeal No. 113 of 1960. M. C. Chagla, D. P. Singh, section C. Agarwal, V. J. Francis, R. Goburdhun and D. Goburdhun, for the appellant. M. C. Setalvad, Sarjoo Prasad, A. G. Ratnaparkhi and Rajiv Shah, for respondent No. 1. The Judgment of the Court was decided by Hegde, J. In this appeal by certificate we are to consider the effect of the will executed by one Raghunath Prasad Singh, on August 31, 1938. The said testator died very soon after the execution of the will leaving behind him his widow Jageshwar Kuer, 72 his daughter Satrupa Kuer and his two grand daughters Talkeshwari Devi (the appellant herein) and Sheorani. The appellant and Sheorani are the daughters of Sukhdeo Prasad Singh, the son of the testator who had predeceased the testator. Jageshwar Kuer died in November 1948 and Sheorani Devi on November 1, 1949 without leaving any issue. The dispute in this case is as to who is entitled to the properties devolved on Sheorani under the provisions of the will left by the testator. For deciding that question we have to refer to the relevant provisions of the will. the genuineness or validity of which is not in dispute. The will in question provides that after the death of the testator a portion of his properties (detailed in the will) was to devolve on Jageshwar Kuer absolutely and the remaining properties are also to devolve on her but therein she was to have only a life interest. The will further provides that after her death "the entire property will be treated as 16 annas property out of which 5 annas 4 pies(five annas four pies) share constituting proprietary interest will pass to Shrimati Satrupa Kuer alias Nan daughter of me, the executant and her heirs as absolute owners and the remaining 10 annas 8 pies (annas ten and eight pies) share will pass to both the minor grand daughters, (1) Shrimati Talkeshwari Kuer alias Babu and (2) Shrimati Sheorani Kuer alias Bachan in equal shares as absolute proprietary interest" (cf. 4 of the will). Clause 5 of the will says : "That if one of the two grand daughters named above, dies issueless, then under such circumstances the other living grand daughter will enter into possession and occupation of the entire 10 annas 8 pies and become the absolute owner thereof. " At the time of the death of the testator, the appellant as well as Sheorani Kuer were minors. After the death of Jageshwar Kuer, the appellant and her sister Sheorani Kuer divided the ten annas eight pies share of the properties which devolved on them in equal shares and each one came into possession of her share of the properties. Immediately after the death of Sheorani Kuer, the appellant instituted a suit for possession of the properties that fell to the share of Sheorani Kuer purporting to base her claim on clause 5 of the will to which we have earlier made reference. That suit was resisted by the first defendant, the husband of Sheorani. He claimed that he was entitled to those properties as the heir of his wife. The trial court dismissed the plaintiff 's suit and the decision of the trial court was upheld by the High Court. It was contended on behalf of the appellant that in view of clause 5 of the will, the appellant is entitled to the suit properties 73 as Sheorani Kuer had died issueless. This contention, as mentioned earlier, did not find favour either with the trial court or with the appellate court. They have held that on a proper leading of the will as a whole, it is clear that clause 5 ceased to be operative on the death of Jageshwar Kuer, thereafter caluse 4 of the will was the only operative clause so far as the rights of the appellant and Sheorani ware concerned. It is undisputed that the duty of the court is to find out the intention of the testator but that intention has to be gathered from the language of the will read as a whole. I+ is clear from clause 4 of the will that the testator wanted to give to his grant daughters an absolute right in the properties that were to devolve on them after the death of his wife, Jageshwar Kuer. The estate bequeathed under clause 4 of the will is not a conditional estate. Clause 5 of the will relates to devolution and it does not provide for any divestment of an estate which had vested. The estate that vested on Sheorani was an absolute one. The will does not provide for the divestment of that estate. It is plain from the language of clause 5 of the will that it refers to the devolution, which means when the properties devolved on the two sisters on the death of Jageshwar Kuer. We are, unable to accept the contention of Mr. M. C. Chagla, learned Counsel for the appellant that there is an , conflict between clause 4 and clause 5 of the will. Clause 5 in our judgment would have come into force if the contingency mentioned therein had happened before the properties absolutely devoted on the two sisters. Clause 5 cannot be considered as a defeasance clause. If the testator wanted that the bequest made to any of his grand daughters should stand divested on the happening of any contingency, then he would have said so in the will, assuming that he could have made such a provision. But the will nowhere says that the properties bequeathed to the appellant and her sister should cease to be their properties on their dying issueless. Obviously what the testator intended was that if any of his grand daughters dies issueless before the devolution took place then the entire property should go to the other granddaughter. To our mind the intention of the testator is plain from the language of the will. To find out the effect of the will before us we have to look to sections 1 4 and 131 of the . Section 124 says : "Where a legacy is given if a specified uncertain event shall happen and no time is mentioned in the will for be occurrence of that event, the legacy cannot take effect, unless such event happens before the period when the fund bequeathed is payable or distributable." L864 Sup. CI/72 74 Illustration (ii) to that section says "A legacy is bequeathed to A, and in the case of his death without children, to B. If A survives the testator or dies in his lifetime leaving a child, the legacy to B does not take effect. " If section 124 applies to the facts of the case, as we think it does, then it is clear that the legacy claimed by the appellant is unavailable as the contemplated contingency did not occur before the fund bequeathed was payable or distributable. Section 124 deals with devolution. But as we shall presently see section 131 deals with divestment of an estate that had vested. Mr. Chagla contends that the governing provision is section 131. That section says: "A bequest may be made to any person with the condition super added that, in case a specified uncertain event shall happen, the thing bequeathed shall go to another person, or that in case a specified uncertain event shall not happen, the thing bequeathed shall go over to another person." had already vested. It speaks of an estate going over to another person. As seen earlier clause 5 of the will is not a defeasance clause. A case somewhat similar to the one before us came up for consideration before the Judicial Committee of the Privy Council in Norendra Nath Sircar and anr. vs Kamal Basini Dasi(1) Therein a Hindu at his death left three sons, the eldest of full age and the other two minors. In his will were the directions "My three sons shall be entitled to enjoy all the movable and immoveable properties left by me equally. Any one of the sons dying sonless, the surviving son shall be entitled to all the properties equally". Interpreting this clause the Judicial Committee held that those words gave a legacy to the survivors contingently on the happening of a specified uncertain event, which had not happened before the period when the property bequeathed was distributable, that period of distribution being the time of the testator 's death. In arriving at this conclusion, the Judicial Committee relied on section 111 of the Indian Succession Act, 1865. That provision is similar to section 124 of the . For the reasons mentioned above we are in agreement with the courts below that the suit brought by the appellant is un sustainable. This appeal is accordingly dismissed with costs. Appeal dismissed. K.B.N. Appeal dismissed.

By clause 4 of a will the testator bequeathed to his grand daughters T and S an absolute right in the properties that were to devolve on them after the death of his wife. , Clause 5 further provided that if one of the two grand daughters were to die issueless the other living grand daughter was to enter into possession of the entire property as absolute owner. After the death of the testator 's wife T and S divided the properties which devolved on them in equal shares. On S dying issueless T instituted a suit for possession of the properties that fell to the share of S basing her claim on clause 5 of the will. The suit was dismissed. Dismissing the appeal, HELD : Clause 5 of the will relates to devolution, it does not provide for any divestment of an estate which had vested. The estate that vested in S under clause 4 of the will was not a conditional estate, it was an absolute one. The will does not provide for the divestment of that estate. Clause 5 would have come into operation if the contingency mentioned therein had happened before the properties absolutely devolved on T and section What the testator intended was that if any of his grand daughters died issueless before the devolution took place then the entire property should go to another grand daughter. The intention of the testator is plain from the language of the will. [73 E] Section 124 of the applies to the facts of the case and not section 131. The legacy claimed by the appellant is unavailable as the contemplated contingency did not occur before the fund bequeathed was payable or distributable. Section 131 provides for the divestment of an estate which had already vested; it speaks of an estate going over to another person. [74B] Norendra Nath Sircar and anr. vs Kamal Basini Dasi, I.L.R. , referred to.

Appeal No. 216 of 1984 From the Judgment and Order dated 11.9.80 of the High Court of Punjab & Haryana at Chandigarh in R.S.A. No. 126/76. Harbans Lal A.K Goel for the Appellant A.K Gauguli and A.D. Sikri for the Respondent. The Judgment of the Court was delivered by VRADARAJAN, J. This appeal by special leave is by the plaintiff against the reversing judgment of the Punjab and Haryana High Court in R.S.A. No. 126 of 1979. The trial court had dismissed the suit but the learned Additional District Judge, Patiala allowed the plaintiff 's appeal and decreed the suit. The plaintiff/appellant 's case was that he had taken on lease under a lease deed dated 26.8.1963 for a term of 10 years a plot! of land measuring 51 ' x 118 ' situate near the Army Headquarters, Lower Mall, Patiala for M/s Jain Motor from its owner Lt. Col. Sadan Singh. He was only a partner of M/s Jain Motors in 1963, but later became its sole owner in 1967. The defendant/respondent took from the appellant on licence for one year under a deed dated 10.12.1969 the suit shed for carrying on the work of repair of motors, tractors, etc. But since he did not vacate the shed after the expiry of the period he terminated the licence and filed the suit on 15.2.1973 for a mandory injunction directing him to vacate the premises. The respondent opposed the suit contending that the appellant sub let to him a plot of land in 1966 67 and he has raised a new construction thereon and is carrying on workshop business therein since then. He further contended that the relationship between the parties was that of landlord and tenant and that the suit for mandatory injunction was not maintainable. The trial court found that M/s Jain Motors were the lessees and that the respondent become a sub tenant of a piece of land and constructed the suit shed thereon and that the suit for mandory injunction is not maintainable and dismissed the suit. In the appeal the learned Additional District Judge set aside the trial court 's findings recorded in favour of the respondent and found that no rent is mentioned either in the document executed by the respon 187 dent in favour of the appellant or in the written statement and no rent receipt was produced by the respondent, and that the relationship between the parries was only one of licensor and licensee. On the question of delay in filing the suit the learned Additional District Judge found that the partie remained busy in fighting out criminal cases till the end and that the present suit had been filed thereafter and there had been no undue delay and also that there was no challenge to the trial court 's finding that the respondent had not put any construction of his own and held that the suit for mandatory injunction against the licensee is maintainable. On these findings he allowed the appeal and decreed the suit, directing the respondent to deliver vacant possession of the shed in dispute to the appellant. In the second appeal the respondent filed an application for receiving as additional evidence a sale deed dated 27.8 1979 whereby he claimed to have purchased the entire property from its original owner. The High Court called for finding in that regard from the trial court which thereupon found that the respondent has purchased the property from its original owner by that sale deed. It was contended in the High Court that in view of that sales, it is not open to the appellant to contend that the respondent in whom the title to the property has come to be vested after the date of the suit, is liable to be ejected on the revocation of the license granted to him by the appellant. On the other hand, it was contended for the appellant that the fact that the respondent had purchased the property from its owner subsequent to the grant of the licence in favour of the respondent does not make any difference to the appellant 's claim for recovering possession of the suit shed and that it is obligatory on the respondent to first surrender possession of the property after the licence had been revoked and hen seek his remedy, according to law, on the basis of the title claimed by him. It was further contended that in view of the provisions ofs. 13 of the East Punjab Rent Restrictions Act, 1949, the appellant who was the tenant of the property under its original owner cannot be dispossessed except in accordance with the provisions of that Act. The learned Single Judge of the High Court rejected the appellant 's contention that his rights under the lease by the original owner cannot be interfered with the provisions of the said Act, observing that from the decisions referred to by him H 188 and the provisions of section 116 of the Indian Evidence Act, it is clear that after the commencement of the tenancy or the licence a tenant or licensee who has purchased the property from its original owner cannot be evicted from that property on the lease or licence. He rejected the contention that the present suit for a mandatory injunction directing the respondent to vacate and hand over possession of the suit shed is in effect a suit for possession and he allowed the second appeal and set aside the judgment and decree of the learned Additional District Judge and restored the trial court 's decree dismissing the suit. Now the parties are bound by the following factual findings recorded by the learned Additional District Judge in the first appeal namely: (1) that the appellant who had become the sole proprietor of M/s Jain Motors in 1967 through at the time of the lease of the property by the original owner Lt. Col. Sadan Singh to M/s Jain Motors in 1963 he was only one of its partners, was the lessee of the property; (2) that the respondent had become a licensee of the suit shed under the appellant when the appellant was in possession of the whole of the demised premises including the suit shed as tenant under the original owner; (3) that the licence in favour of the respondent had been revoked before the institution of the present suit and (4) that subsequent to the decision in the first appeal on 7.12.1978, the respondent had purchased the entire property from the original owner by a sale deed dated 27.8.1979. In these circumstances, there, is no merger of the lease of the whole property by its original owner in favour of the appellant by reason of the sale of the entire property by the original owner in favour of the respondent or of the licence given by the appellant to the respondent which had been revoked prior to the date of the suit. The lease in favour of the appellant continues, and it is not disputed that under the Act of 1949 referred to above, even the tenant of a vacant land in Patiala town cannot be evicted therefrom except in accordance with the provisions of that Act. In K.K. Verma & Anr. vs Union of India & Anr. ,(13 Chagla, C.J. presiding over a Division Bench has observed that in India a landlord can only eject his erstwhile tenant by recourse to law and by obtaining a decree for ejectment. In Milkha Singh vs Dvna & Ors. ,(2) it has (1) AIR 1954 Bombay 358 (2) AIR 1964 Jammu & Kashmir 99. 189 been observed that the principle once a licensee always a licensee would apply to all kinds of licences and that it cannot be said that the moment the licence it terminated, the licensee s possession becomes that of a trespasser. In that case, one of us (Murtaza Fazal Ali, J.) as he then was speaking for the Division Bench has observed: "After the termination of licence, the licensee is under clear obligation to surrender his possession to the owner and if he fails to do so, we do not see any reason why the licensee cannot be compelled to discharge this obligation by way of a mandatory injunction under section 55 of the Specific Relief Act. We might further mention that even under English law a suit for injunction to evict a licensee has always been held to be maintainable. Where a licensor approaches the court for an injunction within a reasonable time after the licence is terminated, he is entitled to the injunction. On the other hand, if the licensor causes huge delay the court may refuse the discretion to grant an injunction on the ground that the licensor had not been diligent and is that case the licensor will have to bring a suit for possession which will be governed by s.7 (v ) of the Court Fees Act." In the present case it has not been shown to us that the appellant had come to the court with the suit for mandatory injunction after any considerable delay which will disentitle him to the discretionary relief. Even if there was some delay, we think that in a case of this kind attempt should be made to avoid multiplicity of suits and the licensor should not be driven to file another round of suit with all the attendant delay, trouble and expense. 1 he suit is in effect one for possession though couched in the form of a suit for mandatory injunction as what would be given to the plaintiff in case he succeeds is possession of the property to which he may be found to be entitled. therefore, we are of the opinion that the appellant should not be denied relief merely because he had couched the plaint in the form of a suit for mandatory injunction. The respondent was a licensee, and he must be deemed to be always a licensee. It is not open to him? during the subsistence of 190 the licence or in the suit for recovery of possession of the property instituted after the revocation of the licence to set up title to the property in himself or anyone else. It is his plain duty to surrender possession of the property as a licence and seek his remedy separately in case he has acquired title to property subsequently through some other person. He need not do so if he has acquired title to the property from the licensor or from some one else lawfully claiming under him, in which case there would be clear merger. The respondent has not surrendered possession of property to the appellant even after the termination of the licence and the institution Or the suit. The appellant is, therefore, entitled to recover possession of the property. We accordingly allow the appeal with costs throughout and direct the respondent to deliver possession of the property to the appellant forthwith failing which it will be open to the appellant to execute the decree and obtain possession. A.P.J. Appeal allowed.

The appellant had taken a plot of land on lease under a lease deed for a term of 10 years for M/s Jain Motors. At that time he was only a partner of M/s Jain Motors but later he became its sole owner. The respondent took from the appellant on licence for one year under a deed the suitshed for carrying on work shop business Since he did not vacate the she dafter the expiry of the period the appellant terminated the licence and filed the suit for a mandatory injunction directing the respondent to vacate the premises. The respondent opposed the suit contending that the appellant sub let to him a plot of land and he had raised a new construction thereon and is carrying on workshop business, and that the relationship between the parties was that of landlord and tenant and the suit for mandatory injunction was not maintainable. The trial court dismissed the suit, for mandatory injunction as not maintainable. On appeal, the Additional District Judge held that the relationship between the parties was only one of licensee and that suit for mandatory injunction was maintainable, allowed the appeal decreed the suit and directed the respondent to deliver vacant possession of the shed. In the second appeal, the respondent filed an application for receiving as additional evidence a sale deed dated 27.8.1979 whereby he claimed to have purchased the entire property from its original owner. On a finding called for 185 by the High Court, the trial court found that the respondent had purchased the property from its original owner by that sale deed. The High Court held that after the commencement of the tenancy or the license a tenant or licensee who has purchased the property from its original owner cannot be evicted from that property on the basis of the lease or laciness. The Second appeal was allowed, the judgment and decree of the additional District Judge was set aside and the trial court s decree dismissing the suit was restored. Allowing the Appeal, ^ HELD: 1. There is no merger of the whole property by it original owner in favor of the appellant by reason of the sale of the entire property by too original owner in favor of the respondent or of the license given by the appellant to the respondent which had been revoked prior to the date of the suit. The lease in favor of the appellant continues and under the East Punjab Rent Restrictions Act 1949 even the tenant of a vacant land cannot be evicted therefrom except in accordance with the provisions of that Act. [188F G] K.K Verma & Anr. vs Union of India & Anr., AIR 1954 Bombay 358, Milka Singh vs Diana & Ors., AIR 1964 Jammu & Kashmir 99, relied upon. In the instant case, it has not been shown that the appellant had filed the suit for mandatory injunction after considerable delay which will disentitle him to the discretionary relief. Even if there was some delay, in a case of this kind attempt should be made to avoid multiplicity of suits and the licensor should not be driven to file another suit with all the attendant delay trouble and expense. [189E F] 3. The suit is in effect one for possession though couched in the form of a suit for mandatory injunction as what would be given to the plaintiff in case he succeeds in possession of the property to which he may found to be entitled. Therefore, the appellant should not be denied relief merely because he had couched the plaint in the form of a suit for mandatory injunction. [189G ] 4. The respondent was a licensee and he must be deemed to be always a licensee. It is not open to him, during the subsistence of the licence or in the licence or in the suit for recovery of possession of the property instituted after revocation of the licence to set up title to the property in himself or anyone else. It is his plain duty to surrender possession of the property as a licensee and seek his remedy separately in case he has acquired title to the property subsequently through some other person. He need not do so if he has acquired title to the property from the licensor or from some one else lawfully claiming under him, in which case there would be clear merger. The respondent had not surrendered the possession of the property to the appellant even after the termination of the licence and the institution of the suit. The appellant is, therefore, entitled to recover possession of the property. The respondent is directed to deliver possession of the property to the appellant forthwith failing which it will be open to the appellant to execute the decree and obtain possession. [189H; 190A C] 186

iminal Appeal No., 7 of 1951. Appeal under article 134(1)(c) of the Constitution of India from the Judgment and Order dated the 10th March,, ' 1951, of the judicial Commissioner Vindhya 1099 Pradesh, Rewa in Criminal Appeal No. 81 of 1950 arising out of the Judgment and Order dated the 26th July, 1950, of the Court of the Special Judge, Rewa, in ' Criminal Case No. 1 of 1949. Jai Gopal sethi (K. B. Asthana, with him) for appellant No.1. S.C. Isaacs (Murtza Fazl Ali, with him) for appellant No. 2. Porus A. Mehta for the respondent. March 5. The Judgment of the Court was delivered by BHAGWATI J. The appellant No. 1 was the Minister *of Industries and the appellant No. 2 was the Secretary to the Government of the Commerce and Industries Department of the State of Vindhya Pradesh. The appellant No. 1 was charged with having committed offences under sections 120 B, 161, 465 and 466 of the Indian Penal Code and the appellant No. 2 under sections 120 B and 161 of the Indian Penal Code as adopted by the Vindhya Pradesh Ordinance No. 48 of 1949. They were tried in the Court of the Special Judge at Rewa under the Vindhya Pradesh Criminal Law Amendment (Special Courts) Ordinance No. LVI of 1949 and the Special Judge acquitted both of them. The State of Vindhya Pradesh took an appeal to the Court of the Judicial Commissioner, Rewa. The Judicial Commissioner reversed the order of acquittal passed by the Special Judge and convicted both the appellants of the several offences with which they were charged. The Judicial Commissioner awarded to the appellant No. 1 a sentence of 3 years rigorous imprisonment and a fine of Rs. 2,000 in default rigorous imprisonment of 9 months under section 120 B of the Indian Penal Code and a sentence of three years ' rigorous imprisonment under section 161 of the Indian Penal Code, both the sentences to run concur rently. He imposed no sentence upon the appellant No. 1 under sections 465 and 466 of the Indian Penal Code. He awarded to the appellant No. 2 a sentence of rigorous imprisonment for one year and a fine of Re. 1,000 and in default rigorous imprisonment for 1100 nine months under section 120 B of the Indian Penal Code. He did not award any separate sentence to appellant No. 2 under section 161 of the Indian Penal Code. On an application made to the Judicial 'Commissioner, Rewa, for leave to appeal to the Supreme Court the Judicial Commissioner granted the appellants leave to appeal under article 134(1)(c) of the Constitution in regard to the four points of law raised in the case before him. The constitutional points involved in the appeal came up for hearing before the Constitution Bench of this court and were dealt with by the Judgment of this court delivered on the 22nd May, 1953. The Constitution Bench held that the appeal to the Judicial Commissioner from the acquittal by the Special Judge was competent and that there was no infringement of the fundamental rights of. the appellants under articles 14 and 20 of the Constitution (Vide ; The appeal was accordingly directed to be posted for consideration whether it was to be heard on the merits. An application wag thereafter made by the appellants to this court for leave to urge additional grounds and this court on the 20th October, 1953, made an order that the appeal should be heard on merits. The appeal has accordingly come up for hearing and final disposal before us. The case for the prosecution was as follows. By an agreement executed on the 1st August, 1936, between the Panna Durbar of the one part and the Panna Diamond Mining Syndicate represented by Sir Chintubhai Madholal and Hiralal Motilal Shah of the other part, the Panna Durbar granted to the syndicate a lease to carry on diamond mining operations for a period of 15 years. The period of the lease was to expire on the 30th October, 1951, but there was an option reserved to the lessee to have a renewal of the lease for a further period of 15 years from the date of such expiration. There were disputes between the syndicate on the one hand and the Panna Durbar on the other and by his order dated the 31st October, 1946, the Political Minister of Panna stopped the mining operations of the syndicate. The, State of 1101 Panna became integrated in the Unit of Vindhya Pradesh in July, 1948, and the administration of Panna came under the control and superintendence of the Government of Vindhya Pradesh with its seat at Rewa under His Highness the Maharaja of Rewa as Rajpramukh and the appellant No. I became the Minister in charge of the Industries Department in the Cabinet which was formed by the Rajpramukh. The appellant No. 2 held the post of Secretary, Commerce and Industries Department, and was working under the appellant No. 1. On the 1st September, 1948, the syndicate appointed one Pannalal as Field Manager to get the said order of the Panna Durbar stopping the working of the mines rescinded. Pannalal made several applications for procuring the cancellation of the said order and on the 13th January, 1949, and the 26th January, 1949, Pannalal made two applications and handed them over personally to the appellant No. I requesting for the resumption of the mining operations and was asked to come in February for the purpose. The appellant No. I consulted the legal advisers of the State and a questionnaire was framed which was to be addressed to the syndicate for its answers. When Pannalal went to Rewa the questionnaire. was handed over to him on the 9th February, 1949, for being sent to Sir Chinubbai Sir Chinubhai sent the replies to the said questionnaire along with a covering letter dated the 18th February, 1949, where in he expressed a desire to meet the appellant No. 1 for personal discussion in regard to the settlement of the matter of the resumption of the mining operations etc. In reply to the telegrams sent by Sir Chinubhai on the 19th February, 1949, the Personal Assistant to appellant No. 1 intimated to Sir Chinubhai that he could go to Rewa and see the appellant No. 1 on the 7th March, 1949. As Sir Chinubhai was ill he deputed his Personal Assistant, Nagindas Mehta to go to Rewa and see the appellant No. 1 on his behalf Nagindas arrived at Rewa on the evening of the 6th March, 1949. The appellant No. 1 had gone out of Rewa and Nagindas had to wait. He saw the appellant No. 1 on the morning. of the 8th March, 1949, but was asked 1102 to see the appellant No. 2. The appellant No. 2 saw Nagindas at the Guest House where lie had put up and informed Nagindas that a third party was offering Rs. 50,000 for the mining rights. Nagindas told the appellant No. 2 that the syndicate was a limited concern and could not afford to pay so much money . but if the amount was reduced they would make an effort to pay the sum. The appellant No. 2 then told Nagindas that he would talk over the matter with the appellant No. I and let him know. The same day in the afternoon the appellant No. 2 saw Nagindas at the Guest House and informed him that as the syndicate was working for the last so many years the appellant No. 1 was prepared to reduce the amount to about Rs. 25,000. Nagindas told the appellant No. 2 that he would talk over the matter with Sir Chinubhai in Bombay and would let him know about it. Nagindas then left for Bombay but he reached Bombay on the 29th March, 1949, having been detained on the way for some other business of his. He saw Sir Chinubhai in Bombay and reported to him what had happened, at Rewa and gave him to understand that resumption orders would not be passed unless a bribe of Rs. 25,000 was paid. Sir Chinubhai did not approve of the idea of giving a bribe and suggested that Nagindas should lay a trap for catching the appellant No. 1. Nagindas sent a telegram on the 29th March, 1949, agreeing to go to Rewa in the week thereafter for completion. On receipt of that telegram the appellant No. 2 in the absence of appellant No. 1 who was on tour sent a telegram on the 1st April, 1949, to Sir Chinubhai pressing him to come the same week as his presence was essential to complete the matter which had been already delayed. On the 4th April, 1949, Pannalal was informed by the appellant No. 2 that the appellant No. 1 was leaving for Delhi that day and that he should go to Bombay and send Sir Chinubhai to Delhi to meet the appellant No. I in the Constitution House where he would be staying. He also gave a letter to Pannalal to the same effect. Appellant No. 1 left for Delhi on the 4th April,, 1949, with the files of the Panna Diamond Mining 1103 Syndicate and reached Delhi on the 5th April, 1949. On the 6th April, 1949, the appellant No. 1 sent a telegram through his Personal Assistant Mukherji to Sir Chinubhai at Bombay asking him to meet the appellant No. I on the 7th, 8th or 9th April, 1949, at 31 Constitution House for final talks regarding the Panna Diamond Mining Syndicate. On receipt of the said telegram Sir Chinubhai sent a telegram in reply stating that his Personal Assistant, Nagindas and Pannalal were reaching Delhi on the 9th April, 1949. Nagindas reached Delhi on the 8th April, 1949, and put up at the Maidens Hotel and Pannalal reached Delhi on the 10th April, 1949, and put up at the Regal Hotel. On the 9th April, 1949, Nagindas informed the appellant No. I on the telephone about his arrival at Delhi and an appointment was fixed for 10 30 am. on the 10th April, 1949 Nagindas contacted Shri. Bambawala, the inspector General of Police of the Special Police Establishment on the morning of the 10th April, 1949, before, coming to meet the appellant No. I and told him how the appellant No. 1 was coercing him to pay a bribe. Shri Bambawala referred Nagindas to Pandit Dhanraj, Superintendent,, Special Police Establishment, and Nagindas told him the whole story of his harassment by the appellant No. 1 and it was then decided to lay a trap for, appellant No. 1. Nagindas informed Pandit Dhanraj that he would meet the appellant No. 1 at about 11 a.m. and then report their talk to him in the afternoon. Nagindas then saw the appellant No. 1 at the Constitution House at the appointed time and at this meeting the appellant No. 1 demanded from Nagindas a sum of Rs. 25,000 as a bribe for allowing the resumption of the mining operations and made it quite clear that he would not accept anything less than ' Rs. 25,000. As Nagindas had not received the moneys from Bombay, the following day, ie., the 11th April, 1949, at 3 p.m. was fixed for the next meeting. Nagindas thereafter informed Pandit Dhanraj as to what had taken place at the aforesaid meeting between him and the appellant No. 1. Nagindas went to the Constitution House and saw the appellant No. I at about 3 p.m. on the 11th April,, 1949. Pannalal was already 143 1104 there. Nagindas and the appellant No. 1 went into the bedroom where Nagindas requested the appellant No. I to extend the period of the lease for 10 years so that the syndicate might be compensated for the loss sustained by the stoppage of the mining operations. The appellant No. I thereupon asked Nagindas to submit a written application in Hindi and as Nagindas did not know it he called Pannalal into the bedroom and asked him to write out an application to that effect. The appellant No. I after making sure from Pannalal that Pannalal was present at Rewa on the 1st April, 1949, asked Pannalal to put the date on the said application as the 1st April, 1949. The appellant No. 1 made an endorsement at the foot of the said application and dated it as of the 1st April, 1949. It was arranged that Nagindas should see the appellant No. 1 at 9 p.m. that day, that Nagindas should pay Rs. 25,000 to the appellant No. I at that time and the appellant No. I would deliver the resumption order to Nagindas on payment of the said sum of Rs. 25,000. Nagindas then left the Constitution House and reported to Pandit Dhanraj what had transpired between him and appellant No. 1. He further told Pandit Dhanraj that he had not received any moneys upto that time. Pannalal was asked to proceed to the Constitution House in advance and inform the appellant No. 1 that Nagindas would be coming along at 9 p.m. that night. Nagindas and Pandit Dhanraj then proceeded to the house of Shri Shanti Lal Ahuja, Additional District Magistrate. Pandit Dhanraj made arrangements for a raiding party. Nagindas 's statement was recorded on oath and a search of his person was made and he was then given three bundles containing 250 Government currency notes of Rs. 100 and a memorandum of the same was also prepared. After these formalities were gone through Pandit Dhanraj, Nagindas and the Additional District Magistrate along with the police party left for the Constitution House. It was arranged that Pannalal should be sent out by Nagindas after the completion of the transaction, on some pretext or other to the taxi waiting outside and that this would serve as a signal for the raiding party 1105 which would rush into the room No. 31 Constitution House which was occupied by the appellant No. 1. Nagindas then went inside the suit of rooms occupied by the appellant No. 1 and the appellant No. 1 took him to his bedroom and closed the door which connected the bedroom with the sitting room where Pannalal was already waiting. After this the appel lant No. 1 handed over the resumption order to Nagindas and on reading the same Nagindas found that the extension given was only for 4 years and be asked the appellant No. 1 why this was so when the appellant No. 1 had promised before to give an extension for 10 years. On this the appellant No. I told Nagindas that he should put up another application after a few months and then the appellant No. 1 would extend the period. Appellant No. 1 then signed the resumption order and put down the date thereunder as the 2nd April, 1949. As soon as the signed order was handed over to him Nagindas handed over to the appellant No. I the Government currency notes of the value of Rs. 25,000 which had been given to him previously by the Additional District Magistrate. Nagindas then asked for an extra copy of the said order and the same was accordingly given to him after being dated and initialled by the appellant No. 1. The appellant No. 1 took the Government currency notes and put them in the upper drawer of the dressing table in the bedroom. After the transaction was thus completed Nagindas shouted to Pannalal to go to the taxi and bring his cigarette case. Pannalal went opt to the taxi and on receipt of this signal the Additional District Magistrate and Pandit Dhanraj rushed into the sitting room along with the other members of the raiding party. The appellant No. 1 met the raiding party at the communicating door between the two rooms. After the Additional District Magistrate and Pandit Dhanraj had disclosed their identity appellant No. I was asked by Pandit Dhanraj whether he had received any money as a bribe to which the appellant No. 1 replied in the negative. Pandit Dhanraj then told appellant. No. 1 that he should produce the money which he had received, otherwise he would be 1106 forced to search the room. On this appellant No. I went to the said dressing table, opened the top drawer and brought out the three bundles of Government currency notes given to him by Nagindas and handed them over to Pandit Dhanraj. On inquiry by the Additional District Magistrate as to how he had come into possession of the said notes, the Appellant No. 1 stated that he had brought Rs. 40,000 from his home out of which Rs. 15,000 had been spent by him in the purchase of a motor car and the remaining sum was with him which was required by him to purchase some ornaments in connection with the marriage of his daughter. In the meanwhile two respectable witnesses, Shri Gadkari, who was a member of the Central Electricity Authority, Ministry of Works;, Mines and Power, Government of India, and Shri Perulakar, who was the Minister for Agriculture and Labour, Madhya Bharat, were brought to the bedroom of the appellant No. 1 by the police. The appellant No. 1 repeated the said statement and gave the same explanation before these two witnesses which he had given and made before the Additional District Magistrate and Pandit Dhanraj a little while before. Nagindas was then searched in the presence of these two witnesses and the two copies of the order which had been given to him by appellant No. I were recovered from his person. Two other copies of the said order and the application and the file of the Panna Diamond Mining syndicate were recovered from the. search of the upper drawer of, the dressing table in the bedroom of appellant No. I Appellant No. 1 also produced a receipt in support of his story of the purchase of the car. The relevant memos of the search were prepared and also a list of the numbers of the Government currency notes of Rs. 25,000 which had been produced by the appellant No. 1. This list was compared and checked by the said witnesses Gadkari and Perulgkar with the numbers of notes and also with those appearing in the list which was in the possession of the Aditional District Magis trate and which, was shown to the said witnesses. They found that the numbers in the said two lists tallied in all respects. After the completion of the list the Additional 1107 District Magistrate confronted appellant No. 1 with the documents which were produced before him by Nagindas and also the list of notes and asked appellant No. 1 if he had any explanation to offer. The apppllant No. 1 was confused and could give no explanation. On further enquiry whether the appellant No. I had any other money with him, he opened an iron confidential box a key of which was in his possession and brought out a sum of Rs. 132 which was not taken charge of as the same had no concern with the case. Thereafter appellant No. I was put under arrest and was subsequently released on bail. * * * * After these documents were forged the next important event was the passing, of the sum of Rs. 25,000 as and by way of bribe or illegal gratification by Nagindas to the appellant No. 1. Here also it would have been difficult for the prosecution to establish the guilt of the appellant No. 1 if the matter had rested merely on the evidence of Nagindas or that of the police witnesses supported a,% they were by Shanti Lal Ahuja, the Additional District Magistrate. Nagindas 's evidence suffering from the infirmity pointed out before could not be enough to carry conviction with the court. He was out to trap the appellant No. 1 and had been clever enough also to have inveigled the police authorities to procure the wherewithal of the bribe for him. It is patent that but for the procurement of these Rs. 25,000 by the police authorities and their handing over the sum to Nagindas, Nagindas would not have had the requisite amount with him and the offence under section 161 would never have been committed. The police authorities also exhibited an excessive zeal in the matter of bringing the appellant No. 1 to book and their enthusiasm in the matter of trapping the ' appellant No. I was on a par. with that of Nagindas and both the parties were thus equally to blame in the matter of entrapping the appellant No. 1. The evidence of these witnesses therefore was not such as to inspire confidence in the mind of the court. Shanti Lal Ahuja, the Additional District Magistrate, also lent himself to the. police authorities and became 1108 almost a limb of the police. His position as the Additional District Magistrate was submerged and he reduced himself to the position of an ordinary witness taking part in the affair as a member of the raiding. party and his evidence could be no better or no worse than that of the police witnesses themselves. If therefore the matter had rested merely upon their evidence it would have been difficult to carry the guilt home to the appellant No. 1. The evidence as to the recovery of this sum of Rs. 25,000 from the top drawer of the dressing table in the bedroom of the appellant No. I and also in regard to the handing over of that sum by the appellant No. I to Shanti Lal Ahuja, the Additional District Magistrate, was equally tainted and if that evidence stood by itself no court would have been safe in acting upon the same. The statement which was made by the appellant No. I to Shanti Lal Ahuja, the Additional District Magistrate, was inadmissible in evidence. Section 162 of the Criminal Procedure Code rendered the statement made by the appellant No. I to the police officers inadmissible. The investigation into the offence had already started immediately on the First Information Report being registered by the police authorities and Pandit Dhanraj himself admitted in his evidence that the investigation into the offence had thus started before the raid actually took place. The statement made by the appellant No. 1 to Shanti Lai Ahuja, the Additional District Magistrate was therefore made after the investigation had started and during the investigation of the offence and was therefore hit by section 164 of the Criminal Procedure Code. It was urged on behalf of the respondent that this statement was not a confessional statement and was therefore not hit by section 164 and Shanti Lai Ahuja, the Additional District Magistrate, could therefore depose to such statement even though the same was not recorded as required by the provisions of section 164 of the Criminal Procedure Code. There is authority however for the proposition that once the investigation had started any non confessional statement made by the accused also required to be recorded in the manner indicated in that section and if no such record had 1109 been made by the Magistrate, the Magistrate would not be competent to give oral evidence of such statement having been made by the accused. (See A.I.R. 1936 Privy Council 253 and Indian Law Reports 49 Calcutta 167 followed in and A.I.R. 1937 Nagpur 254). The statement made by the appellant No. 1 therefore to Shanti Lal Ahuja, the Additional District Magistrate, not having been recorded by him in accordance with the provisions of section 164 was inadmissible in evidence and could not be proved orally by him. , If therefore the statement was thus eliminated from evidence nothing remained so far as the witnesses Nagindas and Pannalal on the one hand and the police witnesses as well as Shanti Lal Ahuja, the Additional District Magistrate, on the other hand were concerned which could bring the guilt home to the appellant No. 1. Reliance was therefore placed by the prosecution on the evidence of Gadkari and Perulakar. They occupied responsible positions in life and were absolutely independent witnesses. Two criticisms were levelled against their evidence by the Special Judge. The one criticism was that contrary to the evidence of Pandit Dhanraj they asserted that their, statements were not recorded on the night of the 11th April, 1949. Pandit Dbanraj had recorded their statements after they had left the bedroom of the appellant No. I at the Constitution House relying upon his memory of the events that had happened that night. These statements however were not read over to them and therefore could not have the value which otherwise they would have had. The other criticism was that they had appended their signatures to the Panchnama of the numbers of the currency,notes recovered at that time which Panchnama contained the statement that on being asked the appellant No. I had produced the bundles of currency notes from the top drawer of the dressing table. This statement was not factually correct as both these witnesses were brought into the bedroom of the appellant No. I after the recovery of the Government currency notes by the police from the appellant No., 1. It was certainly indiscreet on their part not to have scrutinised 1110 the contents of the Panchnama before they appended their signatures thereto. That is however a far cry from coming to the conclusion that they acted in a highly irresponsible manner and their testimony was unreliable. The circumstances under which the numbers of the currency notes were recorded in the Panchnama, the statement made by the appellant No. 1 to them and the confusion into which the appellant No. 1 fell when he was questioned by the police authorities on the tallying of the numbers contained in the memo prepared when the raid was organised with the numbers of the currency notes actually found in the bedroom of the appellant No. 1 were events which would indelibly print themselves in the memory of these witnesses and even though they were examined in the Court of the Special Judge about 10 months after the occurrence, these events and particularly the fact that the appellant No. I claimed these moneys which were thus recovered as his own would certainly not be in any manner whatever forgotten by them. The only suggestion which was made against the credibility of these witnesses on this point was that they must not have exactly remembered what transpired on that night in the bedroom of the appellant No. I and that they might have committed an honest mistake when narrating the events that had happened on that night. An honest lapse of memory would no doubt be a possibility but having regard to the circumstances of the case we are of the opinion that the events that happened that night in the bedroom of the appellant No. I and which were deposed to, by these witnesses were not such as to be easily forgotten by them and when these witnesses deposed to the fact that the appellant No. I claimed this sum of Rs. 25,000 as his own and was utterly confused when explanation was sought from him by the police authorities in regard to the tallying of the numbers of these Government currency notes, it is not easy 'to surmise that they were suffering from any lapse of memory. The evidence of these witnesses in regard to the statement made by the appellant No. 1 before them was also attacked on the ground that Shanti Lal 1111 Ahuja, the Additional District Magistrate 's asking the appellant No. 1 to repeat the statement which he had earlier made before him to these witnesses was a mere camouflage. Shanti Lal Ahuja, the Additional District Magistrate, knew very well that the statement made by the appellant No. 1 to him was not recorded under the provisions of section 164 of the Criminal Procedure, Code and was therefore inadmissible in evidence and he therefore resorted to these tactics of having the appellant No. 1 repeat the very same statement to these witnesses so as to avoid the bar of section 164. Reliance was placed in this behalf on A.I.R. 1940 Lahore 129 (Full Bench) where it wag held that if on the facts of any case it was found that a statement made to a third person was in reality intended to be made to the police and was represented as having been made to a third person merely as a colourable pretence in order to avoid the provisions of section 162 the court would hold it excluded by the section. The same ratio it was submitted applied to the statements made to these two witnesses because they were a colourable pretence to avoid the provisions of section 164 of the Criminal Procedure Code which had certainly not bee n complied with by Shanti Lal Ahuja, the Additional District Magistrate. It has however to be observed that every statement made to a person assisting the police durirng an investigation cannot be treated as a statement made to the police or to the Magistrate and as such excluded by section 162 or section 164 of the Criminal Procedure Code. The question is one of fact and has got to be determined having regard to the circumstances of each case. On a scrutiny of the evidence of these two witnesses and the circumstances under which the statements came to be made by the appellant No. 1 to them we are of the opinion that the appellant No. I was asked by Shanti Lal Ahuja, the Additional, District Magistrate, to make the statements to these two witnesses not with a view to avoid the bar of section 164 of the Criminal Procedure Code or by way of colourable pretence but by way of greater caution particularly having regard to the fact that the appellant No. 1 occupied the position .of a Minister of 144 1112 industries in the State of Vindhya Pradesh. The statements .made by the appellant No. 1 to these witnesses therefore did not suffer ' from this disability and were admissible in evidence. The evidence of these witnesses being thus worthy of credit and the statements made by the appellant No. 1 to them being admissible in evidence there is no doubt that the appellant No. 1 claimed these moneys, viz., Rs. 25,000, which were recovered from the top drawer of the dressing table in the bedroom of the appellant No. 1 as his own being the balance of Rs. 40,000 which he had brought from his home when he came to Delhi. If this was ' so the very fact that the numbers of these Government currency notes of the value of Rs. 25,000 tallied with the numbers of the notes which had been handed over to Nagindas earlier when the raid was organised and which numbers were also specified in the memo prepared at that time was enough to establish the falsity of the allegation made by the appellant No. 1 that he had brought these moneys from his home These moneys were proved to have been provided by the police authorities and given to Nagindas when the raid was organised and were the instruments of the offence of the taking of the bribe or illegal gratification by the appellant No. 1. If the numbers of these notes tallied with the numbers of the notes which were thus handed over by the police authorities to Nagindas they could not have belonged to the appellant No. 1 and were certainly brought there by Nagindas and handed over by him to the appellant No. 1 as alleged, by the prosecution. A suggestion was made that there was oportunity for Nagindas to plant these moneys into the top drawer of the dressing table when the back of the appellant No. 1 was turned upon him. Even assuming that there was that possibility it is sufficiently negatived by the fact that when these moneys were recovered from the top drawer either at the instance Nagindas as alleged by the appellant No. 1 or at, the instance of the appellant No. 1 as alleged by the prosecution the appellant No. 1 did not express any surprise at these moneys being thus found there. If the version of the appellant No. 1 1113 was correct he had only brought about Rs. 25,000 from his house. Rs. 15,000 has been already spent by him in the purchase of the car. , About Rs. 10,600 were spent by him in the purchase of the ornaments and only a sum of Rs. 100 odd was the, balance left with him. According to that version there was not the slightest possibility of the sum of Rs. 25,000 being found in the top drawer of the dressing table. Far from expressing a surprise in this manner the appellant No. 1 claimed these moneys as his own. The appellant No. 1 could not have by any mischance failed to appreciate that these Government currency notes which were thus recovered from the to p drawer of the dressing table exceeded by far the amount which according to him he had left with him by way of balance and the most natural reaction to the recovery of this large sum of money would . have been that he would have certainly denied that these moneys were his and he would have been surprised at finding that such a large sum of money was thus found there. No such reaction was registered on his face. On the contrary if the evidence of the two witnesses Gadkari and Perulakar is to be believed and we see no reason why it should not be believed, the appellant No. 1 claimed this sum of Rs. 25,000 as his own being the balance out of the money which he had brought from his home when he came to Delhi. This is sufficient to establish that these moneys which earlier bad been handed over by the police authorities to Nagindas found their way into the top drawer of the dressing table in the bedroom of the appellant No. 1 and were the primary evidence of the offence under section 161 having been committed by the appellant No. 1. The further circumstance that on the num bers of these notes being tallied and his explanation in that behalf being asked for by the 'Police authorities the appellant No. 1 was confused and could furnish no explanation in regard thereto also supports this conclusion and there is no doubt left in our minds that the appellant No. 1 was guilty of the offence. under section 161 of the Indian Penal Code with ;Which he was charged 1114 We cannot however leave this case without expressing our strong disapproval of the part which the police authorities and Shanti Lal Ahuja, the Additional District Magistrate, took in this affair. As already observed this offence would never have been committed by the appellant No. I but for the fact that the Notice authorities provided Nagindas with the wherewithal of the commission of the offence. Sir Chinubhai as it appears from the evidence was not in a position to provide Nagindas with this sum of Rs. 25,000 or any large sum and in fact in spite of the telephone calls made by Nagindas upon him had not provided any amount beyond Rs. 3,000 which was meant for the other expenses of Nagindas, to him. Nagindas was therefore not in a position to provide this sum of Rs. 25,000 for payment of the bribe or the illegal gratification to the appellant No. 1. But for the adventitious aid which he got from, the police authorities the matter would not have progressed any further, and Nagindas would I have left Delhi empty handed. The police authorities however once they got scent of the intention of Nagindas thought that it was too good an opportunity to miss for entrapping the appellant No. 1 who occupied the position of the Minister of Industries in the State of Vindhya Pradesh. They therefore provided the sum of Rs. 25,000 on their own and handed it over to Nagindas. The police authorities in this step which they took showed greater enthusiasm than Nagindas himself in the matter of trapping the .appellant No. 1. It may be that the detection of corruption may sometimes call for the laying of traps, but there is no justification for the police authorities to bring about the taking of a bribe by supplying the bribe money to the giver where he has neither got it nor has the capacity to find it for himself. It is the duty of the police authorities to prevent crimes being committed. It is no part of their business to provide the instruments of the offence. We cannot too strongly disapprove of the step which the police authorities took in this case in the matter of providing the sum of Rs. 25,000 to Nagindas who but for the 1115 police authorities thus coming to his aid would never have been able to bring the whole Affair to its culmination. Not only did the police authorities thus become active parties in the matter of trapping the appellant No. I they also provided a handy and an ostensibly independent witness in the person of Shanti La] Ahuja, the Additional District Magistrate. Even though he was a member of the judiciary be lent his services to the police authorities and became a limb of the police as it were. The part which Shanti Lal Ahuja, the Additional District Magistrate, took in this affair cannot be too strongly condemned. We can only repeat in this connection the observations of the Privy Council in A.I.R. 1936 Privy Council 253 at page 258 in regard to the Magistrates placing themselves in positions where they would have to step into the witness box and depose as ordinary citizens.: "In their Lordships view it would be particularly unfortunate if Magistrates were asked at all generally to act,rather as police officers under section 162 of the Code; and to be at the same time freed, notwithstanding their position as Magistrates, from any obligation to make records under section 164. In the result they would indeed be relegated to the position of ordinary citizens as witnesses and then would be required to depose to matters transacted by them in their official capacity unregulated by any statutory rules of procedure or conduct whatever. . " The position was laid down with greater emphasis by Mr. Justice P. B. Mukharji in A.I.R. 1951 Calcutta 524 at page 528 where the learned Judge observed: "Before I conclude I wish to express this court 's great disapprobation of the practice that seems to have become very frequent of sending Magistrates as witnesses of police traps. The Magistrate is made to go under disguise to witness the trap laid by the police. 'In this case it was Presidency Magistrate and in other cases which have come to our notice there have been other Magistrates who became such witnesses. To make the Magistrate a party or a limb of the police during the police investigation seriously 1116 undermines the independence of the Magistrates and ,perverts their judicial outlook. The Magistrates are the normal custodians of the general administration of criminal justice and it is they who normally decide and pass judgments on the acts and conduct of the police. It is not enough to say, therefore, that the Magistrate acting as a witness in a particular case does not himself try that case. This practice is all the more indefensible here specially when there is no separation of the executive from the judiciary. The basic merit of the administration of criminal justice in the State lies in the fact that the person arrested by the police is entitled to come before an independent and impartial Magistrate who is expected to deal with the case without the Magistrate himself being in any way a partisan or a witness to police activities. There is another danger and that is the Magistrates are put in the unenviable and embarrassing position of having to give evidence as a witness and then being disbelieved. That is not the Way to secure respect for the Magistracy charged with the administration of justice. In my judgment this is a practice which is unfair to the accused and unfair to, the Magistrates. It is also unfair to the police. Because charged with the high responsibility and duty of performing a great and essential public service of this State the police cannot afford to run the risk of opprobrium ' even if unfounded, that they have enlisted the Magistrate in their cause. That risk is too great and involves forfeiting public respect and confidence. . . " We perfectly endorse the above observations made 'by Mr. Justice P. B. Mukharji and hope and trust that Magistrates will not be employed by the police authorities in the manner it was done by the Special Police Establishment in this case before us. The independence of the judiciary is a priceless treasure to be cherished and safeguarded at all costs against predatory activities of this character and it is of the essence that public confidence in the independence of ,the judiciary should not be undermined by any such tactics adopted. by the executive authorities We have therefore eliminated from our consideration the whole of the evidence given by Shanti Lal Ahuja, the Additional District Magistrate, and come to our conclusion in regard to the guilt of the appellant No. I relying solely on the testimony of the two independent witnesses Gadkari and Perulakar. The result therefore is that the appeal of the appellant No. 1 will be dismissed except with regard to his conviction and sentence, under section 120 B of the Indian Penal Code and the convictions and sentences passed upon him by the Judicial Commissioner under section 465 and section 466 as also section 161 of the Indian Penal Code will be confirmed. The appeal of the appellant No. 2 will be allowed and he be acquitted and discharged of the offences with which he was charged and immediately set at liberty. The bail bond of the appellant No. 2 will be cancelled.

After the investigation into an offence has been started on the registration of the First Information Report by the Police, no statement made by the accused to the Magiarate can be proved unless the statement has been recorded in accordance with the provisions of section 164 of the Code of Criminal Procedure and therefore, if the non confessional statement has not been recorded by the Magistrate in the manner indicated in section 164, the Magistrate would not be competent to give oral evidence of such statement having been made by the accused. Nazir Ahmad vs King Emperor (A.I.R. , Legal Bomembrancer vs Lalit Mohan Singh Boy (I.L.R. 49 Cal. 167), Abdul Bahim and Others vs Emperor and Karu Mansukh Gond vs Emperor (A.I.R. referred to. The conduct of the Police and the Additional District Magistrate inactively instigating the accused to commit the off once of which he was charged by furnishing him with the necessary materials (without which he could not have committed the offence), for the purpose of trapping him, was strongly disapproved. It is the duty of the police to prevent the crimes being committed. It, is no part of their duty to provide the instruments of the offence. The observations of Mr. Justice P. B. Mukherji in the case of M. 0. Mitra vs The State (A.I.R. at p. 528) condemning the practice of sending Magistrates as witnesses of Police trap endorsed because such practice makes a Magistrate a party or a limb of the Police during police investigation and undermines seriously the independence of the Magistrates and perverts their judicial outlook.

Civil Appeal No. 2166 of 1970. of 1970 From the Judgment and Order dated the 31st October, 1968 of the Allahabad High Court in W.P. No. 3233 of 1968. section C. Manchanda and A. G. Ratanaparkhi, for the appellant. T. A. Ramachandran, for the respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. The freak but few facts of this appeal appear to highlight an issue of morality versus legality. But closer scrutiny whittles down this conflict and induces us to dismiss the appeal, subject to certain observations warranted by the circumstances of the case. We may proceed straight to a miniaturised statement of the circumstances giving rise to the controversy before us. The appellant has been the owner of a mango grove of long ago from which he has been deriving income by way of fruits and fallen trees. Way back in 1939 40 he claimed this income to be agricultural and therefore immune to Central income tax. His plea was over ruled by the Income tax officer, but adverse orders notwithstanding, the assessee reached the High Court undaunted by the disappointment he met with as he steered through the statutory spiral of authorities. Unfortunately, on account of the zigzag course of this litigation which had its deck by deck slow motion, more than two decades passed before the High Court could pronounce at long last in favour 5 of the appellant holding that the income in dispute was agricultural t income and therefore could not be taxed. The State did not carry the case further to this Court and thus the decision of the Allahabad High Court rendered on March 21, 1963 became final. As a proposition of law, on the facts of the case the ruling was that such income as arose from mango fruits and fallen trees was agricultural income and therefore outside the pale of the 51 Income tax Act (vide s.4(3) of the Income tax Act). We have no reason to disagree with this view and proceed to dispose of this writ appeal which has come to us by certificate under article 133(1)(a) of the Constitution on the footing that for all the assessment years with which we are concerned as will be explained presently what has been taxed and is in dispute is agricultural income. Some more facts are necessary to bring out the real grievance of the appellant. We have already mentioned that although the first assessment related to the year 1939 40, the final pronouncement by the High Court came only in 1963. During this protracted pendency, years rolled on. and, at the base, the tax officer was busy ritually repeating annually, by his orders, the tax impost on similar income accruing year after year treating it as non agricultural income. In deed, the assessee had been assessed to tax for 21 years on this assumption but he filed appeals only for 8 years, and even that only upto the Appellate Assistant Commissioner 's level where he left it off apparently in the hope that if ultimately the High Court upheld his contention for one year, the tax authorities would give effect to that holding for all the years not a fantastic assumption if Government were a virtuous litigant. At this stage we may state that for the years 1940 41, 1941 42, 1947 48, 1949 50, 1950 51 and 1958 59 to 1961 62 appeals had been preferred most of which were dismissed although in one year or so the appellate authority gave relief accepting the plea of agricultural income. So far as the Income tax officer was concerned, he uniformly adopted the hostile line of treating the income as non agricultural and, except for the years referred to above, the assessee did not think it necessary was it wise or otherwise the sequel proves to challenge these assessment orders. But when the High Court held in his favour in 1963 for the assessment year 1939 40, he applied for refund to the Central Board of` Direct Taxes of the tax paid by him for the other years on the glib ground that, limitation apart, the income having been found by the High Court to be agricultural, had to be excluded from the tax. The Central Board of Revenue, however. declined to oblige him and when on May 11, 1968 his petition was rejected, the assessee moved the High Court under article 226 seeking many reliefs including a direction to the Central Board to issue 'necessary instructions to the Income tax officer, Faizabad,. for the purpose of passing final assessment orders for the assessment years 1940 41 to 1961 62 and for another writ 'quashing the order of the Central Board of Direct Taxes dated 11th May 1968 wherein the Board declined to interfere in the matter in dispute '. A Division Bench of that Court dismissed the writ petition on two grounds: (a) that the assessment orders for the relevant years had become final the assessee not having taken advantage of his remedy provided for in the statute; (b) that several years had lapsed between the last impugned order which related to the assessment year 1961 62 and the writ petition which was filed in September 1968. However, the Court made an observation that if so advised, the petitioner may file appeals under section 30 of the Indian Income tax Act, 1922 and pray for condonation of delay under section 30(2) of the said Act. Surely discomfited. 52 the assessee has come up to this Court hopefully and urged that the various assessment orders were void, that the State was bound to refund what had been illegally levied, that the Central Board should have exercised its power to give proper directions for refund and that in and case justice should be done to the party who should not be penalised for not having filed appeals and second appeals and references to the High Court year after year a repeat performance which would add to the totality of avoidable litigation since the High Court was seized of the identical point between the same parties. At the first flush it may seem that the assessee 's agricultural income having been taxed illegally, a refund was obligatory and the fanatical insistence on the legal 'pound of flesh ' based on limitation and finality was not to be expected from a party like the State. Indeed, one might go to the extent of quoting the cynical words of the ancient legal wit: "Law and equity are two things which God hath joined, but which Man has put asunder". We have to examine the merits of the case in the light of the facts we have set out above and of the principles settled by this Court in regard to the exercise of the writ jurisdiction of the High Court. Shri Manchanda, alive to the spinal weakness of his case in law in that his client had, by option for inaction, permitted the impugned order to become final and listless by lapse of limitation period, played upon judicial sensitivity to justice, equity and good conscience. He argued that regardless of statutory remedies and rules of limitation, the High Court had power under Art 226 to quash orders loudly illegal, deprivatory of property and promoting unjust enrichment by the State. He also urged that the assessment orders were void and the routine challenges through prescribed channels could be bypassed and frontal attack made under article 226 in such extraordinary situations. Sri Ramachandran, appearing for the Revenue, scouted the supplicant plea for equity as unavailable in a court of law. He also insisted that the orders of assessment having become conclusive could not be invaded by the back door, that the orders were not nullities but good until set aside through the regular statutory processes and that the alleged jab on the face of justice is imaginary, the party himself having been guilty of gross laches. We will examine these pleas, not in the general terms set out but within the confines of the particular facts of the present case. We must pause to state one important aspect of the assessment orders since that oxygenates Sri Manchanda 's submission on equity. The Income tax officer, aware of the pendency in the High Court of the precise question confronting him about the agricultural character of the income, had in some years (e.g. 1952 53) recited in his order under section 23(3) of the Act, words which kindled hope in the assessee somewhat in the following terms: "Income from Mango gul Mahuwa and Kathal have been excluded from the total income and treated as agricultural 11 income by the learned Appellate Asstt. Commissioner of In come Tax Banaras in this very case but this very point is 53 already under consideration before the Hon 'ble High Court of Judicature at Allahabad. However with respects to the learned A.A.C. and pending the decision of the Hon 'ble High Court on this point the sum of Rs. 7,960/ is being added back " But the palliative is absent in the orders relating to many other years and, above all, the orders are all made under section 23(3), which means final assessments neither provisional assessments being under section 23(3) nor conditional assessments, such orders being unknown to the scheme of the Act. The points in controversy may be briefly formulated: (1) Are the orders of assessment, which have not been assailed, amenable to challenge under article 226 of the Constitution, or is such jurisdiction inhibited because the regular statutory remedies have not been pursued ? (2) Is the appellant guilty of laches to such an extent that the extra ordinary remedy in writ jurisdiction `l) should not be exercised in his favour? (3) Are the orders of assessments nullities since they are taxes levied on agricultural income, and if so, is the appellant entitled to claim a refund ? (4) Is the Central Board of Direct Taxes charged with any statutory duty to grant refunds even in cases where orders of assessment, though illegal, have been allowed to become final by the wilful default of the assessee ? (5) If justice is on the side of the assessee but law against him, can he seek redressal in a Court on that footing ? We may deal with these points more or less as a package submission but not in the order in which they have been itemised. Counsel has placed considerable stress on the last point which we deal with first. It is true that two stark facts generate some considerations of conscience in favour of the assessee. The High Court having declared this kind of income which was taxed by the income tax officer, 'agricultural income ', it is not liable to tax under the Income tax Act (section 4(8)). In any case, after the Constitution of India came into force, the Union List in the Seventh Schedule expressly excluded agricultural income as forbidden zone for the Centre, so much so it would be an unconstitutional levy if a taxing authority imposed tax on agricultural income purporting to act under the Income tax Act. It may, therefore, well be argued that all the assessments, notwithstanding that no appeals were filed, were void being beyond the jurisdiction of the officer to tax. There is a basic difference between the decision in Comm. of I.T. vs Tribune Trust, 54 Lahore (1) cited by Sri Ramachandran and the present case. There, one of the exemptions statutorily provided in favour of income derived from property held under trust wholly for religious or charitable purposes, fell for consideration. The Judicial Committee held that such assessments, regularly made, which failed to give the exemption claimed, were not nullities: "The assessments were duly made, as they were bound to be made, by the Income tax officer in the proper exercise of his duty. It does not appear to their Lordships that they were a 'nullity ' in any other sense than that if they had been challenged in due time they might have been set aside. " True, mere exemptions from taxation of income otherwise competently taxable fell wholly within the jurisdiction of the officer for determination. There is a fundamental difference where the claim is that agricultural income is beyond the legislative competence of Parliament to enact and altogether outside the jurisdiction of the Income tax officer. It may well be contended that the impost is ultra vires his powers and therefore a nullity. Merely because an order has been passed by the officer and has not been appealed against, it does not become legal and final if otherwise it is void; for instance, if there is a flagrant violation of natural justice, the order by a Tribunal may be a nullity. However, we need not explore this penumbral area because we are satisfied, for reasons to be set out below, that the writ petition itself is misconceived and is bad for unexplained delay. Even so we may state that the levies for the various years would have undoubtedly been set aside and refund ordered if only the assessee had been diligent enough to make annual appeals to higher authorities. In that sense there is some justice on his side. What is more, in some of the orders, as earlier indicated, the Income tax officer himself has stated that he is making the assessments finally but he takes note of the pendency of the identical question before the High Court. He has vaguely quickened wishful thinking in the assessee that in the event of his winning in the High Court he may somehow get a refund. We have set out what Mr. Manchanda has pressed before us as the 'justice ' of his case. Assuming for a moment that 'justice ' is on his side, law is against him because the assessment orders are now unassailable except perhaps under article 226 or article 32 with which we will deal separately. Can a court over ride law to effectuate what it conceives to be justice ? Any legal system, especially one evolving in a developing country, may permit judges to play a creative role and innovate to ensure justice without doing violence to the norms set by legislation. But to invoke judicial activism to set at nought legislative judgment is subversive of the constitutional harmony and comity of instrumentalities. So viewed, the appeal of Sri Manchanda, for relief in the name of justice must fail. If the statute speaks on the subject the judge has to be silent and stop. In a contest between morality and legality. the court, in clear cases has no option. Here, both sides agree that 55 the assessments are final, that limitation has long ago run out, that the Central Board has no judicial power to upset what has been decided by lesser tribunals. Not being a fringe area for judicial activism to play the submission must suffer rejection. The surviving issue of some moment is whether the writ jurisdiction is muzzled by statutory finality to orders regardless of their illegality. We think not. If the levy is illegal, the constitutional remedy goes into action. The Privy Council ruling does not contradict this rule of law because for one thing there the case was income taxable but for a statutory exemption; here the income is agricultural and beyond the orbit of the Income tax Act. For another, the Judicial Committee was not considering the sweep of the constitutional remedy de hors statutory changes but was construing the plea of 'nullity ' with reference to an order Passed, erroneously may be but within jurisdiction and impugned before the statutory tribunals. Even so, the journey of the appellant is beset with insurmountable hurdles. article 226 is not a blanket power, regardless of temporal and discretionary restraints. If a party is inexplicably insouciant and unduly belated due to laches, the court may ordinarily deny redress. And if the High Court has exercised its discretion to refuse, this Court declines to disturb such exercise unless the ground is too untenable. To awaken this Court 's special power gross injustice and grievous departure from well established criteria in this jurisdiction, have to be made out. In the present case, long years have elapsed not only after the impugned orders but even after the High Court held the taxed income agricultural. The reason for the inaction is stated to be an illusory expectation of suo moto modification of assessment orders on representation by the party. The High Court has examined and dismissed the plea and consequentially refused relief. We do not think that in so refusing relief on ground of laches the High Court exercised its discretion arbitrarily or improperly. And the sorry story must thus close. When at the end of the legal tether, the appellant made a plaintive plea for considerateness based on good conscience. No doubt, we feel this is a case where, had the party not been optimistically asleep but had diligently appealed, the tax could not have been recovered by the State. We equally see some compassionate merit in his complaint that a few of the assessment orders made misleading reference to the pendency of the High Court being seised of the identical legal issue. But it is no good alibi in expiation of the sin of gross delay in coming to the High Court. It is doubtful if the Central Board can exercise any judicial power and direct refund. Nor is there a statutory duty cast on it to consider applications for refund and so a writ of mandamus could not issue from the Court. Even so, it is always open to the State, where the justice of the case warrants reconsideration of the levy of a tax illegally imposed to view the situation from an equitable standpoint and direct refund wholly or in part. This perhaps is case where a liberal approach may well be justified. The Court has, however, jurisdiction only when there is a statutory duty. There being 56 none, the issuance of a writ hardly arises. We endorse the observations of the High. Court that, despite inordinate delay, the appellate authority, if moved under section 30(2), will give due regard to the happenings in between, in exercising its power of condonation of delay in filing appeals. We also make it clear that no observation made in this judgment with regard to delay on the part of the assessee in moving the High Court under article 226 shall be taken into account to the prejudice of the assessee while considering the condonation of the delay on his part in preferring the appeal/appeals, if any, filed by him to the. appropriate authority under the Act. The appeal fails and is dismissed. The circumstances are such that the parties may appropriately be, directed to bear their respective costs. We direct accordingly. P.H.P. Appeal dismissed.

The appellant an owner of a mango grove has been deriving income by was of fruits and fallen trees. In the year 1939 40 he claimed this income to be agricultural income and therefore immune to income tax. The Assessing Authorities negatived the claim of the appellant. The High Court in the year 1963 held the income to be agricultural income and therefore exempt from income tax. The State did not challenge the decision of the High Court. The appellant did not challenge the orders of the Assessing Authorities for the subsequent years i.e. 1940 to 1962 in the hope that if ultimately the High Court upheld his contention for one year the Tax Authorities would give effect to that holding for all the years. The appellant thereafter approached the Central Board of Revenue for refund of the tax paid by the appellant in respect of the subsequent years. The Central Board rejected the petition in 1968. The appellant moved the High Court under article 226. The High Court refused to interfere both on the ground of delay as well as on the ground that the assessment orders for the relevant years had become final, the assessee not having taken advantage of his remedy provided for in the statute. The High Court. however, made an observation that if so advised the appellant might file appeals under section 30 of the Income Tax Act, 1922 and pray for condonation of delay under section 30(2) of the said Act. appeal by Special leave to this Court, it was contended by the appellant. (1) Since various assessment orders were void the State was bound to refund what had been illegally levied. (2) The Central Board should have exercised its power to give appropriate directions for refund. (3) Regardless of statutory remedies and rules of limitation, the High l; Court had power under article 226 to quash the illegal orders and to prevent unjust enrichment by the State. The respondents contended: (1) The appellant is guilty of laches. High Court has rightly exercised its discretion. This Court may not interfere with it (2) The assessment orders have become final (3) The Central Board of Direct Taxes has no statutory duty to grant refund even in cases where orders of assessment, though illegal, have been allowed to become final by. wilful default of the assessee. Dismissing the appeal. ^ HELD: (1) The imposition of tax on agricultural income is beyond the legislative competence of Parliament and altogether outside the jurisdiction of the Income Tax officer. It may well be contended that the impost is ultra vires. its powers, and therefore, a nullity. We need not consider this aspect especially since the writ petition itself is bad for unexplained delay. [54C E] 50 (2) The writ jurisdiction is not measured by statutory finality to orders regardless of their illegality. If the levy is illegal the constitutional remedy goes into action. However, article 226 is not blanket power regardless of temporal and discretionary restraint. of a party is inexplicably and unduly delayed due to laches the court may ordinarily deny redress. If the High Court has exercised its discretion to refuse the redress, this court declines to disturb such exercise unless the ground is too untellable. The High Court I in refusing relief on ground of laches did not exercise its discretion arbitrarily or improperly. [55B. D E] (3) It is doubtful if the Central Board can exercise any judicial power and direct refund. Even so, it is always open to the state where the justice of the ease warrants reconsideration of the levy of a tax illegally imposed, to view the situation from an equitable standpoint and direct refund wholly or in part. In this case a liberal approach may well be justified The Appellate Authority if moved under section 30(2) will give due regard to the happenings in between exercising its power of condonation of delay in filing appeals and no observations made in this judgment or in the High Court judgment shall be taken into account to the prejudice of the appellant while considering the condonation of delay by the appropriate authority. [55G 56C]

Civil Appeal No. 2 of 1982. From the Judgment and order dated 16. 10.1981 of the Kerala High Court in C. R. P. No. 1927 of 1987. N. Sudhakaran for the Appellants. E.M.S. Anam for the Respondents. 83 The Judgment of the Court was delivered by A SABYASACHI MUKHARJI, J. This appeal by special leave is directed against the order of the High Court of Kerala at Ernakulam dated the 16th October 1981 in Civil Revision Petition No. 1927 of 1981. The appellants are the heirs of the original tenant. The original appellant died and his heirs have been substituted in his place. The landlord being the respondent herein wanted the premises in question for his own use and occupation. He accordingly applied to the Rent Controller for permission. The Rent Controller after hearing the parties granted such permission The Appellate Authority upholding the order of the Rent Controller, maintained the order of eviction. There was a revision before the learned District Judge. The learned District Judge dismissed the revision petition holding that it was difficult to interfere with the concurrent findings of facts of the Courts below on the bona fide need of the landlord for his own use and occupation. The tenant came up before the High Court in second revision and the High Court after hearing the parties and considering the contentions urged before it, dismissed the revision upholding the order of Rent Controller, the Appellate Authority and the District Court under Section 20 of the Kerala Building (Lease and Rent Control) Act, 1965 that the landlord required the premises for his bona fide need and for self occupation. The only contention that was urged in the matter was that the landlord was not entitled to eviction under sub section (3) of Section 11. Sub section (3) of Section l l provides as under: "A landlord may apply to the Rent Control Court for an order directing the tenant to put in possession of the building if he bona fide needs the building for his own occupation or for the occupation be any member of his family dependent on him. " The contention urged before the Courts below including the High Court was that the second proviso to Sub section (3) of Section 11 had not been fulfilled and the second proviso provides as under: "That the Rent Control Court shall not give any direction to a tenant to put the landlord in possession, if such tenant is depending for his livelihood mainly on the 84 income derived from any trade or business carried on in A such building and there is no other suitable building available in the locality for such person to carry on such trade or business. " All the Courts have found against the tenant 's contention on this aspect of the matter. As this is a question of fact, the High Court in our opinion has rightly declined to interfere with that findings of fact. Before we proceed further it was pointed out by the counsel for the respondents that in view of the provisions of the said Act and in view of the decision of this Court in the case of Aundal Ammal vs Sadasivan Pillai, ; the second revision before the High Court in the facts and circumstances of this case did not lie. For the purpose of this appeal, we are not proceeding with on that basis but have examined the facts found by the courts below to find out if there is any infirmity in their findings as mentioned hereinbefore. It is found as a fact that the landlord bona fide needed the premises in question for his own use and occupation. Therefore, Section 11(3) has been complied with. The only contention raised was whether on the second proviso to Section 11(3) of the Act the landlord was not entitled to eviction. That was rejected by the High Court on the ground that this was a question of fact and all the Courts have found in favour of the landlord. We agree with this. Even if a second revision lay the scope of interference by the High Court in the second revision is very limited. This has been so held by this Court in M/s Sri Raja Lakshmi Dyeing Works and others, vs Rangaswamy Chettiar, A.I.R. 1980 S.C. 1253. We adhere to this principle. It was urged before us that the building in question was used for non residential purpose by the tenant and the bona fide need of the landlord was said to be for the use and occupation of the landlord and his family which is a residential purpose. It was submitted that such a need cannot justify in this case the eviction of the tenant. It was also submitted that Section 17 of the Act prohibited such conversion. Sub section (1) of Section 17 which is relevant for the present purpose provides as follows: "Section 17. Conversion of buildings and failure by land 85 lord to make necessary repairs: (1) No residential buildings shall be converted into a nonresidential building or vice versa and no such building shall be divided into separate portions for letting on rent or for other purposes except with the permission in writing of the Accommodation Controller: Provided that where such conversion involves structural alteration of the building, the consent of the landlord shall also be necessary. " It appears clear that this conversion as contemplated for which permission was required is conversion by the tenant and cannot be a conversion by the landlord. Quite apart from the fact that in this case there was no conversion of the building sought. The building was used for non residential purpose and the purpose for which the building was sought was for residential purpose. It appears to us that putting to a different purpose the user of the building is not a conversion of the building as such. It has been found that the building as it is without any structural change can be put to residential purpose. There was no conversion of the building as such is involved in this case but a change of user of the building. Furthermore, in any event the proviso to Section ( I) makes it clear, in our opinion, that such conversion as contemplated by Section 17 of the Act for which permission in writing by the Accommodation Controller required is in case of change of the user of the premises by the tenant and not by the landlord. The use of the expression "such conversion" in the proviso indicates that in case of conversion by the tenant permission is required on the consent of the landlord. Therefore the absence of permission in writing of the Accommodation Controller in this case does in our opinion affect the position. This appears to be the view of the Kerala High Court on this aspect of the matter. See in this connection Muhammed vs Abdul Rahiman, and Das Naik vs Narayanan, This appears to be the correct view of law. Our attention was also not drawn to any decision of the Kerala High Court which has taken any contrary view. The view held by the Kerala High Court in this aspect has been relied by the High Court in the judgment under appeal. It seems to be logical view. We would therefore follow that view. In view of the proviso explaining the ambit of that requirement that permission sought for or mentioned in Section 17(1) is in respect of the different user by the tenant and not by the landlord. The High Court has also observed in term 86 "convert" does not denote a mere change in the mode of occupation, but covers only alterations of the physical features, the prescriptions of Section 17 are not attracted to the present case at all. Admittedly the building in question has rooms which can be used as bed rooms, sitting room etc. and it has a kitchen and dining hall. No alteration or conversion is required if the building is to be used for residential purposes. In the aforesaid view of the matter there was hardly any scope for interference by the District Judge and he declined to do so on this basis. In our opinion he was right. Similar was the position of the High Court on these facts and it declined to interfere with the findings of fact. In the aforesaid view there is no merit in this appeal. The appeal fails and is dismissed accordingly. Parties will pay and bear their own costs. Since the tenants have been in possession of the premises for some time we direct that the decree for eviction shall not be executed till 30.9.1988 provided all the heirs of deceased appellant file an usual undertaking in this Court within four weeks from today stating inter alia. as follows; 1. That the appellant will hand over vacant and peaceful possession of the suit premises to the respondent on or before 30.9.1988 from today. That the appellants will pay to the respondent arrears of rent, if any, within one month from today. That the appellants will pay to the respondent future compensation for use and occupation of the suit premises month by month before 10th of every month. That the appellants will not induct any other person in the suit premises. It is further directed that in default of compliance with any one or more of these conditions or if the undertaking is not filed as required within the stipulated time, the decree shall become executable forthwith. P.S.S. Appeal dismissed .

% Sub section (3) of section 11 of the Kerala Buildings (Lease and Rent Control) Act, 1965 permits eviction of a tenant where the landlord bona fide needs the building for his own occupation. The second proviso thereto excepts the tenant depending for his livelihood mainly on business carried on in such building. Sub section (1) of section 17 interdicts conversion of a residential building into a non residential one or vice versa and division of such building into separate portions except with the permission of the Accommodation Controller. The proviso thereto makes the consent of the landlord necessary where such conversion involves structural alteration of the building. The premises in question was being used by the tenant for nonresidential purpose. The respondent landlord required it bona fide for his self occupation. The Rent Controller granted permission under section 11(3) for eviction of the tenant. The Appellate Authority and the District Judge in revision did not interfere with the concurrent findings of facts on the bonafide need of the landlord. In second revision the contention that since the requirements of the second proviso to section 11(3) had not been fulfilled, the landlord was not entitled to eviction was rejected by the High Court on the ground that this was a question of fact and ail the courts had found in favour of the landlord. In the appeal by special leave, it was contended for the appellant that since the building in question was used for non residential purpose by the tenant and the landlord required the same for a residential purpose, such a need could not justify tenant 's eviction by virtue of section 17 of the Act which prohibited such conversion. 82 Dismissing the appeal, ^ HELD: l. The landlord is entitled to eviction. It is found as a fact that he bona fide needed the premises in question for his own use and occupation. Therefore, section 11(3) has been complied with. [84D E] The prescriptions of section 17 are not attracted to the instant case. The conversion as contemplated by section 17(1) for which permission was required is conversion by the tenant and cannot be a conversion by the landlord. The use of expression "such conversion" in the proviso to section 17(t) indicates that in case of conversion by the tenant permission is required on the consent of the landlord. Further more, the term "convert" therein does not denote a mere change in the mode of occupation but covers only alterations of the physical features. Putting to a different purpose the user of the building is not a conversion of the building as such. The building was used for non residential purposes and the purpose for which it was sought was for residential purpose. It has been found that the building has rooms which can be used as bed rooms, sitting rooms etc. and it has a kitchen and dining hall. No alteration or conversion is required if the building is to be used for residential purpose. There was, therefore, no conversion of the building as such involved in the instant case, but a change of user of the building. [86A; 85C F, 86B] Muhammed vs Abdul Rahiman, and Das Naik vs Narayanan, , approved. [Since the appellants tenants have been in possession of the premises for sometime, it was directed that the decree for eviction shall not be executed till 30.9.1988 provided they pay arrears of rent, if any, within one month, and undertake to hand over vacant and peaceful possession, to pay future compensation month by month before 10th of every month and not to induct any other person.[86D G]

Appeal No. 527 of 1967. Appeal from the judgment and decree dated August 2nd/3rd, 1965 of the Mysore High Court in Regular First Appeal No. 147 of 1958. M. Natesan and K. Jayaram, for the appellant. section section Shukla, for respondents Nos. 1 to 4. The Judgment of the Court was delivered by Hedge, J. This appeal by certificate arises from the deci sion of the Mysore High Court in R.A. No. 147 of 1958 on its file. The plaintiff is the appellant. The main question that arises for decision in this appeal is as to the share to which the plaintiff is entitled in the properties held to be partible by the High Court. One other minor contention had also been urged which will be referred to and dealt With at the appropriate stage. The facts as found by the High Court and which are no more in dispute may now be stated. The appellant is the adopted son of one Ranga Rao alias Ramachandra Rao who died in 1912. He was adopted by the 202 said Ranga Rao 's widow Seethabai on September 18, 1955. The geneology of the family of Ranga Rao is as follows KRISHNA RAO DESHPANDE (Died 1934) MARRIED RADHABAI (Died 1935) Ranga Rao alias Hanumantha Rao Ramchandra Rao (went out of the (died 1912) family by adoption). Married Seethabai (Defendant No. 1) Govinda (Adopted on 18 9 1955) Plaintiff Lakshmana Rao (died 6 9 1952) Married Venkubai Ambabai lst wife 2nd wife (died 1904) Napppa Nagamma Ansuyabai (Nagesh) Deft. 7 Deft. 2 Krishnaji Lakshamana Gundappa Deft.3 (Deft. 4) Deft. 5. Hanumantha Rao went out of the family having been adopted into some other family. There was a partition between Krishna ' Rao and Lakshmana Rao, the only two existing coparceners at that time, in 1933. After partition Krishna Rao is said to have bequeathed his properties to some of his relations as per his will dated November 8, 1934. Subsequently there was a further partition between Lakshmana Rao and defendant No. 2 Nagappa on 203 February 14, 1946. Lakshmana Rao died in 1952. Asmentioned earlier, the plaintiff was adopted on September 18, 1955 and the suit from which this appeal arises was instituted in1956 by the plaintiff appellant represented by his natural father ashis ' next friend as he was a minor on the date of the suit. The trial court granted the plaintiff half share in the properties that were held to be that of the family. The High Court modified the decree of the trial court in certain respects. It is not necessary to refer to all the modifications made by the High Court. We shall refer only to those modifications which are challenged in this appeal. The High Court reduced the share awarded to the plaintiff from half to 1/3rd of the properties held by it to be partible. The correctness of this decision is questioned. The only other question is whether the High Court was justified in setting aside the trial court 's decree awarding a sum of Rs. 15001 to the plaintiff. Before proceeding to examine the appellant 's contention that he is entitled to a half share in properties held to be partible, it would be convenient to dispose of his contention relating to the money decree. The trial court came to the conclusion that out of the consideration of Rs. 6500/ received under the sale deed Exh. 177, the second defendant had not accounted for Rs. 3000/ . Hence the plaintiff is entitled to a half share therein. The trial court as well as the High Court have found that the sale in question is valid as the same was effected to meet family necessities. The appellant did not seek an accounting from the 2nd defendant. No case was made out for requiring the 2nd defendant to account in respect of the amounts received by him as the karta of the family, nor did the plaintiff aver in his plaint that there was any cash in the hands of the 2nd defendant. Hence the High Court was justified in reversing the decree of the trial court directing the defendant to pay to the plaintiff a sum of Rs. 1500/ . This leaves us with the question as to the share to which the plaintiff is entitled in the partible properties. Even before the plaintiff was adopted into the family, there was a partition between Krishna Rao and Lakshmana Rao. The genuineness of that partition is no more in dispute. After the partition Krishna Rao became absolutely entitled to his share of the properties and hence he was entitled to deal with that property in the manner he thought best. As mentioned earlier he had bequeathed his properties to others. But it was urged on behalf of the appellant that his adoption dates back to the date of the death of his adoptive father, Ranga Rao. By a fiction of law, he must be deemed to have been in existence, when Krishna Rao and Lakshmana Rao divided the properties amongst themselves. The said partition having been effected without his joinder, the same has to be 204 ignored. Hence he is entitled to a half share in the properties. Alternatively, it was contended that the plaintiff is entitled to get by succession half share in the properties that fell to the share of Krishna Rao. Before proceeding to examine the decided cases referred to at the time of the arguments, let us proceed to examine the question on first principles. It is true that by a fiction of law well settled by decided cases that an adopted son is deemed to have been adopted on the date of the death of his adoptive father. He is the continuator of his adoptive father 's line exactly as an aurasa son and an adoption, so far as the continuity of the line is concerned, has a retrospective effect. Whenever the adoption may be made there is no hiatus in the continuity of the line. From that it follows that the appellant must be deemed to have been adopted in 1912. Consequently he is deemed to have been a coparcener in his adoptive father 's family when Krishna Rao and Lakshmana Rao partitioned the properties. The partition having been effected without his consent, it is not binding on him. But from this it does not follow that Krishna Rao and Lakshmana Rao did not separate from the family at the time of the partition. It was open to Krishna Rao and Lakshmana Rao to separate themselves from the family. Once they did separate, the appellant and his adoptive mother alone must be deemed to have continued as the members of the family. It is true that because the plaintiff 's adoptive mother was alive, the family cannot be said to have come to an end on the date of partition. But that does not mean that Krishna Rao and Lakshmana Rao did not separate from the family. the partition took place in 1933, the appellant even if he was a coparcener on that day could have only got 1/3rd share. We, fail to see how. his position can be said to have improved merely because he was adopted subsequent to the date of partition. It is true that because he was not a party to the partition, he is entitled to ask for reopening of the partition and have his share worked out without reference to that partition. But so far as the quantum of his share is concerned, it must be determined after taking into consideration the fact that Krishna Rao and Lakshmana Rao separated from the family in 1933. The alternative contention of the appellant referred to earlier is also untenable firstly because Krishna Rao disposed of his share of the properties by means of a will and secondly even if he had not disposed of his: share of the property, the same would have devolved on Lakshmana Rao by succession and the property that had once vested by succession cannot be divested as in that property the plaintiffs adoptive father had no right of his own. The doctrine of relation back is only a legal fiction. There is no justification to logically extend that fiction . In fact the plaintiff had nothing to do with his adoptive father 's family when Krishna Rao died. On that day 205 his adoptive father was not alive. The devolution of Krishna Rao 's property must be held to have taken place at the very moment Krishna Rao died. We know of no legal fiction under which it can be said to have been in a suspended animation till the plaintiff was adopted. This takes us to the decided cases. A long line of decisions has firmly laid down that an adoption dates back to the date of the death of the adoptive father. It is not necessary to refer to the catena of decisions on this point. Suffice it to refer to the decision of this Court in Shrinivas Krishnarao Kango vs Narayan Devji Kango and Ors.(1). But that fiction by itself does not help the plaintiff. That fiction merely enables him to establish that he must be deemed to have been in existence on the date of the death of his adoptive father. Division of status need not be effected by bilateral agreement. It can be effected by an unilateral declaration by a coparcener if the same is properly communicated. Therefore it was within the power of Krishna Rao and Lakshmana Rao to separate themselves from the family and in fact they did so in 1933. We see no basis for the contention of the appellant that he can ignore the events that took place in 1933. He can no doubt ignore the actual partition by metes and bounds effected by Krishna Rao and Lakshmana Rao and ask for a repartition of the properties but his adoption by itself does not and cannot re unite the divided family. It is one thing to say that an adopted son can ignore a partition effected prior to his adoption, which affects his rights and it is a different thing to say that his adoption wipes out the division of status that had taken place in his family. Reliance was placed on the decision of the Bombay High Court in Ramchandra Shrinivas and Ors. vs Ramkrishna Krishnarao (2 ) in support of the proposition that the plaintiff can enter into the adoptive family on the basis that the family is a joint and undivided Hindu family and his rights in the property of the family must be decided on that basis. It is true that this decision lends some support to the argument that despite the partition effected in 1933, the plaintiff can work out his rights on the basis that the family remains joint. The conclusion of the High Court that the adopted son is entitled to enter his adoptive family on the basis that the family continues as a joint and undivided Hindu family and that his rights in the family property must be decided on that basis does not appear to be supported by any Hindu law text or by any decision of this Court or the Judicial Committee. The decision of the Judicial Committee in Anant Bhikappa Patil, Minor vs Shankar Ramchandra Patil(3), relied on by the High Court did not consider that question. It is true that some of the observations of Chief Justice Stone in Bajirao and Ors. vs Rant (1) ; (2) A.I.R. 1952 Bam.463 (3) 70 I.A. 232. 206 krishna(1), does support the view taken by the Bombay High Court. But the question that arose for decision in that case was whether a person adopted, after a partition in his adoptive father 's family cannot divest the properties that had vested in the other coparceners. It may be noted that in the course of his judgment, the learned Chief Justice observed : "There can, in our opinion, be no question of a partition whereby the partitioning male members take away all the family property from a joint Hindu family unless the family can be wholly disrupted and finally brought to an end. We regard it as clear that a Hindu family cannot be finally brought to an end while it is possible in nature or law to add a male member to it. The family cannot be at an end while there is still a potential, mother if that mother in the way of nature or in the way of law brings in a new male member. The existing male members can separate off; they can take away their share. They cannot prejudice by partitioning the rights of the after bom male member whether the birth is natural or legal. If in point of fact, before his arrival, the existing coparceners have partitioned the new arrival can obtain a re opening of the partition and thereby get his share. How that share is to be calculated in various circumstances need not be decided here. " These observations in our opinion lay down the ratio of the decision and that ratio does not support the conclusion reached by the Bombay High Court. The decision of the Full Bench of the Madras High Court, in K. R. Sankaralingam Pillai and anr. vs Veluchami Pillai, Minor (2) , relied on by Bombay High Court merely laid down that an adopted son is entitled to reopen partition entered into in the family of his adoptive father, before his adoption. That position is no more open to question and was not questioned in this appeal. We are only concerned with the quantum of share to which the plaintiff is entitled. Our attention has not been invited to any decision which supports the view taken by the Bombay High Court. We see no justification to accept that view. Further the interest of the society is not advanced by engrafting one more fiction to the already existing fiction that an adopted son is deemed to have been born on the date of death of his adoptive father. Acceptance of the new fiction canvassed on behalf of the plaintiff is bound to create various complications. Hindu widows in the past were proverbially long lived because of 'the child marriage system. Adoptions might take place and have taken place more than half a century after the death of the adoptive (1) I.L.R. (2) I.L.R. 207 father. Meanwhile the other coparceners might have dealt with the family property on the basis of the then existing rights. They might have alienated the property. We see no justification to create chaos by inventing a new fiction unknown to Hindu law texts nor authorised by stare decisis. This Court in Shrinivas Krishnarao Kango 's case(1) has laid down that the fiction that an adoption relates back to the date of the death of the adoptive father applies only when the claim of the adoptive son relates to the estate of the adoptive father. But where the succession to the property of a person other than the adoptive father is involved, the principle applicable is not the rule of relation back but the rule, that inheritance once vested cannot be divested. It is true that the question that arose for decision in that case was whether an adoptive son can claim to succeed to a collateral 's estate, divesting the property that had already vested in someone else. But the rule laid down by this Court in that case is much wider than the limited question that arose for decision and the reasons given in support of that rule support our conclusion. The rights of an adopted son cannot be more than that of his adoptive father. If the plaintiff 's adoptive father was alive in 1933 when the partition took place, he could not have obtained anything more than 1/3rd share in the family properties. It passes our comprehension how the plaintiff could acquire a greater right than his adoptive father could have had if he had been alive on the date of partition and that he could have got if he had been adopted prior to that date. In our judgment the plaintiff 's claim for a half share in the family properties is unsustainable. In the result ibis appeal fails and the same, is dismissed with costs. S.C. Appeal dismissed. (1) [1955] 1.S.C.R. 1.

The appellant was adopted in 1955 by R 's widow after R 's death in 1912. In 1933, there was a partition between K (R 's father) and his third son L, the only two coparceners existing at that time. Thereafter, K. bequeathed his properties by will to some of his relations. Later, there was a further partition between L and his son. L died in 1952. A suit was filed in 1956 by the appellant, claiming half of the family properties. The trial court granted the appellant half share in the family properties. The High Court reduced the share awarded to the appellant from 1/2 to 1/3 of the properties held by it to be partible. The High Court also set aside the trial court 's decree awarding a sum of Rs. 1500 to the appellant as his share of the consideration received under a sale deed; In appeal to this Court the appellant contended that his adoption related back to the date of death of his adoptive father; by a fiction of law, he must be deemed to have been in existence when K and L divided the properties between them; the partition, having been effected without his joinder, the same had to be ignored; and, therefore, he was entitled to a half share in the properties. Alternatively, it was urged that the appellant was entitled to get by succession, half share of the properties that fell to the share of K. Dismissing the appeal, HELD. (i) The appellant must be deemed to have been adopted in 1912 when R died. Therefore, he must be deemed to have been a coparcener in his adoptive father 's family when K and L partitioned the properties in 1933. The partition having been effected without his consent, it is not binding on him; but from this it cannot be said that K and L did not separate from the family. So far as the quantum of his share is concerned it must be determined after taking into consideration the fact that K & L separated from the family in 1933. The appellant can ignore the actual partition,by meters and bounds effected by K and L and ask for a repartition of the properties but his adoption by itself cannot reunite the divided family. The rights of an adopted son cannot be more than that of his adoptive father. The fiction that an adoption relates back to the date of the death of the adoptive father applies only when the claim of the adopted son relates to the estate of the adoptive father. If the appellant 's adoptive father was alive in 1933, when the partition took place, he could not have obtained anything more than 1/3rd share in the family properties. Therefore, the appellant 's claim for a half share in the family properties is unsustainable. T204 G; 207 B] 201 The alternative claim of the appellant is also not tenable because K disposed his share by a will and secondly, even if he had not disposed of his share, the same would have developed on L by succession and the property once vested cannot be divested as in that property the plaintiffs adoptive father had no right of his own. The doctrine of relation back is only a legal fiction. When K. died, plaintiff 's adoption father was not alive. The revolution of K 's property must be held to have taken place as soon as K died. The property could not have remained in a suspended animation till the appellant was adopted. [2O4G] Shrinivas Krishnarao Kango vs Narayan Devji Kango and ors. ; , ; Anant Bhikappa Patil, Minor vs Shankar Ramchandra Patil, 70 I.A. 232; Bajirao and Ors. vs Ramkrishna, I.L.R. and K. R. Sankaralingam Pillai and Anr. vs Veluchami Pillai, Minor, I.L.R. , referred to. Ramachandra Srinivas vs Ramakrishna Krishna Rao, A.I.R. 1952 Bom. 453, disapproved. (ii) Both the courts below found the sale in question valid as the same was effected to meet family necessities. As the appellant did not seek an accounting from the 2nd defendant, and as no case was made out for requiring the second defendant to account in respect of moneys received by him as Karta and as the plaint did not state that there was any cash in the hands of the 2nd defendant, the High Court was justified in reversing the decree of the trial court directing the payment of Rs. 1500 to the appellant. [203 E]

Civil Appeal No. 2849 of 1987. (In Special Leave Petition (Civil) No. 12198 of 1987). From the Judgment and order dated 26.9.1987 of the Bombay High Court in W.P. No. 1459 of 1987. 882 G. Ramaswamy, Additional Solicitor General and Ms. A Subhashini for the Petitioner. Dr. Y.S. Chitale, A.M. Khanwilkar, A.S. Bhasme and Mrs. Jayshree Wad for the Respondents. Dr. N.M. Ghatate and S.V. Deshpande for the Intervenor. The Judgment of the Court was delivered by VENKATARAMIAH, J. We are very much disturbed by the manner in which the High Court of Bombay (Aurangabad Bench) has interfered not once but twice with the process of election which was being held under the provisions of the Representation of the People Act, 1951 (hereinafter referred to be 'the Act ') to the Legislative Council of the State of Maharashtra from the Osmanabad cum Latur cum Beed Local Authorities Constituency. The Governor of Maharashtra by a notification dated 18th September, 1987 issued under section 16 of the Act called upon six local authorities constituencies in the State of Maharashtra to elect one member from each of the said constituencies in order to fill the vacancies in the Maharashtra Legislative Council which had been caused by the retirement of the members representing the said constituencies on the expiration of their terms of office. On the same day the Election Commission of India, the appellant herein, issued a notification under section 30 of the Act fixing the calendar of events for the purpose of holding the elections accordingly. Osmanabad cum Latur cum Beed Local Authorities constituency was one of the six constituencies referred to above. According to the notification issued by the Election Commission the last date for making nominations was 25th September, 1987. p The date for the scrutiny of nominations was 26th September, 1987. The last date for the withdrawal of candidatures was 28th September, 1987 and the date on which the Poll, if necessary, was to be taken was 18th October, 1987. The entire election process had to be completed within 21st October, 1987. Respondents 1 to 5 Shivaji son of Vishwanath Gangane, Prof. K.S. Shinde, Prabhakar son of Bapurao Pudale, Shankarrao Madhavrao Mane and Ashok son of Rangnath Magar filed a writ petition under Article 226 of the Constitution in Writ Petition No. 1459 of 1987 on September 26, 1987 before the High Court of Bombay (Aurangabad Bench) challenging the validity of the notification issued by the Election Commission on 18th September, 1987 on the ground that the notification was invalid because the Zilla Parishad of Osmanabad and the Zilla Parishad of Latur district which 883 were within the constituency had not been constituted and the Administrators were appointed to run the said Zilla Parishads and therefore the members of the said Zilla Parishads who were entitled to take part in the said elections had been deprived of their right to participate in the said election. Along with the writ petition an application was made for an interim order and the counsel who moved the said application just prayed for the postponement of the last date for withdrawal of candidatures from 28th September, 1987 to Ist October, 1987. It is not clear why such a prayer was made. The learned Single Judge before whom the writ petition came up for consideration however passed an order on September 26, 1987 issuing notice on the writ petition and passing an interim order ex parte directing the postponement of the last date of withdrawal of candidatures from 28th September, 1987 to October 1, 1987. A Division Bench of the High Court which was presided over by the learned Single Judge who had issued the interim order earlier heard the writ petition on October 1, 1987 and dismissed it by the order passed on the same day. In the course of its order the Division Bench relied on the decision in Inderjit Barua & Ors vs Election Commission of India & Ors., [1985] Supp. 3 S.C.R. 225=AIR 1984 S.C. 1911 which had laid down that the validity of an election process under the Act could be challenged only in an election petition filed under the Act as provided by Article 329(b) of the Constitution. While dismissing the writ petition the High Court did not make any observation as to the effect of the interin order passed by it earlier on the election programme. 18 candidates withdrew their candidatures by Ist of October, 1987 which was the last date for withdrawal of candidatures as per the interim order passed by the High Court. In the circumstances the Election Commission considered it fair to postpone the date of poll from 18th October, 1987 (as originally notified) to some later date in order to secure compliance with the spirit underlying section 30(d) of the Act which contemplated an interval of 20 days between the last date for withdrawal of candidatures and the date of poll. Ordinarily a week 's postponement would have been in the opinion of the Election Commission adequate in the present case but as the postponement of one week would have led to the date of poll falling during the festival season the Election Commission revised the date of poll as Ist November, 1987 and notified the change of the date of poll in the official Gazette on 15th October, 1987. The Election Commission also notified under the same notification the date before which the election had to be completed as 4th November, 1987 instead of 2 1st October, 1987 which was the date fixed for that purpose originally. But on 16. l0.1987 respondent 1 to 5 filed a Review Petition in Civil Application for Review No. 2035 of 1987 before the High 884 Court seeking a direction to the effect that the election programme A might be renotified on the ground that clear 20 day 's interval was not there between the last date of withdrawal of candidatures and the date of poll which had been originally fixed as 18th October, 1987. The said Review Petition came up for consideration on the 16th October, 1987 before the very same Bench which had dismissed the Writ Petition earlier on Ist October, 1987. On that occasion it is alleged that it was brought to the notice of the High Court by the learned counsel appearing for the State of Maharashtra, Collector, Osmanabad and the Returning officer for the osmanabad Latur Beed Local Authority Constituency and the District Returning officer for Maharashtra Legislative Council Constituency No. 26, osmanabad Latur Beed Local Authority Constituency, osmanabad, that the Election Commission had on 15. l0.1987 already postponed the date of poll from 18th October, 1987 to the Ist November, 1987. Despite the above submission made by the said counsel the High Court was pleased to make the following order on 16th October, 1987. "Notice before admission. In this matter, the election fixed for the 18th October, 1987 will have to be stayed till we pass further order on 26th October, 1987, looking to the mandatory provision of section 30 of the Representation of the People Act, S.O. till 26 10 1987. " The case was adjourned to October 26, 1987 for hearing. Aggrieved by the interim order passed in the writ petition postponing the last date of withdrawal of the candidatures from 28th September, 1987 to October 1, 1987 and by the interim order passed on October 16, 1987 in the Review Petition the Election Commission has filed this appeal by special leave. The Special Leave Petition filed in the above case came up for hearing on October 27, 1987. On that date this Court directed issue of notice on the Special Leave Petition and also ordered stay of the operation of the stay order which had been passed by the High Court. The Election Commission was permitted to proceed with the election process. The contesting respondents took notice of the petition in the Court through their counsel. The case was adjourned to 30th October, 1987 for final hearing. On 30th October, 1987 the case was heard and the Court passed the following order: "Special leave granted. The appeal is heard. We allow the appeal, set aside the order dated 16. l0.1987 pas 885 sed by the High Court of Bombay at Aurangabad and dismiss the Review Petition No. 2035 of 1987 in writ petition No. 1459 of 1987. The Election Commission shall proceed with the election in accordance with law. Respondent Nos. 1 to 5 shall pay Rs.5000 by way of costs to the appellant. Reasons will follow. " The appeal was accordingly allowed with costs. The following are the reasons for allowing the appeal. Part XV of the Constitution contains the provisions relating to the elections. Article 324(1) of the Constitution vests the superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of all elections to Parliament and to the Legislature of every State and of elections to the offices of the President and the Vice President held under the Constitution in the Election Commission. Article 327 of the Constitution provides that subject to the provisions of the Constitution, Parliament may from time to time by law make provision with respect to all matters relating to, or in connection with, elections to either House of Parliament or to the House or either House of the Legislature of a State including the preparation of electoral rolls, the delimitation of constituencies and all other matters necessary for securing the due constitution of each House or Houses. In exercise of the power granted under Article 327 of the Constitution Parliament has enacted the Act to provide for the conduct of elections to the either House of Parliament, to the House or either House of the Legislature of each State, qualifications and disqualifications for membership of those Houses, corrupt practices and other offences in connection with such elections and the decision of doubts and disputes arising out of or in connection with the such elections. Article 329(b) of the Constitution provides that notwithstanding anything contained in the Constitution no election to either House of Parliament or to the House or either House of the Legislature of a State shall be called in question except by an election petition presented to such authority and in such manner as may be provided for by or under any law made by the appropriate Legislature. The disputes regarding the elections have to be settled in accordance with the provisions contained in Part VI of the Act. Section 80 of the Act states that no election shall be called in question except by an election petition presented in accordance with the provisions of Part VI of the Act. The expression 'election ' is defined by section 2(d) of the Act as an election to fill a seat or seats in either House of Parlia 886 ment or in the House or either House of the Legislature of a State A other than the State of Jammu and Kashmir. Thus a dispute regarding election to the Legislative Council of a State can be raised only under the provisions contained in Part VI of the Act. Section 80A of the Act provides that the Court having jurisdiction to try an election petition shall be the High Court. An election petition has to be presented in accordance with section 81 of the Act. In view of the non obstante clause contained in Article 329 of the Constitution the power of the High Court to entertain a petition questioning an election on whatever grounds under Article 226 of the Constitution is taken away. The word 'election ' has by long usage in connection with the process of selection of proper representatives in democratic institutions acquired both a wide and a narrow meaning. In the narrow sense it is used to mean the final selection of a candidate which may embrace the result of the poll when there is polling, or a particular candidate being returned unopposed when there is no poll. In the wide sense, the word is used to connote the entire process culminating in a candidate being declared elected and it is in this wide sense that the word is used in Part XV of the Constitution in which Article 329(b) occurs. In N.P. Ponnuswami vs Returning officer, Namakkal Constituency and Ors, ; this Court held that the scheme of Part XV of the Constitution and the Act seems to be that any matter which has the effect of vitiating an election should be brought up only at the appropriate stage in an appropriate manner before a special Tribunal and should not be brought up at an intermediate stage before any court. Any other meaning ascribed to the words used in the article would lead to anomalies, which the Constitution could not have contemplated, one of them being any dispute relating to the pre polling stage. In the above decision this Court ruled that having regard to the important functions which the legislatures have to perform in democratic countries, it had always been recognised to be a matter of first importance that elections should be concluded as early as possible according to time schedule and all controversial matters and all disputes arising out of elections should be postponed till after the elections were over so that the election proceedings might not be unduly retarded or protracted. Hence even if there was any ground relating to the noncompliance with the provisions of the Act and the Constitution on which the validity of any election process could be questioned, the person interested in questioning the elections has to wait till the election is over and institute a petition in accordance with section 81 of the Act calling in question the election of the successful candidate within fortyfive days from the date of election of the returned candidate but not earlier than the date of election. This view has been reaffirmed by 887 this Court in Lakshmi Charan Sen & Ors. vs A.K.M. Hassan Uzzaman & Ors. etc., [1985] Supp. 1 S.C.R. 493 and in Inderjit Barua & Ors etc. vs Election Commission of India & Ors. (supra). Realising the effect of Article 329 (b) of the Constitution the High Court even though it had by oversight issued an interim order in writ Petition No. 1459 of 1987 on 26.9.1987 postponing the last date for withdrawal of candidatures to Ist October, 1987 dismissed the petition by its judgment dated 1.10.1987. The relevant part of its judgment reads as follows: "The challenge must fail mainly on two grounds. First on the ground that the stage has reached of withdrawals of nominations for the said election which was infact, fixed on 30th but has been postponed because of our orders as on today. Article 329(b) bars every challenge to any election including all the election process which commences from the date of notification in the official Gazette, except by way of election petition under the Representation of People Act. Mr. Chapalgaonkar, appearing for the respondent has relied upon a decision reported in AIR 1984 Supreme Court page 1911 to support this plea that all election including every election process must be challenged only by way of election petition under the Representation of the People Act. " Having thus dismissed the petition on 1. l0.1987 the Court committed a serious error in entertaining a Review Petition in the very same writ petition on 16.1().1987 and passing an order staying election which had been earlier fixed for 18. l0.1987 till further orders "looking to the mandatory provisions of section 30 of the Representation of the People Act". The High Court tailed to recall to its mind that it was not its concern under Article '26 of the Constitution to rectify any error even if there was an error committed in the process of election at any stage prior to the declaration of the result of the election notwithstanding the fact that the error in question related to a mandatory provision of the statute relating to the conduct of the election If there was any such error committed in the course of the election process the Election Commission had the authority to set it right by virtue of power vested in it under Article 324 of the Constitution as decided in Mohinder Singh Gill & Anr. vs The Chief Election Commissioner, New Delhi & Ors. and to see that the election process was completed in a fair manner. 888 It is true that the Zilla Parishads of Osmanabad and the Latur districts had not been constituted and administrators were functioning in their place. The total voters in the local authorities constituency in question were 577 out. Of which 533 were members of Municipal Councils and 44 were members of the Zilla Parishads. Even if the Zilla Parishads of osmanabad and Latur districts had been in existence the total number of their members would not have exceeded above 110. As such more than 3/4th of the voters entitled to vote in the constituency in question were in existence. The Election Commission had a guideline that if at least 75% of the local authorities in a local authority constituency were functioning and again at least 75% of the voters in the total electorate were available, then the electorate should be asked to elect their representative to the Legislative Council. In the instant case 75% of the total electorate (including the number of members of the Zilla Parishads of Osmanabad and Latur districts who would have been voters had the said Zilla Parishad been constituted) were entitled to participate. Since the existing position in the constituency satisfied the guideline prescribed by the Election Commission, the election from the said constituency had been ordered. It was only on account of the interim order passed by the High Court on 26.9.1987 postponing last date for withdrawal of candidatures from 28.9.1987 to 1.10.1987 and not on account of any mistake committed by the Election Commission the interval between the last date of withdrawal and the date of poll which had been originally fixed as 18.10.1987 fell short of the period of twenty days prescribed by clause (d) of section 30 of the Act. After the judgment of the High Court was pronounced dismissing the writ petition on 1. 10.1987 in order to ensure that there was an interval of 20 days between the last date for the withdrawal of candidatures and the date of poll, the Election Commission had on its own postponed the date of poll to 1.11.1987 and had published a notification in the official Gazette of the State Government even before the Court passed another interim order on 16.10.1987 in the Review Petition. All these changes in the calendar of events of the election in question came about because of the earlier interim order of the High Court. It has to be stated here that it is not the law that every non compliance with the provisions of the Act or of the Constitution will vitiate an election. It is only when it is shown that the result of the election was materially affected by such non compliance the High Court would have jurisdiction to set aside an election in accordance with section 100(1)(d)(iv) of the Act. The High Court was in error in thinking that it alone had the exclusive power to protect the democracy. The success of democracy is dependent upon the cooperation of the Legislature, the Executive, the Judiciary, the Election Commission, the press the 889 political parties and above all the citizenry and each of them discharging the duties assigned to it. Every member of the body politic should play his legitimate role for the success of the democracy. Some times the success of democracy also depends upon the observance of restraint on the part of the constitutional functionaries. We are constrained to observe that the High Court grievously erred in entertaining the review petition and in passing an interim order on 16. 10.1987. We are of the view that both the interim orders the one passed on 26.9.1987 postponing the last date of withdrawal of candidatures from 28.9.1987 to 1.10.1987 and the other passed on 16.10.1987 were without jurisdiction. There was hardly any justification for entertaining the review petition in the circumstances of this case and for issuing notice thereon particularly after the High Court. itself had rejected the writ petition on the ground that it had no jurisdiction to interfere with the process of election at that stage in view of the provisions of Article 329(b) of the Constitution. The review petition filed before the High Court was liable to be dismissed. We directed respondents 1 to 5 to pay Rs.5,000 to the appellant by way of costs since the entire proceedings in the High Court amounted to a clear abuse of the process of law. These are the reasons for our order passed on 30. 10.1987 allowing the appeal. S.L. Appeal allowed.

% The Governor of Maharashtra by a notification dated 18th September, 1987, issued under section 16 of the Representation of the People Act, 1951 ( 'the Act ') called upon six local authorities Constituencies in the State of Maharashtra to elect one member from each of the said constituencies to fill the vacancies in the Maharashtra Legislature Council. On the same day, the Election Commission of India, the appellant, issued a notification under section 30 of the Act fixing the calendar of events for the purpose of holding the elections. Osmanabadcum Latur Beed Local Authorities constituency was one of the said six constituencies. Under the notification of the Election Commission, the last date for the withdrawal of the candidatures was 28th September, 1987 and the poll, if necessary, was to be taken on the 18th October, 1987 and the entire election process was to be completed within 21st October, 1987. Respondents 1 to 5 filed a writ petition in High Court challenging the validity of the notification issued by Election Commission on 18th September 1987, on the ground that the notification was invalid because the Zilla Parishad of Osmanabad and Latur districts which were within the constituency had not been constituted and the Administrators were appointed to run the said Zilla Parishads and, therefore, the members of the Zilla Parishads who were entitled to take part in the said elections had been deprived of their right to participate in the said election. Along with the writ petition, an application was made praying for the postponement of the last date of withdrawal of the candidates from 28th September, 1987 to 1st October, 1987. A Single Judge of the High Court passed an order on September 26, 1987, issuing notice on the writ petition and passing an interim order ex parte directing the postponement of last date of withdrawal of the candidatures from 28th September, 1987 to October 1, 1987. On October 1. 1987. a Division Bench of 879 the High Court dismissed the writ petition. The High Court did not take any observation as to the effect of the interim order passed by it earlier on the election programme. 18 Candidates withdrew their candidature by 1st October, 1987, the last date for withdrawal of candidatures as per the interim order passed by the High Court. In the circumstances, the Election Commission postponed the date of poll from 18th October, 1987 (as originally notified) to 18th November, 1987, in compliance with the spirit underlying section 30(d) of the Act, which contemplated an interval of 20 days between the last date for withdrawal of candidatures and the date of poll and notified the change of the date of poll in the official Gazette. It also notified 4th November, 1987 as the date before which the election had to be completed instead of 21st October, 1987, originally fixed. On 16 l0 1987, the respondents 1 to 5 filed a review petition before the High Court, seeking a direction that the election programme might be renotified on the ground that clear 20 days ' interval was not there between the last date of withdrawal of candidatures and the date of poll originally fixed, viz. 18th October, 1987. The High Court on 16th October 1987, passed an order adjourning the case to October 26, 1987 and staying the election fixed for the 18th October, 1987 till it passed further order on 26th October 1987, even though it was brought to the notice of the High Court that the Election Commission had on 16.10.1987 already postponed the date of poll from 18th October, 1987 to 1st November, 1987. Aggrieved by the interim order in the writ petition postponing the last date of withdrawal of the candidatures from 28th September, 1987, to October 1, 1987 and by the interim order passed on October 16, 1987 in the Review Petition, the Election Commission appealed to this Court for relief by special leave. Allowing the appeal, the Court, ^ HELD: A dispute regarding election to the Legislative Council of a State can be raised only under the provisions contained in Part VI of the Act. Section 80 A of the Act provides that the Court having jurisdiction to try on election petition shall be the High Court. In view of the non obstante clause contained in Article 329 of the Constitution, the power of the High Court to entertain a petition questioning an election on whetever grounds under Article 226 of the Constitution is taken away. If there was any ground relating to the non compliance with the provisions of the Act and the Constitution on which the validity of any election process could be questioned, the person interested in question 880 ing the election has to wait till the election is over and institute a petition in accordance with section 81 of the Act calling in question the election of the successful candidate within forty five days from the date of election of the returned candidate but not earlier than the date of election. The High Court even though it had issued an interim order in the writ petition on 26.9.1987 postponing the last date for withdrawal of the 13 candidatures to 1st October, 1987, dismissed the petition by its judgment dated 1.10.1987. Having dismissed the petition on 1.10.1987, the High Court committed a serious error in entertaining a review petition in the very same writ petition on 16. 10.1987 and passing an order staying the election which had been earlier fixed for 18.10.87 till further orders "looking to the mandatory provisions of section 30 of Representation of the People Act. " The High Court failed to recall to its mind that it was not its concern under Article 226 of the Constitution to rectify any error even if there was an error committed in the process of election at any stage prior to the declaration of the result of the election notwithstanding the fact that the error in question related to a mandatory provision of the statute relating to the conduct of the election. If there was any such error committed in the course of the election process, the Election Commission had the authority to set it right by virtue of power vested in it under Article 324 of the Constitution as decided in Mohinder Singh Gill & Anr. vs The Chief Election Commisioner, New Delhi & Ors., , and to see that the election process was completed in a fair manner. [886A B, G H; 887E H] In this case, 75% of the total electorate (including the number of members of the Zilla Parishads of Osmanabad and Latur districts who would have been voters had the said Zilla Parishads been constituted) were entitled to vote. Since the existing position in the constituency satisfied the guideline prescribed by the Election Commission, the election from the said constituency had been ordered. It was only on account of the interim order passed by the High Court on 26.9.1987 postponing last date for withdrawal of the candidatures from 28.9.1987 to 1.10.1987 and not on account of any mistake committed by the Election Commission that the interval between the last date of withdrawal and the date of poll, originally fixed as 18.10.1987 fell short of the period of twenty days prescribed by clause (d) of section 30 of the Act. After the judgment of the High Court was pronounced dismissing the writ petition on 1.10.1987, in order to ensure that there was an interval of 20 days between the last date for withdrawal of candidatures and the date of poll, the Election Commission had on its own postponed the date of poll on 1.11.1987 and published a notification in the official Gazette even before the Court passed another interim order on 16.10.1987 in 881 the Review Petition. All these changes in the calendar of events of the election came about because of the earlier interim order of the High Court. It is not the law that every non compliance with the provisions of the Act or the Constitution will vitiate an election. It is only when it is shown that the result of the election was materially affected by such non compliance that the High Court would have the jurisdiction to set aside an election in accordance with section 100(1)(d)(iv) of the Act. [888C G] The High Court grievously erred in entertaining the review petition and passing an interim order on 16.10.1987. Both the interim orders the one passed on 26.9.1987 postponing the last date of withdrawal of the candidatures, and the other, passed on 16.10.1987 were without jurisdiction. There was hardly any justification for entertaining the review petition in the circumstances of the case and issuing notice thereon particularly after the High Court itself had rejected the writ petition on the ground that it had no jurisdiction to interfere with the process of election at that stage in view of the provisions of Article 329(b) of the Constitution. The Review Petition before the High Court was liable to be dismissed. The entire proceedings in the High Court amounted to a clear abuse of the process of law. [889B D] OBSERVATION: The success of democracy is dependent upon the cooperation of the Legislature, the press, the political parties and above all the citizenry, and each of them discharging the duties assigned to it. Every member of the body politic should play his legitimate role for the success of the democracy. Some times, the success of democracy also depends upon the observance of restraint on the part of the Constitutional functionaries. [888H; 889A B] Inderjit Barua & Ors. vs Election Commission of India & Ors., [1985] Supp. 3 S.C.R. 225 A.I.R 1984 S.C. 1911; N.P. Ponnuswami vs Returning officer Namakkal Constituency and Ors., ; ; Lakshmi Charan Sen & Ors. vs A.K.M. Hassan Uzzaman & Ors. etc., [1985] Supp. 1 S.C.R. 493 and Mohinder Singh Gill & Anr. vs The Chief Election Commissioner, New Delhi & Ors. J , referred to.

Appeal No. 222 (N) of 1973. From the Judgment and Order dated 13.3.1972 of the Delhi High Court in Civil Writ No. 731 of 1971. M.K. Dua, Aman Vachher and S.K. Mehta for the Appellants. B. Datta, Additional Solicitor General, G.D. Gupta and Mr. C.V. Subba Rao for the Respondents. The Judgment of the Court was delivered by KHALID, J. 1. This appeal by certificate is directed against the Judgment of a Division Bench of the Delhi High Court, in C.W. No. 731 of 1971. The prayer in the Writ Petition is for the issuance of an appropriate writ, order or direction declaring (a) the Police Forces (Restriction of Rights) Act No. 33 of 1966 (for short the Act) as ultra vires the Constitution, (b) the Police Forces (Restriction of Rights) Rules 1966 and Police Forces (Restriction of Rights) Amendment Rules, 1970 (for short the Rules) ultra vires of Act 33 of 1966 and the Constitution of India, (c) that the Circular dated 1st April, 1971 as invalid, illegal, ultra vires, null and void and (d) for a declara tion that the Delhi Police Non Gazetted Karmchari Sangh, petitioner No. 1 in the Writ Petition, is a legally and validly constituted service organisation. 350 2. The first appellant is the Non Gazetted Karmachari Sangh (for short the 'Sangh ') and the appellant Nos. 2 to 7, its members. The High Court dismissed the petition holding that the challenge was not sustainable and that neither the Act nor the Rules violated any provisions of the Constitu tion. The High Court dealt at length with the preliminary objections that a challenge based on the violation of any fundamental right was not permissible in view of the emer gency declared by the President of India, in December, 1977. This need not detain us now in this Judgment. The appellants ' case is that the Act referred above violates Article 19(1)(c) of the Constitution of India and that the restrictions imposed by it., being arbitrary, violates Article 14 of the Constitution. The Non Gazetted members of the Delhi Police Force wanted to form an organi sation of their own and for that purpose constituted the Karmachari Union in 1966 and applied for its registration under the Trade Union Act, 1926. Initially the registration asked for was declined. Then Act 33 of 1966 was enacted. It came into force on 2nd December, 1966. An application for recognition was again made on 9th December, 1966. Recogni tion was granted by the Central Government on 12th December, 1966. The Non Gazetted members of the Delhi Police Force were permitted to become members of the Sangh. On 12th December, 1966, the Central Government made rules under the Act which were amended in December, 1970. The Circular in question was issued under these rules. The Circular attempts to derecognise the Sangh. This occassioned the filing of the writ petition. Before considering the rival contentions urged before us, it would be useful to refer to the salient features of the Act to appreciate its ambit and the restrictions imposed by its provisions. The Act was enacted to delineate the restrictions imposed of the rights conferred by part III of the Constitution, in their application to the members of the forces charged with the maintenance of public order so as to ensure the proper discharge of their duties ' and the mainte nance of discipline among them. The Parliament obviously has this power under Article 33 of the Constitution of India. The provisions of the Act seek to place certain restrictions on members of the police force in exercise of their funda mental rights guaranteed by Article 19(1)(c) to form Associ ation or Unions. Section 3 of the Act reads as follows: "3(1) No member of a police force shall with out the express sanction of the Central Gov ernment or of the prescribed authority (a)be a member of, or be associated in any way with, any trade union, labour union, political association or with any class of trade unions, labour unions or political 351 associations; or (b) be a member of, or be associated in any way with, any other society, institution, association or organisation that is not recognised as part of the force of which he is a member or is not of a purely social, recretional or religious nature; or (c) communicate with the press or publish or cause to be published any book, letter or other document except where such communication or publication is in the bona fide discharge of his duties or is of a purely literary, artistic or scientific character or is of a prescribed nature. Explanation: If any question arises as to whether any society, institution, association or organisation is of a purely social, recre tional or religious nature under clause (b) of this subsection, the decision of the Central Government thereon shall be final. (2) No member of a police force shall partici pate in or address, any meeting or take part in any demonstration organised by any body of persons for any political purposes or for such other purposes as may be prescribed. " Section 4 of the Act provides for penalties if Section 3 is contravened by any person. Section 5 gives power to the Central Government by notification in the official gazette, to amend the schedule by including therein any other enact ment relating to a force charged with the maintenance of public order or omit therefrom any enactment already speci fied therein. Section 6 gives the rule making power to the Central Government. The only contention that now survives is whether the impugned statute, rules and orders are violative of the fights of the appellants guaranteed under Article 19(1)(c) of the Constitution of India. This appeal could be disposed of by a short Order. Appellants No. 2 to 7 are no longer in service. They have been dismissed. As such they do not have the necessary locus standi to sustain this petition. But the appellants ' counsel submitted that the first petitioner the Sangh, was still interested in pursuing this appeal and that persuaded us to hear the appeal on merits. It is true that recognition was given to the Sangh originally. Subsequently by order dated 1 st April, 1971, the Sangh was derecognized. This was pursuant to the amended rules. Rule 3 provided that "no member of the police forces shall participate in, or address, any meeting or take part in any demonstration organised by any body of persons (a)for the purpose of protesting against any of the provisions of the Act or these rules or any other 352 rules made under the Act; or (b)for the purpose of protest ing against any disciplinary action taken proposed to be taken against him or against any other member of a police force; or (c)for any purpose connected with any matter pertaining to his remuneration or other conditions of serv ice or his condition of work or living condition, or the remuneration, other conditions, of any other member or members of a police force. "Provided that nothing contained in clause(c) shall preclude a member of a police force from participating in a meeting convened by an association of which he is a member and which has been accorded sanction under sub section (1) of section3 of the Act, where such meeting is in pursuance of or for the furtherance of, the objects of such associa tion. " The above rules were amended by a notification dated 19th December, 1970 the material change for our purpose being an amendment in the proviso to clause (c) of rule 3. The original proviso to clause(c) was substituted by another proviso which reads as follows: "Provided that nothing contained in clause (c) shall preclude a member of a police force from participating in a meeting (i) which is convened by an association of police officers of the the same rank of which he is a member and which has been granted recognition under clause (b) of sub section (1) of section 3 of the Act; (ii) which has been specifically provided for in the articles of association or/and has been, by general or special order, permitted by the Inspector General of Police having regard ' to the object of such meeting and other relevant factors; and (iv) which has been convened to consider the agenda circulated to all concerned according to the relevant provisions of the articles of association, after giving intimation in ad vance to the ' Inspector General of Police or an officer nominated by him." (Emphasis sup plied). Rule 5 was added to the Rules by virtue of which minutes had to be recorded of the meetings of a recognised associa tion. The Inspector General of Police could send observers by virtue of rule 6 to such meetings. Outsiders were prohib ited from attending the meetings of the association without permission of the Inspector General of Police by Rule 7. Rules 8, 9 & 11 may also be usefully read: 353 "8. Recognition: Members of police force belonging to the same rank desiring to form an association may make an application for the grant of recognition under clause (b) of sub section (1) of section 3 and such application shall be in writing under the hand of a repre sentation of such association addressed to the Inspector General of Police who shall be the authority to grant, refuse or revoke such recognition; Provided that before refusing or revoking recognition, the Association shall be given a reasonable opportunity of making representation against the proposed action." "9. Suspension of recognition: The Inspector General of Police may in the interests of the general public or for the maintenance of discipline in the police force and with the prior approval of the Central Government, the State Government or as the ease may be the Administrator of the Union Territory suspend the recognition granted under rule 8 for a period not exceeding three months which may be extended for a further period of three months by the Central Government, State Government or as the case may be the Administrator of the Union Territory so however that the total period for which such recognition may be suspended shall, not, in any case, exceed six months." "11. Special provision regarding recognition already granted: Recognition granted prior to the commencement of the Police Forces (Restriction of Rights) Amendment Rules, 1970, to any association the articles of association of which are not in conformity with these rules shall, unless the said artides of association are brought in conformity with the provisions of these rules within a period of thirty days, stand revoked on the expiry of the said peri od. It is the change effected by the new Proviso to Rule 3(c) which has come in for attack at the hands of the appel lants. Previously all non gazetted officers of the Delhi Police Department could be members of the Sangh. Now, the amended proviso to rule 3(c) mandates that only members of the Police Force having the same rank could constitute themselves into one Association. The effect of this amended rule is that the Sangh will have to be composed of various splinter associations consisting of members holding differ ent ranks. This according to the appellants violates not only Article 19(1)(c) which protects freedom of association, but also the provisions of the Act. 354 The immediate provocation for filing the writ petition was the Circular by which the recognition granted to the Sangh was revoked. The operative part of the Circular reads as follows: "Rule 11 of the Police Force (Restriction of Rights) Amendment Rules, 1970 published vide extraordinary Gazette of India notifica tion No. GSR 2049 dated 19 12 70 lays down that recognition granted prior to the com mencement of these rules, to any association the articles of which are not in conformity with these rules shall unless the articles are brought in conformity with the provisions of these rules within a period of 30 days, stand revoked on the expiry of the said period. Whereas the Constitution of the Delhi Police NonGazetted Karmchari Sangh which was granted recognition vide Government of India, Ministry of Home Affairs letter No.8/70/66 P.I., dated 12 12 66 and which contains a number of provisions not in con formity with the above rules, the recognition already granted to the Delhi Police Non Gazet ted Karmachari Sangh, stands revoked. This may be brought to the notice of a11 ranks. A copy of this circular may be published in the Delhi Police Gazette. " The appellants ' counsel Submits that recognition of the association carries with it the right to continue the asso ciation as such. It is a right flowing from the fact of recognition. To derecognise the association in effect of fends against the freedom of association. It is urged that once the Government had granted recognition to the Sangh and approved its constitution neither the Parliament nor any delegated authority can take away that recognition or dic tate to the association who could be its members. The right available to the members of the association at the commence ment should continue as such without any hindrance. Before considering the questions of law raised by the appellants ' counsel with reference to the decided cases, it would be useful to bear in mind the fact that this associa tion consists of members of Police Force who by virtue of this fact alone stands on a different footing from other associations. The Constitution of India has taken care to lay down limitations on such, associations from exercising rights under Article 19(1)(c). Article 33 read with 355 Article 19(4) of the Constitution offers an effective reply to the contention raised by the appellants. Article 33 reads as follows: "Parliament may, by law, determine to what extent any of the rights conferred by this Part shall, in their application to the mem bers of the Armed Forces or the Forces charged with the maintenance of public order, be restricted or abroagated so as to ensure the proper discharge of their duties and the maintenance of discipline among them. " Article 19(4) reads as follows: "Nothing in sub clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the sovereignty and integrity of India or public order or morality, reasonable restric tions on the exercise of the right conferred by the said sub clause. " That the Sangh and its members come within the ambit of Article 33 cannot be disputed. The provisions of the Act and rules taking away or abridging the freedom of association have been made strictly in conformity with Article 33. The right under Article 19(1)(c) is not absolute. Article 19(4) specifically empowers the State to make any law to fetter, abridge or abrogate any of the rights under Article 19(1)(c) in the interest of public order and other considerations. Thus the attack against the Act and rules can be successful ly met with reference to these two Articles as members of the Police Force, like the appellants herein, are at a less advantageous position, curtailment of whose fights under Article 19(1)(c) comes squarely within Article 33 in the interest of discipline and public order. This conclusion of ours is sufficient to dispose of this appeal. However, we will deal with the submissions made before us for the com pleteness of the Judgment. The scope of Article 19(1)(c) came up for considera tion before this Court in Damyanti Naranga vs The Union of India & Ors., ; The question related to the Hindi Sahitya Sammelan, a Society registered under the . The Parliament enacted the Hindi Sahitya Sammelan Act under which outsiders were per mitted to become members of the Sammelan without the voli tion of the original members. This was challenged and this Court held that any law altering the composition of the Association compulsorily will be a breach of the right to form the association because it violated the composite right of forming an association and the right to continue it as the original members desired it. 356 10. Here we have an entirely different situation since we are dealing with a group distinct in its nature and composition from others. Here we are dealing with a force that is invested with powers to maintain public order. Article 33 enables Parliament to restrict or abrogate the fundamental rights in their relation to the Armed Forces including Police Force. In Ous Kutilingal Achudan Nair & Ors., vs Union India & Ors., ; this Court had to consider two questions; whether the employees of the defence establishment such as cooks, barbers and like civil employees were "members of the Armed Forces" and if so whether they could be validly deprived of their right to form unions in violation of Article 19(1)(c). This Court held that they fell within the category of members of the Armed Forces and that the Central Government was competent by notification to make rules restricting or curtailing their right to form associations, Article 19(1)(c) not withstanding. In Raghubar Dayal Jai Prakash vs The Union of India and Ors., ; this Court had to deal with this question in relation to the functions of an incorporated body the objects of which were, interalia, to regulate forward transactions in the sale and purchase of various commodities, Freedom of association is a fundamental right. It was contended that if a law regulated the recognition of an association under certain conditions subject to which alone recognition could be accorded or continued, such conditions were bad. This Court had to consider whether the freedom of association implied or involved a guaranteed right to recognition also. The contention was that if the object of an association was lawful, no restriction could be placed upon it except in the interest of public order and that freedom to form an association carried with it the right to determine its internal arrangements also. Repelling this contention this Court held that restrictions cannot be imposed by statute for the purpose of regulating control of such associations. While the right to freedom of association is fundamental, recognition of such association is not a fundamental right and the Parliament can by law regulate the working of such associations by imposing conditions and restrictions on such functions. It cannot be disputed that the fundamental rights guaranteed by Article 19(1)(c) can be claimed by Government servants. A Government servant may not lose its right by joining Government service. Article 33 which confers power on the Parliament to abridge or abrogate such rights in their application to the Armed Forces and other similar forces shows that such rights are available to all citizens, including Government servants. But it is, however, necessary to remember that Article 19 confers fundamental rights which are not absolute but are subject to reasonable restrictions. What has happened in this case is only to impose reasonable restrictions in the interest of discipline and public order. 357 13. The validity of the impugned rule has to be judged keeping in mind the character of the employees we are deal ing with. It is true that the rules impose a restriction on the right to form association. It virtually compels a Gov ernment servant to withdraw his membership of the associa tion as soon as recognition accorded to the said association is withdrawn or if, after the association is formed, no recognition is accorded to it within six months. In other words, the right to form an association is conditioned by the existence of the recognition of the said association by the Government. If the association affairs recognition and continues to enjoy it, Government servants can become mem bers of the said association; if the said association does not secure recognition from the Government or recognition granted to it is withdrawn, Government servants must cease to be members of the said association. That is the plain effect of the impugned rule. These rules are protected by Articles 33 and 19(4) of the Constitution. Besides, it is settled law that the right guaranteed by Article 19(1)(c) to form associations does not involve a guaranteed right to recognition also. The main grievance of the appellants is that the first appellant Sangh when recognised, comprised of Police Officers of various ranks, the common factor being that all its members were non gazetted police officers. This composi tion was changed by the impugned rules. Not only is the composition changed; the entire Sangh stood derecognised for failure to alter its constitution complying with the new rules. This attack cannot be sustained. Section 3 of the Act permits the rule making authority to define any group of Police Force that can form an Association. It also gives power to prescribe the nature of activity that each ' such association of members can indulge in. It, therefore, fol lows that if rules can be framed defining this aspect, a rule can also be framed enabling the authorities to revoked or cancel recognition once accorded, if the activities offended the rules. The further grievance of the appellant is that non gazetted officers who once formed one block have been fur ther divided with reference to ranks and that this again is an inroad into their right under Article 19(1)(c). This submission has been already met. Besides, this classifica tion based on ranking has its own rationale behind it. We are dealing with a Force in which discipline is the most important pre requisite. Non gazetted officers consist of men of all ranks; the lowest cadre and officers who are superior to them. If all the nongazetted officers are grouped together irrespective of rank, it is bound to affect discipline. It was perhaps, realising the need to preserve discipline that the changes in the rule were effected. We are not satisfied that there has been violation of any law in doing so. 358 On a careful consideration of the questions involved in this appeal, we hold that the High Court was right in its decision. We accordingly dismiss the appeal. S.R. Appeal dismissed.

The non gazetted members of the Delhi police Force wanted to form an association of their own and for that purpose constituted the Karmachari Union in 1966 and applied for its registration under the Trade Union Act, 1926 and this was refused. After the coming into effect from 2.12.1966 of the Police Force (Restriction of Rights) Act, 33 of 1966 another, application for recognition was again made on 9.12.1966 which was granted on 12.12.1966. The non gazetted members of the Delhi Police Force were permitted to become members of the Sangh. The Police Force (Restriction of Rights) Rules, 1966 made by the Central Government on 12.12.1966 were amended by the Amendment Rules of 1970. Rule 11 thereof provides for revocation of the recognition grant ed to an association, if the said associations articles are not in conformity with the Rules or are not brought in conformity with the provisions of the amended Rules within a period of 30 days. Since the Articles of Association of the appellant Sangh contained a number of provisions not in conformity with the rules and since the Sangh failed to bring the same in conformity, by a circular dated 1.4.1971 the recognition granted was revoked. The appellants, there fore, filed a writ petition before the Delhi High Court challenging the constitutional validity of the Act, Rules and the impugned circular. The writ petition having been rejected the appellants have come by way of special leave. Dismissing the appeal, the Court, 348 HELD: 1.1 The Police Force (Restriction of Rights) Act (33 of) 1966, the Police Force (Restriction of Rights) Rules 1966 (as amended by the 1970 Rules) and the circular dated 1.4.1971 are all constitutionally valid. They do not offend the provisions of Articles 14 and 19(1)(c) of the Constitu tion. [350 C, 355 E F] 1.2 The right under Article 19(1)(c) is not absolute. Article 19(4) specifically empowers the State to make any law to fetter, abridge or abrogate any of the fights under Article 19(1)(c) in the interest of public order and other considerations. While the right to freedom of association is fundamental, recognition of such association is not a funda mental fights and the Parliament can by law regulate the working of such associations by imposing conditions and restrictions on such functions. [355 E, 356 F] 1.3 The fundamental fights guaranteed by Article 19(1)(c) can be claimed by Government servants. A government servant may not lose his right by joining government serv ice. Article 33 which confers power on the Parliament to abridge or abrogate such rights in their application to the Armed Forces and other similar forces shows that such fights are available to all citizens, including government serv ants. What has happened in this case is only to impose reasonable restrictions in the interest of discipline and public order. [356 G H] 1.4 Rule 11 read with Rule 3(c) of the Amended Police Force (Restriction of Rights) Rules, 1966 has to be judged keeping in mind the character of the employees to whom it applies. It is true that the rules impose a restriction on the right to form association. It virtually compels a gov ernment servant to withdraw his membership of the associa tion as soon as recognition accorded to the said association is withdrawn or if, after the association is formed, no recognition is accorded to it within six months. In other words, the right to form an association is conditioned by the existence of the recognition of the said association by the government. If the association obtains recognition and continues to enjoy it, government servants can become mem bers of the said association, if the said association does not secure recognition from the government or recognition granted to it is withdrawn, government servants must cease to be members of the said association. That is the plain effect of the impugned role. These rules are protected by Articles 33 and 19(4) of the Constitution. Besides, it is settled law that the right guaranteed by Article 19(1)(c) to form associations does not involve a guaranteed right to recognition also. [357 A C] 1.5 Section 3 of the Police Force (Restriction of Rights) Act permits the rule making authority to define any group of Police Force that can form an Association. It also gives power to prescribe the nature of activity that each such association of members can indulge in. It, therefore, follows that if rules can be 349 framed defining this aspect, a rule can also be framed enabling the authorities to revoke or cancel recognition once accorded, if the activities offended the rules. Besides the classification based on ranking has its own rationale behind it. The Court is dealing with a Force in which disci pline is the most important prerequisite. Non gazetted officers consist of men of all ranks; the lowest cadre and officers who are superior to them. If all the non gazetted officers are grouped together irrespective of rank, it is bound to affect discipline. It was perhaps, realising the need to preserve discipline that the changes in the rule were effected. [357E, G ] Damyanti Naranga vs The Union of India & Ors., ; ; Ous Kutilingal Achudan Nair & Ors., vs Union of India & Ors., ; ; and Raghubar Dayal Jai Prakash vs The Union of India & Ors., ; fol lowed.

grounds of detention, the manner in which the gold biscuits were concealed was mentioned and that itself suggested that the detenus must have been indulging in smuggling 439 activities. [p. 443 B C] & ORIGINAL JURISDICTION: Writ Petition (Crl.) Nos. 105 & 106 of 1991. (Under Article 32 of the Constitution of India.) Harjinder Singh and R.N. Joshi for the Petitioners. A.K. Ganguli, Ms. Kitty Kumar Manglam, Ms. A. Subhashini and T.T. Kunhikannan for the Respondents. The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J. Common questions arise for consideration in these two writ petitions filed under Arti cle 32 of the Constitution of India seeking writ of habeas corpus for quashing the orders of detention and for immedi ate release of the detenus. First, we shall deal with Writ Petition (Crl.) No. 105 of 1991. Writ Petition (Crl.) No. 105 of 1991 The petitioner detenu is a foreign national being a resident of Republic of Maldives. On 25.10.90 he landed at Trivandrum Airport from Male and was moving towards the exit gate of the Customs Import Baggage Hail. He was intercepted by the Air Customs Officers and on examination he was found to be carrying 50 gold biscuits of foreign origin which were seized from either side of the handle inside the lock system of he red colour suit case belonging to the petitioner. His passport and other documents were also seized. The petition er 's statement was recorded under Section 108 of the wherein he is alleged to have confessed the guilt. After the arrest he was produced in the Court of Chief Judicial Magistrate, Trivandrum and was remanded to judicial custody for a period of 14 days. Thereafter he was shifted to the Court of the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam. While he was in jail he made an application for granting of bail under Section 437 Cr. P.C. on 29.10.90 but it was rejected on 2.11.90 by the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam. While the petitioner. was confined in jail an order of detention was passed under Section 3(1) of the Conservation of Foreign Exchange & Prevention of Smug gling Activities Act, 1974 ( 'COFEPOSA Act ') for short) by the Secretary to the Government, Government of Kerala, Home (SS A) Department on 7.11.90 and the same was served on the petitioner on 8.11.90. The grounds of 440 detention alongwith the list of documents annexed thereto were served in time. The petitioner made a representation and it was rejected. It is submitted that since his bail application has been rejected and since he was in jail and his passport was also seized, there was no compelling necessity for such a deten tion. It is also contended that no antecedents are there showing his involvement in such incidents and this was the solitary incident, therefore the provisions of the Act are not attracted. The next main and important submission is that the copies of the bail application filed by him and the order refusing bail, which are relevant documents, were suppressed and not placed before the detaining authority nor they were supplied to the detenu and therefore there is non application of mind and the petitioner also is denied a reasonable opportunity under Article 22(5) of the Constitu tion of India. We see no force in the first submission namely that there was no compelling necessity for passing the detention Order. It is true that when the detention order was passed on 7.11.1990 the detenu was in jail and his bail application also was rejected and his passport also was seized. But the detaining authority has mentioned in the grounds that "I am aware that you are under judicial custody and possibility of your release on bail in the near future cannot be ruled out. Also nothing prevents you from moving bail application in the jurisdictional court and getting released on bail. ' Therefore it cannot be said that the detaining authority did not apply his mind to this aspect. It is entirely within his subjective satisfaction whether there are such compelling circumstances or not. He has noted that though the detenu was in jail there is likelihood of his being released and therefore it is clear that he has applied his mind to this aspect also. The learned counsel appearing for the petition er relied on a judgment of this Court in Dharmendra Sugan chand Chelawat and Anr. vs Union of India and Others [ ; wherein it is observed that an order of detention can be validly passed against a person in custody and for that purpose it is necessary that the grounds of detention must show that the detaining authority was aware of the fact that the detenu was already in detention and there were compelling reasons justifying such detention and that there should be cogent material on the basis of which the detain ing authority may be satisfied that there are compelling reasons such as that the. detenu is likely to be released from custody in the near future and the nature of the an tecedents and activities of the detenu which indicate that he is likely to indulge in such activities if released and therefore it is necessary to detain him in order to prevent him from engaging in such activities. But we may observe that what 441 would be the compelling reasons in the context would depend on the facts of each case. In this case the allegation is that 50 gold biscuits of foreign origin were found in either side of the handle inside the lock system of the suitcase. This itself manifests the expertise of the carrier in smug gling. The detaining authority was aware that the detenu was in custody but he was satisfied that there is every likeli hood of his being released on bail and he is likely to indulge in such smuggling activities. It is mentioned in the counter affidavit that the remand period of the detenu was to expire on 10.11.90 and that was also a ground which impelled the detaining authority to think that he was likely to be released on bail. This was the material before the detaining authority on the basis of which he was satisfied that there were compelling reasons to pass the detention order. Having carefully considered the submission of the learned counsel we are unable to say that there were no compelling reasons. Learned counsel also relied on the judgment of this Court in Abdul Razak Abdul Wahab Sheikh vs S.N. Sinha, Commissioner of Police, Ahmedabad and Another ; That was a case of public order and after referring to some of the earlier decisions including the decision of the Constitution Bench in Rameshwar Shaw vs District Magistrate, Burdwan, ; , this Court considered the contention i.e. since the detenu was in custody at the time of service of the order of detention there was no material to disclose necessitating the detention. It was held thus: "On a consideration of the aforesaid deci sions the principle that emerges is that there must be awareness in the mind of the detain ing authority that the detenu is in custody at the time of service of the order of detention on him and cogent relevant materials and fresh facts have been disclosed which necessi tate the making of an order of detention. In this case, the detenu was in jail custody in connection with a criminal case and the order of detention was served on him in jail. It is also evident that the application for bail filed by the detenu was rejected by the Designated Court on May 13, 1988. It is also not disputed that no application for bail was made for release of the detenu before the order of detention was served on him on May 23, 1988. It appears that in the grounds of detention there is a statement that at present you are in jail yet "there are full possibilities that you may be released on bail in this offence also. " This state ment clearly shows that the detaining authori ty was completely unaware of the fact that no application for bail was made on behalf of the detenu for his release before the Desig nated Court and as such the possibility of his coming out 442 on bail was non existent. This fact of non awareness of the detaining authority, in our opinion, clearly establishes that the subjec tive satisfaction was not arrived at by the detaining authority on consideration of rele vant materials. There is also nothing to show from the grounds of detention nor any fresh facts have been disclosed after the detention order dated January 25, 1988 was set aside by the Advisory Board on March 13, 1988, on the basis of which the detaining authority could come to his subjective satisfaction that the detenu, ii released on bail will indulge in acts prejudicial to the maintenance of public order and as such an order of detention is imperative." Having so observed the Division Bench referred to various criminal cases pending against the detenu at the relevant time and noted that some of the cases having noth ing to do with the maintenance of public order and then held that: "These statements do not disclose any activity after March 14, 1988 or any activity of the time when the detenu was a free person. Con sidering all these facts and circumstances we are constrained to hold that there has been no subjective satisfaction by the detaining authority on a consideration of the relevant materials on the basis of which the impugned order of detention has been clamped on the detenu. It also appears that the detenu was in detention as well as in jail custody for about three years except released on parole for short periods." The Division Bench finally concluded thus: "It is highlighted in this connection that in the affidavit inreply filed by respondent 1, the detaining authority, he merely denied the specific averments made in para 3(111) that no act prejudicial to the maintenance of law and order on the part of the detenu is alleged to have been committed by the detenu between March 14 to April 13, 1988 etc. without spe cifically denying those statements. In this background, a mere bald statement that the detenu who is in jail custody is likely to be released on bail and there are full possibili ties that he may continue the above offensive activities without reference to any particular case or acts does not show on the face of the order of detention that there has been subjec tive satisfaction by the detaining authority in making the order of detention in question." (emphasis supplied) 443 From the above passages it can be seen that this Court categorically held that a person in custody can be detained. There must be awareness in the mind of the detaining author ity that the detenu is in custody and that there should be cogent and relevant material showing that there is a compel ling necessity to detain him. Since that was a case of public order, the learned Judges proceeded to consider the nature of the cases that were pending and ultimately on the facts and circumstances of the case held that the absence of a reference to any one of such recent cases would show that the subjective satisfaction has not been arrived at proper ly. This reasoning cannot be applied to the facts of this case. In the grounds, the manner in which the gold biscuits were concealed is mentioned and that itself suggests that the detenu must have been indulging in smuggling activities. So there was relevant material on the basis of which the detaining authority was satisfied that there was compelling necessity to pass the detention order. The next submission is that there were no antecedents and that this being the solitary incident the detention is unwarranted. It is again a question of satisfaction of the detaining authority on the basis of the material placed before it. Even a solitary incident which has been detected may speak volumes about the potentialities of the detenu and merely on the ground that there were no antecedents the detention order cannot be quashed. The authorities cannot and may not in every case salvage the antecedents but as noted above even a solitary incident may manifest the poten tialities of a detenu in the activities of smuggling. The next and main submission is that there was suppres sion of vital documents namely bail application and the order refusing bail, which are relevant documents, and had those documents been placed before the detaining authority they might have influenced the mind of the detaining author ity one way or the other. Alternatively it is also contended that irrespective of the fact whether they were placed before the authority or not the copies thereof ought to have been supplied to the petitioner paripassu the grounds of detention and that failure to supply the same has deprived the petitioner of an opportunity of making an effective representation and therefore the detention as such is ille gal and violative of Article 22(5) of the Constitution of India. There is no dispute that the detenu moved for bail under Section 437 Cr. P.C. on 29.10.90 before the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam and by an order dated 2.11.90 the bail application was rejected. The first grievance of the petitioner is that these two documents were not placed before the detaining authority and they were suppressed,. In support of this plea reliance is placed on the grounds wherein the 444 detaining authority has stated that he was aware that the petitioner was in judicial custody and possibility of his release on bail in the near future cannot be ruled out. It is submitted that this statement itself shows that the detaining authority was not aware that a bail application in fact was made and the same has been rejected and the only inference that can be drawn is that these relevant documents were suppressed and not placed before the detaining authori ty. In the counter affidavit filed by the second respondent, State of Kerala, it is categorically denied that the bail application and the order refusing bail were suppressed from the detaining authority and that at the time of sponsoring the petitioner 's name the copies of the bail application and the order refusing bail were not made available to the Department and therefore they were not placed before the authority. From these averments, one of the questions that arise for consideration is whether the failure to supply these two documents to the detenu or alternatively whether the failure to place the bail application and the order refusing bail before the detaining authority does in any way affect the detention order. The learned counsel in this context sought to place reliance on some of the judgments of this Court. In M. Ahmedkutty vs Union of India and another; , , the contention was that the bail application and the order granting bail which were relied upon by the detaining authority were not supplied to the detenu and therefore the detention was illegal. A Division Bench of this Court noticed that in the grounds it was clearly men tioned that the detenu was remanded to judicial custody and was subsequently released on bail. Therefore these documents were in fact placed before the detaining authority and were relied upon by it and therefore the non supply of these relevant documents to the detenu disabled him to make an effective representation. Therefore there was violation of Article 22(5) of the Constitution. In arriving at this conclusion, the Division Bench relied on several other decisions and observed that all the documents relied upon by the detaining authority must be pari passu supplied to the detenu. In the instant case, the facts are different. In the counter affidavit it is clearly stated that the bail appli cation and the order refusing bail were not there before the sponsoring authority. Therefore they were not placed before the detaining authority. The grounds do not disclose that the detaining authority has relied upon any of these two documents. On the other hand as already noted the detaining authority mentioned in the grounds that it was aware that the detenu was in custody but there is every likelihood of his being released on bail. This itself shows that these documents were not before the authority. Therefore it cannot be said that the docu ments referred to and relied upon in the grounds were not supplied to the detenu and the ratio in 445 Ahmedkutty 's case; , on this aspect does not apply to the facts in the instant case. It is not necessary to refer to in detail various decisions of this Court where in it has been clearly laid down that the documents referred to or relied upon in the grounds of detention only are to be supplied. This has been settled by a long line of decisions: Ramachandra A. Kamat vs Union of India ; , Frances Coralie Mullin vs W.C. Khambra, [19801 2 SCC 275, Ichhu Devi Choraria vs Union of India, ; , Pritam Nath Hoon vs Union of India, ; , Tushar Thakker vs Union of India, , Lallubhai Jobibhai Patel v.union of India; , , Kirti Kumar Chatnan Lal Kundalia vs Union of India , and Ana Carolina D 'Souza v Union of India 1198x1 Supp. SCC 53 (1) At this juncture it is also necessary to note that such of those documents which are not material and to which a casual or passing reference is made in the grounds, need not be supplied. In Mst. L.M.S. Ummu Saleema vs Shri B.B. Guja ral and another; , after referring to some of the earlier decisions of this Court, it was held thus: "It is, therefore, clear that every failure to furnish copy of a document to which reference is made in the grounds of detention is not an infringement of Article 22(5), fatal to the order of detention. It is only failure to furnish copies of such documents as were relied upon by the detaining authority, making it difficult for the detenu to make an effec tive representation, that amounts to a viola tion of the fundamental rights guaranteed by Article 22(5). In our view it is unnecessary to furnish copies of documents to which casual or passing reference may be made in the course of narration of facts and which are not relied upon by the detaining authority in making the order of detention. It will therefore be seen that failure to supply each and every document merely referred to and not relied upon will not amount to infringement of the rights guaranteed under Article 22(5) of the Constitution. We may of course add that whether the document is casually or passingly referred to or whether it has also formed the material for arriving at the subjective satisfaction, depends upon the facts and grounds in each case. In the instant case we are satisfied that these two documents were not placed before the detaining authority nor they were referred to or relied upon. The learned counsel, however, proceeded to submit that even assuming that these documents were not relied upon or referred to by the detaining authority yet the failure to place these relevant documents before the 446 detaining authority amounted to suppression and therefore there was non application of mind and that the detention order passed without looking into such relevant material is invalid. In Ahmedkutty 's case no doubt there is an observa tion having regard to the facts therein that non considera tion of the bail application and the order of releasing would amount to non application of mind and that would affect the detention order. The Division Bench made these observations while considering the contention that the order granting bail and the bail application, though referred to, were not relied upon. It is not laid down clearly as a principle that in all cases non consideration of the bail application and the order refusing bail would automatically affect the detention. The relevant observations in this context made by this Court Ahmedkutty 's case may be noted: "If in the instant case the bail order on condition of the detenu 's reporting to the customs authorities was not considered the detention order itself would have been af fected. Therefore, it cannot be held that while passing the detention order the bail order was not relied on by the detaining authority. In section Gurdip Singh vs Union of India, , following Ichhu Devi Choraria vs Union of India, ; and Shalini Soni vs Union of India, ; it was reiterated that if the documents which formed the basis of the order of detention were not served on the detenu along with the grounds of detention, in the eye of law there would be no service of the grounds of detention and that circumstance would vitiate his detention and make it void ab initio." (emphasis supplied). It is further observed in this case that: "Considering the facts in the instant case, the bail application and the bail order were vital materials for consideration. If those were not considered the satisfaction of the detaining authority itself would have been impaired, and if those had been considered, they would be documents relied on by the detaining authority though not specifically mentioned in the annexure to the order of detention and those ought to have formed part of the documents supplied to the detenu with the grounds of detention and without them the grounds themselves could not be said to have been complete. We have, therefore, no alterna tive but to hold that it amounted to denial of the detenu 's right to make an effective repre sentation and that it resulted in violation of Article 22(5)of the Constitution of India 447 rendering the continued detention of the detenu illegal and entitling the detenu to be set at liberty in this case." (emphasis supplied) Placing considerable reliance on this passage, the learned counsel contended inter alia that in the instant case from other point of view namely (i) if the bail application and the order refusing bail were not considered or (ii) if considered the non supply of the copies of the same to the detenu would affect the detention order. In other words, according to him, non consideration of these two documents by the detaining authority would itself affect the satisfaction of the detaining authority. If on the other hand they are taken into consideration and relied upon the non supply of the same to the detenu would result in violation of Article 22(5) of the Constitution rendering the detention invalid. We are unable to agree with ' the learned counsel. We are satisfied that the above observations made by the Division Bench of this Court do not lay down such legal principle in general and a careful examination of the entire discussion would go to show that these observations were made while rejecting the contention that the bail application and the order granting bail though referred to in the grounds were not relied upon and therefore need not be supplied. The case is distinguishable for the reason that the Division Bench has particularly taken care to mention that "Considering the facts . the bail application and the bail order were vital materials". In that view these observations were made. Further that was a case where the detenu was released on bail and was not in custody. This was a vital circumstance which the authority had to consider and rely before passing the detention order and therefore they had to be supplied. Now we shall consider the other submission regarding the non supply of the bail application and the order refusing bail to the detenu and its effect. According to the learned counsel these two documents formed relevant material and irrespective of the fact whether they were placed before the detaining authority or not they ought to have been supplied to the detenu and failure to do so has caused prejudice in making an effective representation. We are unable to agree. In Abdul Sattar Abdul Kadar Shaikh vs Union of India and Others [1990] I SCC 480 it is observed thus: "In fact the bail applications were filed by the detenu himself and he was very much aware of the contents of those bail applications and the orders made thereon. These documents were not relied upon bv the detaining authority. When a request is made by the detenu for supply of these bail applications and 448 orders refusing thereon are made, the court inter alia has to look into the question whether the detenu is in any way handicapped in making an effective representation by such refusal. No authority has been placed before us which goes to the extent of holding that a mere non supply of any document whatever its nature may be, to the detenu per se amounts to the denial of an opportunity under Article 22(5)." (emphasis supplied). In Syed Farooq Mohammed vs Union of India and Another, JT [1990] 3SC 102 this Court considered precisely the same question and it was observed thus: "The third ground of challenge is that the relevant document i.e. bail application of the petitioner and order made there on which might have been considered by the detaining authori ty were not supplied to the petitioner and as such his right of making effective representa tion guaranteed under Article 22(5) of the Constitution of India has been seriously prejudiced. This ground is without any sub stance because firstly there is nothing to show from the grounds of detention that the rejection of this bail application by the Sessions Judge, Greater Bombay on January 5, 1990 was considered by the detaining athority before passing the impugned order of detention and as such this being not referred to in the grounds of detention, the documents had not been supplied to the petitioner, and it, therefore, cannot be urged that non supply of this document prejudiced the petitioner in making effective representation against the order of detention. Article 22(5) of the Constitution, undoubtedly, mandates that all the relevant documents referred to in the grounds of detention and which are considered by the detaining authority in coming to his subjective satisfaction for clamping an order of detention are to be supplied to the detenu. The said document was not considered by the detaining authority in coming to his subjec tive satisfaction and in making the impugned order of detention. The nonfurnishing to the detenu of the said document i.e. the bail application and the order passed thereon, does not affect in any manner whatsoever the dete nu 's right to make an effective representation in compliance with the provisions of Article 22(5) of the Constitution of India. This ground, therefore, is wholly untenable." (emphasis supplied) 449 From the above discussion it emerges that even if the bail application and the order refusing bail are not placed before the detaining authority or even if placed, if the detaining authority does not refer to or rely upon or has failed to take them into consideration, that by itself does not lead to an inference .that there was suppression of relevant material or in the alternative that there was non application of mind or that subjective satisfaction was impaired. When these documents are neither referred to nor relied upon, there is no need to supply the same to the detenu. As already noted, in all such cases where the detenu was in custody at the time of passing an order of detention what is strictly required is whether the detaining authority was aware of the fact that the detenu was in custody and if so was there any material to show that there were compelling reasons to order detention inspire of his being in custody. These aspects assume importance because of the fact that a person who is already in custody is disabled from indulging in any prejudicial activities and as such the detention order may not normally be necessary. Therefore the law requires that these two tests have to be satisfied, in the case of such detention of a person in custody. The Constitution Bench in Rameshwar Shaw 's case held thus: ". . Whether the detention of the said person would be necessary after he is released from jail, and if the authority is bonafide satisfied that such detention is necessary, he can make a valid order of detention a few days before the person is likely to be released. XXX XXXX XXX Therefore, we are satisfied that the question as to whether an order of detention can be passed against a person who is in detention or in jail, will always have to be determined in the circumstances of each case. " Following the above principles, another Bench of three Judges of this Court in N. Meera Rani vs Government of Tamil Nadu and Another, ; after reviewing the various other decisions, it was observed that "A review of the above decisions reaffirms the position which was settled by the decision of a Constitution Bench in Rameshwar Shaw 's case and that none of the observations made in any subse quent case can be construed at variance with the principle indicated in Rameshwar Shaw 's case. " Having so observed the Bench summarised the principle thus: "Subsisting custody of the detenu by itself does not invalidate 450 an order of his preventive detention and the decision must depend on the facts of the particular case; preventive detention being necessary to prevent the detenu from acting in any manner prejudicial to the security of the State or the maintenance of public order etc. ordinarily it is not needed when the detenu is already in custody;, the detaining authority must show its awareness to the. fact of sub sisting custody of the detenu and take that factor into account while making the order; but even so, if the detaining authority is reasonably satisfied on cogent material that there is likelihood of his release and in view of his antecedent activities which are proxi mate in point of time he must be detained in order to prevent him from indulging in such prejudicial activities, the detention order can be validly made even in anticipation to operate on his release. This appears to us, to be the correct legal position." In Chelawat 's case after examining the various decisions of this Court dealing with preventive detention of a person in custody, it is held thus: "The decisions referred to above lead to the conclusion that an order for detention can be validly passed against a person in custody and for that purpose it is necessary that the grounds of detention must show that (i) the detaining authority was aware of the fact that the detenu is already in detention; and (ii) there were compelling reasons justifying such detention despite the fact that the detenu is already in detention. The expression "compel ling reasons" in the context of making an order for detention of a person already in custody implies that there must be cogent material before the detaining authority on the basis of which it may be satisfied that (a) the detenu is likely to be released from custody in the near future, and (b) taking into account the nature of the antecedent activities of the detenu, it is likely that after his release from custody he would in dulge in prejudicial activities and it is necessary to detain him in order to prevent him from engaging in such activities." In Sanjay Kumar Aggarwal vs Union of India and Others ; after reviewing all the relevant cases including Chelawat 's case, this Court observed as under: "It could thus be seen that no decision of this Court has gone to the extent of holding that no order of detention can validly be passed against a person in custody under any circumstances. Therefore the facts and circum stances of each case have to be 451 taken into consideration in the context of considering the order of detention passed in the case of a detenu who is already in jail. We have already, in the instant case, referred to the grounds and the various circumstances noted by the detaining authority and we are satisfied that the detention order cannot be quashed on this ground. " In a very recent judgment of this Court in Kamarunnissa etc. vs Union of India and Another., all the above mentioned decisions dealing with the detention of a person in custody have been reviewed and it is finally held as under: "From the catena of decisions referred to above it seems dear to us that even in the case of a person in custody a detention order can validly be passed (1) if the authority passing, the order is aware of the fact that he is actually in custody; (2) if he has reason to believe on the basis of reliable material placed before him (a) that there is a real possibility of his being released on bail, and (b) that on being so released he would in all probability indulge in prejudi cial activity and (3) if it is felt essential to detain him to prevent him from so doing. If the authority passes an order after recording his satisfaction in this behalf, such an order cannot be struck down on the ground that the proper course for the authority was to oppose the bail and if bail is granted notwithstand ing such opposition to question it before a higher Court. " Having regard to the various above cited decisions on the points often raised we find it appropriate to set down our conclusions as under: (1) A detention order can validly be passed even in the case of a person who is already in custody. In such a case, it must appear from the grounds that the authority was aware that the detenu was already in custody. (2) When such awareness is there then it should further appear from the grounds that there was enough material necessitating the detention of the person in custody. This aspect depends upon various considerations and facts and circumstances of each case. If there is a possibility of his being released and on being so released he is likely to indulge in prejudicial activity then that would be one such compelling necessity to pass the detention order. The order cannot be quashed on the ground that the proper course for the authority was to oppose the bail and that if bail is granted 452 notwithstanding such opposition the same can be questioned before a higher Court. (3) If the detenu has moved for bail then the applica tion and the order thereon refusing bail even if not placed before the detaining authority it does not amount to sup pression of relevant material. The question of non applica tion of mind and satisfaction being impaired does not arise as long as the detaining authority was aware of the fact that the detenu was in actual custody. (4) Accordingly the non supply of the copies of bail application or the order refusing bail to the detenu cannot affect the detenu 's right of being afforded a reasonable opportunity guaranteed under Article 22(5) when it is clear that the authority has not relied or referred to the same. (5) When the detaining authority has merely referred to them in the narration of events and has not relied upon them, failure to supply bail application and order refusing bail will not cause any prejudice to the detenu in making an effective representation. Only when the detaining authority has not only referred to but also relied upon them in arriv ing at the necessary satisfaction then failure to supply these documents, may, in certain cases depending upon the facts and circumstances amount to violation of Article 22(5) of the Constitution of India. Whether in a given case the detaining authority has casually or passingly referred to these documents or also relied upon them depends upon the facts and the grounds, which aspect can be examined by the Court. (6) In a case where detenu is released on bail and is at liberty at the time of passing the order of detention, then the detaining authority has to necessarily rely upon them as that would be a vital ground for ordering detention. In such a case the bail application and the order granting bail should necessarily be placed before the authority and the copies should also be supplied to the detenu. Bearing in mind the principles laid down in the above mentioned case, we shall now examine the facts in the case before us. The detaining authority in Ground Nos. 3 and 4 has stated as under: "3. You were arrested under Section 104 of the by the Superintendent on 26.10.90. You were produced before the Chief Judicial Magistrate, Trivandrum on the same day. The Magistrate remanded you to judicial custody. 453 4. I am aware that you are under judicial custody and possibility of your release on bail in the near future cannot be ruled out. Also nothing prevents you from moving bail application in the jurisdictional court and getting release on bail. " In the counter affidavit, it is stated that the period of remand to the judicial custody was to expire the next day after his detention. Therefore there was every likelihood of his moving for bail and getting released On bail. These materials Show that the detaining authority was not only aware that the detenu was in jail but also noted the circum stances on the basis of which he was satisfied that the detenu was likely to come out on bail and continue to in dulge himself in the smuggling activities. It, therefore, cannot be said that there were no compelling reasons justi fying the detention despite the fact that the detenu is already in custody. Likewise the failure to supply the bail application and the order refusing bail does not in any manner prejudice the detenu from making a representation particularly when he was fully aware of the contents of application made by himself and also the refusal order. However, when they are not referred to or relied upon the non supply does not affect the detention. These are all the submissions made by the learned coun sel for the petitioner and we do not see any merit in any of them. Accordingly the Writ Petition is dismissed. Writ Petition (Criminal) No. 106 of 1991 In this Writ Petition also the petitioner is a foreign national, being resident of Republic of Maldives. On 25.10.90 he landed at Trivandrum Airport from Male. After customs clearance the petitioner proceeded to Hotel Geeth at Trivandrum and while he was staying there, some officers of Customs came to the room and conducted a search. Nothing was recovered. But the officers took the petitioner by force to the Customs Import Baggage Hall and it is alleged that on examination, 30 gold biscuits of foreign origin were seized from either side of the handle inside the lock system of the blue colour suitcase which is alleged to be of petitioner. The petitioner 's passport and other documents were also seized by the Air Customs Officer, Trivandrum. The petition er 's statement was recorded ' under Section 108 of the Cus toms Act, 1962 wherein he is alleged to have confessed the guilt. After the arrest he was produced in the Court of Chief Judicial Magistrate, Trivandrum and was remanded to judicial custody for a period of 14 days. Thereafter he was shifted to the Court of the Additional Chief Judicial Magis trate (Economic Offences), Ernakulam. While he was in jail he made an application for grant of bail under Section 473 Cr. 454 P.C. on 29.10.90 but it was rejected on 2.11.90 by the Additional Chief Judicial Magistrate (Economic Offences), Ernakulam. While the petitioner was in jail, an order of detention was passed under Section 3(1) of the COFEPOSA Act by the Secretary to the Government, Govt. of Kerala, Home (SSA) Department, on 7.11.90 and the same was served on the petitioner on 8.11.90. The grounds of detention alongwith the list of documents annexed thereto were served in time. The petitioner made a representation stating that since his bail application has been rejected and since he was in jail and his passport was also seized, there is no compelling necessity for such a detention. He also stated that no antecedents are there showing his being involved in such incidents and this was the solitary incident, therefore the provisions of the Act are not attracted. The same points as in Writ Petition (Criminal) No. 105 of 1991 are raised in this petition also. We have negatived all the contentions in the above case. One another submission of the learned counsel for the petitioner is that in the case of this petitioner the deten tion order mentions only smuggling and that when once the detenu is in jail and when his passport is seized, he can no more indulge in smuggling and therefore according to the learned counsel, there is non application of mind. In this context he relied on the definition of "smuggling". Section 2(e) of the COFEPOSA Act defines "smuggling* ' thus: "2. Definitions In this Act, unless the context otherwise requires, xxxx xxxx xxxx xxx (e) "smuggling" has the same meaning as in clause (39) of Section 2 of the , and all its grammatical variations and cognate expressions shall be construed accord ingly. " Clause (39) of Section 2 of the defines "smuggling" thus: "2. Definitions In this Act, unless the context otherwise requires, (39) "smuggling" in relation to any goods means any act or 455 omission which will render such goods liable to confiscation under section 111 or section 113? Sections 111 and 113 of the provide for confiscation of improperly imported goods and exported goods respectively. The submission of the learned counsel is that the petitioner being in custody in India can no more indulge in smuggling and therefore the detention on the ground that he is likely to indulge in smuggling is non existent. We see no force in this submission. The potentialities of the detenu as gathered from his act of smuggling that form basis for detention. It is difficult to comprehend precisely the manner in which such a detenu with such potentialities may likely to indulge in the activities of smuggling. It is for the detaining authority to derive the necessary satisfaction on the basis of the materials placed before him. In the result this Writ Petition is also dismissed. RP Petitions dismissed.

The petitioners foreign nationals found to be carrying gold biscuits of foreign origin were arrested by the Customs authorities. Their applications for grant of bail under section 437 Cr. P.C. were rejected. Thereafter orders of their detention were passed under section 3(1) of the Conserva tion of Foreign Exchange and Prevention of Smuggling Activi ties Act. The grounds of detention alongwith the lists of documents annexed thereto were served in time. The petition ers made representations which were rejected. In the writ petitions under Article 32 of the Constitu tion, the petitioners before this Court contended that there was no compelling necessity for their detention under the as they were in jail and their bail applica tions were rejected and passports seized; that the provi sions of the Act were not attracted, as each of the inci dents in the case of the respective petitioners was solitary and there were no anticidents showing their involvement in the like incidents; that there was non application of mind by the detaining authority as copies of the bail applica tions and the orders refusing bail which were relevant documents were neither placed 436 before the detaining authority nor were supplied to them. On behalf of one of the petitioners it was also contended that there was no application of mind by the detaining authority inasmuch as the order of detention mentioned only smuggling and once the detenu is in jail, his passport being seized he could no more indulge in smuggling. Dismissing the writ petitions, this Court, HELD: 1.1 A detention order can validly be passed even in the case of a person who is already in custody. In such a case, it must appear from the grounds that the authority was aware that the detenu was already in custody. [451 F] 1.2 When such awareness is there then it should further appear from the grounds that there was enough material necessitating the detention of the person in custody. This aspect depends upon various considerations and facts and circumstances of each case. If there is a possibility of his being released and on being so released he is likely to indulge in prejudicial activity then that would be one such compelling necessity to pass the .detention order. The order cannot be quashed on the ground that the proper course for the authority was to oppose the bail and that if bail is granted notwithstanding such opposition the same can be questioned before a higher Court. [451G H, 452 A] Dharmendra Suganchand Chelawat & Anr. vs Union of India vs S.N. Sinha, Commissioner of Police, Ahmedabad & Anr., ; , referred to. Rameshwar Shah vs District Magistrate, Burdwan, ; , followed. N. Meera Rani vs Government of Tamil Nadu &Anr. , ; ; Sanjay Kumar Aggarwal vs Union of India & Ors., ; and Kamarunnissa etc. vs Union of India &Anr., , relied on. 2.1 If the detenu has moved for bail then the applica tion and the order thereon refusing bail even if not placed before the detaining authority it does not amount to sup pression of relevant material. The question of non applica tion of mind and satisfaction being impaired does not arise as long as the detaining authority was aware of the fact that the detenu was in actual custody. [452 B] 437 2.2 Accordingly the non supply of the copies of bail application or the order refusing bail to the detenu cannot affect the detenu 's right of being afforded a reasonable opportunity guaranteed under Article 22(5) of the Constitu tion, when it is clear that the authority has not relied or referred to the same. [452 C] 2.3 When the detaining authority has merely referred to them in the narration of events and has not relied upon them, failure to supply bail application and order refusing bail will not cause any prejudice to the detenu in making an effective representation. Only when the detaining authority has not only referred to but also relied upon them in arriv ing at the necessary satisfaction then failure to supply these documents, may, in certain cases depending upon the facts and circumstances, amount to violation of Article 22(5) of the Constitution of India. Whether in a given case the detaining authority has casually or passingly referred to these documents or also relied upon them depends upon the facts and the grounds, which aspect can be examined by the Court. [452 C E] 2.4 In a case where detenu is released on bail and is at liberty at the time of passing the order of detention. then the detaining authority has to necessarily rely upon them as that would be a vital ground for ordering detention. In such a case the bail application and the order granting bail should necessarily be placed before the authority and the copies should also be supplied to the detenu. [452 E F] M. Ahmedkutty vs Union of India & Anr., ; ; Ramachandra A. Kamat vs Union of India. ; ; Frances Coralie Muffin W.C. Khambra. ; ; Icchu Devi Choraria vs Union of India. ; Pritam Nath Hoon vs Union of India ; ; Lallub hai Jobibhai Patel vs Union of india; , ; Tushar Thakker vs Union of India ; Kirti Kumar Chaman Lal Kundalia vs Union of India ; Ana Carolina D 'Souza vs Union of India [1981] Supp. SCC 53(10); Mst. L.M.S. Ummu Saleema vs Shri B.B. Gujaral & Anr. , ; ; Abdul Sattar Abdul Kadar Shaikh vs Union of India & Ors., and SaVed Farooq Mohammad vs Union of India & Anr., JT , referred to. It is entirely within the subjective satisfaction of the detaining authority whether or not there were compelling circumstances to detain the person concerned. [p. 440 E] 438 4.1 In the instant case, in the counter affidavit it was stated that the period of remand to the judicial custody was to expire the next day after the detention. Therefore, there was every likelihood of the detenu 's moving for bail and getting released on bail. These materials showed that the detaining authority was not only aware that the detenus were in jail but also noted the circumstances on the basis of which he was satisfied that they were likely to come out on bail 'and continue to indulge in the smuggling activities. [453 B C] As mentioned in the grounds of detention, there was relevant material on the basis of which the detaining au thority was satisfied that there was compelling necessity to pass the detention orders. It, therefore, cannot be said that there were no compelling reasons justifying the deten tion despite the fact that detenus were already in custody. [443 C, 453 C] 4.2 Failure to supply the bail applications and the orders refusing bail did not in any manner prejudice the detenus from making representations particularly when they were fully aware of the contents of the applications made by them and also the refusal orders. However, when they are not referred to or relied upon, the non supply does not affect the detention. [453 C D] 5.1 Even a solitary incident may speak volumes about the potentialities of the detenu and merely on the ground that there were no antecedents the detention order cannot be quashed. The authorities cannot and may not in every case salvage the antecedents but even a solitary incident may manifest the potentialities of a detenu in the activities of smuggling. [p. 443 D E] 5.2 The potentialities of the detenu as gathered from his act of smuggling form basis for detention. It is diffi cult to comprehend precisely the manner in which a detenu with certain potentialities may likely to indulge in the activities of smuggling. It is for the detaining authority to derive the necessary satisfaction on the basis of the materials placed before him. [p. 455 B C]

Appeal No. 135 of 1955. Appeal by special leave from the judgment and order dated October 30, 1952, of the Labour Appellate Tribunal of India, Allahabad, in Misc. Case No. C 146 of 1952. R. R. Biswas, for the appellant. Sukumar Ghose (amicus curiae), for the respondents. November 28. The Judgment of the Court was delivered by S.K. DAS J. This is an appeal by special leave from the judgment and order of the Labour Appellate Tribunal of India at Allahabad dated October 30, 1952. The relevant facts are these. The Banaras Ice Factory Limited, the appellant before us, was incorporated on September 13, 1949, as a private limited company and was carrying on the business of manufacturing ice in the city of Banaras though its registered office was in Calcutta. The factory worked as a seasonal factory and had in its employment about 25 workmen at all material times. These workmen were employed from the month of March to the month of September 145 year. The appellant company got into financial difficulties on account of trade depression, rise in the price, of materials and increase in the wages and emoluments of workmen. It tried to secure a loan of Rs. 10,000/ from a Bank but met with no success. Thereupon, it decided to close down the factory and on January 15, 1952, a notice was given to its workmen saying that the factory would be closed down with effect from January 17, 1952, and the services of the workmen would not be necessary for two months from that date. The work. men received their wages up to January 16, 1952. On March 18, 1952, they were again taken into service but this temporary closing of the factory gave rise to an industrial dispute and the workmen complained that they were wrongfully laid off with effect from January 17, 1952. The dispute was referred to the Regional Conciliation Officer, Allahabad, for adjudication. In the meantime, that is, on June 6, 1952, the workmen gave a strike notice and as there was no coal in the factory, the appellant also gave a notice of closure on June 12, 1952. A settlement was, however, arrived at between the parties on June 15, 1952, at the house of the Collector of Banaras. The terms of that settlement, inter alia, were: (1) the management would withdraw its notice of closure dated June 12, 1952 ; (2) the workmen would withdraw their strike notice dated June 6, 1952; (3) there being no coal, the workers would remain on leave for a period of thirty days with effect from June 16, 1952, and would report for duty on July 16, 1952, at 8 A.M. and (4) after the workers had resumed their duty on July 16, 1952, the appellant would not terminate the services of any workmen or lay them off in future without obtaining the prior permission of the Regional Conciliation Officer, Allahabad. On June 28, 1952, the Regional Conciliation Officer, Allahabad, gave his award in the matter of the industrial dispute between the appellant and its work , men with regard to the alleged wrongful laying off of the workmen from January 17, 1952, to March 18, 1952, 19 146 referred to above. By his award the Regional Conciliation Officer gave full wages to the workmen for the period in question. On July 16, 1952, none of the workmen reported for duty in accordance with the terms of the agreement referred to above, and on that date the appellant gave a notice to its workmen to the effect that the appellant found it difficult to run the factory and had decided to close it down; the workmen were informed that their services would not be required and would be terminated upon the expiry of thirty days from July 16, 1952. The workmen, it is stated, accepted the notice and took their pay for one month (from July 16 to August 15, 1952) without any protest. Against the award of the Regional Conciliation Officer dated June 28, 1952, the appellant filed an appeal to the Labour Appellate Tribunal on July 25, 1952. On August 31, 1952, a complaint was made on behalf of the workmen to the Labour Appellate Tribunal under section 23 of the Industrial _ Disputes (Appellate Tribunal) Act, 1950, hereinafter referred to as the Act. The gravamen of the complaint was that the appellant had contravened the provisions of section 22 of the Act. because the appellant had discharged all the workmen with effect from August 15, 1952, without the permission in writing of the Labour Appellate Tribunal during the pendency before it of the appeal filed on July 25, 1952, against the award of the Regional Conciliation Officer. The Labour Appellate Tribunal dealt with this complaint by its order dated October 30, 1952. Before the Labour Appellate Tribunal it was urged on behalf of the appellant that there was no contravention of a. 22, because on July 16, 1952, when the notice of discharge was given by the appellant, no appeal was pending before it, the appellant 's appeal having been filed several days later, namely, on July 25, 1952. This contention was not accepted by the Labour Appellate Tribunal on the ground that though the notice of discharge was given on July 16, 1952, the termination of service was to come into operation after one month, that is, from August 15, 1952, on which date the appeal before the Labour Appellate Tribunal was certainly pending. As learned counsel for the 147 appellant has not again pressed this point before us, it is not necessary to say anything more about it. A second point uroed before the Labour Appellate Tribunal was that the appellant had the right to close down the factory, when the appellant found that it was not in a position any longer to run the factory. The agreement of June 15, 1952, did not stand in the appellant 's way, as the workmen themselves did not report for duty on July 16, 1952. The closure being a bona fide closure, it was not necessary to obtain the permission of the Labour Appellate Tribunal and there was therefore no contravention of section 22 of the Act. The Labour Appellate Tribunal apparently accepted the principle that the appellant had the right to close its business but took the view that permission should have been obtained before the closure. It referred to the agreement of June 15, 1952, and held that though the appellant had the right to close its business, permission was still necessary and in the absence of such permission, the appellant was guilty of contravening cl. (b) of section 22 of the Act, and directed that the appellant should pay its workmen full wages as compensation for the period of involuntary unemployment up to the date of its award, that is, during the period from August 16, 1952, to October 30, 1952. Relying on the decision in J. K. Hosiery Factory vs Labour Appellate Tribunal of India (1), learned counsel for the appellant has urged three points before us. His first point is that the termination of the services of all workmen on a real and bona fide closure of business is not 'discharge ' within the meaning of cl. (b) of section 22 of the Act. His second point is that if the word 'discharge ' in cl. (b) aforesaid includes termination of services of all workmen on bona fide closure of business, then the clause is an unreasonable restriction on the fundamental right guaranteed in el. (g) of article 19 (1) of the Constitution. His third point is that, in any view, the Labour Appellate Tribunal, was not entitled to grant compensation to the workmen, because section 23 of the Act did not in terms entitle the Labour (1) A.I.R. 1956 All. 148 Appellate Tribunal to pass an order of compensation. We may state here that if the appellant succeeds on the first point, it becomes unnecessary to decide the other two points. For a consideration of the first point, we must first read sections 22 and 23 of the Act. Section 22: " During the period of thirty days allowed for the filing of an appeal under section 10 or during the pendency of any appeal under this Act, no employer shall (a)alter, to the prejudice of the workmen concerned in such appeal, the conditions of service applicable to them immediately before the filing of such appeal, or (b)discharge or punish, whether by dismissal or otherwise, any workmen concerned in such appeal, save with the express permission in writing of the Appellate Tribunal. " Section 23: " Where, an employer contravenes the provisions of section 22 during the pendency of proceedings before the Appellate Tribunal, any employee, aggrieved by such contravention, may make a complaint in writing, in the prescribed manner, to such Appellate Tribunal and on receipt of such complaint, the Appellate Tribunal shall decide the complaint as if it were an appeal pending before it, in accordance with the provisions of this Act and shall pronounce its decision thereon and the provisions of this Act shall apply accordingly." The short question before us is whether the word 'discharge ' occurring in cl. (b) of section 22 includes termination of the services of all workmen on a real and bona fide closure of his business by the employer. It is true that the word 'discharge ' is not qualified by any limitation in cl. We must, however, take the enactment as a whole and consider section 22 with reference to the provisions of the , (XIV of 1947) which is in pari materia with the Act under our consideration. We have had occasion to consider recently in two cases the general scheme and 149 scope of the . In Burn & Co., Calcutta vs Their Employees(1) this Court observed that the object of all labour legislation was ' firstly, to ensure fair terms to the workmen and secondly, to prevent disputes between employers and employees so that production might not be adversely affected and the larger interests of the public might not suffer. In Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union (2) it was observed " The objects mentioned above can have their fulfilment only in an existing and not a dead industry. " We accepted the view expressed in Indian Metal and Metallurgical Corporation vs Industrial Tribunal(3) and K. M. Padmanabha Ayyar vs The State Of Madras (4) that the provisions of the , applied to an existing industry and not a dead industry. The same view was reiterated in Hariprasad Shivshankar Shukla vs A. D. Divikar (5) where we held that 'retrenchment ' in cl. (oo) of section 2 and section 25F did not include termination of the services of workmen on bona fide closure of business. Turning now to section 22 of the Act, it is clear enough that el. (a) applies to a running or existing industry only; when the industry itself ceases to exist, it is otiose to talk of alteration of the conditions of service of the workmen to their prejudice, because their service itself has come to an end. The alteration referred to in cl. (a) must therefore be an alteration in the conditions of service to the prejudice of the workmen concerned, in an existing or running industry. Similarly, the second part of cl. (b) relating to punishment can have application to a running or existing industry only. When the industry itself ceases to exist, there can be no question of punishment of a workman by dismissal or otherwise. We are then left with the word 'discharge '. Unqualified though the word is, it must, we think, be interpreted in harmony with the general scheme and scope of the . Our attention has been drawn to (1) ; (4) (2) 2. (5) [1957] S.C. R.121. (3) A.I. R. 150 the definition of 'workman ' in cl. (s) of a. 2, which says ". for the purposes of any proceeding under this Act in relation to an industrial dispute, (the definition) includes any person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute. " In the said definition clause also, the word 'discharge ' means discharge of a person in a running or continuing business not discharge of all workmen when the industry itself ceases to exist on a bona fide closure of business. The true scope and effect of sections 22 and 23 of the Act were explained in The Automobile Products of India Ltd. vs Rukmaji Bala (1). It was pointed out there that the object of section 22 was " to protect the workmen concerned in disputes which formed the subject matter of pending proceedings against victimisation " and the further object was " to ensure that proceedings in connection with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no employer should during the pendency of these proceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relations between the employer and the workmen. " Those objects are capable of fulfilment in a running or continuing industry only, and not a dead industry. There is hardly any occasion for praying for permission to lift the ban imposed by section 22, when the employer has the right to close his business and bona fide does so, with the result that the industry itself ceases to exist. If there is no real closure but a mere pretence of a closure or it is mala fide, there Is no closure in the eye of law and the workmen can raise an industrial dispute and may even complain under a.23 of the Act. For these reasons, we must uphold the first point taken before us on behalf of the appellant. The Appellate Tribunal was in error in holding that the (1) ; 151 appellant had contravened cl. (b) of section 22 of the Act. The Appellate Tribunal did not find that the closure of the appellants business was not bona fide; on the ' contrary, in awarding compensation, it proceeded on the footing that the appellant was justified in closing its business on account of the reasons stated by it. As to the agreement of June 15, 1952, the workmen themselves did not abide by it and the appellant 's right cannot be defeated on that ground. In view of our decision on the first point, it becomes unnecessary to decide the other two points. On the point of construction of section 22 of the Act,, we approve of the decision of the Allahabad High Court in J. K. Hosiery Factory vs Labour Appellate Tribunal of India (supra) but we refrain from expressing any opinion on the other points decided therein and we must not be understood to have expressed our assent, contrary to the opinion expressed by us in the case of The Automobile Product8 of India Ltd. (supra) to the view that under section 23 of the Act, it is not open to an industrial Tribunal to award compensation in an appropriate case. In the result, the appeal is allowed and the decision of the Labour Appellate Tribunal dated the 30th October 1952 is set aside. As the workmen did not appear before us, there will be no order for costs. We are indebted to Mr. Sukumar Ghosh for presenting before us the case of the workmen as amicus curiae. Appeal allowed.

Clause (b) Of section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 provides that during the pendency of any appeal under the Act no employer shall discharge any workmen concerned in such appeal, save with the express permission in writing of the Appellate Tribunal, and section 23 enables any employee to make a complaint in writing to such Appellate Tribunal, if the employer contravenes the provisions Of section 22 during the pendency of proceedings before the said Tribunal. 144 During the pendency of an appeal filed before the Labour, Appellate Tribunal the appellant company finding it difficult to run the factory decided to close it down and gave notice to all the workmen that their services would be terminated upon the expiry of thirty days from July 16, 1952. On August 31, 1952, a complaint was made on behalf of the workmen to the Tribunal under section 23 Of the Act that the appellant had discharged them without the permission in writing of the Tribunal and had thereby contravened the provisions of section 22 of the Act. It was found that the closure of the appellant 's business was bona fide. Held, that section 22 of the Act is applicable only to an existing or running industry and that the termination of the services of all workmen, on a real and bona fide closure of business, is not 'discharge ' within the meaning of section 22(b) of the Act. J. K. Hosiery Factory vs Labour Appellate Tribunal of India (A.I.R. 1956 All. 498), approved on the point of construction of section 22 of the Act. Pipraich Sugar Mills Ltd. vs The Pipraich Sugar Mills Mazdoor Union followed.

Criminal Appeal No. 54 of 1963. Appeal by special leave from the judgment and order dated September 13, 1962, of the Allahabad High Court in Criminal Appeal No. 877 of 1962 and Referred No. 79 of 1962. O. P. Rana, for the appellant. G.C. Mathur and C. P. Lal, for the respondent. May 10. The judgment of the Court was delivered by SHAH J. The appellant Kirpal Singh and his two brothers Arjun Singh and Sarwan Singh, 994 were tried by the Sessions judge, Pillibhit for causing the death of one Karam Singh with gunshot injuries in the evening of March 26, 1961 at Village Shanti Nagar. The Sessions judge acquitted Arjun Singh and Sarwan Singh and convicted the appellant Kirpal Singh of the offence charged against him and sentenced him to suffer the penalty of death subject to confirmation by the High Court. The High Court of Allahabad confirmed the order of conviction and sentence. With special leave, Kirpal Singh has appealed to this Court. The case for the prosecution was as follows The appellant and his father in law Rakkha Singh were refugees from West Pakistan. A block of agricultural land, allotted by the Government to Rakkha Singh and the appellant was partitioned but no boundary marks were erected on the line dividing the lands. In December 1960 there was a dispute between Rakkha Singh on the one hand and the appellant and his brothers on the other about the harvesting of sugarcane planted in the land. This dispute was settled on the intervention of one Sardar Ajit Singh, and Rakkha Singh agreed to give seven hundred maunds of sugarcane to the appellant and his brothers. The appellant and his brothers went to the house of Rakkha Singh on March 22, 1961 and complained that they were not given four hundred maunds of sugarcane out of the seven hundred maunds promised to them. There was a quarrel on that occasion between Karam Singh eldest son of Rakkha Singh and the appellant, the former saying that the appellant and his brothers were "behaving like dishonest persons '. Rakkha Singh intervened and nothing untoward happened on that occasion. On March 26, 1961 at about 6 p.m. when Rakkha Singh and his two sons Karam Singh and Manjit Singh and their neighbour Sardar Anokh Singh were sitting in a thatched hut, the appellant 995 armed with a gun, and his two brothers armed with lathis arrived near the hut, and the appellant shouted to Karam Singh asking him to come out of the hut. On Karam Singh 's emerging from the hut the appellant told him that since he (Karam Singh) "did not settle the dispute regarding the sugarcane he would settle his account just then", and opened fire causing injuries to Karam Singh on the chest which resulted in death instantaneously. On hearing the report of gun fire Rakkha Singh, his son Manjit Singh and Sardar Anokh Singh came out of the thatched hut. Manjit Singh tried to catch hold of the appellant and his brothers but without success. Rakkha Singh then went to the police station Puranpur and lodged the first information at 7 45 a.m. At the trial of the appellant and his brothers before the Court of Session, Manjit Singh, Anokh Singh and Rakkha Singh were examined as persons who were present at the scene of offence and witnessed the assault on Karam Singh. Manjit Singh and Anokh Singh however did not support the prosecution case. They stated that at about 8 or 9 p.m. on March 26, 1961 when they were in their respective houses they heard report of gun fire and on coming out came to learn from some person that Karam Singh was fired upon by 'some Sardar who was wearing a mask '. The witnesses were cross examined by the prosecutor with leave of the Court in the light of their statements recorded by the sub inspector of police in the course of his investigation but they denied having made the statements that the appellant and his two brothers had come to Shanti Nagar at 6 p.m. on the day of occurrence and that the appellant had killed Karam Singh by causing him gunshot injuries. But Rakkha Singh supported the prosecution case. He spoke about the dispute about sugarcane, and also about the quarrel between Karani Singh and the appellant on March 22, 1961. He then stated that on March 26,1961 at about 6 p.m. the appellant and his two brothers had 996 come near his hut, that the appellant had called out Karam Singh and after shouting that as Karam Singh was not settling the matter of sugarcane they "were going to settle his matter" had fired a shot killing Karam Singh instantaneously. In cross examination he stated that from the hut in which he was sitting he could not see the faces of the assailants but on hearing the report of gun fire he came out of the hut and saw the assailants running away, and that he was able to recognise them by "their gait and voice". The learned Sessions judge accepted the testimony of Rakkha Singh and, in so for as it inculpated the appellant, convicted him of the offence of causing the death of Karam Singh. He however held that the two brothers of the appellant were not proved to be guilty of the offence charged against them and acquitted them. The High Court of Allahabad agreed with the finding recorded by the Court of First Instance and confirmed the sentence of death passed against the appellant. The conclusion recorded by the Court of First Instance and affirmed by the High Court is based upon appreciation of evidence and no question of law arises therefrom. Normally this Court does not proceed to review the evidence in appeals in criminal cases, unless the trial is vitiated by some illegality or irregularity of procedure or the trial is held in a manner violative of the rules of natural justice resulting in an unfair trial or unless the judgment under appeal has resulted in gross miscarriage of justice. Rakkha Singh deposed that he had been able to recognise the appellant from his "voice and gait". Rakkha Singh was the father in law of the appellant, and had during the last few days before the death of Karam Singh seen the appellant frequently. Only four days before the incident there was a quarrel between Kararn Singh and the appellant about the 997 delivery of sugarcane crop and the appellant and his brothers had retired from the scene at the intervention of Rakkha Singh, greatly annoyed. It is true that the evidence about identification of a person by the timbre of his voice depending upon subtle variations in the overtones when the person recognising is not familiar with the person recognised may be somewhat risky in a criminal trial. But the appellant was intimately known to Rakkha Singh and for more than a fortnight before the date of the offence he had met the appellant on several occasions in connection with the dispute about the sugarcane crop. Rakkha Singh bad heard the appellant and his brothers calling Karam Singh to come out of the hut and had also heard the appellant, as a prelude to the shooting referring to the dispute about sugarcane. In the examination, in chief Rakkha Singh has deposed as if he had seen the actual assault by the appellant, but in cross examination he stated that he had not seen the face of the assailant of Karam Singh. He asserted however that he was able to recognize the appellant and his two brothers from their 'gait and voice '. It cannot be said that identification of the assailant by Rakkha Singh, from what he heard and observed was so improbable that we would be justified in disagreeing with the opinion of the Court which saw the witness and formed its opinion as to his credibility and of the High Court which considered the evidence against the appellant and accepted the testimony. Manjit Singh and Anokh Singh have tried to shield the appellant by deposing that the assault took place at about 9 p.m. and that they were informed that the assailant had put on a mask. Their statements recorded in the course of investigation were inconsistent with the tenor of their evidence in Court. It is true that there was some delay in lodging the first information, the offence took place according to Rakkha Singh at 6 p.m. ,on March 26, 1961 and 998 information at the police station Puranpur was lodged at 7.45 a.m. on March 27, 1961. The distance between the police station and the village Shanti Nagar, as the crow flies, is about 15 miles but by the public transport system one has to take a long detour to reach Puranpur Police Station. Rakkha Singh says that to avoid delay and to secure the presence of a Police Officer he secured a jeep from Sampurna Nagar Union and proceeded to the police brought the sub inspector of police to in the same jeep. We do not think, station and santi Nagar having regard to the circumstances, that there has been any such gross delay in lodging the first information as would justify us in throwing doubt on the truth of the story of Rakkha Singh. It appears that there are two police outposts near Shanti Negar one at a distance of about two miles and another at a distance of five miles but the officer in charge of the police outposts had, it is conceded by counsel for the appellant, no authority to record a first information. Rakkha Singh desired to lodge a complaint About the commis sion of the offence of murder, he was not apprehensive of any violence at the hands of the appellant and his brothers, and if he did not contact the officer at the police outposts, who could not record his complaint, no fault can be found. against him. The postmortem examination of the stomach contents of Karam Singh disclosed that there was 8 ozs. of half digested food and that indicated that the death was caused some two hours after the last meal was taken by Karam Singh; Counsel for the appellant said that the condition of the stomach supported the version of Manjit Singh and Anokh Singh, but Rakkha Singh has deposed that Karam Singh had taken at about 4 p.m. tea and pakadas. That explains the presence of ' half digested food in the stomach. The case for the prosecution undoubtedly depends for its support upon the testimony of a single witness, who did not claim to have identified 999 the assailant by seeing his face. But we do not think that is a circumstance which would justify us in departing from the rule normally followed by this Court. The offence was committed when there was sufficient daylight : the assailant was intimately known to Rakkha Singh and the witness had heard the appellant 's voice speaking about the dispute which was pending between him and the appellant. We do not think that the circumstance that Rakkha Singh had not seen the face of the appellant when the latter was running away is a ground for discarding his testimony. The conviction of the appellant must therefore be confirmed. Sentence passed by the Trial Court is, in the circumstances of the case the only appropriate sentence. Before parting with the case, we think it necessary to observe that the committing Magistrate in this case erred in committing the accused to the Court of Session without recording the evidence of all the witnesses to the actual commission of the offence, Under the Code of Criminal Procedure as amended by Act 26 of 1955, the Magistrate holding committal proceedings is required to take the evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual commission of the offence alleged, and if the Magistrate is of opinion that it is necessary in the interest of justice to take the evidence of any one or more of the other witnesses for the prosecution, he may take such evidence also: section 207A (4). The Magistrate has in the enquiries relating to charges for serious offences like murder the power and indeed a duty in the interest of the accused, as well as in the larger interest of the public to record the evidence of other witnesses who throw light on the case. Examination of witnesses to the actual commission of the offence should in inquiries, for committal on charges for such serious offences, be the normal rule. The prosecutor is expected ordinarily to examine in the Court of the 1000 committing Magistrate all witnesses to the actual commission of the offence: if without adequate reasons he fails to do so, the Magistrate is justified and in enquiries on charges for serious offences is under a duty to call witnesses who would throw light upon the prosecution case. Before the Code was amended by Act 26 of 1955 it was necessary for the Magistrate holding the inquiry to record the evidence of all the important witnesses. With a view to shorten delays in the proceeding preliminary to bringing the accused to trial, the Legislature has by enacting section 207A conferred a discretion upon the Magistrate in the matter of examination of witnesses not produced by the prosecutor. Exercise of that discretion must be judical : it is not to be governed by any set rules or standards, but must be adjusted in the light of circumstances of the case. The Magistrate is again not to be guided by the attitude of the prosecutor. He must of course consider the representation relating to the examination of witnesses by the prosecutor, but in considering whether it is necessary in the interest of justice to take evidence of any one or more of the other witnesses for the prosecution, he must have due regard to the nature and gravity of the offence, the interest of the accused and the larger interest of the public, and the defence if any disclosed by the accused. A Magistrate failing to examine witnesses to the actual commission of the offence because they are not produced, without considering whether it is necessary in the interest of justice to examine such witnesses, in our judgment, fails in the discharge of duties. There is nothing in the decision of this Court in Sriram vs The State of Bombay (1), which may support the view that in the matter of examination of witnesses, especially in the inquiry relating to serious charges like murder and culpable homicide, the Magistrate is to be guided by the prosecutor. It is (1) [1961]2 S.C.R. 890. 1001 the duty of the Magistrate to examine all such witnesses as may be produced by the prosecutor as witnesses to the actual commission of the offence alleged, but his duty does not end with such examination. He must apply his mind to the documents referred to in section 173, and the testimony of witnesses, if any, produced by the prosecutor and examined, and consider whether in the interest of justice it is necessary to re. cord the evidence of other witnesses. In inquiries relating to charges for serious offences like murder, normally the Magistrate should insist upon the exa mination of the principal witnesses to the actual commission of the offence. Failure to examine the witnesses may be justified only in exceptional cases. This is so because the Magistrate in committing a person accused of an offence for trial has to perform a judicial function which has a vital importance in the ultimate trial, and slipshod or mechanical dealing with the proceeding must be deprecated. The appeal fails and is dismissed. Appeal dismissed.

The appellant was convicted by the Sessions judge of the offence of murder of K and sentenced to death, and the con viction and sentence were confirmed by the High Court. The committal proceedings disclosed that the Magistrate committed the accused to the Court of Session without recording the evidence of the witnesses to the actual commission of the offence. Held that under section 207A of the Code of Criminal Pro cedure, 1898, as amended by Act 26 of 1955, a Magistrate., has 993 been given a discretion in the matter of examination of witnesses not produced by the prosecutor. The prosecutor is expected ordinarily to examine in the court of the committing Magistrate all witnesses to the actual commission of the offence, but if without adequate reasons he fails to do so, the Magistrate is justified and, in enquiries on charges of serious offences like murder, is under a duty to call witnesses who would throw light upon the prosecution case. A Magistrate failing to examine witnesses to the actual commission of the offence because they are not produced, without considering whether it is not necessary in the interests of justice to examine such witnesses, fails in the discharge of his duties. The Magistrate must apply his mind to the documents referred to in section 173 of the code and the testimony of witnesses, if any, produced by the prosecutor and examined, and consider whether in the interests of justice it is necessary to record the evidence of other witnesses. A Magistrate in committing a person accused of an offence for trial has to perform a judicial function which has a vital importance in the ultimate trial, and a slipshod or mechanical dealing with the proceeding must be deprecated. Shriram Daya Ram vs The State of Bombay, [1961] 2 S.C.R. 890, considered.

ION: Civil Appeal No. 38(NCE) of 1981. Appeal by Special leave from the judgment and Order dated the 1st January, 1980 of the Madras High Court in Application No. 4309 of 1980 in Election Petition No. 17 of 1980. AND Special Leave Petition (Civil) No. 1580 of 1981 From the Judgment and Order dated the 13th January, 1981 of the Madras High Court in Election Petition No. 13 of 1980, 633 AND Special Leave Petition (Civil) No. 5178 of 1981. From the Judgment and Order dated the 8th July, 1981 of the Madras High Court in Application No. 1967 of 1981 in Election Petition No. 14 of 1980. AND Civil Appeal No. 4216(NCE) of 1982. Appeal by Special leave from the Judgment and Order dated the 22nd October, 1982 of the Madras High Court in Application No. 265 of 1981 in Election Petition No. 5 of 1980. AND Civil Appeal No. 1170 of 1981. Appeal by Special leave from the Judgment and Order dated the 4th February, 1981 of the Madras High Court in Application No. 189 of 1981 in Election Petition No. 7 of 1980. IN CIVIL APPEAL NO. 38/81 G. Ramaswamy, K. Rajendra Chowdhury, N.A. Subhramanyam and Mahabir Singh for the Appellant. N.T. Vanamalai, R.K. Garg, V.J. Francis and Bhaskar Shankar for the Respondent. A.V. Rangam for Respondent No. 10. A.T.M. Sampath for the intervener. IN SLP (C) NO. 1580 OF 1981 C.S. Vaidyanathan for the Petitioner. A.T.M. Sampath for Respondent No. 1. A.V.Rangam for Respondent No. 2. 634 IN SLP(C) NO. 5178 of 1981 K.R. Nambiar for the Petitioner. P.N. Ramalingam for the Respondent. IN C.A. NO. 1170 of 1981 G. Ramaswamy and A.S. Nambiar for the Appellant. A.T.M. Sampath for Respondent No. 1. A.V. Rangam for Respondent No. 2. IN CA. 4216 of 1980 A.S. Nambiar and P. Parmeswaran for the Appellant. A.T.M. Sampath for Respondent. A.V. Rangam for Respondent. The Judgment of the Court was delivered by SEN J. These appeals by special leave and the connected special leave petitions from the judgment and orders of the High Court of Madras raise the same question and therefore they are disposed of by this common judgment. In Civil Appeal No. 38 (NCE) of 1981, there is a further question involved. The facts are more or less similar in all these appeals, except that in Civil Appeal No. 38(NCE) of 1981 there are certain additional facts. It will suffice for our purposes to set out the facts giving rise to that appeal. At the last general election to the State Legislative Assembly of Tamil Nadu from the Anna Nagar Assembly Constituency No. 8 held in May 1980, the appellant, M. Karunanidhi, leader of the Dravida Munnetra Kazhagam party, contested as a candidate of that party and secured 51290 votes. As against this, the respondent Dr. H.V. Hande sponsored as a candidate by the All India Anna Dravida Munnetra Kazhagam secured 50591 votes. On June 1, 1980 635 the appellant, M. Karunanidhi, was consequently declared elected by a margin of 699 votes. The last date for filing an election petition to challenge his election was July 16, 1980. On July 14, 1980 the respondent, Dr. H.V. Hande, filed an election petition under section 81 read with section 100 of the Representation of People Act 1951 (for the sake of brevity hereinafter referred to as 'the Act ') challenging the election of the appellant on various grounds. The election petition was accompanied by a pre receipted challan prepared by the Accounts Department of the High Court on the basis of a lodgment schedule initialled by the Assistant Registrar II, High Court, showing that a sum of Rs. 2,000 had been credited on July 11, 1980, to the account of the Registrar, High Court, Madras, in the Reserve Bank of India, Madras, as security for costs along with the lodgment schedule signed by the Assistant Registrar II. The respondent pleaded, inter alia, in paragraph 18 of the petition that the appellant was guilty of corrupt practice under sub s.(6) of section 123 of the Act by incurring or authorising expenditure in contravention of section 77. It was alleged that he had failed to disclose certain items of expenditure in his statement of election expenses filed by him in connection with the election as detailed in subparagraphs (a) to (e) of paragraph 18 of the petition. The allegation in paragraph 18(b) related to an expenditure of about Rs 50,000 in erecting fancy banners throughout the constituency and it was alleged that there were such fancy banners about 50 in number, the cost of each banner being not less than Rs 1,000 It was averred in paragraph 18(b) that a photograph of one such banner was filed along with the petition. Admittedly, though the respondent had filed with the election petition a photograph of one such banner, a copy of the photograph was not annexed to the copy of the petition furnished to the appellant. On October 30, 1980 the appellant filed his written statement. He pleaded, inter alia, that the election petition was liable to be dismissed in limine under sub section (1) of section 86 due to non compliance with the requirements of sub s.(1) of s.117 of the Act read with rule 8 of the Madras High Court (Election Petitions) Rules, 1967, for the reason that there was no deposit of Rs. 2,000 in cash in the High Court as security for costs, and also for non compliance with the requirements of sub s.(3) of section 81 of the Act as the copy of the election petition served on the appellant was not accompanied by a copy of the photograph of the alleged fancy banner annexed to the 636 petition, as alleged in paragraph 18(b) of the petition. The appellant accordingly raised a preliminary objection as to the maintainability of the election petition. The High Court by its order dated December 1, 1980, overruled both the preliminary objections. In regard to the objection based on sub s.(1) of section 117 of the Act read with Rule 8 of the Madras High Court (Election Petitions) Rules, 1967 (for short 'the Election Petitions Rules '), the High Court held that a sum of Rs. 2,000 as security amount had been deposited by the respondent in the Reserve Bank of India to the credit of the Registrar, High Court, at the instance of the High Court, and in accordance with the procedure followed for deposit of amounts in court. In reaching that conclusion, the High Court relied upon the lodgment schedule presented by K. Subramaniam, counsel for the respondent, which had been prepared in the Registry by the Assistant Registrar II, and the challan in triplicate prepared by the Accounts Department of the High Court and signed by the official referee specifying the amount and the date within which it had to be deposited. It held that the requirements of sub s.(1) of section 117 of the Act read with rule 8 of the Election Petitions Rules for the making of the deposit of Rs. 2,000 as security for costs in the High Court were mandatory but the manner of making such deposit was directory and as the amount of Rs. 2,000 had, in fact, been deposited to the credit of the Registrar, High Court, within the time allowed therefor, there was substantial compliance with the requirements of sub section (1) of section 117 of the Act. As regards the objection based on the non supply of a copy of the photograph of the fancy banner adverted to in paragraph 18(b), the High Court relying upon the decision of this court in Sahodrabai Rai vs Ram Singh Aharwar,(1) held that the banner could not be treated to be an integral part of the election petition but was merely a piece of evidence as to the nature and type of fancy banners erected by the appellant and therefore failure to supply a copy of the photograph to the appellant did not amount to a breach of the provisions contained in sub s.(3) of section 81 of the Act. These findings were reached by the High Court on the basis of the affidavits filed by the parties and the material on record. The High Court had also before it a report from the Registry as to the procedure followed with regard to Court deposits: 637 "Any person desirous of paying money into Court shall present a lodgement schedule, duly vouched by the concerned Section regarding the quantum and the time limit, and initialled by the Officers of Original Side or Appellate side as the case may be, to the Accounts Department for the issue of a Challan to enable the party to make the payment into Reserve Bank of India, Madras to the credit of the case concerned. On the presentation of the Lodgement Schedule to the Accounts Department a Challan in triplicate specifying the amount and the date within which it should be paid will be issued by the Accounts Department to the person, desirous of making such payment, who will deliver the Challan to the Bank. The Bank in turn after deposit deliver one part of the Challan duly signed to the person making the payment. On the production of the Challan, the Accounts Department will make necessary credit entries in the ledgers and the receipt registers. The remaining two parts of the Challan are sent by Reserve Bank of India, Madras to Pay and Accounts Office, which in turn sends one part of it to this Office. Sometimes it takes about one or two months to receive the said Challan from the Pay and Accounts Office. In cases where advocates do not produce one part of Challan in Accounts Department, credit entries are made on the strength of the Challan from Pay and Accounts Office and the pass book from the Reserve Bank of India, Madras. Official receipt for such deposits are issued under the signature of the Assistant Registrar (Original Side) for Original Side Deposits and of the Deputy Registrar for Appellate Side Deposits to such of those parties who produce one part of the Challan and make a request for official receipt to that effect. It is also submitted that Accounts Department will not receive cash without specific orders to that effect. This is the procedure that is being followed by the Accounts Section of High Court with regard to Court Deposits. " It is against this order of the High Court that this appeal was filed. The appeal was first heard in April 1981, and this Court by 638 its order dated April 2, 1981, remitted back the issue with regard to the alleged non compliance with the requirements of sub s.(1) of section 117 read with rule 8 of the Election Petitions Rules to the High Court for a decision afresh, as it was felt that the point raised was primarily a matter of evidence, but the parties had unfortunately not led any evidence on the point. It accordingly directed the High Court to record the evidence that may be adduced as regards the practice and procedure followed by the High Court in regard to the making of an election petition under section 81 of the Act and the manner in which the security amount of Rs. 2,000 was deposited in the High Court in compliance with the requirements of sub s.(1) of section 117 of the Act read with rule 8 of the Election Petitions Rules. After the issue was remitted, the High Court allowed the parties to lead their evidence both oral as well as documentary and has recorded its findings dated July 20, 1981. The High Court adhered to its earlier view that on a construction of sub section (1) section 117 of the Act, the factum of making of deposit of Rs. 2,000 as security for costs in the High Court was mandatory but the manner of making such deposit was directory and further held that although there was no strict or literal compliance with the requirements of rule 8 of the Election Petitions Rules, there had been substantial compliance with the requirements of sub s.(1) of s.117 of the Act, in that the requisite amount of Rs. 2,000 had actually been deposited to the credit of the Registrar, High Court, in the Reserve Bank of India on July 11, 1980, that is, before the election petition was filed on July 14, 1980, and the same was available for payment of costs. In the connected cases also, the High Court reached the same conclusion after taking evidence of the respective parties. It appears from the evidence adduced in all these cases that after the general elections to the State Legislative Assembly of Tamil Nadu, the then Chief Justice Ismail, C.J., nominated K.S. Natarajan (P.W. 4) Assistant Registrar II, to deal with all election petitions filed under section 81 of the Act. The evidence of P.W. 4 shows that he met the officer in charge of the Accounts Department of the High Court and ascertained the procedure to be followed for making the security deposit of Rs. 2,000/ in cash in the High Court. He was informed by the officer in charge that the party filing the election petition should bring the lodgment schedule duly filed and that P.W.4 should initial it and then the lodgment schedule had to 639 be taken to the Accounts Department. He was told that the Accounts Department would prepare a challan in triplicate and hand over the same to the party for depositing the money in the Reserve Bank of India in the name of the Registrar, High Court, and that the duplicate challan must be filed along with the election petition. He deposed that the same procedure was adopted in all the cases. The lodgment schedule, Ex P 2B, prepared by K. Subramaniam (P.W.6), counsel for the respondent, had been initialled by him and that he had also put the date July 14, 1980 by which date the deposit had to be made K. Subramaniam (P.W.6), counsel for the respondent, stated that the respondent had given him the amount of Rs. 2,000 in the first week of July 1980, and accompanied by an authorised representative of the respondent, he took the lodgement schedule exhibit P 2B to K.S. Natarajan (P.W.4), Assistant Registrar II, who initialled the same and indicated the date by which the deposit was to be made. He then took the lodgment schedule to the Accounts Department where section Seturaj (P.W.1) working as challan issuing clerk, prepared the challan in triplicate. Thereafter, he took the challan in triplicate to the Reserve Bank of India and deposited the amount of Rs. 2,000 in cash in the name of the Registrar, High Court, and the duplicate copy of the challan was handed over to him. The duplicate copy of the challan, exhibit P 2C, bears the seal of the Reserve Bank of India, with the endorsement 'received in cash ' and is dated July 11, 1980. The duplicate copy of the challan Ex P 2C, was filed along with the election petition. At this point, it is necessary to refer to the entries of the duplicate copy of the challan. Column 1 of the challan bears the heading "By whom paid and name (or designation) and address of the person on whose behalf money is paid" and the entry reads "Registrar, High Court, Madras" and bears the seal of the High Court. Column 2 reads "On what account with authority, if any" and the entry bears the name of the counsel for the election petitioner and mentions that the amount was deposited as security deposit for the election petition. Column 3 bears the heading "Amount" and the amount deposited in each case is entered as Rs. 2,000. The last column bears the heading "Head of account" and gives the head as "P.D.A/c, Registrar, High Court, Madras". A bare reading of the challans would show that the amount of Rs. 2,000 as security for costs was received by the High Court and credited to its own account. When the High Court asked the counsel for the election 640 petitioner to credit the amount in the Reserve Bank along with the pre receipted challan, it must be deemed that the Reserve Bank was acting as an agent of the High Court. All the challans bear the seal of the Reserve Bank of India with the endorsement "received in cash". Article 329(b) of the Constitution provides that no election to either House of Parliament or to the House or either House of the Legislature of the State shall be called in question except by an election petition presented to such authority and in such manner as may be provided by or under any law made by the appropriate Legislature. The Representation of the people Act, 1951 is a law made by Parliament under article 327 of the Constitution to provide for adjudication of disputes regarding such elections. Part VI of the Act is headed "Disputes regarding elections ' and Chapter II in that Part deals with the presentation of election petitions to the High Court. Section 80 provides that no election shall be called in question except by an election petition presented in accordance with the provisions of Part VI. Section 80A provides that the Court having jurisdiction to try an election petition shall be the High Court. In N.P. Ponnuswami vs Returning Officer, Namakkal,(1) this Court restated the principle that the right to vote or stand as a candidate for election is not a civil right but is a creature of statute or special law and must be subject to the limitations imposed by it. The Court having regard to the non obstante clause in article 329 (b) held that the Act having furnished a complete Code for challenging an election, the election must be challenged in the manner provided. The Court relied upon the dictum of Wiles, J. in Wolverhampton New Water Works Company vs Hawkesford(2) which has become classical. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. As observed by this Court in Jagan Nath vs Jaswant Singh & Ors. ,(3) an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the Court possesses no common law power. It also added that: "It is a sound principle of natural justice that the success of a candidate who has won at an election should not be 641 lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law. " At the same time, the Court added a note of caution: "It is always to be borne in mind that though the election of a successful candidate is not to be lightly interfered with, one of the essentials of that law is also to safeguard the purity of the election process and also to see that people do not get elected by flagrant breaches of that law or by corrupt practices. In cases where the election law does not prescribe the consequence or does not lay down penalty for non compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected. " There are two questions that fall for determination. The first is whether the election petition filed by the respondent under section 81 read with s.100 of the Representation of the People Act, 1951 was liable to be dismissed in limine under sub section (1) of s.86 on the ground that there was non compliance with the requirements of sub section (1) of section 117 of the Act read with r. 8 of the Election Petitions Rules. The second is whether the election petition is also liable to be dismissed under sub section (1) of s.86 of the Act inasmuch as the copy of the election petition furnished to the appellant was not accompanied by a copy of the photograph of the fancy banner referred to in paragraph 18(b) of the petition as required by sub section (3) of s.81 of the Act. In view of the arguments addressed to us, it is necessary to set out a few of the relevant provisions which bear upon the points raised. S.81 deals with presentation of election petitions. It runs: "81. (1) An election petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty five days from, but not earlier than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two dates. 642 Explanation In this sub section, 'elector ' means a person who was entitled to vote at the election to which the election petition relates, whether he has voted at such election or not. (3) Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition. " Section 82 which is the next section lays down who shall be parties to an election petition. We need not refer to this section in detail since we are not concerned with it. S.83 is however material and it provides what shall be the contents of an election petition. It reads: "83 (1) An election petition (a) shall contain a concise statement of the material facts on which the petitioner relies; (b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908) for the verification of pleadings: Provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof. (2) Any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition. " The next chapter which is Chapter III deals with the trial of election petitions but here we are concerned only with sub section (1) of 643 section 86 which interdicts that the High Court shall, in certain circumstances, dismiss an election petition in limine. Sub section (1) of section 86 provides as follows: "86 (1) The High Court shall dismiss an election petition which does not comply with the provisions of section 81 or section 82 or section 117. Explanation: An order of the High Court dismissing an election petition under this sub section shall be deemed to be an order made under clause (a) of section 98. " Sub section (1) of section 117 which is important for our purposes is in these terms: "117. Security for costs (1) At the time of presenting an election petition, the petitioner shall deposit in the High Court in accordance with the Rules of the High Court a sum of two thousand rupees as security for the costs of the petition. " Rule 8 of the Madras High Court (Election Petitions) Rules, 1967 framed by the High Court under article 225 of the Constitution which is also important for the purposes of these cases provides as follows: "8. An Election Petitioner before presenting his Election Petition shall deposit in the High Court in cash a sum of two thousand rupees towards security for costs as provided for under Section 117 of the Act and shall produce the receipt of the Registrar for the same at the time of presentation of the petition. " Rule 12 of the Election Petitions Rules is also relevant and reads: "12. Subject to the foregoing rules and to the extent they are not inconsistent with the provisions of the Act the Rules of the High Court, 1956 (Original Side) shall, as far as practicable, be observed in all Election Petitions and all applications taken in respect of them. " 644 Taking up the contentions in the order in which they were advanced, we shall first deal with the submission that there was non compliance with the mandatory requirements of sub section (1) of section 117 of the Act read with r.8 of the Election Petitions Rules framed by the High Court, which is common to all these cases. The factum of deposit of Rs. 2000/ in each of these cases on the strength of pre receipted challans issued by the Accounts Department of the High Court in the Reserve Bank of India to the credit of the Registrar, High Court, Madras as security for costs well within the period of limitation for filing the election petition is not in dispute and the controversy turns on the question whether the deposit of the security amount was in accordance with the rules of the High Court. There are different sets of rules framed by different High Courts under article 225 of the Constitution regulating the practice and procedure to be observed in all matters coming before the High Court in exercise of its jurisdiction under s.80A of the Act. The words "in accordance with the rules" must therefore connote "according to the procedure prescribed by the High Court". The mode of making deposit must necessarily be an internal matter of the concerned High Court. In support of this appeal, learned counsel for the appellant contends that the provisions of sub section (1) of section 117 of the Act are mandatory, non compliance of which will entail dismissal of the election petition in limine under sub section (1) of s.86 of he Act. It is urged that no distinction can be drawn between the requirement as to the making of a security deposit in the High Court under sub section (1) of section 117 and the manner of making such deposit and sub section (1) of section 117 cannot be dissected into two parts, one part being treated as mandatory and the other as directory. It is further urged that the words "in accordance with the rules of the High Court under sub section (1) of section 117" were as much a mandatory requirement as the requirement that the election petitioner shall, at the time of presenting an election petition, deposit in the High Court a sum of Rs. 2000/ as security for the costs of the petition. There is therefore no warrant for the view taken by the High Court that the factum of deposit of the security amount of Rs.2000/ in the High Court was mandatory and not the manner in which the security deposit was made. It is also urged that r.8 of the Election petitions Rules framed by the High Court under article 225 to regulate the mode of making deposit must be read as forming part of sub s.(1) of s.117 by incorporation and therefore the only manner prescribed is by 645 making deposit in cash with the Registrar. When a statute requires that something shall be done in a particular manner or from expressly declaring what shall be the consequence of non compliance with it, the requirement must be regarded as imperative. Having regard to the definite stand taken by the respondent that he had complied with the requirements of r.8, it is not permissible to fall back on the provisions contained in order 31 of the Madras High Court Rules relating to deposit of suitors ' money. The last submission is that in view of the finding reached by the High Court that there was no strict or literal compliance of r.8, the election petition must be dismissed. Even if the rule of substantial compliance applies, it is clear on evidence that there has been no compliance at all much less any substantial compliance. There is intrinsic evidence to show that there has been tampering with the documents. We are afraid, the contention that there was no compliance of sub section (1) of s.117 of the Act cannot prevail in the light of the well settled principles. The submissions advanced by learned counsel for the appellant cannot be accepted as they proceed on the assumption that no distinction can be drawn between the requirement as to the making of a deposit in the High Court under sub section (1) of s.117 and the manner of making such deposit. There was considerable emphasis laid by learned counsel that sub section (1) of s.117 cannot be dissected into two parts, one part being treated as mandatory and the other as directory. The contention is wholly misconceived and indeed runs counter to several decisions of this Court. It is always important to bear the distinction between the mandatory and directory provisions of a statute. Sub section (1) of s.117 is in two parts. The first part of sub section (1) of s.117 provides that at the time of presenting an election petition, the petitioner shall deposit in the High Court a sum of Rs. 2000/ as security for the costs of the petition, and the second is that such deposit shall be made in the High Court in accordance with the rules of the High Court. The requirement regarding the making of a security deposit of Rs. 2000/ in the High Court is mandatory, the non compliance of which must entail dismissal in limine of the election petition under sub section (1) of s.86 of the Act. But the requirement of its deposit in the High Court in accordance with the rules of the High Court is clearly directory. As Maxwell on the Interpretation of Statutes, 12th edn. at p.314 puts it: "An absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled 646 substantially. " The rule of construction is well settled and we need not burden the judgment with many citations. It is well established that an enactment in form mandatory might in substance be directory and the use of the word "shall" does not conclude the matter. The general rule of interpretation is well known and it is but an aid for ascertaining the true intention of the Legislature which is the determining factor, and that must ultimately depend on the context. The following passage from Crawford on 'Statutory Construction ' at p.516 brings out the rule: "The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed. The meaning and intention of the legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other. " This passage was quoted with approval by the Court in State of U.P. vs Manbodhan Lal Srivastava,(1) The State of Uttar Pradesh & Ors. vs Babu Ram Upadhya(2) and Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur.(3) The Court in Manbodhan Lal 's case, (supra) where article 320 (3) (c) of the Constitution was held to be directory and not mandatory, relied upon the following observations of the Privy Council in Montreal Street Railway Company vs Normandih(4): "The question whether provisions in a statute are directory or imperative has very frequently arisen in this country, but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at. The cases on the subject will be found collected in Maxwell on Statutes, 5th ed., p.596 and following pages. When the provisions of a statute relate to the performance of a public duty and the case is such 647 that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done." In Manbodhan Lal 's case, (supra) the contention was that the reduction in rank after departmental inquiry was invalid for noncompliance with the requirements of article 320 (3) (c) of the Constitution which read literally made it obligatory for the Government of India or a Government of a State to consult the Union Public Service Commission or the State Public Service Commission in all disciplinary matters affecting a person in service of the State. In turning down the contention it was observed by this Court: "The use of the word "shall" in a statute, though generally taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding, or the outcome of the proceeding, would be invalid. " Following the principle laid down by the Privy Council in Montreal Street Railway Company 's case, (supra) the Court held that article 320 (3) (c) itself contemplates three grounds, and the word "shall" appeared in almost every paragraph and every clause or sub clause of that Article. If it were held that the provisions of Art, 320 (3) (c) were mandatory in terms, the other clauses or sub clauses of that Article would have to be equally held to be mandatory. If they were so held, any appointments made to the public services without observing strictly the terms of these sub clauses in cl. (3) of article 320 would adversely affect the person so appointed to a public service, without any fault on his part and without his having any say in the matter and this could not have been contemplated by the makers of the Constitution. The Court held that if the Article were construed as mandatory, it would cause serious general inconvenience and injustice to persons who had no control over those entrusted with the duty. As the Privy Council itself pointed out, the question whether provisions in a statute are directory or mandatory cannot be decided 648 by laying down a general rule and in every case the object of the statute must be looked at. In Raza Buland Sugar Co. Ltd. 's case, (supra) the question for consideration was whether the whole of sub s.(3) of s 131 of the U.P. Municipalities Act, 1916 was mandatory, or the part of it requiring publication in the manner laid down in sub s.(3) of s.94 was merely directory. Per majority, the Court held that sub s.(3) of section 131 could be divided into two parts the first one providing that the proposal and draft rules for a tax intended to be imposed should be published for the objections of the public, if any, and the second laying down that the publication must be in the manner laid down in sub section (3) of section 94. Considering the object of the provisions for publication, namely, to enable the public to place its view point, the Court found it necessary to hold that the first part of the section was mandatory, for to hold otherwise would be to render the whole procedure prescribed for the imposition of tax nugatory. The second part of the section was however held to be merely directory. In that case, there was no regularly published local Hindi newspaper but the publication was made in Hindi in a local paper which on the evidence seemed to have good circulation in Rampur. There was, in the circumstances, substantial compliance with the provisions of sub s.(3) of section 94 of that Act. There was quite some discussion at the Bar as to the legality and propriety of the procedure adopted in the Madras High Court as to the making of a security deposit under sub section (1) of s.117 of the Act. The objection is to the manner of such deposit being made on the strength of pre receipted challan prepared by the Accounts Department on the basis of the lodgment schedule into the Reserve Bank of India to the credit of the Registrar, High Court, Madras. It was submitted that this was in complete violation of r.8 of the Election Petitions Rules. It is said that r. 8 must be read as forming part of sub s.(1) of section 117 and the only manner prescribed is by making deposit in cash with the Registrar and obtain his receipt therefor. It was urged that it is paradoxical to say that deposit of money into the Reserve Bank to the credit of the Registrar, High Court, Madras is a sufficient compliance of sub s.(1) of s.117 when r. 8 provides that the money should be deposited in the High Court in cash, and that is the only mode prescribed under sub s.(1) of section 117. We are afraid we are unable to accept this line of argument. 649 A literal and mechanical interpretation of r.8 would lead to manifest absurdity as it would imply that in every case the election petitioner shall have to pay to the Registrar a sum of Rs. 2,000 in cash towards security for costs as required by sub s.(1) of s.117 of the Act and obtain a receipt from him therefor. Rule 8 is silent as to how the cash is to be handled. It cannot ordinarily be expected that the Registrar of a High Court would accept the amount of security deposit in cash. The procedure adopted by II Assistant Registrar in directing that the money be deposited to the credit of the Registrar of the High Court in the Reserve Bank of India was in conformity with the requirements of r.8 of the Election Petitions Rules. Inasmuch as r. 8 does not lay down the procedure regulating the manner of deposit of cash, the matter falls to be governed by r.2 of Order 31 of the Madras High Court (Original Side) Rules, 1956 by reason of r. 12 of the Election Petitions Rules. Although Order 31, r. 2 does not in terms apply because Order 31 relates to "Payment into court of moneys to the credit of civil court deposits and account of suitor 's money", and though no lodgment schedule can be prepared under r.2 except in pursuance of a decree or order passed by the High Court i.e. in relation to some proceeding pending, or disposed of, by the High Court, still by virtue of r. 12 of the Election Petitions Rules that is the procedure to be adopted for deposit of Rs. 2000 in the High Court in cash i.e. by crediting the amount on the strength of a pre receipted challan prepared by the Accounts Department on the basis of a lodgment schedule. That was the only procedure applicable and there was nothing wrong in the procedure adopted in making the deposit. When the amount was so deposited with a pre receipted challan issued by the Accounts Department to the credit of the Registrar of the High Court and the Reserve Bank of India made the endorsement "Received in Cash", it must be regarded that the payment was made in the High Court and the pre receipted challan bearing the endorsement of the Reserve Bank of India must be treated as the receipt of the Registrar in terms of r. 8, the Reserve Bank acting as an agent of the High Court. We are informed that the same practice and procedure has been followed during the relevant period in all the election petitions filed in the Madras High Court and there was no separate receipt of the Registrar except in one case where the election petition was not tried. We need not dilate on the point any further. It must accordingly be held that there was due compliance with the requirements of sub s.(1) of section 117 of the Act read with r. 8 of the Election Petitions Rules. 650 The matter is no longer res integra. The submission runs counter to the decision of this Court in the well known case of K.Kamaraja Nadar vs Kunju Thevar & Ors.(1) That was a case under the old section 117 of the Act as it stood prior to its amendment by Act 47 of 1966. It read: "The petitioner shall enclose with the petition a Government Treasury receipt showing that a deposit of one thousand rupees had been made either in a Government Treasury or in the Reserve Bank of India in favour of the Secretary to the Election Commission as security for the costs of the petition." In that case, the petitioner enclosed a Government Treasury receipt showing a deposit of Rs.1000 as security for costs in the State Bank of India, Ranchi Branch, but it did not show that the deposit had been made in favour of the Secretary to the Election Commission. A question arose whether the election petition was liable to be dismissed summarily under s.85 or sub s.(3) of s.90 as the requirements of section 117 of the Act had not been complied with. The Court analyzed section 117 and observed that it consisted of three parts, viz: (1) The Government Treasury receipt must show that such deposit had actually been made in a Government Treasury or in the Reserve Bank of India. (2) It must show that it had been made in favour of the Secretary to the Election Commission. And (3) it must further show that it had been made as security for the costs of the petition. The question then arose whether the words "in favour of the Secretary to the Election Commission" were mandatory in character so that if the deposit had not been made in favour of the Secretary to the Election Commission as therein specified, the deposit even though made in a Government Treasury or in the Reserve Bank of India and as security for costs of the petition, would be invalid and of no avail. This Court held that these words in section 117 were directory and not mandatory in their character and that the essence of the provision contained in section 117 was that the petitioner should furnish security for the costs of the petition and should enclose along with the petition a Government Treasury receipt showing that a deposit of Rs. 1000/ had been made by him either in a Government Treasury or in the Reserve Bank of India to be at the disposal of the 651 Election Commission to be utilized by it in the manner authorized by law and was under its control and payable on a proper application being made in that behalf to the Election Commission or to any person duly authorized by it to receive the same, be he the Secretary to the Election Commission or any one else. If this essential requirement was complied with, no literal compliance was at all necessary with the words "in favour of the Secretary to the Election Commission". Though therefore the making of the deposit and the presentation of the receipt thereof along with the petition was held to be mandatory, this Court held that the form in which the deposit should be made was only directory. This Court rejected the contention that the election petition was liable to be dismissed in limine under section 85 or sub s.(3) of section 90 for non compliance with the requirements of section 117 of the Act and observed: "It would be absurd to imagine that a deposit made either in a Government Treasury or in the Reserve Bank of India in favour of the Election Commission itself would not be sufficient compliance with the provisions of section 117 and would involve a dismissal of the petition under section 85 or section 90(3). The above illustration is sufficient to demonstrate that the words "in favour of the Secretary to the Election Commission" used in s.117 are directory and not mandatory in their character. What is of the essence of the provision contained in section 117 is that the petitioner should furnish security for the costs of the petition, and should enclose along with the petition a Government Treasury receipt showing that a deposit of one thousand rupees has been made by him either in a Government Treasury or in the Reserve Bank of India, is at the disposal of the Election Commission to be utilised by it in the manner authorised by law and is under its control and payable on a proper application being made in that behalf to the Election Commission or to any person duly authorised by it to receive the same, be he the Secretary to the Election Commission or any one else." The same question was dealt with in Chandrika Prasad Tripathi vs Siv Prasad Chanpuria & Ors.(1) In that case, security deposit of Rs. 1000/ had been made, but not, in terms, in the name of the Secretary 652 to the Election Commission; instead, the deposit was made "refundable by order of the Election Commission of India, New Delhi". The Court held that the objection based on the peculiar wording of the deposit was purely technical. To the same effect are the decisions of this Court in Om Prabha Jain vs Gian Chand & Anr.(1) and Budhi Nath Jha vs Manilal Jadav.(2) The Court in all these cases followed the decision in Kamaraja Nadar 's case, (supra) that section 117 of the Act should not be strictly or technically construed and that substantial compliance with its requirements should be treated as sufficient. In contrast, the decisions in Charan Lal Sahu vs Nandkishore Bhatt & Ors.(3) and Aeltemesh Rein vs Chandulal Chandrakar & Ors.(4) were cases where the petitioners made no security deposit before filing their election petitions. In Charan Lal Sahu 's case, supra, the petitioner applied to the High Court for being absolved from making any security deposit or to reduce the amount required to be deposited under the Act. This Court referred to article 329 (b) of the Constitution and held that the petitioner had no right to file an election petition except in the manner provided by the Act. There being no provision to absolve the petitioner from payment of security for costs, this Court held that the Madhya Pradesh High Court was right in rejecting the election petition under sub section (1) of s.86 of the Act. In Aeltemesh Rein 's case, supra, it was stated in the petition that a security amount of Rs. 2000 was being deposited, but in fact no deposit was made. The Madhya Pradesh High Court dismissed the election petition. On appeal, the petitioner contended that sub section (1) of s.117 of the Act was ultra vires article 329 (b) of the Constitution and therefore the High Court was in error in dismissing the election petition on the ground of non compliance of the provisions of sub section (1) of s.117. This Court repelled the contention and expressed the view that the words "in such manner" in article 329(b) could not be limited in their operation to procedural requirements. The Court held : "The provision of law which prescribes that an election petition shall be accompanied by the payment of security amount pertains to the area covered by the manner of the 653 making of the election petition and is therefore within the authority of Parliament." Adverting to the dismissal of the election petition by the High Court, this Court held that the High Court had no option but to dismiss the petition as it was not accompanied by payment of the security deposit for sub section (1) of s.86 of the Act clearly provides that the High Court shall dismiss an election petition which did not comply with the provisions of s.81, or 82 or 117 of the Act. The remaining part of the case is not free from difficulty. There are two questions that arise, namely: (1) Whether the photograph referred to in paragraph 18(b) was a schedule or annexure within the meaning of sub section (2) of s.83 and therefore formed an integral part of the election petition and thus the failure to furnish the appellant with a copy of the photograph along with a copy of the election petition amounted to a non compliance of sub section (3) of s.81 (2) Whether the High Court was right in relying upon the decision of this Court in Sahodrabai Rai vs Ram Singh Aharwr(1) in holding that the photograph was merely a document filed along with the election petition as a piece of evidence in proof of the allegation contained in paragraph 18(b) and therefore there was no need for the respondent to supply the appellant with a copy of the photograph. To bring out the points in controversy, the averments in paragraph 18(b) may be set out ; "18. The Petitioner submits that the first Respondent is guilty of the corrupt practice under Section 123(6) of the Act by incurring and authorising expenditure in excess of the limit of Rs. 35,000/ fixed under Section 77 of the Act. The first Respondent has submitted a statement of election expenses disclosing a total of Rs. 10,125.75 only. A true photostat copy of the Return filed by him is filed herewith as Annexure V. He has, however, failed to disclose the following amount incurred by him in connection with the election, between the date of his nomination and the date of the declaration of the result thereof. (b) The first Respondent erected fancy banners throughout the constituency and the number of such 654 banners is about 50. A photograph of one such banner is filed herewith. The cost of each such banner will be not less than Rs. 1000. The expenditure involved in erecting these fifty banners is about Rs. 50,000. It is submitted that the first Respondent has incurred the above said expenditure which added to the amount disclosed in the Return of Election Expenses exceeds the amount fixed under Section 77 (3) of the Act thus amounting to a corrupt practice under Section 123(6) of the Act. " Admittedly, a copy of the photograph was not furnished to the appellant along with a copy of the election petition, The averment contained in paragraph 18(b) would be incomplete without a copy of the photograph being supplied with a copy of the election petition. The averment therein is that the appellant committed a corrupt practice under sub s.(6) of s.123 of the Act by incurring or authorising expenditure in contravention of s.77. It is alleged that the appellant had set up fancy banners throughout the constituency and the number of such banners was about 50, the cost of each such banner being not less than Rs. 1000 and therefore the expenditure involved in erecting these 50 banners was not less than Rs. 50,000/ , but that the appellant had not disclosed the amount in the return of the election expenses and thus committed a corrupt practice under sub s.(6) of s.123 of the Act. It is not possible to conceive of the dimension of the large fancy banner unless one has a look at the photograph. The photograph filed with the election petition gives a visual description of the fancy banner, the cost of which at a mere look would show that the expenditure in setting up each such banner would be Rs. 1000 or more. The photograph depicts two election banners. One of them is a huge fancy banner or a hoarding on the left side of the road and the other on the right is a smaller election banner. The fancy banner depicts two groups, and the appellant is present in both. On the left hand top there is a large picture of the appellant with the late Sri Annadurai and at the right hand below there is a smaller picture of the appellant with Smt. Indira Gandhi. The fancy banner shown in the photograph contains an election slogan in Tamil appealing to the electorate to vote for the appellant. This has been translated for us into English and it reads: 655 "To The Electorate in Anna Nagar Constituency I request you to mark on the Rising Sun and ensure success to enable service to you. Always your affectionate, Kalaignar M. Karunanidhi Polling Date 31.5.80" It is true that paragraph 18(b) must be read in conjunction with the opening part of paragraph 18. Though the words "in connection with" do not appear in paragraph 18(b), these words are there in paragraph 18 and therefore it must be taken that the fancy banners were set up in connection with the election. Nevertheless, without being furnished with a copy of the photograph, the averments in paragraph 18(b) would be incomplete as regards the allegation of the corrupt practice committed by the appellant. We are driven to this conclusion by the mandatory requirement of sub section (3) of section 81 of the Act which is in two parts. The first part of sub section (3) of s.81 provides that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and the second part relates to the manner in which such copy shall be attested by the petitioner under his own signature to be a true copy of the petition. It has already been stated that mandatory provisions must be fulfilled exactly whereas it is sufficient if directory provisions are substantially fulfilled. In Ch. Subbarao vs Member, Election Tribunal, Hyderabad,(1) this Court held that (1) if there is a total and complete non compliance of the provisions of sub s.(3) of s.81 the election petition might not be "an election petition presented in accordance with the provisions of this Part" within the meaning of s.80 of the Act, and (2) by the expression "copy" in sub section (3) of s.81, it was meant not an exact copy but only one so true that nobody can possibly misunderstand it being not the same as the original. In Ch. Subbarao 's case, supra, there was no attestation at the foot of the copies that they were true copies. It was held that the absence in the copy of a note to the effect that it was a 'true copy ' 656 could not detract the copy from being a true copy. The facts and circumstances of the case therefore showed that there had been a substantial compliance with the requirements of sub s (3) of s.81 of the Act. The wider question whether sub section (3) of section 81 or a part thereof is mandatory or directory was left open. On the facts of that case the Court held that if there was substantial compliance with the requirements of sub section (3) of s.81, the election petition could not be dismissed. It was submitted on behalf of the appellant that there was total and complete non compliance of the requirements of sub section (3) of section 81 and therefore the election petition was liable to be dismissed in limine under sub section (1) of s.86. The argument to the contrary advanced on behalf of the respondent was that the photograph filed along with the election petition had to be treated as a document in proof of the allegations contained in paragraph 18(b) and not as a part of the election petition. The submission is that there is a distinction 'between a schedule or annexure to the petition referred to in sub section (2) of section 83" and "a document which is merely evidence in the case which is annexed to the election petition" and to such a document sub section (3) of s.81 is not attracted. The preliminary issue and the appeal turn on a short point of construction. The question that arises is whether the words "copies thereof" in sub section (3) of s.81 comprehend the election petition proper or do they also include a schedule or annexure annexed thereto. The controversy whether the photograph was a schedule or annexure in terms of sub section (2) of s.83 or merely a document only in proof of the allegations in paragraph 18(b) must turn on a construction of sub section (3) of s.81 read with sub s.(2) of s.83. It now appears to be well settled by Sahodrabai 's case (supra) that sub section (2) of s.83 applies only to a schedule or annexure which is an integral part of the election petition and not to a document which is produced as evidence of the election petition. In dealing with sub section (2) of s.83 of the Act it was observed: "We are quite clear that sub section (2) of s.83 has reference not to a document which is produced as evidence of the averments of the election petition but to averments of the election petition which are put, not in the election petition but in the accompanying schedules or annexures. We can give quite a number of examples 657 from which it would be apparent that many of the averments of the election petition are capable of being put as schedules or annexures. For example, the details of the corrupt practice there in the former days used to be set out separately in the schedules and which may, in some cases, be so done even after the amendment of the present law. Similarly, details of the averments too compendious for being included in the election petition may be set out in the schedules or annexures to the election petition. The law then requires that even though they are outside the election petition, they must be signed and verified, but such annexures or schedules are then treated as integrated with the election petition and copies of them must be served on the respondent if the requirement regarding service of the election petition is to be wholly complied with. But what we have said here does not apply to documents which are merely evidence in the case but which for reasons of clarity and to lend force to the petition are not kept back but produced or filed with the election petitions. They are in no sense an integral part of the averments of the petition but are only evidence of those averments and in proof thereof. The pamphlet therefore must be treated as a document and not as a part of the election petition in so far as averments are concerned. " The High Court rests its conclusion on the decision of this Court in Sahodrabai 's case, supra, but that decision, in our opinion, is inapplicable to the facts and circumstances of the present case. In Sahodrabai 's case (supra) an election petition was filled together with a pamphlet as annexure thereto. A translation in English of the pamphlet was incorporated in the body of the election petition and it was stated that it formed part of the petition. A preliminary objection was raised that a copy of the pamphlet had not been annexed to the copy of the petition served on the returned candidate and therefore the election petition was liable to be dismissed under sub s.(1) of s.86 of the Act. The Madhya Pradesh High Court sustained the preliminary objection and dismissed the election petition. On appeal, this Court held that the words used in sub section (1) of section 81 are only "the election petition" and there was no mention of documents accompanying the election petition. Since the election petition itself reproduced the whole of the pamphlet in translation 658 in English, it could not be said that the averments with regard to the pamphlet were themselves a part of the petition and therefore the pamphlet had in fact been served on the returned candidate although in a translation and not in the original. The Court then stated that even if it were not so, sub section (2) of s.83 of the Act has reference not to a document which is produced as evidence of the averments of the election petition but to averments of the election petition which are put, not in the election petition but in the accompanying schedules or annexures. It was observed that the details of averments may be too compendious for being included in the petition and may be set out in the schedule or annexure to the election petition. The Court then gave examples on which it would be apparent that many of the averments of the election petition are capable of being put as schedules or annexures. It then went on to say that such annexures or schedules are treated as integrated with the election petition and copies of them must be served on the returned candidate if the requirement regarding service of the election petition is to be wholly complied with. But that this rule was not applicable to documents which are merely an evidence in the case but which, for reasons of clarity and to lend force to a petition, are not kept back but are produced or filed with the election petition. The Court added: "They are in no sense an integral part of the averments of the petition but are only evidence of those averments and in proof thereof." In that view of the matter the Court held that the pamphlet in question had to be treated as a document and not as a part of the election petition so far as the averments were concerned. It said: "It would be stretching the words of sub section (2) of s.83 too far to think that every document produced as evidence in the election petition becomes a part of the election petition proper. In this particular case we do not think that the pamphlet could be so treated. " It follows as a necessary corollary that if the pamphlet had not been incorporated in the body of the election petition, the decision of the Court in Sahodrabai 's case, supra, would have been otherwise. That precisely is the case here. 659 In this connection, we may next refer to the decisions of this Court in Jagat Kishore Prasad Narayan Singh vs Raj Kumar Poddar & Ors. (1) and Satya Narain vs Dhuja Ram & Ors. (2) In Jagat Kishore Prasad Naryan Singh 's case, supra, there were serious discrepancies between the original election petition filed in the Court and the copies supplied to the contesting candidates. This Court dismissed the election petition on the ground of non compliance of sub section (3) of s.81 as the copies furnished to the contesting respondents were not true copies and there was divergence between the allegations made in the petition and the allegations made in the copies, and that such divergence was bound to mislead the contesting candidates and prejudice their defence, particularly in a case where the returned candidate is charged with corrupt practice. That is because he must know the nature of the charge against him, so that he may prepare his defence. It was observed: "The law requires that a true copy of an election petition should be served on the respondents. That requirement has not been either fully or substantially complied with. " The next case in point is Satya Narain vs Dhuja Ram & Ors.(supra) where the election petition was not accompanied by the requisite number of spare copies for service on the respondent and no schedules were filed along with the petition. When the petition came up for scrutiny, the Deputy Registrar of the High Court asked the election petitioner to remove the defects. Before the date refixed the spare copies were filed and the defect removed. The question before the Court was whether the petition was liable to be dismissed in limine under sub section (1) of s.86 of the Act for non compliance of sub section (3) of s.81. The importance of the decision in Satya Narain 's case (supra) lies in the fact that the Court laid down that the first part of sub section (3) of s.81 which required that the election petition should be accompanied by as many copies thereof as there were respondents mentioned in the petition, was mandatory in character and non compliance with it was fatal to the petition in view of sub section (1) of s.86. The decision in Kamalam vs Dr. V.A. Syed Mohamad(3) may also be referred. What had happened in that case was this. The signature of the election petitioner by way of authentication appeared 660 at the foot of the copy of the affidavit but there was no such signature separately appended at the foot of the copy of the election petition. There was a preliminary objection raised that since the copy of the election petition had not been attested by the petitioner under her own signature to be a true copy, there was no compliance with sub s.(3) of s.81 of the Act and hence the petition was liable to be dismissed in limine under sub section (1) of s.86 of the Act. In repelling the contention, the Court observed that the second part of sub s.(3) of s.81 had been complied with upon the view that the copy of the petition and the affidavit filed along with it as required by law constituted one single document and the signature in original of the petitioner in proof of the affidavit satisfied the requirements of sub s.(3) of s.81 of the Act. In explaining as to what constitutes an election petition for purposes of sub section (3) of s.81, it was observed: "Now, the first question which arises is as to what constitute an election petition for the purpose of section 81, sub section (3). Is it confined only to election petition proper or does it also include a schedule or annexure contemplated in sub section (2) of section 83 or a supporting affidavit referred to in the proviso to section 83, sub section (1)? To answer this question, we must turn to section 83 which deals with contents of an election petition. Sub section (1) of that section sets out what an election petition shall contain and provides that it shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 for the verification of pleadings. The proviso requires that where the petitioner alleges any corrupt practice, prescribed form in support of the allegation of such corrupt practice the election petition shall also be accompanied by an affidavit in the and the particulars thereof. The context in which the proviso occurs clearly suggests that the affidavit is intended to be regarded as part of the election petition. Otherwise, it need not have been introduced in a section dealing with contents of an election petition nor figured as a proviso to a sub section which lays down what shall be the contents of an election petition. Sub section (2) also by analogy supports this inference. It provides that any schedule or annexure to an election petition shall be signed by the petitioner and verified in the same manner as an election petition. It is now established by the decision of this Court in Sahodrabai Rai vs 661 Ram Singh Aharwar that sub section (2) applies only to a schedule or annexure which is an integral part of the election petition and not to a schedule or annexure which is merely evidence in the case but which is annexed to the election petition merely for the sake of adding strength to it. " The test to be applied in determining whether the photograph referred to in paragraph 18(b) is an integral part of the election petition or was merely a piece of evidence in proof of the allegations contained therein, depends on whether it is a part of the pleadings. Upon the view that the photograph was not merely a document accompanying the election petition but was a part and parcel of the pleading contained in paragraph 18(b), it is unnecessary for us to deal with the submission based on order VII, r.14 of the Code of Civil Procedure, 1908. Our attention was drawn to the passage in Sahodrabai 's case, supra, at p.18 of the Report. The Court observed that under order VII, r.14 where a plaintiff sues upon a document in his possession or power, he is required to file only one copy of the document and not as many copies as there are defendants and therefore a copy of the document is not expected to be deliberate with the copy of the plaint to the answering defendants when summons is served on them and that it would be too strict a reading of the provisions of sub section (3) of s.81 and sub section (2) of s.83 to lay down that the election law provides anything different. These observations cannot, in our opinion, be read out of context. The decision in Sahodrabai 's case, supra, was that since the election petition itself reproduced the whole of the pamphlet in a translation in English, the pamphlet filed along with the petition had to be treated as a document and not as a part of the election petition and that being so, the Court observed that it would be stretching the words of sub section (3) of s.81 and sub section (2) of s.83 too far to think that every document produced as evidence in the election petition becomes a part of the election petition proper. We would add for the sake of completeness that we have been referred to the decision of this Court in Sharif ud din vs Abdul Gani Lone (1) but that decision is not directly in point. One of us (Venkataramiah, J.) had occasion to deal with the corresponding sub section (3) of s.89 of the Jammu & Kashmir Representation of the people Act, 1957 which reads: 662 "Every election petition should be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the petitioner under his own signature to be true copy of the petition. " In that case, both the copies of the election petition contained the endorsement "Attested true copy, Piyare Lal Handoo, Advocate". The question arose whether there was a sufficient compliance with the provisions of sub section (3) of s.89 of that Act. The Court pointed out that sub section (3) of s.89 consists of two parts. The first part requires that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and the second part requires that every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition. The first part of the section has been held to be a mandatory requirement by this Court in Satya Narain 's case (supra) The Court held the second part also to be mandatory and observed: "It is true that sub s.(3) of s.89 of the Act was purely procedural in character and that ordinarily procedural law should not be given that primacy by courts as would defeat the ends of justice. But if a law even though it may be procedural in character insists that an act must be done in a particular manner and further provides that certain consequences should follow if the act is not done in that manner, the Courts have no option but to enforce the law as it is." Upon that view it was held that the attestation of the copies by counsel for the election petitioner as true copies was not a sufficient compliance with the provisions of sub section (3) of s.89 of that Act as it required attestation by the election petitioner himself. The decision is an application of the rule that mandatory provisions must be fulfilled exactly. It is obvious that photograph was a part of the averment contained in paragraph 18 (b). In the absence of the photograph the averment contained in paragraph 18 (b) would be incomplete. The photograph referred to in paragraph 18 (b) was therefore an integral part of the election petition. It follows that there was total non compliance with the requirements of sub section (3 of s.81 of the Act by failure to serve the appellant with a copy of the election petition. In 663 Ch. Subbarao 's case, supra, the Court held that if there is a total and complete non compliance with the provisions of sub section (3) of s.81, the election petition could not be treated an "election petition presented in accordance with the provisions of this Part" within the meaning of s.80 of the Act. Merely alleging that the appellant had put up fancy banners would be of no avail unless there was a description of the banner itself together with the slogan. The conclusion is irresistible that the words "copies thereof" in sub s.(3) of s.81 read in the context of sub s.(2) of s.83 must necessarily refer not only to the election petition proper but also to schedules or annexures thereto containing particulars of any corrupt practice alleged therein. That being so, we are constrained to reverse the judgment of the High Court insofar as it holds that the photograph of the fancy banner adverted to in paragraph 18 (b) could not be treated to be an integral part of the election petition but was merely a piece of evidence as to the nature and type of fancy banner erected by the appellant and therefore failure to supply a copy of the photograph to the appellant did not amount to a violation of the provisions of sub section (3) of s.81 of the Act. For these reasons, all the appeals and special leave petitions except Civil Appeal No. 38 (NCE) of 1981 must fail and are dismissed. Civil Appeal No.38(NCE) of 1981 partly succeeds and is allowed. The judgment of the High Court holding that the amount of Rs. 2000 having been deposited to the credit of the Registrar, High Court in the Reserve Bank of India on the strength of pre receipted challans issued by the Accounts Department on the basis of a lodgement schedule, there was substantial compliance of the requirements of sub section (1) of s.117 of the Act, is upheld. But the judgment of the High Court is set aside insofar as it holds that the failure to supply a copy of the photograph of the fancy banner referred to in paragraph 18 (b) along with a copy of the election petition to the appellant did not amount to a breach of the provisions contained in sub section (3) of s.81 of the Act, and instead we hold that the failure to do so amounted to non compliance of sub section (3) of s.81 inasmuch as the photograph of the fancy banner was an integral part of the election petition and therefore the election petition must be dismissed summarily under sub section (1) of s.86 of the Representation of the People Act, 1951. We further direct that the High Court shall permit the appellant to withdraw the recrimination petition filed by him under s.97 of the Act in terms of the undertaking given by learned 664 counsel for the appellant during the course of the hearing of the appeal. The costs throughout shall be borne by the parties as incurred. H.S.K Civil Appeal No. 38/81 partly by allowed. Petitions & Civil Appeal Nos. 4216/82 and 1170/81 dismissed.

Respondent No. 1 in C.A. 38 of 1981 filed an election petition under the Representation of the People Act challenging the election of the appellant to the State Legislative Assembly on various grounds. The petition was accompanied by a pre receipted challan prepared by the Accounts Department of the High Court on the basis of the lodgment schedule initialled by the Assistant Registrar II, showing that a sum of Rs. 2000/ had been credited to the account of the Registrar, High Court, Madras, in the Reserve Bank of India, Madras, as security for costs. The facts are more or less similar to all the appeals. In C.A. 38/81, which has additional facts, the respondent pleaded, inter. alia, that the appellant was guilty of corrupt practice under sub s.(6) of section 123 of the Act. He alleged that the appellant had erected about 50 fancy banners each costing not less than Rs. 1000/ and if this expenditure of Rs. 50,000/ was added to the amount already disclosed by him in his return of election expenses it would exceed the prescribed limit thus amounting to a corrupt practice. The respondent filed a photograph of one such fancy banner with the election petition but did not annex a copy of this photograph to the copy of the election petition furnished to the appellant. The appellant raised two preliminary objections as to the maintainability of the petition on the ground of non compliance with sub s.(1) of section 117 read with r. 8 of the Election Petitions Rules, and with sub s.(3) of section 81. High Court overruled both the objections and held: (1) there was substantial compliance with sub section (1) of section 117: and (2) the banner could not be treated as an integral part of the election petition but was merely a piece of evidence as to the nature and type of the fancy banners erected by the appellant and therefore failure 630 to supply a copy of its photograph to the appellant along with the copy of the election petition did not amount to a breach of sub s.(3) of of section 81. On appeal, this Court by its order dated April 2, 1981 remitted back the issue with regard to non compliance of sub section (1) of section 117 read with r. 8 for a decision afresh on the basis of the evidence to be led by the parties. After considering the evidence, the High Court adhered to its earlier view. The appellant contended in this Court: (1) the provisions of sub section (1) of section 117 were mandatory; there was no distinction between the requirement as to the making of security deposit and the manner of making such deposit; the words "in accordance with the rules of the High Court" in sub section 117 were mandatory; r. 8 must be read as forming part of sub section (1) of section 117 by incorporation; in view of the definite stand taken by the respondent t at he had complied with r. 8 it was not possible to fail back on Order 31 of the Madras High Court (Original Side) Rules, 1956. There was no compliance with r. 8 as the security amount was not deposited with the Registrar in cash. (2) There was no compliance with the requirements of sub section (3) of section 81 as the copy of the election petition served on him was not accompanied by a copy of the photograph of the fancy banner. Dismissing all the appeals and special leave petitions except C.A. 38/81 which partly succeeds and is allowed. ^ HELD: 1(a). Sub section (1) of section 117 is in two parts. The first part provides that at the time of presenting an election petition, the petitioner shall deposit in the High Court a sum of Rs. 2000 as security for the costs of the petition, and the second is that such deposit shall be made in the High Court in accordance with the rules of the High Court. The requirement regarding the making of a security deposit of Rs. 2000 in the High Court is mandatory, the non compliance of which must entail dismissal in limine of the election petition under sub section (1) of section 86 of Act. But the requirement of its deposit in the High Court in accordance with rules of the High Court is clearly directory. The essence of sub.s. (1) of section 117 is that at the time of filing an election petition the petitioner should furnish security for the costs of the petition. Section 117 should not be strictly or technically construed and substantial compliance with its requirements should be treated as sufficient. [645 F, 651 E, 652 B] 1(b). A literal and mechanical interpretation of r. 8. of the Election Petitions Rules would lead to manifest absurdity as it would imply that in every case the election petitioner shall have to pay to the Registrar a sum of Rs. 2000 in cash towards security for costs and obtain a receipt from him there for. Rule 8 is silent as to how the cash is to be handled. Inasmuch as r. 8 does not lay down the procedure regulating the manner of deposit of cash, the matter falls to be governed by r. 2 of Order 31 of the Madras High Court (Original Side) Rules, 1956 by reason of r. 12 of the Election Petitions Rules. Although Order 31, r. 2 does not in terms apply because Order 31 relates to " payment into court of moneys to the credit of civil court deposits and account of suitors ' money", and though no lodgment schedule can be prepared under r. 2 except in pursuance of a decree or order passed by the High Court i.e. in relation to some proceeding pending, or disposed of, by the High Court, still 631 by virtue of r. 12 of the Election Petitions Rule that is the procedure to be adopted for deposit of Rs. 2000 in the High Court in cash i.e. by crediting the amount on the strength of a pre receipted challan prepared by the Accounts Department on the basis of a lodgment schedule.[649 A E] In the present case the Assistant Registrar II, Madras High Court, directed that the money be deposited to the credit of the Registrar of the High Court in the Reserve Bank of India. The election petitioner deposited Rs. 2000 with a pre receipted challan issued by the Accounts Department to the credit of the Registrar of the High Court and the Reserve Bank of India made the endorsement "received in cash". It must be regarded that the payment was made in the High Court and the pre receipted challan bearing the endorsement of the Reserve Bank must be treated as the receipt of the Registrar in terms of r. 8, the Reserve Bank acting as an agent of the High Court. The procedure adopted by Assistant Registrar II, was in conformity with r.8. There was due compliance with the requirements of sub section (1) of section 117 of the Act read with r. 8 of the Election Petitions Rules. [649 B, E H] K. Kamaraja Nadar vs Kunju Thevar & Ors., ; Chandrika Prasad Tripathi vs Siv Prasad Chanpuria & Ors. , ; ; Om Prabha Jain vs Gian Chand Jadav, ; Charan Lal Sahu vs Nandkishore Bhatt & ors., [1974]1 SCR 294; Aeltemesh Rein vs Chandulal Chandrakar & Ors., ; , referred to. 2(a). Sub section (3) of section 81 of the Act is in two part. The first part provides that every election petition shall be accompanied by as many copies there of as there are respondents mentioned in the petition and the second part relates to the manner In which such copy shall be attested by the petitioner under his own signature to be a true copy of the petition. The first part is mandatory in character and non compliance with it was fatal to the petition in view of sub section (1) of section 86. E, 659 F] 2(b). The words "copies thereof" in sub section (3) of section 81 read in the context of sub section (2) of section 83 must necessarily refer not only to the election petition proper but also to schedules or annexures thereto containing particulars of any corrupt practice alleged therein. Sub section (2) of section 83 applies only to a schedule or annexure which is an integral part of the election petition and not a document which is produced as evidence of the averments of the election petition. [663 B C, 656 F G] In the instant case, the test to be applied in determining whether the photograph referred to in the election petition is an integral part of the election petition or was merely a piece of evidence in proof of the allegations contained therein, depends on whether it is a part of the pleadings. The photograph which gives a visual description of the fancy banner, the cost of which at a mere look would show that the expenditure in setting up each such banner would be Rs. 1000/ or more, was not merely a document accompanying the election petition but was a part and parcel of the pleading contained therein. The averment contained in the election petition would be incomplete as regards the allegation of the corrupt practice committed by the appellant without a 632 copy of the photograph being supplied with a copy of the election petition. Merely alleging that the appellant had put up fancy banners would be of no avail unless there was a description of the banner itself together with the slogan. The failure to supply a copy of the photograph along with a copy of the election petition to the appellant amounted to non compliance of sub section (3) of section 81,[661 B, C, 654 C, 655 D, 663 A B, F G] Sahodrabai Rai vs Ram Singh Aharwar, ; , held inapplicable.] Ch. Subbarao vs Member, Election Tribunal Hyderabad, ; ; Jagat Kishore Prasad Narayn Singh vs Raj Kumar Poddar & Ors. [1971] 1 SCR 821; Satya Narain vs Dhuja Ram & Ors., ; and Kamalam (M) vs Dr. V.A. Syed Mohamad, ; , referred to. Sharif ud din vs Abdul Gani Lone,[1980] 1 SCR 1176, distinguished. It is always important to bear the distinction between mandatory and directory provisions of 3 statute. The general rule of interpretation is well known and it is but an aid for ascertaining the true intention of the legislature which is the determining factor and that must ultimately depend on the context. The question as to whether a statute is mandatory or directory, depends upon the intent of the legislature and not upon the language in which the intent is clothed. The meaning and intention of the legislature must govern, and these must be ascertained not only from the words used, but also by considering its object and consequences which would follow from construing it one way or the other. An absolute enactment must be obeyed or fulfilled exactly but it is sufficient if a directory enactment be obeyed or fulfilled substantially. An enactment in form mandatory might in substance be directory and the use of the word "shall" does not conclude the matter. [645 E H, 646 A C] N.P. Ponnuswami vs Returning Officer, Namakkal, ; ; Wolyerhampton New Water Works Company vs Hawkesford; , at 356; Jagan Nath vs Jaswant Singh & Ors., ; ; Maxwell on the Interpretation of Statutes, 12th Edn. p. 314; Crawford on 'Statutory Construction ' p. 516; State of U.P. vs Manbodhan Lal Srivastva, ; ; State of U.P. & ors, vs Babu Ram Upadhya; , ; Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur, and Montreal Street Railway Company vs Normandin LR ; , referred to.

Appeal No. 121 of 1951. Appeal from the Judgment and Decree dated 15th December, 1948, of the High Court of Judicature at Madras (Subba Rao and Pancha,Pakesa Ayyar JJ.) in Appeal No. 474 of 1945 arising out of the Judgment and Decree dated 3 1 st July, 1945,, of the Court of the Subordinate Judge of Tenali in Original Suit No, 24 of 1944. 130 1002 M. C. Setalvad, Attorney General for India, (N. Subrahmanyam and K. R. Chowdhury, with him) for the appellants. K. section Krishnaswamy Aiyangar (M. Seshachalapathi, with him) for the respondents. February 26. The Judgment of the Court was delivered by DAS J. This appeal arises out of a suit for recovery of possession of certain immovable properties measuring about 93 acres and 33 cents which are more fully and particularly set out and described in Schedule A to the plaint. That suit was instituted by Konduru Venkatapayya, respondent No. 1, in his capacity as the Executive Officer appointed by the Government on the 15th July, 1942, in respect of Sri Somasekharaswami Temple at Kotipalle, hamlet of Donepudi, a temple notified on the 26th October, 1939, under the provisions of Chapter VIA of the Madras Hindu Religious Endowments Act (Act 11 of 1927). The suit was instituted in forma pauperis. The claim for ejectment of the defendants was founded on the allegation that the properties belonged to the temple, having been given to it by an Inam grant made in 1770 A.D. by Janganna Rao, the then Zamindar of Rachur, that the defendants I to 16 and their predecessors were Archakas rendering Nitya Naivedya Deeparadhana services and as such were in possession of the properties for and on behalf of the temple and that defendants 17 to 43 were the lessees under the Archakas and that the defendants I to 16 were wrongfully claiming the properties as their own and the other defendants claimed to be in possession of portions of the properties as their lessees. The plaintiff instituted this suit after having given registered notice to the defendants to make over possession of the suit properties to the plaintiff as the Executive Officer of the temple but the defendants were still continuing in such possession in spite of such notice. The defendants filed written statements raising various contentions 1003 and issues to which it is not necessary now to refer. The learned Subordinate Judge by his judgment dated the 31st July, 1945, decreed the plaintiff 's suit. Some of the defendants preferred an appeal to the High Court but the High Court dismissed the same. Those defendants obtained leave of the High Court to appeal to the Federal Court and that appeal has now come up for hearing before us. The only two points which were raised before us, as before the High Court, are (1) whether the Inam grant was made in favour of the temple or whether the grant was made in favour of the Archakas burdened with the duties of service, and (2) what right did the grant confer on the grantee whether it was a grant of the land itself or only of the melvaram interest in the properties. It is urged by the learned Attorney General that as the defendants and their predecessors have been in possession of the properties from ancient times it should be presumed that their possession originated in some lawful title conferred on them. In short, the contention, founded on several judicial decisions, is that the principle of a lost grant should be applied in this case in favour of the Archakas who have been in quiet possession for over a century and a half. There is no doubt, on the authorities, that a presumption of an origin in some lawful title may in certain circumstances be made to support possessory rights long and quietly enjoyed where no actual proof of title is forthcoming but it is equally well established that that presumption cannot be made where there is sufficient evidence and convincing proof of the nature of the grant and the persons to whom it was made. It is true that the original grant is not forthcoming but turning to the evidence we find two documents which appear to us to be decisive on the question of title. The first one is Exhibit P/3, a copy of the relevant entries in the Inam Register of 1860. This Inam Register was prepared after enquiries made by the Inam Deputy Collector and the statements furnished at that time by the then Archakas were taken into consideration for 1004 preparing the register. The copy of the statement filed by the then Archakas before the Inam Deputy Collector was exhibited in this case as Exhibit D/3. In the Inam Register (exhibit P/3) under the several columns grouped under the general heading " Class extent and value of Inam " this Inam is classified in column 2 as Devadayam. In column 3 are set out the survey numbers together with the word ' Dry ' indicating the nature of the land comprised within the survey numbers. The areas are set out in column 5. The heading of column 7 is " where no survey has been made and no assessment fixed by Government, the cess paid by the ryot to the Inamdar, or the average assessment of similar Government land should be entered in column (7) ". Under this heading are set out the amounts of respective assessments against the three survey numbers totalling Rs. 198139. We then pass on the next group of columns under the general heading " Description, tenure and documents in support of the Inam ". Under column 8 'description of Inam 'is entered the remark " For the support of a Pagoda. Now kept up ". The entry in column 9 shows that the Inam was free of tax, i.e., sarvadumbala. Under column 10 headed "Hereditary, unconditional for life only or for two or more lives " is mentioned ' Permanent '. The name of the grantor as stated in column 1 1 is Janganna Rao and the year of grant is fasli 1179, A.D. 1770. In column 13 the name of the temple is set out as the original grantee. The name of the temple and the location of the temple are also set out under columns 16 and 17. Turning now to the statement exhibit D/3 caused to be written and filed by the then Archakas during the Inam Inquiry held in 1859 60 Sree Somasekharaswami Varu is given as the name of the Inamdar and the present enjoyer. The name of the temple is also set out under columns 3,5,6 and 12. Under the heading " Income derived from the Inam whether it is sarvadumbala or jodi. lf jodi the amount" in column 13 is stated " sarvadumbala Inam Cist according to the rate prevailing in the neighbouring fields Rs. 26631. " This statement (exhibit D/3) bears 1005 the signature of the Karnams and the witnesses. it will be noticed that neither in the Inam Register exhibit P/3 nor in the statement exhibit D/3 is there any mention of the Archakas as the grantee or for the matter of that, having any the least interest, personal or otherwise, in the subject matter of the Inam grant. The two exhibits quite clearly indicate that the Inam grant was made in favour of the temple by the gurant or and that in the face of this definite evidence and proof of the nature of the grant, no presumption of a lost grant can be made in favour of the Archakas. We, therefore, in agreement with the High Court, hold that the deity was the grantee and the first question raised before us must be answered against the appellants. The learned Attorney General next contends that, assuming that the Inam grant was made in favour of the temple, it was only a grant of melvaram interest and that the Archakas who have the kudivaram rights cannot be ejected. He relies strongly on an unreported judgment of the Madras High Court in Appeal No. 213 of 1942 (The Board of Commissioners for the Hindu Religious Endowments, Madras vs Parasaram Veeraraghavacharyulu and others) where it was held: "The records of the Inam settlement really contain only one clear indication as to the precise extent of this grant. The statement at the Inam Inquiry, Exhibit V, upon which the decision of the Inam Commissioner was presumably based contains a column headed " Income realised from the Inam sarvadumbala " and in that column we find the entry "Rs. 14 sarvadumbala". On its face this entry seems to show that the income of the Inam was Rs. 14 free from all charges. We find, however, from the Inam Register, Exhibit IV, that the assessment of the Inam on the basis of the enjoyment of 16 97 acres is also Rs. 14. This seems to indicate that the extent of the Inam was the amount of the assessment. * * * * * It seems, therefore, that the decision must rest on the recital in Exhibit V that the income of the Inam 1006 consists of Rs. 14, read along with the recital in Exhibit TV that the assessment on the land also comes to Rs. 14. On these materials we confirm the findings of the learned District Judge, although we do not accept his reasoning, and hold that the grant is a grant of melvaram only. " The facts of that case appear to us to be different from those in the present case. The Archakas in. that case were found to have the kudivaram rights from before the Inam grant was made. In the copies of the Inam Register and Inam Statement filed in that case the Archakas were shown as the grantees and the present enjoyers of the Inam grant and the amount shown under the heading in column 2 of the Inam register as the assessment was the same as the amount shown under column 3 of the Inam Statement under the heading "Income derived from Inam". In the case before us the Archakas are nowhere mentioned in either Exhibit P/3 or in Exhibit D/3, there is no evidence that they had any title to kudivaram rights and finally the amount of assessment shown under column 7 of the Inam register, Exhibit P/3, is Rs. 198139, whereas the amount shown as income derived from the Inam as shown in column 13 of the Inam Statement, Exhibit D/3, is Rs. 26631. Apart from these points of distinction the decision relied on by the learned Attorney General appears to us to be of doubtful authority. As will appear from the passages quoted above, the decision rested mainly, if not entirely, on the fact that the amount of assessment and the amount of income were the same and the conclusion was drawn that the Inam grant comprised only of the revenue assessment, i.e., of melvaram rights. We are unable to follow the reasoning. Whether the Inam comprised the land itself, that is to say, both melvaram and kudivaram rights or only the melvaram rights, the entries had to be made in the Inam Register in the same form and even in the case of the grant of the land itself comprising both the rights the amount of assessment had to be set out under column 7 of the Inam Register for it is not 1007 suggested that a different form had to be used where the grant comprised both the rights. It follows, therefore, that no inference that the Inam grant comprised only melvaram rights can be inferred from the fact that under column 7 only the amount of assessment is set out, and, therefore, the reasoning on which the decision relied on by the learned Attorney General was founded cannot be supported as correct. Indeed, that decision has been dissented from by another Bench of the Madras High Court in Yelamanchili Venkatadri & another vs Vedantam Seshacharyulu and others (1). In the present case the High Court was, in our opinion, clearly right in preferring the last mentioned decision to the unreported decision mentioned above. Having regard to the different entries under the different columns in Exhibit P/3 and Exhibit D/3 there is no escape from the position that this Inam grant in favour of the temple comprised both the interests in the land. An argument was sought to be raised by the learned Attorney General that the grantor Janganna Rao was only the Collector of the revenue and as such could not grant more than what he had got. Reference was made to the Kistna District Manual by Gordon Mackenzie but it appeared that the person therein mentioned was not the same grantor as we are concerned with in this case and the point was not pursued and nothing further need be said about it. Finally, the learned Attorney General submits that these Archakas who were rendering services faithfully from generation to generation from ancient times should not, in equity, be ejected from the entire lands and that they should be allowed to remain in possession of the lands and be permitted to appropriate to themselves the expenses of the services and a reasonable remuneration and the rest of the income should be made over to the temple as its property. Reference was made to two unreported decisions of the Madras High Court in Appeal No. 218 of 1946 (1) A.I.R. 1948 Mad. 72, 1008 Dandibhotla Kutumba Sastrulu vs Kontharapu Venkatalingam, and in Appeal No. 709 of 1944, Buddu Satyanarayana vs Dasari Butchayya, Executive Officer of the Temple of Sri Malleswaraswami Varu, China Pulivaram. In a proceeding for the framing of a scheme relating to a temple it may be permissible to take into account the claims, moral if not legal, of the Archakas and to make some provision for protecting their rights, but those considerations appear to us to be entirely out of place in a suit for ejectment on proof of title. If the two decisions lay down, as it is contended they do, that the principles which may have a bearing on a proceeding for framing of a scheme or for enforcing the scheme that is framed may be applied to a case of the kind we have now before us it will be difficult for us to uphold them either on authority or on principle. Further what is the conduct of the Archakas defendants appearing on the record of this case ? Although they are Archakas they actually asserted an adverse right in the face of the honest admission of their predecessors in title, made in the Inam statement Exhibit D 3. Such conduct cannot but be regarded as disentitling them from any claim founded on equity. The explanation put forward for the first time in paragraph 7 of their present statement of case filed in this Court explaining the absence of a claim to the property by their predecessors at the time of the Inam Inquiry namely, respect for the deity enjoined by Agama Shastra is not at all convincing. Further, the giving of such equitable relief must depend on questions of fact, namely, the income of the property, the reasonable expenses and remuneration for the services, the amounts appropriated by them all this time and so forth which have not been investigated into in this case, because, no doubt, this question of equitable relief has been put forward as a last resort after having lost their battle. We do not think in the circumstances of the case any indulgence should be shown to the Archakas even if it were permissible for the Court in a suit of this description to give such relief. 1009 The result, therefore, is that this appeal must fail and is accordingly dismissed with costs. Appeal dismissed. Agent for appellant: section Subramaniam. Agent for respondent: M.S.K. Aiyangar.

Though a presumption of an origin in some lawful title may in certain circumstances be made to support possessory rights long and quietly enjoyed where no actual proof of title is forthcoming, that presumption cannot be made where there is sufficient evidence and convincing proof of the nature of the grant and of the persons to whom it was made. In the case of an inam grant, the mere fact that the amount shown in the In am Register as the assessment was the same as the amount shown in the Inam Statement under the heading "income from the inam" does not lead to an inference that the grant comprised only the melvaram rights and not the land itself. Though in a proceeding for framing a scheme relating to a temple it may be permissible to take into account the claims, moral though not legal, of the archakas and to make some provision to protect their interest, such considerations are out of place in a suit for ejectment of the archakas on proof of title, especially when they set up an adverse title and deny the title of the temple. [On the facts their Lordships held (i) that there was clear evidence that the inam grant in question was made by the grantor in favour of the temple and that in the face of this definite evidence as to the nature of the grant no presumption of a lost grant can be made in favour of the archakas of the temple; and (ii) that the grant was of the land itself and not of melvaram rights only.]

Civil Appeal NO 900 of 1987 From the Judgment and order dated 12.2.1987 of the Calcutta High Court in Matter No. 676 of 1978. Dr. Y.S. Chitale, Anil Mitra, P.H. Parekh, D. Chandfachud, S.C. Ghosh and R.K. Dhil1on for the Appellants. K. Parasaran Attorney General for Union of India. 498 K.N. Bhat, A. Subba Rao and Miss Madhu Moolchandani for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. I had the advantage of reading in draft the judgment proposed to be delivered by my learned Brother Ranganathan, J. It is, however, necessary to add a few sentences. I was reluctant to take up this matter as it arises out of a decision of the Division Bench of the High Court of Calcutta. That decision was occasioned by a reference made by the Chief Justice of that High Court on a reference made by me to the Chief Justice sitting singly in that Court. In the High Court I had not expressed any view on the contentions urged. In those circumstances both the parties requested me to take up the matter. It was in these circumstances that I became a party to this judgment. I agree with my learned Brother that the appeal should be dismissed and the order he proposes to make as to costs. It is not necessary in view of the facts and circumstances of the case to refer in detail to the reasons. I would, however, make it clear that I prefer the view of the Division Bench of the Madhya Pradesh High Court in the case of L.S. Nair vs Hindustan Steel Ltd. Bhilai, AIR 1980 MP 106. I would prefer this view in preference to that of the F. Iearned Single Judge of the Bombay High Court in Miscellaneous Petition No. 458/79 Elliot Waud Hill (P) Ltd. vs Life Insurance Corpn. Further, it is necessary to reiterate that in this case we have proceeded on the short question canvassed before the Division Bench of the High Court out of which this appeal arises, i.e., whether the impugned Act which provides for eviction of unauthorised occupants from public premises to the extent it has been extended to premises belonging or taken on lease by a corporation established by or under a Central Act and owned or controlled by the Central Govt. is ultra vires or beyond the legislative power of the Parliament to extend the applicability of the Act to such premises. It is only this question which was mooted before the High Court and required consideration by us under Article ,136 of the Constitution. It is, therefore, not necessary to express any view on any other aspect of the matter. Furthermore, as has been emphasised by my learned Brother there was no dispute as to whether the premises in the present appeal is a public premises. Therefore, the question whether the premises in question or of this type is a public premises is not an aspect into which we were required to go. 499 For the purpose of this appeal once it is held that the Public Premises (Eviction. Of Unauthorised occupants) Act, 1971 is intra vires the Parliament, no further issue between the parties survive because no other contention was raised before the Division Bench of the High Court and also in this appeal under Article 136 of the Constitution, no other issue can be canvassed. It is, therefore, not necessary, in my opinion, to consider whether the provisions of 1971 Act even if intra vires would prevail upon the provisions of the State legislation. Hence, for the purpose of this appeal it is unnecessary to express any view on the amplitude and scope of Article 254 of the Constitution. Indu Bhusan Bose vs Rama Sundari Devi & Anr., ; is a decision of five learned Judges of this Court affirming the Calcutta view which held that the legislation in question in that case was to be found in Entries 6, 7 & 13 of List III of the 7th Schedule of the Constitution and neither in Entry 18 of II Schedule nor in Entry 3 of II Schedule of the Constitution. It rejected the Bombay view expressed in ,4. C. Patel vs Vishwanath Chadda, ILR Respectfully, it has to be taken that the legislation in question must be understood in its pith and substance and so understood the Act in question in the instant case, is in respect of transfer of property other than agricultural land and, as such, falls in Entry 6 of List III of the 7th Schedule to the Constitution. It is clear from the said decision and the subsequent decision reaffirming the same view in V. Dhanapal Chettiar vs Yesodai Ammal, ; that the subject matter of housing accommodation and control thereof falls within the purview of concurrent list. In that view of the matter, it cannot in my opinion, be canvassed that the 197 1 legislation in question was beyond the competence of the legislature. With these observations I agree with respect with my learned Brother that the appeal should be dismissed without any order as to cost section RANGANATHAN, J. The first appellant is a private limited company. The company is occupying a portion of premises No. 18, Russel Street, Calcutta. The premises belong to the United Commercial Bank, a statutory corporation constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. The appellant company claims to be the tenant of the Bank but this is not admitted by the respondent Bank. The Bank alleges that the appellant company, when somewhat differently constituted, had been allowed to occupy a portion of the Bank 's premises as licensee in consideration of 500 certain accountancy and secretarial services which it was required to render to the Bank. It appears that sometime in 1975 the respondent Bank issued a notice of eviction to the appellant company under Section 13(6) of the West Bengal Premises Tenancy Act, 1956 (hereinafter referred to as 'the 1956 Act '). Subsequently, however, the Bank issued a notice dated 4.2.1977 to the appellants under the Public Premises (Eviction of Unauthorised occupants) Act, 1971 (hereinafter referred to as 'the 1971 Act '), which is an Act of Parliament. The appellants thereupon filed a writ petition in the Calcutta High Court being Matter No. 676 of 1978. Though several contentions appear to have been raised in the writ petition, the judgment of the Division Bench of the Calcutta High Court dated 12th February, 1987, (which is the one presently under appeal) records that "the only question which has been mooted and agitated before us is whether the impugned Act which provides for eviction of unauthorised occupants from public premises to the extent it has been extended to premises belonging or taken on lease by a corporation established by or under a Central Act and owned or controlled by the Central Government is ultra vires as it was beyond the legislative power of the Parliament to extend the applicability of the said Act to such premises." Though the appellants are interested only in denying the legislative power of Parliament in so far as it purports to extend the applicability of the 1971 Act to premises belonging to or taken on lease by what may be described as public sector corporations, the contention as urged is somewhat broader. The argument goes to the extent of urging that only the State legislatures, and not Parliament, is competent to legislate on the topic of landlordtenant relationships in respect of land and buildings. This has been the principal contention addressed to us by Dr. Chitale appearing on behalf of the appellants. The 1971 Act received the assent of the President on 23rd August, 1971 but it is deemed to have come into force on the 16th day of September, 1958 for certain 'historical ' reasons which are not relevant for our purposes. The Act provides for the eviction of 'unauthorised occupants from public premises and for certain incidental matters. section 2(c) defines premises ' to mean 'any land or any part of a building and to include garden, grounds and outhouses appurtenant to the building or fittings affixed thereto '. The expression 'public premises ' has been defined in Section 2(e) of the Act. This definition is in three parts. Sub clause ( 1) of clause (e) takes in premises belonging to, or taken on lease or requisitioned by, or on behalf of, the Central Government, as well as premises placed by that Government under the control of either House of Parliament for providing residential 501 accommodation to the members of the staff of the Secretariat of either House of Parliament. Sub clause (3) of clause (e) takes in premises belonging to certain local authorities in the Union Territory of Delhi. Sub clause (2) of clause (e) brings in premises belonging to or taken on lease by, or on behalf of, various kinds of bodies, such as Universities, Institutes of Technology, Board of Trustees of Major Port Trusts and the Bhakra Management Board. It takes in any premises belonging to or taken on lease by, or on behalf of, a Government company or its subsidiary. It also takes in and this is what we are concerned with here premises of "any corporation (not being a company as defined in section 3 of the or a local authority) established by or under a Central Act and onwed or controlled by the Central Government". There is no dispute that the premises in question in the present appeal is "public premises" within the meaning of the Act. The Act contemplates the appointment of an Estate officer who is a high placed officer of the Government or of the relevant statutory authority in respect of public premises controlled by that authority. The Act enables the Estate officer to call upon "unauthorised occupants" of public premises (meaning persons occupying such premises without authority or continuing in occupation after the authority to do so has expired or has been determined for any reason) to show cause why they should not be evicted and to proceed to evict them, if need be, after considering the cause, if any, shown by the persons concerned in response to a notice served on them. It also contains powers to remove unauthorised constructions, demolish unauthorised constructions, dispose of property left on public premises by unauthorised occupants, require payment of rent or damages in respect of public premises and so on. An order passed by the estate officer, under the provisions of the Act, is appealable, the appellate authority being the District Judge or such other judicial officer of not less than 10 year 's experience as a District Judge and subject to the above right of appeal, the orders passed by the estate officer are final. Section 15 bars the jurisdiction of Courts to entertain any suits or proceedings in respect of, inter alia, the eviction of any person who is in unauthorised occupation of public premises. This, broadly, is the outline of the 1971 Act. Before proceeding to deal with the contentions urged before us, it is necessary to refer to two more enactments, which have a bearing on the topic of discussion before us. It has been mentioned earlier that the Bank had served a notice on the appellants under the 1956 Act. This Act, which received the H 502 assent of the President on 30th March, 1956, is on the pattern of the lease and rent control legislation prevalent in various States. It regulates, inter alia, the matter of eviction of tenants of buildings situated in Calcutta and certain important cities and localities of the State where there is scarcity of housing accommodation. It is not necessary to set out the provisions of this Act except one. Under the second proviso to section 1(3) the Act is not to apply to (a) any premises belonging to any local authority, (b) any premises belonging to or requisitioned by Government and (c) any tenancy created by Government in respect of any premises taken on lease by Government. The premises in the present case does not fall within any of these categories and, according to the appellants before us, the provisions of 1956 Act were squarely applicable and should have been resorted to by the Bank for evicting them. This is one. The other relevant statute is the West Bengal Public Land (Eviction of Unauthorised occupants) Act, 1962, (hereinafter referred to as 'the 1962 Act '). This legislation is on the same pattern as the 1971 Act, a pattern which appears to have been in existence in various States, conferring special powers on statutorily named officers to evict unauthorised occupants of public premises. The definitions of 'land ', 'public land ' and 'unauthorised occupation ' contained in sections 2(2), 2(7) and 2(8) are so wide as to leave no doubt that the premises belonging to the Bank would be within the scope of the said Act and that proceedings for eviction of the appellants could also be initiated by the Collector under that Act. It thus appears that the procedure for the eviction of the petitioners will be governed by the 1971 Act as well as either or both of the State Acts and the question is, which of these will prevail? The appellants urge that a legislation of this type will fall within the legislative field exclusively open to the State legislatures and that the 1971 Act is ultra vires Parliament in so far as it purports to affect the appellants ' rights. It will be convenient, at this stage, to set out all the relevant entries in the Seventh Schedule of the Constitution that may have a bearing on the discussion before us along with the corresponding entries under the 7th Schedule to the Government of India Act, 1935. These are: CONSTITUTION 1935 ACT List I Union List List I Federal List ENTRY 3 ENTRY 2 Delimitation of cantonment Naval, military and air force works; 503 areas, local self government local self government in cantonment in such areas, the consti areas, the constitution and powers tution and powers within within such areas of cantonment such areas of cantonment authorities, the regulation of house authorities and the regula accommodation in such areas, and the tion of house accommodation delimitation of such areas. including the control of rents in such areas. ENTRY 10 ENTRY 32 Works, lands and buildings vested Property of the Union and in, or in the possession of, His the revenue therefrom, but Majesty for the purposes of the as regards property situated Dominion (not being naval, military in a State* * * subject to or air force works), but? as regards legislation by the State, save property situate in a Province, in so far as Parliament by law subject always to Provincial otherwise provide. legislation, save in so far as Dominion law otherwise provides, and, as regards property in an Acceding State held by virtue of any lease or agreement with that State, subject to the terms of that lease or agreement. ENTRY 43: ENTRY 33: Incorporation7 regulation Corporations, that is to say, the and winding up of trading incorporation, regulation and corporations, including winding up of trading corporations, banking, insurance and including banking, insurance and financial corporations hut financial corporations, but not not including co operative including corporations owned or societies. controlled by an Acceding State and carrying on business only within that State or co operative societies, and of corporations, whether trading or not, with objects not confined to one unit, ENTRY 44: but not including universities. Incorporation, regulation and winding up of corpora tions, whether trading or not, with objects not confined to one State, but not including universities. 504 LIST II STATE LIST LIST II PROVlNClAL LIST ENTRY 18: ENTRY 21: Land, that is to say, rights Land, that is to say, rights in or over land, land tenun in or over land, land tenures, including the relation of including the relation of landlord and tenant, and the landlord and tenant, and the collection of rents; transfer collection of rents; transfer, and alienation of agricultural alienation and devolution of land; land improvement a agricultural land; land agricultural loans; improvement and agricultural colonization. loans; colonization; courts of Wards; encumbered and attached estates; treasure trove. List 111 CONCURRENT LIST LIST 111 CONCURRENT LIST ENTRY 5: ENTRY 7: Marriage and divorce; infants, Wills, intestacy, and succession, and minors; adoption; wills save as regards agricultural intestacy and succession; land. joint family and partition; all matters in respect of which parties in judicial proceedings were immedia tely before the commencement of this Consti tution subject to their personal law. ENTRY 6: ENTRY 8: Transfer of property other Transfer of property other than agricultural land; than agricultural land; regis registration of deeds and tration of deeds and documents. documents. ENTRY 7: ENTRY 10: Contracts, including part Contracts, including partnership, ship, agency, contracts of agency, contracts of carriage, carriage, and other special and other special forms of forms of contracts, but not contracts,but not including including contracts relating contracts relating to agricultural land. to agricultural land. 505 One thing may be made clear at the outset. The present argument may not have been open to the appellants if the premises of the bank could be said to be premises belonging to the Union Government. In that case, the legislation to the extent it governs such premises can be said to fall under entry 32 of List I as one covering the "property of the union". Though, the premises being situated in Calcutta, any legislation under that entry in regard thereto would be subject to State legislation, the State legislation can only govern "save in so far as Parliament by law otherwise provides". Parliament having provided otherwise by the 1971 Act, that Act will, it can be said, prevail over the 1956 and 1962 Acts. It is, however, common ground before us that though the Bank is a corporation wholly owned and controlled by the Government, it has a distinct personality of its own and its property cannot be said to be the property of the Union. The position, indeed, is beyond the pale of controversy after the decisions of this Court in Bacha. F.Guzdarv. C. r. T.; , ; State Trading Corporation of India Ltd. vs C.T.O.,[1964] 4 S.C.R. 99; A.P. State Road Transport Corporation vs I.T.O. [1964] 7 S.C.R. 17; Heavy Engineering Mazdoor Union vs State, ; Vidarbha Housing Board vs I. T. O.,[1973] and Western Coalfields Ltd. vs Special Area Development Authority, ; It is, therefore, not possible for the respondents to support the legislation, qua the premises in question, under Entry 32 of List I. Entry 32 of List I being out of the way, Dr. Chitale, appearing on behalf of the appellants, contends that the legislation squarely falls under Entry 18 of List II. He points out that judicial decisions have given the word `land ' in Entry 18 a very wide interpretation so as to comprehend not only land of all types rural or urban, agricultural or non agricultural, vacant or built up but also `buildings ' put up thereon. Since the entry specifically includes the relationship of landlord and tenant, there can be no doubt that tenancy legislations pertaining to land and buildings derive their authority from Entry 18. He referred in this context inter alia, to Manohar vs C. Desai, AIR 1951 Nag 33; A. C. Patel vs Vishwanath Chadda, ILR , Raman Doss v State, AIR 1954 ALL 707; Darukhanawala vs Khemchand, ILR ; M. Karuna vs State, AIR 1955 Nag. 153; Kevalchand vs Dashrathlal, I.L.R. ; Sukumar Dutta vs Gauriskanker, ; Raval & Co. vs Ramackandran, AIR 1967 Mad. 57 and a detailed and comprehensive judgment of Parekh J. in Elliot Waud and Hill P. Ltd. vs L.I.C., [1980] Bom. C.R. 590 Which we are informed is pending consideration on appeal, before a Full Bench of the Bombay High Court. We do not, however, propose to discuss 506 these cases at length firstly, because there is a contrary line of decisions also vide Mangtulal vs Radheshyam, AIR 1953 Pat. 14; Milap Chand vs Dwarakadas, AIR 1954 Raj. 252; Nawal Mal vs Nathu Mal, AIR 1962 Raj 193, Rama Sundari vs Indu Bhushan, AIR 1967 Cal 355; L.S. Nair vs Hindustan Steel Ltd., AIR 1980 M.P. 106 and Bapalal & Co. vs Thakur Das, AIR 1982 Mad. 309 and the judgment presently under appeal and secondly, because a question as to the interpretation of Entry 18 (or its predecessor, Entry 21 of the Provincial List under the Government of India Act, 1935, (hereinafter referred to as 'the 1935 Act ') had arisen before the Federal Court and the Privy Council and some of the above judgments have also been considered in certain earlier decisions of this Court. It would, therefore, be appropriate to refer to these decisions: (1) The earliest of the decisions relevant in this context is the decision of the Federal Court in United Provinces vs Atiga Begum, That case was concerned with the interpretation of Entry 21 of List II in the Seventh Schedule to the Government of India Act, 1935. It raised the issue of the validity of the United Provinces Regularisation of Remissions Act (14 of 1938). In view of an unprecedented fall in the prices of agricultural produce, the United Provinces Government directed a remission in the rents payable by tenants to their landlords. But this remission was declared by the High Court to be unauthorised and inoperative as being in contravention of the provisions of the Agra Tenancy Act, 1926. The Provincial Legislature, therefore, passed the impugned Act which precluded any question as to the validity of the orders of remission being raised in courts. This Act was held by a Full Bench of Allahabad High Court to be ultra vires the Legislature. The Provincial Government appealed to the Federal Court. The Federal Court held that the legislation was clearly governed by Entry 21. The learned Chief Justice observed: "The subjects dealt with in the three legislative lists are not always set out with scientific definition. It would be practically impossible for example to define each item in the Provincial List in such a way as to make it exclusive of every other item in that List, and Parliament seems to have been content to take a number of comprehensive categories and to describe each of them by a word of broad and general import. In the case of some of these categories such as "Local Government", "Education", "Water", "Agriculture" and "Land", the general word is amplified and explained by a number of example or illustrations, some of 507 which would probably on any construction have been held to fall under the more general word, while the inclusion (of) others might not be so obvious. Thus "Courts of Wards" and 'treasure trove ' might not ordinarily have been regarded as included under the head "Land", if they had not been specifically mentioned in item no 21. I think, however, that none of the items is to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. I deprecate any attempt to enumerate in advance all the matters which are to be included under any of the more general descriptions; it will be sufficient and much wiser to determine each case as and when it comes before this Court. " The Court then proceeded to hold that, if the Provincial Legislature could legislate in respect of collection of rents, it must also have the power to legislate with respect to any limitation on the power of a landlord to collect rents, that is to say, with respect to the remission of rents as well as to their collection. (2) The next decision, on certain observation in which Dr. Chitale placed considerable reliance is that of the Privy Council in Megh Raj vs Allah Rakhia, AIR 1947 PC 72. In that case the question was whether the Punjab Restitution of Mortgaged Lands Act, an Act of the Punjab Legislature, was void as being ultra vires of the Punjab Legislature. The Act applied to mortgagees in possession of certain lands. The expression 'land ' was defined as "land which is not occupied as the site of any building in a town or village and is occupied or let for agricultural purposes or for purposes subservient to agriculture or for pasture" and included, inter alia, "the sites of buildings and other structures on such lands. " The object of the impugned Act was the relief of mortgagors by giving them restitution of the mortgaged premises on conditions more favourable than those under the mortgage deed and by providing for a procedure before the Collector which was more summary than that before the ordinary Courts. The contention before the Privy Council, on behalf of the Punjab Province, was that the provisions of the impugned Act were traceable to item 21 supplemented, it need be, by item 2 of the Provincial Legislative List of the 1935 Act. The appellants, on the other hand, contended that the impugned Act went beyond the limits of the Legislative powers of the Province under list II and could not be supported by invoking the 508 powers of the Province under List III (i.e. Entries 4, 7, 8 and 10 corresponding to Entries 13, 5, 6 and 7 of List III under the Constitution). It was pointed out that certain provisions of the impugned Act were repugnant to the provisions of the Indian Contract Act and the Code of Civil Procedure. The Judicial Committee came to the conclusion that the legislation was clearly covered by Entry 21 in List III. In so holding, they observed: "The key to item 21 is to be found in the opening word "land". That word is sufficient in itself to include every form of land, whether agricultural or not. Land indeed is primarily a matter of provincial concern. The land in each Province may have its special characteristics in view of which it is necessary to legislate, and there are local customs and traditions in regard to land holding and particular problems of provincial or local concern which require provincial consideration. It would be strange if the land in a province were to be broken up into separate portions some within and some outside the legislative powers of the province. Such a conflict of jurisdiction is not to be expected. Item 21 is part of a constitution and would on ordinary principles receive the idest construction, unless for some reason, it is cut down either by the terms of Item 21 itself or by other parts of the constitution which has to be read as a whole. As to Item 21 "land", the governing word is followed by the rest of the item, which goes on to say, "that is to say". These words introduce the most general concept "rights in or over land." "Rights in land" must include general rights like full ownership or leasehold or all such rights. "Rights over land" would include easements or other collateral rights, whatever form they might take. Then follow words which are not words of limitation but of explanation or illustration, giving instances which may furnish a clue for particular matters; thus there are the words "relation of landlord and tenant and collection of rents. " These words are appropriate to lands which are not agricultural equally with agricultural lands. Rent is that which issues from the land. Then the next two sentences specifically refer to agricultural land, and are to be read with item 7, 8 and 10 of List 3. These deal with methods of transfer or alienation or devolution which may be subject to federal legislation but do not concern the land itself, a sphere in which the provincial and federal powers are con 509 current, subject to the express exception of the specific head of agricultural land which is expressly reserved to the provinces. The remainder of Item 21 specifies important matters of special consequence in India relating to land. The particular and limited specification of agricultural land proves that "land" is not used in Item 21 with restricted reference to agricultural land but relates to land in general. Item 2 is sufficient to give express powers to the provinces to create and determine the powers and jurisdiction of Courts in respect of land, as a matter ancillary to the subject of item 21. It is next necessary to consider the terms of the impugned Act, which it is said is ultra vires of the Province, and compare them with the terms of the constitution just quoted. But before that is done, it may be observed that there is no express provision in the constitution referring by name to mortgages, though mortgages are of particular importance in India as a subject of ordinary business life and of litigation and of legislation. But a constitution does not generally deal with particular transactions or types of transactions, and mortgages of land would, in their Lordships ' judgment, as a matter of construction, properly fall under Item 21 in so far as they are mortgages of land, though in certain aspects they include elements of transfer of property and of contract. But they form a type of transaction which may properly be regarded as sui generis, incidental to land and included within Item 21 except in so far as they fall within Items 8 and 10 of List 3 which again contain an express exception in the case of agricultural land. Their Lordships cannot accept the view that so important a subject as mortgages was left out of the Constitution and merely left to the Governor General 's powers under section 104, Constitution Act as a residual subject. So far as land at least is concerned, Item 21 would include mortgages as an incidental and ancillary subject. The impugned Act, as already explained, has the main purpose of giving relief to mortgagors by enabling them to obtain restitution of the mortgaged lands on terms less onerous than the mortgage deeds require. It is limited to existing mortgages of land as defined in section 3, effected prior to 8.6.1901. That definition restricts it to land "occupied or 510 let for agricultural purposes or for purposes subservient to agriculture or for pasture". The addition of the word "pasture" has been relied on as extending the scope of the Act beyond agriculture, but pasture is certainly "land" within Item 21 or Item 3. It may have been mentioned ex abundanti cautela but in any case it is sufficiently allied to agriculture generally to be treated as a species of agricultural land or at least as land occupied or let for purposes subservient to agriculture and as such within the general scope of an Act dealing with agricultural land. Section 3 of the Act goes on, it is true, to give a number of specific types of land which are included, but they are all governed by the controlling words of sub.s.(1) which limits the whole Act to agricultural land in the sense already stated. Thus head (b) of sub s (1) of section 3, must be read as referring to an estate or holding in the only class of land with which the Act deals. The same is true of all the other heads in the sub section, dues, rent, water rights, occupancy, trees, all come within the category of rights in or over land within Item 21 List 3, and all are governed by the same controlling reference to agriculture or agricultural purposes. This reading of the section is supported by the qualification of trees as trees standing on such land, that is agricultural land. Section 7 and 8 of the impugned Act embody its main substantive provisions for the refief of mortgagors and need not be repeated here. The rest of the Act deals with ancillary matters like procedure which fall within the powers given by Item 2 and also by Item 21. If, as their Lordships think, the impugned Act is limited to agricultural land, items, 7, 8 and 10 of List III do not affect the position at all since agricultural land is excluded in these entries. But, in any event, the Act does not deal with wills or transfer of property at all; it does certainly deal with mortgages but, as their Lordships have already stated, mortgage though not expressly mentioned in the Constitution, are properly to be classed not under the head of contracts, but as special transactions ancillary to the entry of "land" (3) The next decision of this court to which our attention is drawn is the decision of this court in Atma Ram vs State of Punjab, [1959] (Suppl. 1) SCR 748. The poini in controversy in this decision 511 was the constitutional validity of the Punjab Security of Land Tenures Act (10 of 1953) as amended by Act 11 of 1955, which sought to provide for the security of land tenure and other incidental matters. The impugned Act admittedly dealt with holdings as defined in the Punjab Revenue Act, 1887. It limited the area which might be held by a land owner for the purpose of self cultivation and released surplus area to be utilised for resettling ejected tenants. Section 18 conferred upon tenants the right to purchase from the land owners the lands held by them and thus themselves to become the land owners at prices which would be below the market value. The land owners affected by the impugned Act contended that under Entry 18 of List II of the Seventh Schedule to the Constitution the State Legislature was incompetent to enact a law limiting the extent of land to be held by a land owner and that the provisions of the impugned Act contravened their fundamental rights. On the question of the legislative competence the Court made the following observations: "At the outset, it is necessary to deal with the question of legislative competence, which was raised on behalf of some of the petitioners, though not on behalf of all of them. This argument of want of legislative competence goes to the root of the impugned Act, and if it is well founded, no other question need be gone into. It has been argued that Entry 18 of List II of the Seventh Schedule to the Constitution, should not be read as authorising the State Legislature to enact a law limiting the extent of the land to be held by a proprietor or a landowner. Entry 18 is in these words:" " 18. Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization." "It will be noticed that the Entry read along with article 246(3) of the Constitution, has vested exclusive power in the State to make laws with respect to "rights in or over land, land tenures including the relation of landlord and tenant . ". The provisions of the Act set out above, deal with the landlord 's rights in land in relation to his tenant, so as to modify the landlord 's rights in the land, and correspondingly, to expand the tenant 's rights therein. Each of the expressions "rights in or over land" and "land 512 tenures", is comprehensive enough to take in measures of reforms of land tenures, limiting the extent of land in cultivating possession of the land owner, and thus, releasing larger areas of land to be made available for cultivation by tenants. Counsel for some of the petitioners who challenged the legislative competence of the state Legislature, were hard put to it to enunciate any easily appreciable grounds of attack against Entry 18 in List II of the Seventh Schedule. It was baldly argued that Entry 18 aforesaid was not intended to authorise legislation which had the effect of limiting the areas of land which could be directly held by a proprietor or a land owner. It is difficult to see why the amplitude of the words "rights in or over land" should be cut down in the way suggested in this argument. " In support of its conclusion, the Court referred to the decisions United Provinces vs Mst. Atiqa Begum, and Megh Raj vs Allah Rakhia, AIR 1947 PC 72. We may next refer to the decision in Manaklal Chhotalal vs M.G. Makwana & Ors. ; The question here arose in the context of the Bombay Town Planning Act. A scheme drafted by the Ahmedabad Municipal Corporation after following the procedure prescribed under the Act was sanctioned by the State Government. As a result of this the petitioners were allotted a much smaller extent of land than they originally owned within the city of Ahmedabad and they were also directed to pay certain sums as their share of contribution. The petitioners challenged the competence of the State Legislature to enact the legislation in question. The Court upheld the legislation by reference to Entry 18 of List II as well as Entry 20 of List III ("Economic and Social planning"). Reviewing the provisions of the Act in question, the Court came to the conclusion that the legislation in question could be said to be a legislation in regard to land. Various aspects dealt with in the Act, according to the Court, could be considered to deal with land and accordingly, competence of the State Legislature to enact the measure in question could be found in Entry 18. Indu Bhusan Bose vs Rama Sundari Devi, ; is a decision of five Judges of this Court and was rendered on an appeal from the Calcutta case cited earlier. The question for consideration 513 was whether the act of a rent controller in fixing fair rent for certain premises within the cantonment area of Barrackpore was valid. The claim of the respondent owner was that the appellant was not entitled to the protection of 1956 Act since "regulation of house accommodation including the control of rents" in cantonment areas was the subject matter of Entry 3 of the federal list under the 1935 Act. The State legislature, it was therefore argued, could not competently extend the 1956 Act (applicable in other parts of the State) to the cantonment areas. This plea was upheld. However, one of the contention raised on behalf of the appellants was that the power of Parliament under Entry 3 of List I does not extend to regulating the relationship between landlord and tenant as that power vests in the State Legislature either under Entry 18 of List II or Entries Nos. 6, 7 and 13 of List III. In support of this contention reliance was placed on a decision of the Bombay High Court in A.C. Patel vs Vishwanath Chada, ILR 1954 Bombay 434, referred to earlier. In that case, the Bombay High Court was concerned with the applicability of the Bombay Rent Restriction Act (No. 57) of 1947 to contonment areas. The Court first expressed the opinion that Act was referrable to Entry 21 of the List II of the 1935 Act. Relying upon the English Interpretation Act applicable to interpret the 1935 Act, the Court held that the word 'land ' in that entry would include buildings also so as to confer jurisdiction on the Provincial Legislature to legislate on relations between landords and tenants of buildings. Then the Court expressed the view that the legislation could not be said to be one dealing with house accommodation. The Supreme Court was, however, clear that the legislation was covered by the language of Entry 2 of the Federal List. However, appropos the first aspect of the High Court 's decision, the Supreme Court observed: "We have felt considerable doubt whether the power of legislating on relationship between landlord and tenant in respect of house accommodation or buildings would appropriately fall in Entry 21 of List II of the Seventh Schedule to the Government of India Act, 1935, or in the corresponding Entry. 18 of List II of the Seventh Schedule to the Constitution. These Entries permit legislation in respect of land and explain the scope by equating it with rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents. It is to be noted that the relation of landlord and tenant is mentioned as being included in land tenures and the expression "land tenures" would not, in our opinion, appropriately cover tenancy of buildings or of house accommodation. That expression is 514 Only used with reference to relationship between landlord and tenant in respect of vacant lands. In fact,. leases in respect of non agricultural property are dealt with in the Transfer of Property Act and would much more appropriately fall within the scope of Entry 8 of List III in the Seventh Schedule to the Government of India Act read with Entry 10 in the same List or within the scope. Entry 6 of List III in the Seventh Schedule to the Constitution read with Entry 7 in the same list leases and all rights governed by leases, including the termination of leases and eviction from property leased, would be covered by the field of transfer of property and contracts relating thereto. However, it is not necessary for us to express any definite opinion in this case on this point because of our view that the relationship of landlord and tenant in respect of house accommodation situated in cantonment areas is clearly covered by the Entries in List I. In the Constitution, the effect of Entry 3 of List I is that Parliament has exclusive power to make laws in respect of the matters contained in that Entry, notwithstanding the fact that a similar power may also be found in any Entry in List II or List III. Article 246 of the Constitution confers exclusive power on Parliament to make laws with respect to any of the matters enumerated in List I, notwithstanding the concurrent power of Parliament, and the State Legislature, or the exclusive power of the State Legislature in Lists III and II respectively. The general power of legislating in respect of relationship between landlord and tenant exercisable by the State Legislature either under Entry 18 of List 11 or Entries 6 and 7 of List 111 is subject to the overriding power of Parliament in respect of matters in List I, so that the effect of Entry 3 of List I is that, on the subject of relationship between landlord and tenant insofar as it arises in respect of house accommodation situated in cantonment areas, Parliament alone can legislate and not the State Legislature . In the view, we are unable to affirm the view of the Bombay High Court in A. Patel 's case, which is based on the interpretation that Entry ' in List I of the Seventh Schedule to the Government to India Act only permitted laws to be made for requisitioning of property, acquiring of property and allocation of property only. " The Court then proceeded to consider the decision in Darukhanawala 515 v Khemchand, ILR ; Kewalchand vs Dashrathlal, ILR ; Babu Jagtanand Sri Satyanarayanji ILR 40 Patna at 625 and expressed the view that all these cases had placed a narrow interpretation on the expression "regulation of house accommodation" used in the relevant entry of the Union List. Having said this, the Court concluded: "On the other hand, the Rajasthan High Court in Nawal Mal vs Nathu Lal, ILR II Rajasthan 421; held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings is to be found in Entries, 6, 7 and 13 of List lll of the Seventh Schedule to the Constitution and not in Entry 18 of List ll, and that power was circumscribed by the exclusive power of Parliament to legis late on the same subject under Entry 3 of List I. That is also the view which the Calcutta High Court has taken in the judgment in appeal before us. We think that the decision given by the Calcutta High Court is correct and must be upheld." (6) Dr. Chitale also placed considerable reliance on Union of India vs Valluri B. Chaudhary, ; which dealt with the validity of the Urban Land (Ceiling & Regulation) Act, 1976. Counsel for the appellant relied, in particular, upon the procedure adopted by Parliament in enacting this piece of legislation. The legislatures of eleven States considered it desirable to have a uniform legislation enacted by Parliament for the imposition of a ceiling on urban property for the country as a whole. They passed resolutions under article 252(1) of the Constitution authorising Parliament to legislate on this topic. Parliament, accordingly, enacted the Urban Land (Ceiling and Regulation) Act, 1976. In the first instance, the Act covered the eleven States which had passed the above resolutions. Subsequently, the Act was adopted by resolution passed by the legislatures of six more States. The primary object and purpose of the Act was the imposition of a ceiling on vacant land in 'urban agglomerations ', the acquisition by the Government of such land in excess of the prescribed ceiling, the regulation of construction of buildings on such land and matters connected therewith. All this was done with a view to prevent the concentration of urban land in the hands of a few persons and speculation and profiteering therein, and with a view to bring about an equitable distribution of land in urban agglomeration to subserve the common good in furtherance of the Directive Principles enunciated in article 39(b) and (c) of the Constitution. The controversy before the Court 516 turned mainly on the construction of Articles 251 and 252 of the Constitution and certain allied questions. Dr. Chitale, however, laid em phasis on three important aspects of this legislation and decision. The first was the language of the resolutions passed by the States in this context, which appear to have been on the same lines and one of which is set out in the judgment. They contained the following paragraphs: "Whereas this Assembly considers that there should be a ceiling on Urban Immovable Property And whereas the imposition of such a ceiling and acquisition of urban immovable property in excess of that ceiling are matters With respect to which Parliament has no power to make law for the State except as provided in Articles 249 and 250 of the Constitution of India" (underlining added) The second was the preamble to the legislation in question. After setting out the long title to the Act and the object and purpose of the legislation in terms already described, the preamble to the Act contains the following para: "And whereas Parliament has no power to make laws for the State with respect to the matters aforesaid except as provided in Articles 249 and 250 of the Constitution. " The third was the following passage from the judgment: "We are afraid this contention cannot be accepted. It is not disputed that the subject matter of Entry 18 List II of the Seventh Schedule i.e. land covers 'land and buildings ' and would, therefore, necessarily include vacant land. The expression 'urban immovable property ' may mean 'land and buildings ' or 'buildings or land '. It would take in lands of every description i.e. agricultural land, urban land or any other kind and it necessarily includes vacant lands." (underlining added) Stopping here for a brief review of the above decisions, it will be seen that except for Indu Bhushan 's case which will be discussed later, the other rulings are not helpful in deciding the issue before us. Atiqa Begum and Atma Ram concerned a legislation that clearly pertained to 517 land in fact, land governed by systems of land tenure prevalent in the States of Uttar Pradesh and Punjab. In Allah Rakhia, the impugned Act was limited to agricultural land and, since the items in the concurrent list excluded such land, was covered by Entry 21. In Maneklal, the legislation primarily concerned land, though not agricultural land, for, as observed in State vs Peter, ; at p. 292, "land is at the base of all development". It is not quite certain that the provisions of the Act also affected buildings, but if indeed any buildings were affected, that was only incidental. As pointed out by the Court, the primary target of the legislation was only urban land, the ways and means of developing it and proper utilisation of land situate within the municipal limits. These decisions no doubt establish two propositions: ( 1) The opening word 'land ' in entry 18 is not restricted to agricultural land as are the latter portions of it. It would cover all types of land rural or urban, agricultural or non agricultural, vacant fallows or pastures. (2) The words which follow 'land ' only make it clear that the legislative entry takes in not merely the tangible immovable property one normally describes as land but also all kinds of intangible rights or interests, in or over, land in the broad sense explained above. The phrases which follow the words "rights in or over land" in the entry are illustrative and are not restrictive. They only make it clear that the legislative entry takes in not merely the tangible immovable property one describes as land but also all kinds of intangible rights or interests, in or over, land in the broad sense explained above. But none of the decisions contain any support for the further proposition that the legislative entry should be so interpreted as to cover houses and buildings as well as the relationship of landlord and tenant in regard thereto or the collection of rents therefrom. We are unable to agree with Dr. Chitale that this further proposition emerges from the decision in Union of India vs Valluri B. Chaudhary, ; The Urban Land Ceiling Act also was a legislation primarily intended to deal with vacant lands. If one scans the provisions of the Act it is clear that the theme of the Act was only to place a ceiling on vacant lands in cities or what we call urban agglomerations and to ensure equitable distribution of such urban vacant lands. The pith and substance of the legislation was with regard to urban land and its provisions in respect of buildings were incidental to the main objective of the urban land ceiling. In this context, it is perhaps not without significance that as against the proposal of the States for a ceiling on 'urban immovable. property ' Parliament restricted the legislation to vacant land. In the light of these circumstances the declaration in the preamble to the Act is basically correct that the pith and substance of the legislation was 'land ' and this is exclusively within the State 's legislative domain by 518 virtue of Entry 18 of List II. We do not also agree with the counsel that the passage extracted from the judgment reflects a decision of the Court that land includes 'lands and buildings '. It proceeds on a concession to that effect. That apart, the context of the above observation is also interesting. The Court was dealing with a contention that the resolution of the States had authorised Parliament to impose a ceiling on urban immovable property and that the legislation imposing a ceiling on urban land was on a different subject and thus contrary to the resolution. The Court, rejecting this argument, pointed out that since 'urban immovable property ' was a wider expression which also included 'land ', there was no contradiction between the resolution and the legislation. It is in this context that a reference, on admission, regarding the scope of Entry 18 finds a place in the passage. Neither was the scope of the entry in issue in the case nor can the isolated sentence, on admission, be treated as a decision by the court. We now come to Indu Bhushan 's case. While the counsel for the respondents would have it that this ruling has concluded the present issue in their favour, Dr. Chitale contends that this is not so. He points out that the court has been careful to say that "it is not expressing any final opinion" regarding Entry 21. It has, at another place, referred to the framing of house tenancy legislation "either under Entry 18 of List II or Entries 6, 7 and 13 of List III" which also indicates that the Court had not made up its mind as to whether this type of legislation will fall under List II or List III. It is submitted also that an analysis of the Calcutta and Rajasthan decisions approved by it would show that they had not at all been considering any conflict between entries in Lists II and III and were concerned only with the interpretation of Entry 2 in List I and Entry 21 of List II. Dr. Chitale, therefore, urges that Indu Bhushan cannot be taken as a decision that house tenancy legislation cannot come under Entry 18 of List II. We are not, however, persuaded that Indu Bhushan 's case is capable of being brushed aside so easily. It is true that, ultimately, the decision in that case turned on the wider interpretation of Entry 2 of List I favoured by the Supreme Court in preference to the narrower one preferred by Bombay. Nevertheless the judgment contains a specific discussion of the terms of Entry 21. This is because the Bombay High Court had first discussed the terms of this entry and expressed an opinion thereon. The Supreme Court considered the High Court 's interpretation of the entry and disagreed therewith. The view of the Supreme Court on the entry has been set out in some detail and cannot be ignored. Not only this, in the last para of its judgment the Court has 519 reaffirmed the earlier discussion and interpretation. We have extracted earlier this concluding para of the judgment. In our view the effect of this para cannot be explained away by trying to analyse the Calcutta and Rajasthan decisions to see what they had actually decided. The important thing is how the Supreme Court understood what the two High Courts had decided. This is set out in the two sentences of the last paragraph of the judgment, which have been underlined in the extract set out earlier. The Supreme Court then specifically affirmed this to be the correct ratio. We are, therefore, of the opinion that Indu Bhushan must be taken to have expressed a view that premises tenancy legislation in so far as it pertains to houses and buildings is referable not to entry 18 of List II but to entries 6, 7 and 13 of List III. As pointed out by the learned Attorney General, Indu Bhushun has been understood, as above, in the subsequent decision of the Supreme Court in Jaisingh Jairam Tyagi vs Maman Chand; , The decision of the larger Bench of the Supreme Court in V. Dhanpal Chettiar vs Yesodai Ammal, ; , also re inforces the same line of thinking. The question for consideration in this case was whether, in respect of a tenancy governed by Tamil Nadu Buildings (Lease and Rent Control) Act, it was necessary for the landlord to issue a notice under section 106 of the Transfer of Property Act terminating the tenancy before he could obtain an order of eviction against the tenant. This question was answered in the negative. In the course of its discussion the Supreme Court observed as follows: "Under the Transfer of Property Act the subject of "leases of Immovable Property" is dealt with in Chapter, V. Section 105 defines the lease, the lessor, the lessee and the rent. Purely as a matter of contract, a lease comes into existence under the Transfer of Property Act. But in all social legislations meant for the protection of the needy, not necessarily the so called weaker section of the society as is commonly and popularly called, there is appreciable inroad on the freedom of contract and a person becomes a tenant of a landlord even against his wishes on the allotment of a particular premises to him by the authority concerned. Under section 107 of the Transfer of Property Act a lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. None of the State Rent Acts has abrogated or affected this provision. Section 520 108 deals with the rights and liabilities of lessors and lessees. Many State Rent Acts have brought about consider able changes in the rights and liabilities of a lessor and lessee, largely in favour of the latter, although not wholly. The topic of Transfer of Property other than agricultural land is covered by Entry 6 of List III in the Seventh Schedule to the Constitution. The subject being in the Con current List, many State Rent Acts have by necessary implication and many of them by starting certain provisions with non obstante clause have done away with the law engrafted in section 108 of the Transfer of Property Act except in regard to any matter which is not provided for in the State Act either expressly or by necessary implication. " The above passage clearly proceeds on the view that the subject matter of housing accommodation falls within the purview of the Concurrent List. It would have strengthened the landlord 's contention in Dhanpal Chettiar 's case to urge that the terms of the house control legislation being traceable to List II and not to List III, the provisions of the Transfer of Property Act could not affect the same at all. If Indu Bhushan had been understood as having left the question open, it is difficult to imagine that, before the larger Bench of the Court, counsel would not have raised the issue again. The discussion and ratio of Dhanpal Chettiar fall into place only on the view that by that time it was taken as settled law that State House control legislations were referable to the legislative powers conferred by the Concurrent List. So much in regard to precedents. But, leaving precedents aside, let us proceed to consider the terms of the legislative entry itself, treating the observations in Indu Bhushan as merely of persuasive value. We agree that entry 18 should be given as wide a constriction as possible consistent with all the other entries in all the three legislative lists. The entry deals with four main topics: land, transfer and alienation of agricultural land, land improvement and agricultural loans and colonisation. The second and third of these clearly pertain to agricultural land. Perhaps the last also does, because, usually, by colonisation we mean conversion into buildings and industrial sites of what was previously agricultural land but, may be, it is wider and includes colonisation of vacant non agricultural land as well. Any way, as the decisions have unanimously held there is no reason why the first topic viz. land should be narrowly interpreted. It should be understood as including all types of land rural or urban, agricultural or non agricultural, arid, cultivated, fallow or vacant. But, what is 'land '? This can 521 be gathered from the other words of the entry which attempt a paraphrase. They say in effect that legislation in regard to 'land ' will comprise of legislation in regard to three things, that is to say, (i) rights in or over land; (ii) land tenures, including the relationship of landlord and tenant; and (iii)collection of rents. In our opinion, the true import of the word 'land ' can be gathered if we try to ascertain the proper interpretation and ambit of these three phrases, particularly, the first two among them, in the context of other entries in the Union List. Doing so, is it possible to interpret this entry as encompassing within its terms legislation on the relationship of landlord and tenant in regard to houses and buildings? That is the question. After careful consideration, we have reached the conclusion that the answer to this question has to be in the negative for a number of reasons: 1. As pointed out in Megh Raj, there was good reason for placing land ' in the Provincial List. Land indeed is primarily a matter for provincial concern. It is well known that land in each Province had its special characteristics. There were local customs and traditions in regard to landholding and particular problems of local concern which required provincial consideration. There are no such special features that require placing buildings also in the State list. The problem of scarcity of house accommodation is a general feature all over the country thanks to India 's post independent industrial development involving large influxes of population into towns, big and small, from the villages. Urban housing problems are almost the same throughout the country despite minor differences here and there and uniform nationwide legislation in regard thereto, atleast on same common aspects, is also a necessary desideratum. In other words, the subject is appropriate for an entry in the Concurrent List. Such a need for a uniform legislation by the Centre was felt even in respect of vacant urban land, (where unlike agricultural land, there are no special features which need varying provincial treatment) despite its being on the State List. It is all the more imperative in respect of public premises, i.e., buildings belonging to the Union or to public sector corporations which have all India operations. It is, therefore, only appropriate that 'buildings ' should be an item in the Concurrent Legislative List. 522 2. A scrutiny of the Legislative lists would show that the Constitution uses different expressions in different places, appropriate to the context and these entries indicate an awareness on the part of the Constitution of the distinction between various kinds of property. Entries 32, 87 and 88 of List I and Entry 6 of List III use the word 'property ', a word of the widest connotation, which takes in not merely land, buildings and other immovable properties but also all kinds of rights and interests in tangible and intangible properties. There are Entries 35 and 49 of List II which make specific reference to 'lands and buildings '. The expression 'land ' is used, therefore, obviously where reference to land only is intended. Even the width of this expression is cut down and reference is confined only to 'agricultural land ' as in Entries 47 and 48 of List II, 6 and 7 of List III and even 18 of List II. In this scheme of the entries, it would be inappropriate to interpret the word 'land ' in Entry 18 as including buildings also. The Bombay case, in interpreting Entry 21 of the 1935 Act, was bound to take into account the terms of section 3 of the (English) Interpretation Act, 1889 which specifically defined 'land ' in the widest sense as including all 'messages, tenements and hereditaments, houses, and buildings of any tenure". The assistance of the Interpretation Act cannot be invoked to interpret the entries in the Constitution. The entry in question specifically refers to the relationship of landlord and tenant but this is in the part of the entry which reads: "land tenures including the relationship of landlord and tenant". The words "land tenures", are not followed by a comma in some of the editions though the 1935 Act and some of the other editions and text books on the Constitution have a comma in between. But this makes no difference. The words "tenant" and "tenure" have a common derivation and the expression 'tenure ' no doubt comprehends within it the relationship of landlord and tenant. But this had to be specified and clarified because in India, the expression "land tenures", as pointed out in Indu Bhushan, has acquired a special significance. It connotes various types of holdings of land, involving the King or the Government, the zamindar, the inamdar and various other types of holders, lessors, sub lessors, lessees and sub lessees under or through them and evolved at various stages of Indian history by various rulers, nawabs and chieftains Hindu, Muslim and British differently in different parts of the country. Sir Baden Powell has written a vast treatise on such law systems prevalent in India. The Constitution in section 31A contains a clue that expression like "estate" and "land tenures" have a special meaning in relation to land, connoting the relationship among 523 its owner, holder and other intermediary for the time being, be it on tenancy or otherwise and the collection of rents therefrom. Section 31A also describes some of these relationships. The system had developed so many complications and nuances that a determined liquidation of all these special types of relationships had to be achieved by special provisions in the chapter on fundamental rights. Viewed in this background, the words "relationship of landlord and tenant and the collection of rents" cannot impart a wider meaning to the words "land" and "land tenure" used in the entry. While, on the one the hand, the words in Entry 18 have to be given the widest meaning possible, it has to be borne in mind that the entries in the various lists have to be read together and construed in such a manner as to give a meaning and content to all of them. We need hardly say that the Constitution should be so interpreted as to reconcile all concerned and relevant entries (See: Hoechst Pharmaceuticals vs State, ; and the Dhillon case: ; If we give the word "land" a meaning so as to include buildings and also give the words "rights in or over land" a wide interpretation as we have to, in view of the discussion and ratio in Megh Raj vs Allah Rakhia, AIR 1947 P.C. 72 this entry will be seen to cover almost all kinds of not only transfer but also alienation and devolution of, or even succession to, lands and buildings. The interpretation thus placed will affect not merely leases and, therefore, a small part of the contents of the item regarding 'transfer of property '; it will apply equally to sales, mortgages, charges and all other forms of transfer of all kinds of interests in land and buildings and this make such a substantial inroad into the scope of Entry 6 in the concurrent list as to denude it of all application except to property other than land and buildings. The word "property" used in Entry 6 will thus lose even its normal meaning not to speak of its being given the widest meaning possible appropriate to a legislative entry. It will mean that though transfer of property other than agricultural land is in the Concurrent List, the State will have exclusive power to legislate in respect of transfer of all property in the nature of land and buildings; in other words, for the words "transfer of property other than agricultural land", we will be substituting "transfer of property other than lands and buildings". It will mean that though wills, intestacy and succession are in item 5 of the Concurrent List, the State can legislate exclusively in respect of devolution of land and buildings of all description. It will render Entry 35 of List 11 a surplusage in so far as it refers to "lands and buildings". We do not think that such an interpretation should be favoured. The more harmonious interpretation would be that any sub 524 ject matter that involves the element of transfer or alienation of any property (other than agricultural land) or of devolution (on testamentary or intestate succession) of any property or contract (other than one in relation to agricultural land) will fall in the Concurrent List and not in the State List even though it may relate to land or buildings. Another feature of the entries in the Lists also lends support to our view. Reference has been made to Entry 3 of List I by which, inter alia, Parliament has been given exclusive power to enact lease and rent control legislation in cantonment areas. Entry 5 of List II is the corresponding entry regarding local self government in areas of States excluding cantonment areas. Had it been the intention to confer legislative power on the State Legislature in regard to housing and rent control accommodation in the States, one would have expected a repetition in Entry 5 of List Il or, at least, in entry 18 of List II of the words of entry 3 of List I. We do not think that the omission of those crucial words in Entry S or 18 can be attributed to more inadvertance. We have earlier referred to Dr. Chitale 's reference to the Urban Land Ceiling Act, 1971 and pointed out how the preamble to the Act does not support counsel 's interpretation of Entry 18. We may point out, on the other hand, that quite a few (though not all) State Legislations on house and rent control (including the 1956 Act) have been enacted after obtaining the President 's assent. This indicates a legislative recognition that such legislation stems from the Concurrent List and not the State List. The learned Attorney General sought to derive some support for his contention also from the wording of Entry 32 of List I which deals with the 'property of the Union ', an expression wide enough to comprehend all kinds of property, essentially lands and buildings. It does three things at the same time: (a) it enables Parliament to legislate exclusively with respect to all property belonging to the Union; (b) it, however, subjects such power, in so far as property situated within the territory of any State is concerned, to any legislation of the State in regard thereto; (c) it nevertheless authorises Parliament to provide otherwise by law. 525 This language is somewhat analogous to that of article 254(2) and is consistent with a special provision for an item, which, otherwise, would primarily be covered by the Concurrent List on which both Parliament and State Legislature can legislate. It may be usefully contrasted with Entries like Nos. 23 and 24 of List ll where the language of the entry clearly grants primacy to Parliamentary legislation in regard to a part of the field occupied by an entry in the State List. There is some force in this contention which, effectively, is that if land and buildings were so clearly covered by Entry 18 of List II, either the wording of entry 32 would have been made subject to List Il of Entry 18, in this regard, like nos. 23 and 24 would have been made subject to List 1. 9. It is also a relevant consideration that, while the interpretation suggested by appellants completely denies power to Parliament to legislate on the subject matter under consideration, the interpretation preferred by us does not exclude the States ' power to legislate with respect to the topic. It recognises a concurrent power in Parliament and State Legislatures. For the reasons discussed above, we are of opinion that all the legislations coming up for consideration in the present case are referable to entries in the Concurrent List and the topic of legislation is not referable to Entry 18 List II. The provisions of the 1971 Act, in so far as they are made applicable to the premises of the respondent bank are, therefore, intra vires and valid. Once it is held that the 1971 Act is intra vires Parliament, no further issue between the parties would seem to survive for consideration for, as we have already pointed out, no other contention was raised before the Division Bench of the High Court. However, there was some discussion before us as to whether the provisions of the 1971 Act, even if intra vires, would prevail against the provisions of the State legislations. In this context, Dr. Chitale invited our attention to Jain Ink Manufacturing Co. vs LIC, ; where this Court held that the provisions of the 1971 Act will prevail against the provisions of the Delhi Rent Control Act, 1956 and the Delhi Slum Areas (Improvement & Clearance) Act, 1956 on the grounds that it was both a later Act and a special Act. He submitted that the decision in the case is the subject matter of reference to a larger Bench and that we should, therefore, defer our decision in the present case to await the result of the reference. We do not think this is called for. In our opinion, that decision has no reference to the issues before us. In that 526 case, all the three legislations were Parliamentary legislations (Delhi being a Union Territory) and the question was regarding the inter se overlap among the three Acts touching upon the same subject matter viz. eviction of a tenant by a landlord. Here the legislations which are said to occupy this, same field are one of Parliament of 1971 and two of the State of West Bengal of 1956 and 1962, all passed in exercise of the powers conferred with respect to matters contained in the Concurrent List. The resolution of a conflict, if any, between the two will have to be in terms of Article 254 of the Constitution. This article reads: Inconsistency between laws made by Parliament and laws made by the Legislatures of States (1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provisions repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent,. prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State. It will be convenient, before applying the provisions of the article to the facts of the present case, to refer to the elucidation of the scope of its provisions by decisions of this Court. In Zaverbhai Amaidas vs State, [1955] SCR 799 the question whether a provision in Central Act 527 XXIV if 1946 as amended by the Act LII of 1950 would prevail against a provision in Bombay Act XXXVI of 1947. Both legislations were referable to the Concurrent List and the State law had been passed after obtaining the assent of the Governor General. Referring to article 254(2), the Court said: "This is, in substance, a reproduction of section 107(2) of the Government of India Act, the concluding portion thereof being incorporated in a proviso with further additions. Discussing the nature of the power of the Dominion Legislature, Canada, in relation to that of the Provincial Legislature, in a situation similar to that under section 107(2) of the Government of India Act, it was observed by Lord Watson in Attorney General for Outario vs Attorney General for the Dominion, that though a law enacted by the Parliament of Canada and within competence would over ride Provincial legislation covering the same field, the Dominion Parliament had no authority conferred upon it under the Constitution to enact a statute repealing directly any Provincial statute. That would appear to have been the position under section 107(2) of the Government of India Act with reference to the subjects mentioned in the Concurrent List. Now by the proviso to Article 254 (2) the Constitution has enlarged the powers of Parliament. and under that proviso, Parliament can do what the Central Legislature could not under section 107(2) of the Government of India Act and enact a law adding to, amending, varying or repealing a law of the State, when it relates to a matter mentioned in the Concurrent List. The position then is that under the Constitution Parliament can, acting under the proviso to article 254(2), repeal a State law. But where it does not expressly do so, even then, the State law will be void under the provision if it conflicts with a later "law with respect to the same matter" that may be enacted by Parliament. " Later, the Court observed: "It is true, as already pointed out, that on a question under article 254( 1) whether an Act of Parliament prevails against a law of the State, no question of repeal arises; but the principle on which the rule of implied repeal rests, namely, that if the subject matter of the later legislation is identical 528 with that of the earlier, so that they cannot both stand together, then the earlier is repealed by the later enactment, will be equally applicable to a question under Article 254(2) whether the further legislation by Parliament is in respect of the same matter as that of the State law. We must accordingly hold that section 2 of Bombay Act No. XXXVI of 1947 cannot prevail as against Section 7 of the Essential Supplies (Temporary Powers) Act No. XXIV of 1946 as amended by the Act No. LII of 1950. " It is sufficient to cite certain observations from one more judgment on this aspect: Hoechst Pharmaceuticals vs State, ; which had to consider an alleged conflict between a provision of a State sales tax law and a provision of an order made under the Essential Commodities Act of Parliament. The case dealt with several points with which we are not here concerned. Expatiating on the scope of Article 254, the Court observed: "article 254 of the Constitution makes provision first, as to what would happen in the case of conflict between a Central and State law with regard to the subjects enumerated in the Concurrent List and secondly, for resolving such conflict. article 254(1) enunciates the normal rule that in the event of a conflict between a Union and a State law in the concurrent field, the former prevails over the latter. (1) lays down that if a State law relating to a concurrent subject is 'repugnant ' to a Union law relating to that subject, whether the Union law is prior or later in time, the Union law will prevail and the State law shall, to the extent of such repugnancy, be void. To the general rule laid down in cl. (1), cl. (2) engrafts an exception, viz. that if the President assents to a State law which has been reserved for his consideration, it will prevail notwithstanding its repugnancy to an earlier law of the Union, both laws dealing with a con current subject. In such a case, the Central Act will give way to the State Act only to the extent of inconsistency between the two, and no more. In short, the result of obtaining the assent of the President to a State Act which is inconsistent with a previous Union law relating to a concur rent subject would be that the State Act will prevail in that State and override the provisions of the Central Act in their applicability to the State only. The predominance of the State law may however be taken away if Parliament legis 529 lates under the Proviso to cl. The proviso to article 254(2) empowers the Union Parliament to repeal or amend a repugnant State law, either directly, or by itself enacting a law repugnant to the State law with respect to the 'same matter '. Even though the subsequent law made by Parliament does not expressly repeal a State law, even then, the State law ill become void as soon as the subsequent law of Parliament creating repugnancy is made. A State law would be repugnant to the Union law when there is direct conflict between the two laws. Such repugnancy may also arise where both laws operate in the same field and the two cannot possibly stand together. " The present case is clearly governed by the primary rule in Article 254(1) under which the law of Parliament on a subject in the Concurrent List prevails over the State law. article 254(2) is not attracted because no provision of the State Acts (which were enacted in 1956 and 1962) were repugnant to the provisions of an earlier law of Parliament or existing law. The fact that the 1956 Act was enacted, after being reserved for the President 's assent is, therefore, immaterial. Even if the provisions of the main part of Article 254(2) can be said to be somehow applicable, the proviso, read with Article 254(1) reaffirms the supermacy of any subsequent legislation of Parliament on the same matter even though such subsequent legislation does not in terms amend, vary or repeal any provision of the State Legislation. The provisions of the 1971 Act will, therefore, prevail against those of the State Acts and were rightly invoked in the present case by the respondent Rank. Dr. Chitale, while initially formulating his contentions, outlined an argument that the provision in the 1971 Act appointing one of the officers of the respondent bank as the Estate officers is violative of Article 14. We do not see any substance in this contention. In the very nature of things, only an officer or appointee of the Government, statutory authority or Corporation can be thought of for implementing the provisions of the Act. That apart, personal bias cannot necessarily be attributed to such officer either in favour of the bank or against any occupant who is being proceeded against, merely because he happens to be such officer. Moreover, as pointed out earlier, the Act provides for an appeal to an independent judicial officer against orders passed by the Estate officer. These provisions do not, therefore, suffer from any infirmity. In fact, Dr. Chitale did not pursue this objection seriously. 530 No other contention was urged. The appeal, therefore, fails and is dismissed. We would, however, make no order as to costs as it is the existence of a multiplicity of statutory provisions that enabled the appellant to come to Court. S.L. Appeal dismissed.

The first appellant in this appeal, a private limited company, occupying a portion of the premises belonging to the United Commercial Bank, claimed to be the tenant of the Bank, but this was not admitted by the respondent Bank. The Bank alleged that the appellant company had been allowed to occupy a portion of the Bank 's premises as licensee in consideration of certain accountancy and secretarial services rendered to the Bank. The Bank had issued a notice of eviction to the appellant company under the West Bengal Premises Tenancy Act, 1956 ( 'the 1956 Act '). Subsequently, the Bank issued a notice to the appellants under the Public Premises (Eviction of unauthorised occupants) Act, 1971 ( 'the 1971 Act ') which is an Act of the Parliament. The appellants filed a writ petition in the High Court, agitating the question whether the impugned Act which provides for eviction of unauthorised occupants from public premises belonging to or taken on lease by a corporation established by or under a Central Act and owned or controlled by the Central Government was ultra vires as it was beyond the legislative power of the Parliament to extend the applicability of the said Act to such premises. The appellants were interested in denying the legislative power of Parliament in so far as it purported to extend the applicability of the 1971 Act to the premises belonging to or taken on lease by public sector corporations. Their argument went to the extent of urging that only the State legislatures and not Parliament were competent to legislate on a topic of landlord tenant relationship in respect of land and buildings. According to the appellants, the provisions of 1956 Act were squarely applicable and should have been resorted to by the Bank for evicting them. 494 The appellants contended that a legislation of the type of West A Bengal Land (Eviction of unauthorised occupants) Act, 1962 (1962Act), which was on the pattern of the 1971 Act, would fall within the legislative field exclusively open to the State Legislatures and that the 1971 Act was ultra vires the Parliament in so far as it purported to affect the appellants ' rights. Dismissing the appeal, the Court, ^ HELD: Per Sabyasachi Mukharji, J. His Lordship agreed with Ranganathan, J. that the appeal should be dismissed. His Lordship preferred the view of the Madhya Pradesh High Court in L.S. Nair vs Hindustan Steel Ltd. Bhilai, A.I.R. 1980 M.P. 106 to the view of the Bombay High Court in Miscellaneous Petition No. 458/79 Elliot Waud Hill (P) Ltd. vs Life Insurance Corpn. This Court had in this Case proceeded on the short question whether the impugned Act which provides for eviction of unauthorised occupants from public premises to the extent it had been extended to premises belonging or taken on lease by a corporation established by or under a Central Act and owned or controlled by the Central Government, was ultra vires or beyond the legislative power of the Parliament to extend the applicability of the Act to such premises. [498D G] There was no dispute, as emphasised by Ranganathan, J., as to whether the premises in question or of this type was a public premises. For the purpose of this appeal, once it was held that the Public Premises (Eviction of Unauthorised occupants) Act was intra vires the Parliament, no further issue between the parties survived. It was not necessary to consider whether the provisions of the 1971 Act even if intra vires would pervail upon the provisions of the State Legislation. For the purpose of this appeal, it was unnecessary to express any view on the amplitude and scope of Article 254 of the Constitution. [498H; 499A B] It had to be taken that the legislation in question must be under stood in its pith and substance, and so understood, the Act in question in this case is in respect of transfer of property other than agricultural land and as such falls in Entry 6 of List III of the 7th Schedule to the Constitution. It is clear from the decision of this Court in Indu Bhusan Bose vs Rana Sundari Devi and Anr., ; and the subsequent decision in V. Dhanapal Chettiarv. YesodaiAmmal; , that the subject matter of housing accommodation and control thereof falls within the purview of concurrent list. In that view 495 of the matter, it could not be convassed that the 1971 legislation in question was beyond the competence of the legislature. [499C E] Per section Ranganathan, J. The present agrument of the appellants might not have been open to them if the premises of the Bank could be said to be premises belonging to the Union Government In that case, the legislation to the extent it governs such premises can be said to fall under Entry 32 of List I as one covering the "property of the Union". Though, the premises being situated in Calcutta any legislation under that entry in regard thereto would be subject to State Legislation, the state Legislation can only govern "save in so far as Parliament by law otherwise provides." Parliament having provided otherwise by the 1971 Act, that Act will prevail over the 11/56 and 1962 Acts. Though the Bank was a corporation wholly owned and controlled by the Government, it had a distinct personality of its own and its property could not be said to be the property of the Union. The position was beyond the pale of controversy after the decision of this Court in Bacha F.Guzdar vs C.I.T., ; ; State trading Corporation of India Ltd. vs C.T.O., [1964] 4 S.C.R. 99, and many other cases. lt was not possible for the respondents to support the legislation qua the premises under Entry 32 of List I. [505A D] Entry 32 of List I being out of the way, the appellants contended that the legislation squarely regularly fell under Entry 18 of List II. A question as to the interpretation of Entry 18 (or its predecessor, Entry 21 of the Provincial List under the Government of India Act, 1935) had arisen before the Federal Court and Privy Council, and also was considered in some decisions of this Court, which, except in the case of Indu Bhusan Bose vs Rama Sundari Devi, ; , were not helpful in deciding the issue before the Court. In respect of Indu Bhushan 's case, while the respondents contended that the ruling concluded the issue in their favour, the appellants urged that it could not be taken as a decision that the house tenancy legislation could not come under Entry 18 of List II. [505E; 506B C; 513C] It was true that the decision in Indu Bhushan 's case ultimately turned on the wider interpretation of Entry 2 of List I favoured by this Court, nevertheless, the judgment contains a specific discussion of the terms of Entry 21. Indu Bhushan must be taken to have expressed a view that premises tenancy legislation in so far as it pertains to houses and buildinYs is referable not to Entry 18 of List II but to entries 6,7 496 and 13 of List III. The decision of the larger Bench of this Court in V. Dhonpal Chettier vs Yesodai Ammal, ; , also reinforced the same line of thinking. The discussion and ratio of Dhanpal Chettier fall into place only on the view that by that time it was taken as settled law that State house control legislations were referable to the legislative powers conferred by the Concurrent List. [513C; 520D E] Entry 18 should be given as wide a construction as possible consistent with all the other entries in all the three legislative Lists. There is no reason why the first topic dealt with by the entry, viz. land, should be narrowly interpreted. lt should be understood as including all types of land, rural or urban, agricultural or non agricultural, arid, cultivated, fallow or vacant, What is 'land ' can be gathered from the other words of the entry which attempt a paraphrase. It is not possible to interpret this entry as encompassing within its terms legislation on the relationship of landlord and tenant in regard to houses and buildings. All the legislation coming up for consideration in the present case are referable to entries in the concurrent List and the topic of legislation is not referable to Entry 18 of List II. The provisions of the 1971 Act, in so far as they were made applicable to the premises of the respondent Bank, are intra vires and valid. [520F H; 525E] Once it was held that the 1971 Act is infra vires the Parliament, no further issue between the parties survived. There was some discussion r. before this Court as to whether the provisions of the 1971 Act, even if intra vires, would prevail against the provisions of the State legislations. This case is clearly governed by the primary rule in Article 254(1) of the Constitution under which the law of Parliament on a subject in the concurrent List prevails over the State Law. Article 254(2) of the Constitution is not attracted because no provision of the State Acts (enacted in 1956 and 1962) were repugnant to the provisions of an earlier law of Parliament of existing law. Even if the provision of the main part of Article 254(2) can be said to be somehow applicable, the proviso, read with Article 254(1), reaffirms the supremacy of any subsequent legislation of Parliament on the same matter even though such subsequent legislation does not in terms amend, vary or repeal any provision of the State Legislation. The provisions of the 1971 Act will, therefore, prevail against those of the State Acts and were rightly invoked in this case by she respondent Bank. [525F; 529C E] There was no substance in the appellants ' contention that the provision in the 1971 Act appointing one of the officers of the respondent Bank as the Estate officers was violative of Article 14. [529F] 497 The appeal failed. L.S. Nair vs Hindustan Steel Ltd. Bhilai, A.I.R. 1980 M.P. 106; Elliot Waud Hill (P) Ltd. vs Life Insurance Corporation Miscellaneous Petiton No. 458/79 before Bombay High Court; Indu Bhusan Bose vs Rama Sundari Devi and Anr. ; ; A.C. Patel vs Vishwanath Chadda, ILR 1954 Bombay 434; V. Dhanapal Chettiar vs Yasodai Ammal, ; ; Bacha P. Guzdar vs C.I.T., ; ; State Trading Corporation of India Ltd. vs C.T.O [1964] 4 SCR 99; A.P. State Raod Transport Corporation vs I.T.O.; , ; Heavy Engineering Mazdoor Union vs State, ; Vidarbha Housing Board vs I.T.O., ; Western Coalfields Ltd. vs Special Area Development Authority; , ; Manohar vs C.G. Deasi, AIR 1951 Nag. 33; Raman Dass vs State, AIR 1954 All. 707; Darukhanawala vs Khemchand, ILR ; M. Karuna vs State, AIR 1955 Nag 153, Kewalchand vs Dashrathlal, ILR ; Sukumar Dutta vs Gaurishankar, ; Raval & Co. vs Ramachandran, AIR 1967 Mad. 57;Mangtulal vs Radhey Shyam, AIR 1953 Pat. 14; Milap Chand vs Dwarakadas, AIR 1964 Raj 252; Rama Sundari vs Indu Bhusan, AIR 1967 Cal. 355; Nawal Mal vs Nathu Mal, AIR 1962 Raj. 193; Bapalal & Co. vs Thakur Das, AIR 1982 Mad. 309; Vnited Province vs Atiga Begum, ; Megh Raj vs Allan Rakhia, AIR 1947 PC 72; Atma Ram vs State of Punjab, [1959] Supp. 1 S.C.R. 748; Manaklal Chhotalal vs M.G. Makwana & Ors., ; ; Babu Jagtanand Sri Satyanarayanji, ILR 40 Patna 625; Union of India vs Valluri section Chaudhary, ; , State vs Peter; , , 292; Jaisingh Jairam Tyagi vs Maman Chand, ; ; Hoechst Pharmaceuticals vs State; , ; Dhillon 's case, [1972] 2 S.C.R. 33; Jain Ink Manufacturing Co. vs LIC, ; and Zaverbhai Amaidas vs State, [1955] S.C.R. 799, referred to.

Appeal No. 2539 of 1972. (From the Judgment and Order dated 10 3 1972 of the Mysore High Court in Misc. First Appeal No. 234/70) H.S. Parihar for 1. N. Shroff, for the Appellant. K.R. Nagaraja and P.N. Puri for the Respondent. The Judgment of the Court was delivered by BEG, J. The judgment of a Division Bench of the Mysore High Court under appeal before us after certification of the case as fit for an appeal to us, follows the decision of a Full Bench of that Court in Venkatamma vs Special Land Acquisition officer. (1) The FuII Bench had held that the date for the determination of compensation under the provi sions of section 23(1) of the Land Acquisition Act, which was to. be applied to acquisitions under the City of Mysore Improvement Act 3 of 1903 (hereinafter referred to as 'the Mysore Act '), was the date of notification under section 18 of the Act corresponding to section 6 of the Acquisition Act. Recently, we have had to deal with a case in which the provisions of the City of Bangalore Improvement Act, 1945, corresponding substantially with those of the Act now before us, were interpreted by us. The provisions of Sections 14, 16 and 18 of the Mysore Act of 1903, as well as the Banga lore Act of 1945 are identical. And, the provisions of section 23 of the Mysore Act are identical with those Sec tion 27 of the Bangalore Act. Therefore, a Division Bench of the Karnataka High Court considered itself bound by the Full Bench decision of the Mysore High Court (subsequentiy the Karnataka High Court) on the provisions of the Mysore Act of 1903 even in interpreting the Bangalore Act of 1945. But, this Court held, in the Land Acquisition Officer, City Improvement Trust Board vs H. Narayanaiah etc. ,(2) that the Division Bench decision of the Karnataka High Court holding that the market value, for the purposes of compensa tion, must be determined with reference to the date of notification under section 18 of the Bangalore Act, was erroneous. It, therefore, allowed the appeals from the judgment of the Division Bench of the Karnataka High Court which had purported to follow the Full Bench decision of the Mysore Act of 1903. The main argument in the appeal before us is that this Court had observed in Narayanaiah 's case (supra) that the Full Bench decision related to an interpretation of provi sions of an Act as it stood in (1) A.I.R. (2) ; 551 1903, when the date of market value, to be determined for purposes of compensation, was the date of notification under section 6 of the Acquisition Act. That date was subse quently changed by the Mysore Act 1 of 1927 to that of publication and notification under Section 4(1) of the Acquisition Act. It is true that this Court did observe that this difference was vital. In doing so, it had ac cepted the. argument put forward on behalf of the Land Acquisition Officer. But, it had not decided what was the real meaning of provisions of Section 23 of the Mysore Act which correspond with section 27 of the Bangalore Act. Section 23 of the Mysore Act now before us reads as follows: "23. The acquisition otherwise than by agreement of land within or without the City under this Act shall be regulated by the provisions, so far as they are applicable, of the Land Acquisition Act, 1894, and by the following further provisions, namely : (1 ) Upon the passing of a resolution by the Board that an improvement scheme under section 14 is necessary in respect of any locality, it shall be lawful for any person either generally or spe cially authorised by the Board in this behalf and for his servants and workmen, to do all such acts on or in respect of land in that locality as it would be lawful for an officer duly authorised by Government to act under section 4(2) of the Land Acquisition Act, and for his servants and workmen, to do thereunder, and the provision contained in section 5 of the said Act shall likewise be ap plicable in respect of damage caused by any of the acts first mentioned. (2) The publication of a declaration under section 18 shall be deemed to be the publication of a declaration under section 6 of the Land Acquisi tion Act. (3) For the purposes of section 50(2) of the Land Acquisition Act, the Board shall be deemed to be local authority concerned. (4) After the land vests in the Government under section 16 of the Land Acquisition Act, the Deputy Commissioner shall, upon payment of the cost of the acquisition, and upon the Board agreeing to pay any further costs which may be incurred on account of the acquisition, transfer the land to the Board, and the land shall thereupon vest in the Board". The reasoning of the Full Bench of the. Mysore High Court, which did not appeal to this Court in Narayanaiah 's case (supra), was that, since a declaration under section 18 of the Act was equated with section 6 of the Acquisition Act, proceedings under section 4(1) of the Acquisition Act could only be equated with the stage of a resolution 552 under section 14(1) of the Act which was anterior to the declaration under section 18 of the Mysore Act. section 16 of the Act is also anterior to Section 18. This Court found that, although the procedure laid down in section 16 of the Bangalore Act, which corresponds exactly with section 16 of the Mysore Act now before us, is more elaborate than the procedure under section 4(1) of the Acquisition Act, yet, the purpose of section 16 of the Bangalore Act was the same as that of section 4 (1) of the Acquisition Act, we think that this reasoning applies equally to the provisions of the Mysore Act. It is true that it can be more plausibly argued, with regard to the provisions of Mysore Act of 1903, that the market value for acquisition under this Act should be deter mined with reference to the Acquisition Act as it stood in 1903. After carefully considering this point of view, we think that such a departure from the generally accepted procedure which regulates acquisition and compensation for it under similar Acts in the State of Mysore as well as under Land Acquisition Act today has to be justified by something more explicit, express and substantial than the mere date of enactment of the Mysore Act. If Section 23(1) of the Acquisition Act lays down, as we think it does, the only procedure for award of compensation, it has to be followed as it exist at the time of acquisition proceedings. No one has a vested right in a particular procedure. It is a fair interpretation of section 23 of the Mysore Act of 1903 to hold that it means that, whatever may be the proce dure there, with regard to matters regulating compensation under the Acquisition Act,. at the time of acquisition proceedings, will apply to acquisition under the Mysore Act. If the procedure that the market value should be deter mined with reference to section 6 of the Acquisition Act had been replaced, by an amendment of 1927. by the provision that the relevant date will be the date of notification under section 4(1) of the Acquisition Act, we will really have to determine what is the equivalent in the Mysore Act of proceedings under section 4(1) of the Acquisition Act. The provision relating to determination of compensation with reference to Section 6 having disappeared was no longer available to be applied at all on the date of the acquisi tion with which we are now concerned. Hence. to argue that the equivalent of section 6 notification trader the Acquisi tion Act should govern even proceedings commenced after the amendment would be to apply what had ceased to exist long before the proceeding commenced. The amendment of section 23(1) of the Acquisition Act meant a legally valid substitu tion of the notification under section 4(1) for the one under section 6 of the Acquisition Act. This implied an effective repeal and replacement. In such a situa tion, according to section 6 of the Mysore General Clauses Act, only proceedings commenced before the repeal would be governed by the unamended procedure. We think that the language of section 23 of the Mysore Act applies the provisions of the Acquisition Act to acquisitions under the Mysore Act, except to the extent of express deviation by the Mysore Act from the general procedure in the Acquisition Act as amended from time to time. The procedure contained in the Acquisition Act, for the time being, did 553 need to be expressly applied once again after each amendment of the Acquisition Act, as the Mysore High Court seems to have opined. It was enough to lay, down, as section 23 of the Mysore Act does, that the general procedure found in the Acquisition Act will apply except to the extent it was inapplicable. This means that amendments of the procedure in the Acquisition Act will apply if it is capable of appli cation. In the case before us, the preliminary notification under section 16 of the Mysore Act of 1903 was published on 27th May, 1965. This we equate with notification under section 4(1) of the Acquisition Act for reasons we have already given in Narayanaiah 's case (supra). At that time, there was no date other than the date of the notification under section 4(1) of the Acquisition Act prescribed for ascertainment of the market value, as a matter of correct procedure for determining compensation. The procedure under the unamended Act may have had relevance for acquisition proceedings begun before the amendment of the Acquisition Act in 1927 when it really existed. But, we think that it is a fair interpretation of the provisions of Section 23 of the Mysore Act to hold that compensation for acquisitions will be general provisions of the Acquisition Act as they exist on the date of a particular acquisition proceeding except to the extent to which a different procedure is expressly laid down in the Mysore Act. On the view we take, the market value of the property acquired had to be deter mined with reference to the date of notification under Section 16 of the Mysore Act. Consequently, we set aside the judgment and order of the Mysore High Court. We remand the case to the High Court for determination of the market value and disposal of the case in accordance with the law as declared by us. The parties will bear their own costs throughout. V.P.S. Appeal allowed.

Section 23(1) of the Land Acquisition Act originally provided that the date for Section 23 (1) of the market value for purpose of compensation is the date of the notification under section 6. In 1927, section 23(1) was amended making the date of section 4(1) notification as the relevant date. With respect to certain acquisitions under the City of Mysore Improvement Act, 1903. (Mysore Act) the notifica tion under section 16 of the Act was published in May 1965 and the notification under section 18, which corresponds to section 6 of the Acquisition Act, was published some, time later. On the question of the date for the determination of market value for purposes of compensation under the provisions of section 23(1), Acquisition Act, the High Court followed the Full Bench decision of that court in Venkatamma vs Special Land Acquisition Officer (AIR and held that the date of section 18 notification is the relevant date, on the ground that section 23(1), Acquisition Act, as it stood in 1903 should be applied, since its amendment in 1927, has not been made specially applicable to acquisitions after that date. Allowing the appeal to this Court and remanding the case to the High Court for determination of the market value as on the date of section 16 notification. HELD: (1) Section 23, Mysore Act, applied the provisions of the Acquisition Act to acquisitions under the Mysore Act, except to the extent of any express deviation by the Mysore Act from the general procedure in the Acquisition Act. It is a fair interpretation of section 23, Mysore Act, to hold that it means that, whatever may be procedure with regard to matters regulating compensation under the Acquisition Act, at the time of acquisition proceedings, will apply to acqui sitions under the Mysore Act. The procedure, contained in the Acquisation Act for the time being need not be expressly applied once again after each amendment of the Acquisition Act, and such procedure in the Acquisition Act would apply if it is capable of application, since no one has a vested right in a particular procedure. [552 A F] Therefore: section 23(1) of the Acquisition Act, which lays down the procedure for awarding compensation, has to be followed as it exists at the time of requisition proceed ings. [552H 553A] (2) the 927 amendment of section 23(1), Acquisition Act, meant a legally valid substitution of the notification under section 4(1) for the one under section 6 of the Acquisition Act, that is, an effective repeal and replacement. In such a situation, according to section 6, Mysore General Clauses Act, only proceedings commenced before the repeat would be governed by the unamended procedure. [552 F G] (3) The date of notification under section 4(1) of the Acquisition Act would thus be the relevant date, for determining market value. Although the procedure laid down in section 16, Mysore Act, is more elaborate than the proce dure under section 4(1), Acquisition Act, the purpose of section 16, Mysore Act is the same as that of section 4(1) Acquisition Act. Therefore, the date of s 16 notification would be the rele vant date. [553 B F] 550 Land Acquisition Officer, City Improvement Trust Board vs H. Narayanaiah etc., etc. ; , followed. Venkatamma vs Special Land Acquisition Officer (AIR overruled.

Civil Appeal No. 3530 of 1 979. Appeal by Special Leave from the Judgment and order dated 2 2 1979 of the Madras High Court in A.S. No. 924/74. K. section Ramamurthy, P. N. Ramalingam and A. T. M. Sampath for the Appellant. K. Rant Kumar and K. Jayaram for the Respondent. 309 The Judgment of the Court was delivered by KAILASAM, J. The appellants in the appeal by special leave are plaintiffs 1 to 5 in the suit. The plaintiffs 1 to 5 are sisters and defendants 1 to 2 are their brothers. The third defendant is their unmarried sister. They are the children of the late Muthukumaraswamy Gounder who died intestate on 20 12 1962 leaving his father Vanavaraya Gounder who was managing all the ancestral joint family property as the head of the Hindu Undivided Joint Family till his death on 5 3 1972. The plaintiffs claimed that on the death of Muthukumaraswamy Gounder his 1/3rd share in the joint family property devolved on his sons and daughters, his sons, defendants 1 and 2 taking 1/3rd share each in l/3rd share of the family property by birth and in the balance all the sons and daughters of Muthukumaraswamy Gounder taking an equal share each. The plaintiffs claimed to have been in joint possession of the properties alongwith Vanavaraya Gounder and his other sons. Similarly on the death of Vanavaraya Gounder, his 1/3rd share in the family properties devolved upon his heirs, the plaintiffs and defendants 1 to 3 being entitled to certain shares. The claim in the plaint is that each of the plaintiffs is entitled to a share in the suit properties as heirs to Late Muthukumaraswamy Gounder and also as heirs to late Vanavaraya Gounder, their grand father. Each plaintiff claimed that she was entitled to 1/72 share in the suit properties as heirs to their father Muthukumaraswamy Gounder and also to 1/96 share as heirs to their grand father Vanavaraya Gounder. It was alleged in the plaint that since the death of Vanavaraya Gounder, defendants nos. 1 to 6 failed to give the plaintiffs their share of income and the plaintiffs could not remain in joint possession. The plaintiffs repeatedly demanded partition and the defendants 1 to 6 were evading. The plaintiffs claimed that each of the plaintiffs as co owners are in joint possession of the suit properties and this action was laid to convert the joint possession into separate possession so far as the shares of the plaintiffs are concerned. For the purposes of court fee and jurisdiction, the plaintiffs valued their share of the property and paid court fee of Rs. 200 under section 37(2) of the Tamil Nadu Court Fees and Suits Valuation Act. The relief prayed for was for partition of the properties and for allotment of their separate share, for accounts and for other reliefs. In the written statement, the defendants 1 to 2, the brothers, con tended that the properties were divided in the year 1946 during the life time of Muthukumaraswamy Gounder and that Muthukumaraswamy was enjoying the properties separately. Regarding possession of 310 the plaintiffs, defendants l to 3 the contesting defendants alleged in paragraph 18 of the written statement as follows : "The suit as framed is not maintainable in law. The plaintiffs have framed the suit as though they are in joint possession and enjoyment of the suit properties. The plaintiffs are out of possession and they are living in different villages. While it is so the allegation that they are in joint possession v of the suit properties is not correct. The plaintiff ought to J have paid court fee under section 37(i) of the Court Fees Act and not under 37(ii) of the Act. They ought to have paid the court fee at the market value of the suit properties and unless the court fee at the market rate is paid they arc not entitled to claim any share." The Subordinate Judge who tried the suit did not frame any preliminary issue regarding court fee as required under section 12 of the Court Fees Act but proceeded to try all the issues together. The Subordinate Judge granted preliminary decree for partition and possession of the plaintiffs ' 1/72 share in B. Schedule properties, and to certain shares in deposit in State Bank of India at Pollachi, and to the share in the Gnanambika Mills, on payment of court fees by the plaintiffs under section 37(i) of the Court Fees Act. The Court granted time for payment of court fee till 15 2 1973. As the court fee was not paid, the Trial Court dismissed the suit, by its judgment dated 7 2 1974. The plaintiffs filed two appeals A.S. No. 811 of 1975 against the decision of the Subordinate Judge holding that the plaintiffs are liable to pay court fee on the market value of the property under section 37(1) of the Court Fees Act and A.S. No. 924 of 1974 against the order dismissing the suit. The High Court heard both the appeals together and disposed them of by a common judgement. When the appeals were taken up, the defendants/respondents contended that the court fee ought to have been paid on the plaint under section 37(1) and also on the memorandum of appeal before the High Court and as the proper court fee has not keen paid, the appeals ought to be dismissed. The High Court accepted the contention raised by the defendants and held that the plaintiffs arc liable to pay court fee under S.37(1) of the Tamil Nadu Court Fees Act. In coming to its conclusion, the High Court mainly relied on . paragraph 12 of the plaint which reads as follows: "Since the death of Vanavaraya Gounder the defendants 1 to 6 failed to give the plaintiffs their share of income and 311 the plaintiffs could not remain in joint possession. Therefore, the plaintiffs repeatedly demanded partition and the defendants 1 to 6 were evading. The 3rd plaintiff sent a notice through her counsel to defendants 1, 2 and 5 to which the 3rd plaintiff received replies containing false and untenable allegations. " The High Court proceeded to observe that while the statement that The plaintiffs were in joint possession with the defendants occurring in other paragraphs of the plaint is merely a formal statement repeating the statutory language, the statement contained in paragraph 12 of the plaint constitutes a statement of fact in the context in which paragraph 12 occurs and consequently paragraph 12 of the plaint contains a clear averment that the plaintiffs could not remain in joint possession and that was the reason why they repeatedly demanded partition. If so, on the date of the suit, the plaintiffs were not in possession. The High Court held that court fee is payable under section 37(1) of the Court Fees Act. D On reading of the plaint as a whole, we arc unable to agree with the view taken by the High Court. It is settled law that the question of court fee must be considered hl the light of the allegation made in the plaint and its decision cannot be the either by the pleas in the written statement or by the final decision of the suit on merits. All the material allegations contained in the plaint should should be construed and taken as a whole vide section Rm . section Sp. Sathappa Chettiar vs section Ram Ar. Ramanathan Chettiar. The plaint in paragraph 5 states that Muthukumaraswamy Gounder died intestate and undivided and Muthukumaraswamy 's father Vanavaraya Gounder was managing all the ancestral joint family property as the head of the Hindu undivided joint family till his death. In paragraph 8 the plaintiffs stated that on the death of Muthukumaraswamy Gounder his 1/3rd share in the joint family properties devolved upon his sons and daughters. It further alleged that the plaintiffs were in joint possession of the properties alongwith Vanavaraya Gounder and his other sons. In paragraph 9, it is stated that each of the plaintiffs is entitled to a share in the suit properties as heirs of the late Muthukumaraswamy Gounder and also as heir of the late Vanavaraya Gounder. In paragraph 11, it is stated that since the death of Vanavaraya Gounder defendants 1 to 6 are receiving the income from the properties and are liable to account to the plaintiffs. In paragraph 12, it is stated that since the death of Vanavaraya Gounder defendants 1 to 6 failed to give the 312 plaintiff their share of income and the plaintiffs could not remain in joint possession. Therefore the plaintiffs demanded partition and the defendants 1 to 6 were evading. Again in paragraph 13, it is claimed that each of the plaintiff as co owners is in joint possession of the suit properties? and this action is laid to convert the joint possession into separate possession so far as the shares of the plaintiffs are concerned. Throughout the plaint, the plaintiffs have asserted that they are in joint possession. We are unable to agree with the High Court that recitals in all the paragraphs is merely a formal statement repeating. the statutory language. The plea in paragraph 12 which was relied on by the High Court states that the defendants 1 to 6 failed to give the plaintiffs their share of the income and the plaintiffs could not remain in joint possession. The plea that they were not given their due share would not amount to dispossession. Reading the plaint at its worst against the plaintiffs, all that could be discerned is that as the plaintiffs were not given their share of the income, they could not remain in joint possession. The statement that they arc not being paid their income, would not amount to having been excluded from possession. The averment in the plaint cannot be understood as stating that the plaintiffs were not in possession. In fact, the defendants understood the plaint as stating that the plaintiffs are in joint possession of the suit properties. In paragraph 18 of the written statement the defendants plaintiff that the plaintiffs have framed the suit as though they are in joint possession and enjoyment of the suit properties. Asserting that the plaintiffs were out of possession, the defendants stated: "While it is so the allegation that they are in joint possession of the suit properties, is not correct." The Trial Court has not placed any reliance on the recitals in para 12 of the plaint on which the judgment of the High Court is based. The Trial Court found on evidence that the plaintiffs never enjoyed the suit properties at any time. This finding is not enough for, the mere fact that the plaintiffs were not paid their share of the income or were not in actual physical possession, would not amount to the plaintiff.; having been excluded from joint possession to which they arc in law entitled. On a consideration of the plaint as a whole and giving it its natural meaning, we are unable to agree with the conclusion arrived at by the High Court. section 37 of the Tamil Nadu Court Fees and Suit Valuation Act n relates to Partition Suits. section 37 provides as follows: 37(1) In a suit for partition and separate possession of a share of joint family property or of property owned, jointly 313 or in common, by a plaintiff who has been excluded from possession of such property, fee shall be computed on the market value of the plaintiff 's share. 37(2) In a suit for partition and separate possession of joint family property or property owned, jointly or in common by a plaintiff who is in joint possession of such property, fee shall be paid at the rates prescribed. It will be seen that the court fee is payable under section 37(1) if the plaintiff is 'excluded" from possession of the property. The plaintiffs who are sisters of the defendants, claimed to be members of the Joint Family, and prayed for partition alleging that they are in joint possession Under the proviso to S.6 of the (Act 30 of 1956) the plaintiffs being the daughters of the male Hindu who died after the commencement of the Act, having at the time of the death an interest in the Mitakshara coparcenary property, acquired an interest by devolution under the Act. It is not in dispute that the plaintiffs are entitled to a share. The property to which the plaintiffs are entitled is undivided 'joint family property! '; though not in the strict sense of the term. The general principle of law is that in the case of co owners, the possession of one is in law possession of all, unless ouster or exclusion is proved. To continue to be in joint possession in law, it is not necessary that the plaintiff should be in actual possession of the whole or part of the property. Equally it is not necessary that. he should be getting a share or some income from the property. So long as his right to a share and the nature of the property as joint is not disputed the law presumes that he is in joint possession unless he is excluded from such possession. Before the plaintiffs could be called upon to pay court fee under section 37(1) of the Act on the ground that they had been excluded from possession, it is necessary that on a reading of the plaint, there should be a clear and specific averment in the plaint that they had been "excluded" from joint possession to which they are entitled in law. The averments in the plant that the plaintiff could not remain in joint possession as he was not given any income from the joint family property would not amount to his exclusion from possession. We are unable to read into the plaint a clear and specific admission that the plaintiff had been excluded from possession. In the result the appeal is allowed with cost. As we have found that the Trial Court was in error in directing the plaintiffs to pay the court fee under section 37(1), the preliminary decree for partition and possession of 1/72 share in the B. Schedule properties and the shares in 314 deposit in State Bank of India at Pollachi, and in the share in the Gnanambika Mills, is confirmed. The direction by the Trial Court as to payment of Court Fee under section 37(1) of the Court Fees Act and the judgment of the High Court in A.S. No. 924/1974 and A.S. 811 /75 are set aside. S.R. Appeal allowed.

The plaintiffs, appellants filed a suit for partition and separate possession of their individual share as per law and paid a court fee at the rates prescribed under section 37 (ii) of the Tamil Nadu Court Fees and Suit Valuation Act. There was a specific allegation that they were in joint possession. The Trial Court decreed the suit but directed the plaintiffs appellants to pay the court fec under Section 37 (ii) of the Act. As the difference in court fee was not paid the trial Court dismissed the suit. Two appeals were filed by the appellants in the High Court, one against the decision that they were liable to pay court fee (m the market value of the property under section 37 (1) and another against the order dismissing the suit. The High Court heard the two appeals together and disposed of the appeals accepting the contention of the respondents/defendants that the Court fees are payable both on the plaint and on the memorandum of appeals under Section 37 (I ) of the Act. Allowing the appeal by special leave, the Court ^ HELD: 1. It is settled law that the question of Court fee must be considered in the light of the allegation made in the plaint and its decision cannot be influenced either by the pleas in the written statement or by the final decision of the suit on merits. All the material allegations contained in the plaint should be construed and taken as a whole. [311 D E] In the instant case: (a) on reading of the plaint as a whole, it is clear that throughout the plaint, the plaintiffs/appellants have asserted that they were in joint possession and therefore the observation of the High Court that recite in all the paragraphs is merely a formal statement repeating the statutory language is not correct. (b) the plea that they were not given their due share would not amount to dispossession. Reading the plaint at its worst against the plaintiffs, all that could be discerned is that as the plaintiffs were not given their share of the income, they could not remain in joint possession. The statement that they are not being paid their income. would not amount to having been excluded from possession. The averment in the plaint cannot be understood as stating that the plaintiffs were not in possession. In fact, the defendants understood the plaint as stating that the plaintiffs are in joint possession of the suit properties. In paragraph 18 of the written statement the defendants pleaded 308 that the plaintiffs have framed the suit as though they are in joint possession and enjoyment of the suit properties. Asserting that the plaintiffs were out of possession, the defendants stated: "while it is so, the allegation that they arc in joint possession of the suit properties, is not correct." The mere fact that the plaintiffs were not paid their share of the income or were not in actual possession would not amount to the plaintiffs having been excluded from joint possession to which they are in law entitled.[1311D, 312 B F] section Rm. section Sri Cathanna Chettiar vs section RM. Ramanathen Chettiar, @ PP 1031 32; followed. Under section 37(1) of the Tamil Nadu Court Fees and Suit Valuation Act, relating to partition suits, the Court fee is payable, if the plaintiff is "excluded" from possession of the property. The general principle of law is that in the case of co owners, the possession of one is in law possession of all, unless ouster or exclusion is proved. To continue to be in joint possession in law it is not necessary that the plaintiff should be in actual possession of the whole or part of the property. Equally it is not necessary that he should be getting a share or some income from the property. So long as his right to a share and the nature of the property as joint is not disputed the law presumes that he is in joint possession unless he is excluded from such possession Before the plaintiffs could be Called upon to pay court fee under section 37 (1) of the Act on the ground that they had been excluded from possession it is necessary that there should be a clear and specific averment in the plaint that they had been "excluded" from joint possession to which they are entitled in law [1313 B. D F] In the instant case: (a) The averments in the plaint that the plaintiff could not remain in joint possession as he was not given any income from the joint family property would not amount to his exclusion from possession. [313 F G] (b) The plaintiffs who are sisters of the defendants claimed to be members of the joint family and prayed for partition alleging that they are in joint possession. Under the proviso to section 6 of the (Act 30 of 1956), the plaintiffs being the daughters of the male Hindu who died after the commencement of the Act, having at the time of the death an interest in the Mitakshara coparcenary property, acquired interest by devolution under the Act. The property to which the plaintiffs are entitled is undivided 'joint family property ', though not in the strict sense of the term. [313 C D]

Appeal No. 54 of 1958. Appeal by special leave from the Award dated January 14, 1957, of the Industrial Tribunal at Bombay in Reference (I. T.) No. 75 of 1956. M. C. Setalvad, Attorney Generalfor India and I. N. Shroff for the appellants. N. V. Phadke, T. section Venkataraman K. R. Sharma and K. R. Chaudhury, for respondent No. I and the Intervener. May 5. The Judgment of the Court was delivered by 950 BHAGWATI, J. This appeal with special leave challenges the award made by the Industrial Tribunal, Bombay, in Reference (IT) No. 75 of 1956 between the appellant and the respondents whereby the Industrial Tribunal awarded to the respondents 4 1/2 months ' basic wages as bonus for the year 1954 55 (year ending June 30, 1955). The appellant is a subsidiary of the Premier Construction Co., Ltd., and manufactures Hume Pipes. It has factories in different parts of India, Pakistan and Ceylon. The respondents are the workers employed in the appellant 's factory at Antop Hill, Wadala, Bombay. In October 1955, respondent I who are workmen represented by the Engineering Mazdoor Sabha made a demand for the payment of six months ' wages as bonus for the year 1954 55. The matter was also referred to the Conciliation Officer requesting him to initiate Conciliation Proceedings. The Conciliation Proceedings went on before the Conciliation Officer upto March 23, 1956, on which date both the parties arrived at and executed an Agreement to refer the matter to an Industrial Tribunal for adjudication. Accordingly, on April 30, 1956, both the parties drew up and signed a joint application for referring the dispute for adjudication to a Tribunal and the Government of Bombay thereupon in exercise of the powers conferred by sub section (2) of section 10 of the , by its order dated June 11, 1956, referred the following dispute to the Tribunal : " DEMAND: Every Workman (daily rated) should be paid bonus for the year 1954 55 (year ending 30th June, 1955) equivalent to six months ' wages without it attaching any condition thereto ". Respondent No. I filed their statement of claim before the Tribunal on June 29, 1956. They alleged that the profits of the appellant during the year 195455 were higher than those during the year 1953 54 for which year the appellant had paid four months ' basic wages as bonus. They also alleged that the wages paid to them by the appellant fell short of the, living wage and therefore the appellant should pay the in six months ' basic wages as bonus for the relative year. 951 The appellant filed its written statement in answer on August 14, 1956. The appellant submitted that, after providing for " the prior charges " according to the formula laid down by the Labour Appellate Tribunal the profits made during the year under consideration did riot leave any surplus and tile, respondents were not entitled to any bonus. It denied that it bad made huge profits during the year in question and submitted that the profits made were not even sufficient to provide for " the prior charges ", etc. The Tribunal after hearing the parties came to the conclusion that even if payment of a bonus equal to 4 1/2 months ' basic wages were made a fair surplus would be left in the hands of the appellant to the tune of Rs. 3.30 lacs and therefore awarded the same subject to the following conditions: (a) Any employee who has been dismissed for misconduct resulting in financial loss to the company shall not be entitled to bonus to the extent of the loss caused. (b) Persons who are eligible for bonus but who are no longer in the service of the company on the date of the payment shall be paid the same provided that they make a written application for the same within three months of publication of this award. Such bonus shall be paid within one month of receipt of application provided that no claim can be enforced before six weeks from the date this award becomes enforceable. Being aggrieved by the said award of the Tribunal, the appellant applied for and obtained from this Court special leave to appeal against the same under article 136 of the Constitution and hence this appeal. The formula evolved by the Full Bench of the Labour Appellate Tribunal in Millowners ' Association, Bombay vs Rashtreeya Mill Mazdoor Sangh, Bombay(1) is based on this idea that " as both labour and capital contribute to the earnings of the industrial concerti, it is fair that labour should derive some benefit, if there is a surplus after meeting " prior or necessary charges ". The following were prescribed as the first charges on (1) 952 gross profits, viz., (1) Provision for depreciation ;(2) reserves for rehabilitation ; (3) a return at 6%on the paid up capital; (4) a return on the working capital at a lesser rate than the return on paid up capital and (5) an estimated amount in respect of the payment of income tax. The surplus that remained after making the aforesaid deductions would be available for distribution among the three sharers, viz., the shareholders, the industry and the workmen [See Muir Mills Co., Ltd. vs Suti Mills Mazdoor Union, Kanpur (1) and Sree Meenakshi Mills Ltd. vs Their Workmen (2)]. This Full Bench Formula has been working all throughout the country since its enunciation as aforesaid and has been found to be, in the main, fairly satisfactory. It is conducive to the benefit of both labour and capital and even though certain variations have been attempted to be made therein from time to time the main features thereof have not been substantially departed from. We feel that a formula which has been thus adopted all throughout the country and has so far worked fairly satisfactorily should be adhered, ' to, though there is scope for certain flexibility in the working thereof in accordance with the exigencies of the situation. In the working of the said formula, however, regard must be had both to the interests of capital and labour. In any given industry there are three interests involved, viz., the shareholders, the Company and the workmen and all these interests have got to get their proper share in the surplus profits ascertained after due provision is made for these " prior charges ". The shareholders may look to larger dividends commensurate with the prosperity of the industrial concern, the company would, apart from rehabilitation and replacement of buildings, plant and machinery, look forward to expansion and satisfaction of other needs of the industry and the workmen would certainly be entitled to ask for a share in the surplus profits with a view to bridge the gap between the wages earned by them and the living wages. All these interests (1) [1955]1 1,s. C.R. 991, 998. (2) ; , 884, 953 have, therefore, got to be duly and properly provided for having regard to the principles of social justice and once surplus profits available for distribution amongst these respective interests are determined after making due provision for the " prior charges " as aforesaid the Industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same having regard, of course, to the considerations mentioned hereinabove. But so far as the determination of the surplus profits is concerned the formula must be adhered to in its essential particulars as otherwise there would be no stability nor uniformity of practice in regard to the same. It maybe noted, 'however, that in regard to the depreciation which is a prior charge on the gross profits earned by a concern there is always a difference in the method of approach which is adopted by the income tax authorities and by the industrial tribunals. It was pointed out by us in Sree Meenakshi Mills Ltd. vs Their Workmen (1) that the whole of the depreciation admissible under the Income tax Act was not allowable in determining the available surplus. The initial depreciation and the additional depreciation were abnormal additions to the income tax depreciation and it would not be fair to the workmen if these depreciations were rated as prior charges before the available surplus was ascertained. Considerations on which the grant of initial and additional depreciations might be justified under the Income tax Act were different from considerations of social justice and fair apportionment on which the Full Bench Formula in regard to the payment of bonus to workmen was based. This was the reason why we held in that case that only normal depreciation including multiple shift depreciation, but not initial or additional depreciation should rank as prior charge. We approved of the decision of the Labour Appellate Tribunal in U. P. Electric Supply Co., Ltd. vs Their Workmen (2) in arriving at the above conclusion and disallowed the claim of the company there to deduct the initial or additional depreciation as prior charge in bonus calculations. (1) ; 120 (2) 954 When this decision was reached we had not before us the decision of the Labour Appellate Tribunal in Surat Electricity Company 's Staff Union vs The Surat Electricity Co., Ltd. (1) where a Bench of the Labour Appellate Tribunal had negatived the contention that if only the " normal " depreciation allowed by the Income tax law were allowed a company would be able to recoup the original cost of the assets and observed that: " For the purpose of bonus formula the initial and additional depreciation, which are disallowed by that formula, must be ignored in fixing the written down value and in determining the period over which the normal depreciation will be allowed. The result will be a notional amount of normal depreciation ; but, as we have said repeatedly the bonus formula is a notional formula. " We have already expressed in the judgment delivered by us in Associated Cement Co., Ltd. vs Its Workmen (1) that for the purpose of the bonus formula the notional normal depreciation should be deducted from the gross profits calculated on the basis adopted in Surat Electric Supply Co. Staff Union vs Surat Electricity Co., Ltd. (1) and not merely the normal depreciation including multiple shift depreciation allowed by the income tax authorities as stated in U. P. Electric Supply Co., Ltd. vs Their Workmen (3). It is well settled that the actual income tax payable by the company on the basis of the full statutory depreciation allowed by the income tax authorities for the relevant accounting year should be taken into account as a prior charge irrespective of any set off allowed by the Income tax authorities for prior charges or any other considerations such as building up of income tax reserves for payment of enhanced liabilities of income tax accruing in future. It is also well settled that the calculations of the surplus available for distribution should be made having regard to the working of the industrial concern in the relevant (1) (2) (3) 955 accounting year without taking into consideration the credits or debits which are referable to the working of the previous years, e.g., the refund of excess profits tax paid in the past or loss of previous years carried forward but written off in the accounting year as also any provision that may have to be made to meet future liabilities, e.g., redemption of debenture stock, or provision for Provident Fund and Gratuity and other benefits, etc., which, however, necessary they may be, cannot be included in the category of prior charges. If regard be had to the principles enunciated above it is clear that the items of Rs. 1.14 lacs representing the Lahore factory balance written off, Rs. 0.34 lacs being patents written off, and Rs. 0.09 lacs shown as loss on sale of Tardeo property cannot be allowed as proper deductions from the gross profits for the purposes of bonus calculations. The first two items represented debits in connection with the working of previous years. Loss of the Lahore factory had been incurred during the three previous accounting years and had been carried forward from year to year and the only thing which was done during the year under consideration was that it was then written off as irre coverable. The patents also had been worked off in previous years and the amounts spent in the purchase thereof were therefore to be written off but had reference to the working of the company during the previous years. The last item of Rs. 0.09 lacs was trivial and was therefore not pressed with the result that all these three items were rightly added back in the calculations of the gross profits of the appellant and the figure of gross profits taken at Rs. 36.21 lacs was correctly arrived at by the Tribunal. The depreciation allowed by the Tribunal was Rs. 9.82 lacs which was the full statutory depreciation allowed by the Income tax authorities. That should not have been done and the only depreciation allowed should have been the notional normal depreciation which was agreed between the parties before us at Rs. 6.23 lacs. Working the figure of income tax deducted by the 956 appellant on the basis adopted in Shree Meenakshi Mills Ltd. vs Their Workmen (1) the income tax on the gross profits of Rs. 36.21 lacs less the statutory depreciation allowed by the income tax authorities, viz., Rs. 9.82 lacs would be equivalent to 7 annas in the rupee on Rs. 26.39 lacs, i.e., Rs. 11.55 lacs thus leaving a balance of Rs. 16.82 lacs from which the other prior charges would have to be deducted in order to ascertain the distributable surplus. 6% return on the ordinary share capital and 5% return on the preference share capital would come to Rs. 4.30 lacs. The appellant, however, claimed that even on the preference shares 6% return should be allowed and not 5% even though preference shareholders were not entitled to anything beyond 5% under the terms of issue. The appellant obviously relied upon the wording of the formula: " return at 6% on the paid up capital " and contended that the preference shares also being paid up capital it would be entitled to a return of 6% on the preference shares for the purposes of the bonus formula even though in fact it would have to pay only 5% return on the same. We cannot accept this contention. Even though the bonus formula is a notional one we cannot ignore the fact that in no event would the appellant be bound to pay to the preference shareholders anything beyond 5% by way of return. The Full Bench Formula cannot be so literally construed. There is bound to be some flexibility therein, the 6% which is prescribed there as the return on paid up capital is not inexorable, and the Tribunals could if the circumstances warrant vary the rate of interest either by increasing or decreasing the same. On the facts of this case however there is no warrant for allowing anything beyond 5% return on preference share capital and the amount of Rs. 4.30 lacs should therefore be deducted as another prior charge from the grsos profits of the appellant. 4% return on reserves used as working capital was calculated merely at a figure of Rs. 0.29 lacs worked out on a total figure of Rs. 7,42,139. The Tribunal (1) 957 did not take into consideration another sum of Rs. 41,81,196 which represented the depreciation fund which according to the appellant had been used as working capital during the year. If that had been allowed a further sum of Rs. 1.67 lacs should have been added to Rs. 0.29 lacs and the total amount of 4% return on reserves used as working capital would have amounted to Rs. 1.96 lacs. Two arguments were advanced against this contention of the appellant. One was that there was nothing like a depreciation fund, that it merely represented a credit item introduced in the balance sheet as against the value of the fixed capital at its original cost and would have disappeared as such if the proper accounting basis had been adopted, viz., the fixed block bad been showed at its depreciated value after deducting the amount of depreciation from the original cost. Such book entries, it was contended, did not convert that credit item into a depreciation fund available to the company and there was therefore no basis for the contention that such a depreciation fund ever existed and could be used as working capital in the business. The other was that there was nothing on the record to show that such a depreciation fund, if any, had been, in fact, used as working capital in the business during that year. The answer furnished by the appellant in regard to both these contentions was that on a true reading of the balance sheet Rs. 41,81,196 were reserves used as working capital, vide calculations in Exhibit C 12. Provision for depreciation was Rs. 1,10,29,954 and the paid up capital was Rs. 80,00,000 thus totaling to Rs. 1,90,29,954. The total capital block as shown in page 5 of the balance sheet for the year ending June 30, 1955, was Rs. 1,48,48,758 and the working capital therefore was Rs. 41,81,196. This was apart from Rs. 7,42,139 which was the total of the three items at page 4 of the balance sheet: Rs. 98,405 capital reserves, Rs. 4,73,734 other reserves and Rs. 1,70,000 provision for doubtful debts as also the investments, cash and bank balance. This being the true position it follows on the facts of the present case that this 958 amount was available for use as working capital and the balance sheet showed that it was in fact so used. Moreover, DO objection was urged in this behalf nor was any finding to the contrary recorded by the Tribunal. We are, therefore, of the opinion that the reasoning adopted by the Tribunal was not correct and the appellant was entitled to 4% return on the reserves used as working capital including the sum of Rs. 41,81,196. The appellant was thus entitled to Rs. 1.96 lacs as the 4% return on reserves used as working capital and not merely Rs. 0.29 lacs as allowed by the Tribunal. The provision for rehabilitation bad been claimed by the appellant at Rs. 1.10 lacs on the basis of 10% of the net profits relying upon para. 20 of the Report of the Committee on Profit Sharing in which the Committee had proposed that 10% of the net profits should compulsorily be set aside for reserves to meet emergencies as well as for rehabilitation, modernization and reasonable expansion. No evidence was at all led by the appellant before the Tribunal showing the cost of the machinery as purchased, the age of the machinery, the estimate for replacement etc. , in order to substantiate this claim for rehabilitation and the appellant was content merely to rely upon this recommendation of the Committee on Profit sharing. This was rightly considered by the Tribunal as insufficient to support the appellant 's claim, though it allowed for rehabilitation, in addition to the statutory depreciation, the amount for which the appellant had actually made provision, viz., the sum by which the depreciation written off for the year exceeded the statutory depreciation (i. e., Rs. 10,00,000 minus Rs. 9,82,799Rs. 17,201). The amount was really small and did not affect the bonus to be awarded. The Tribunal, in fact, allowed the same, though it appears that in the absence of evidence of the nature above referred to even that sum of Rs. 0.17 lacs ought not to have been allowed. In this state of affairs it is really impossible for us to allow the appellant 's claim for rehabilitation in anything beyond the sum of Rs. 0.17 lacs actually 959 allowed by the Tribunal and the claim of the appellant for any further provision for rehabilitation must be disallowed for the purpose of the bonus calculations for the year under consideration. It will however be open to the appellant to claim higher rehabilitation for subsequent years if it can substantiate its claim by adducing proper evidence. In addition to these various sums allowed to the appellant by way of prior charges against the gross profits earned during the accounting year the Tribunal also allowed to the appellant Rs. 2.50 lacs by way of provision for debenture redemption fund. The claim of the appellant was for a sum of Rs. 3.50 lacs for the same and it arose under the following circumstances. The appellant had issued debentures of the value of Rs. 30 lacs in the year 1942 43 and they were redeemable in the year 1962 63. No annual provision had been made from profits for redemption of the same inasmuch as until the year 1949 the appellant was not working at a profit. Such provision was made only thereafter. For the year 1950 51, the appellant made a provision for Rs. 75,000 for debenture redemption fund, for 1951.52, Rs. 1,50,000, for 1952 53 Rs. 1,50,000, for 1953 54 Rs. 75,000 and further provision had to be made for redemption of debentures in a sum of Rs. 24,50,000. In so far as 7 more years were left before the due date for redemption the appellant claimed Rs. 3,50,000 as the annual sum to be set apart, though as a matter of fact in the balance sheet only a provision of Rs. 2,50,000 had been made by it for debenture redemption reserve. The Tribunal pointed out that when the appellant had in its accounts appropriated Rs. 2,50,000 for the debenture redemption fund the claim to have Rs. 3,50,000 for the purposes of bonus formula was clearly untenable. It however was of the opinion that a reasonable provision for redemption fund should be allowed as a prior charge and actually allowed the sum of Rs. 2,50,000 which had been actually provided for the purpose in the balance sheet, negativing the contention of the respondents that no provision should be allowed for debenture redemption fund in the bonus formula. 960 We are of the opinion that the Tribunal was not justified in allowing the sum of Rs. 2,50,000/ for debenture redemption fund as a prior charge in the bonus calculations. The Full Bench Formula does not envisage any such prior charge. It is no doubt true that capital is shy and it would not be practicable for the industrial concern to raise large amounts by way of fresh debentures when they become due. It is also true that the debentures do not stand on a par with other debts of a concern because the debentureholders would in a conceivable situation be able to enforce their security by bringing the industry to a stand still by taking over charge of the whole concern. It would therefore appear that the redemption of these debentures would be one of the primary obligations of the industrial concern and due provision has of necessity to be made for redemption thereof on due date. This however does not mean that in the calculations of the distributable surplus the provision for such redemption should be given the status of a prior charge, though of course that would be a relevant con sideration while distributing the available surplus between the various interests entitled thereto. We are therefore of opinion that the Tribunal was wrong in allowing Rs. 2,50,000/ as a prior charge in the bonus calculations. This disposes of all the contentions which have been urged on behalf of both the parties and calculating the figure on that basis we arrive atthe following Rs. in lacs. Gross Profit as per Tribudal 's calculations 36.21 Less: Notional Normal Depreciation 6.23 29.98 Less: Tax @ 7 as. in a rupee 11.55 18.43 Less: 6% return on ordinary share capital and 5% on preference share capital 4.30 14.13 961 Less: 4% Return on reserves used as working capital: 7,42,139 29 + 41,81,196 1.67 49,23,335 1.96 12.17 Less:Provision for Rehabilitation 0.17 Available Surplus 12.00 This would bring the available surplusfor distribution to a sum of Rs. 12 lacs and this would be distributable amongst the shareholders, the company and the workmen concerned. It is not feasible to lay down any rigid formula as to what the proportion of such distribution amongst these various interests should be. The shareholders as well as the company would both be naturally interested inter alia in providing the debenture redemption reserves as also meeting the needs of the industry for further expansion. The workmen would no doubt be interested in trying to bridge the gap between their actual wage and the living wage to the extent feasible. This surplus of Rs. 12 lacs would have to be distributed amongst them having regard to the facts and circumstances of the case, of course bearing in mind the various considerations indicated above. Before we arrive at the figure of the actual bonus which it will be appropriate in the circumstances of this case to allow to the workmen, we may advert to one argument which was pressed before us. on their behalf and that was that the bonus calculations should not be made on the basis of the All India figures which were adopted by the Tribunal but on the basis of the actual amounts which the appellant had paid and would have to pay to the workmen concerned. It was pointed out that the respondents here were only the workmen in the Wadala Factory of the appellant. The appellant had, however, paid to the various workmen elsewhere as and by way of bonus sums varying between 4% and 29% of the basic wages for the year in question. The sum of Rs. 1,23,138/ only had been 121 962 paid in full and final settlement to the workmen in some of the factories and the bonus calculations on an All India basis would thus work to the advantage of the appellant in so far as they would result in saving to the appellant of the difference between the amounts to which those workmen would be entitled on the basis of the All India figures adopted by the Tribunal and the amounts actually paid to them as a result of agreements, conciliation or adjudication. It was therefore contended that the calculations should be made after taking into account the savings thus effected by the appellant and only a sum of Rs. 1,23,138 / which was the actual sum paid to those workmen should be taken into account and no more. We are afraid, we cannot accept this contention. If this contention was accepted the respondents before us would have an advantage over those workmen with whom settlements have been made and would get larger amounts by way of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen at lesser figures. If this contention of the respondents was pushed to its logical extent it would also mean that in the event of the non fulfilment of the conditions imposed by the Tribunal in the award of bonus herein bringing in savings in the hands of the appellant, the respondents would be entitled to take advantage of those savings also and should be awarded larger amounts by way of bonus, which would really be the result of the claimants entitled to the same not receiving it under certain circumstances an event which would be purely an extraneous one and unconnected with the contribution of the respondents towards the gross profits earned by the appellant. The Tribunal was, therefore, right in calculating the bonus on an All India basis. By our order dated April 12, 1957, the appellant was ordered to pay to the respondents within a fortnight from the date thereof bonus for the year 1954 55 equivalent to two months ' basic wages; that amount has already been paid and works out at Rs. 3.39 lacs on an All India basis. The only question which therefore survives is what further bonus, if any, would the respondents be entitled 963 to from the distributable surplus of Rs. 12 lacs. The sum of Rs. 3.50 lacs required for building up the debenture redemption reserve is an all engrossing need of the appellant and that is a factor which must of necessity be taken into consideration while arriving at the ultimate figure, particularly because such redemption of the debentures would enure not only for the benefit of the Company and its shareholders but also of the workmen employed therein. Having regard to all the circumstances of the case, we feel that an award of four months ' basic wages as aggregate bonus for the year 1954 55 (which by the way was the bonus awarded for the previous year 1953 54 also) would give a fair share to the labour in the distributable surplus, leaving to the shareholders and the company a balance of Rs. 5.22 lacs to be utilised by them not only towards building up of the debenture redemption reserve but also for building up other reserves, which would be utilised for various other purposes indicated above. The appellant would no doubt get also the refund of the income tax on the bonus payments made by it. This rebate would also go towards the fulfilment of the very same objectives, which would ultimately enure both for the benefit of the capital as well as labour. We have, therefore, come. to the conclusion that the appellant should pay to the respondents, in addition to the two months ' basic wages already paid to them in pursuance of this Court 's order dated April 12, 1957, an additional sum equivalent to two months ' basic wages by way of bonus for the year 1954 55 subject to the same conditions as were laid down in the award of the Tribunal above referred to, all the dates mentioned therein being calculated from the date of this judgment. We accordingly allow the appeal, modify the award of the Industrial Tribunal to the extent mentioned above, but in the circumstances of the case we make no order as to costs, each party bearing and paying its own costs thereof. Appeal allowed.

The appellant manufactured hume pipes and had factories in different parts of India, Pakistan and Ceylon. For determining the available surplus for the payment of bonus for the year 1954 55 the appellant claimed deductions as prior charges on account of (i) losses suffered on the Lahore factory written off, (ii) expenditure on patents written off, and (iii) debenture redemption reserve. It also claimed 6% return on the preference shares as return on paid up capital. The losses on the Lahore factory had been incurred in the previous years which had been carried forward from year to year and had been written off as irrecoverable in the bonus year. The amounts spent on the purchase of the patents which had been worked off in the previous years had also been written off in the bonus year. The appellant had issued debentures in 1942 43 redeemable in 1962 63 and claimed Rs. 3,50,000 as the annual contribution towards the redemption reserve. The appellant bad issued preference shares on which the shareholders, under the terms of the issue, were not entitled to more than 5%, but the appellant claimed a return of 6% on these hatres also as return on paid up 949 capital as provided in the Full Bench formula. The dispute regarding bonus had been raised by the workmen of the Wadala factory alone, the workmen of other factories having settled the matter had been paid the agreed bonus. The respondents claimed that the bonus calculations should not be made on the basis of All India figures but on the basis of the actual amounts paid or payable by the appellant under the settlements. Held, that the losses on the Lahore factory and the patents written off could not be allowed as prior charges as they were merely debits in connection with the working of previous years. Nor could the amount on account of the debenture redemption reserve be allowed as a prior charge as no such charge was envisaged by the Full Bench formula of the Labour Appellate Tribunal ; but this amount could be taken into consideration when distributing the available surplus among the various interests entitled thereto. In determining the available surplus the Full Bench formula must be adhered to in its essential particulars as otherwise there would be no stability or uniformity of practice. A deduction of more than 5% return on the preference shares could not be allowed as that was the maximum return which the shareholders could get on these shares. Even though the Full Bench formula mentioned 6% return on paid up capital it was not to be literally construed and the Tribunal could, if the circumstances warranted, increase or decrease the rate. In calculating the actual amount of bonus to be paid calcu lations had to be made on the basis of All India figures otherwise the respondents would have an advantage over those workmen with whom settlements had been made and would get larger amounts of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen at lesser figures.

l Appeals Nos. 2143 to 2145 of 1968. 315 Appeals from the judgments and orders dated March 18, 1965 of the Calcutta High Court in Income tax References Nos. 154, 155. and 156 of 1961. M.C. Chagla, P. C. Bhartari, and 0. C. Mathur, for the appellant (in C.As. 2143 and 2144 of 1968). S.Mitra, P. C. Bhartari and 0. C. Mathur, for the appellant (in C.A. No. 2145 of 1968). S.T. Desai, section K. Aiyar and B. D. Sharma, for the respondent (in all the appeals). The Judgment of the Court delivered by Shah, Actng C.J. These appeals relate to the assessment to tax of M/s. Bengal Enamel Works Ltd. a public limited com pany for the assessment years 1951 52, 1952 53 and 1953 54. The Company is doing business of manufacturing "enamelled ware. It had originally employed a "technician ' at a monthly salary of Rs. 5001 . In June 1941 the technician was relieved, and one Col. Bhattacharya who was a director of the Company was appointed its "Technical Adviser. " He was to receive as remuneration 15% of the gross annual profits of the Company. Col. Bhattacharya resigned his office and Dr. Ganguly (son inlaw of Col. Bhattacharya) was appointed to that office. The Board of Directors resolved on May 18, 1950 to pay to Dr. Ganguly 15% of the gross annual profits (without deducting depreciation) as his remuneration. In the assessment years 1951 52, 1952 53 and 1953 54 the Company claimed under section 10(2) (xv) of the Income tax Act, 1922, as admissible allowance, in computing its taxable income, Rs. 52,947/ , Rs. 64,356/ and Rs. 79,227/ respectively, paid as remuneration to Dr. Ganguly under the terms of the resolution dated May 48, 1950. The Income tax Officer, Companies District III, Calcutta, allowed for each of the years remuneration at the rate of Rs. 42,000/ only as a permissible deduction. The order was confirmed in appeal to the Appellate Assistant Commissioner and by the Tribunal. The Tribunal referred in respect of each of the three years the following question: "Whether on the facts and in the circumstances of the case, the disallowance of a part of the expenses incurred by the assessee 'for payment of remuneration to its Technical Adviser is permissible under the Provisions of section 10(2) (xv) of the Indian Income tax Act)" 216 The High Court answered the question in the affirmative, and disallowed the claim of the Company. With certificate of fitness, these appeals are preferred against the order of the High Court. In computing the taxable income of an assessee, whether an amount claimed as expenditure was laid out or expended wholly and exclusively for the purpose of the, business, profession or vocation of the assessee must be decided on the facts and in the light, of the circumstances of each case : Swadeshi Cotton Mills Co. Ltd. vs Commissioner of Income tax, U.P.(1). Resolution of the assessee fixing the remuneration to be paid to an employee and production of vouchers for payment together with proof of rendering service do not exclude an enquiry whether the expenditure was laid out wholly and exclusively for the purpose of the assessee 's business. It is open to the Tax Officers to hold agreement to pay and payment notwithstanding that the expenditure was not laid out wholly and exclusively for the purpose of the business: Swadeshi Cotton Mills Co.Ltd. 's case( '). But an inference from the facts found that the expenditure was, wholly and exclusively laid out for the purpose of the business is one of law and not of fact, and the High Court in a reference under section 66 of the Income tax Act is competent to decide that the inference raised by the Tribunal is erroneous in law. In the present case, the facts found are these : Col. Bhattacharya and his son in law Dr. Ganguly were two of the directors of the Company who between them held on January 1, 1950 49% of the total number of shares of the Company and the other directors of the Company held only I % of the shares. Dr. Ganguly had received no training in the technique of enamelling : he was a medical practitioner earning Rs. 20,000/ per annum by the exercise of his profession. Apparently no applications were invited for the appointment of a Technical Adviser when Col. Bhattacharya resigned his office. In the resolution passed by the Directors it was recorded that many "personal enquiries" regarding the post were made, but no candidate was found suitable The Board, it was recorded, considered the applications of section Urbeneck and J. Schulser but the qualifications of these two candidates did not impress the directors: moreover the terms of service offered by J. Schulser were not acceptable to the Board and therefore the only applicant Dr. Ganguly who was working on Probation in the post for some time past and had worked without remuneration up to December 31, 1949 was considered the applications of section urbeneck and J. Schulser though called for by the Incometax Officer were not produced by the Com pany. At the relevant time "a good technical expert in enamelling" (1) 63 I.T . R. 57. 317 could be secured for a monthly remuneration of Rs. 1,000/ or Rs. 1,200/ provided that appointment was not for a short period. In the view of the Income tax Officer, Dr. Ganguly came to be appointed to the post of Technical Adviser of the Company as soon as, his father in law vacated the post and "the generous remuneration offered to him was influenced by factors other than commercial considerations, and considering that Dr. Ganguly was giving up his professional practice in allopathic medicine which yielded him an annual income of Rs. 20,000/ to engage himself as a whole time Adviser attending to the development of the industry a gross remuneration of Rs. 3,500/ per month, beside the .remuneration of Rs. 1,000/ per month that he obtained as Secretary of the Managing Agents of the Company, would be adequate. " With that view the Applicate Assistant Commissioner and the Income tax Appellate Tribunal have substantially agreed. The Tribunal observed that they were inclined to conclude that "extra commercial considerations" had influenced the fixation of remuneration of Dr. Ganguly and that partial disallowance of the remuneration "so influenced seems quite fair". Counsel for the Company urged, relying upon the judgments of this Court in J. K. Woollen Manufacturers vs Commissioner of Income tax, U.P.(1) and Commissioner of Income tax, Bombay vs Walchand & Co. Private Ltd.( ') that in determining the admissibility of an allowance as expenditure laid out and expended wholly and exclusively for thee purpose of the business has to be adjudged from the point of view of the employer and not of the revenue, the Taxing authorities had no power to disallow the remuneration paid to its Technical Adviser, merely because they think that the Company may probably have secured the services of another Adviser for a smaller remuneration. But these cases, in our judgment, have no bearing here. The departmental authorities have not attempted to reduce the allowance on the ground that the remuneration paid to Dr. Ganguli was in their view excessive. Indisputably an employer in fixing the remu neration of his employee is entitled to take into consideration the extent of his business, the nature of duties to be performed, the special aptitude of the employee, the future prospects of the business and other related circumstances and the taxing authorities cannot substitute their own view as to the reasonable remuneration which should have been agreed to be paid to the employee. But the taxing authority may disallow an expenditure claimed on the ground that the payment is not real or is not incurred by the assessee in the course of his business, or that it is not laid out wholly and exclusively for the purpose of the business (1) ; (2) ; 318 of the assessee. Thereby the authority does not substitute its own view of how, the assessee 's business affairs should be managed, but proceeds to disallow the expenditure because the condition of its admissibility is absent. It, has been uniformly found by all the authorities that the remuneration agreed to be paid to Dr. Ganguly was influenced by "extra commercial considerations". Ganguly and Col. Bhattacharya were able to control the voting before the Board of Directors. Dr. Ganguly was not trained in the technique of . enamelled ware," and had no special qualifications for the post. The remuneration agreed to be paid was much in excess of what was normally payable, and also of what Dr. Ganguly was earning by practising his profession as a doctor of medicine. The criticism that the Tribunal 's finding was based on no evidence or was based on irrelevant considerations cannot therefore be accepted. Where an amount paid to an employee pursuant to an agreement is excessive because of "extra commercial considerations," the taxing authority has jurisdiction to disallow a part of the amount as expenditure not incurred wholly and "elusively for the purpose of the business : Swadeshi Cotton Mills Co. Ltd. The appeals fail and are dismissed with costs. One hearing fee. V.P.S. Appeals dismissed.

The appellant, which was doing the business of manufacturing enamelled ware, appointed a technical adviser and the Board of Directors resolved to pay him 15% of the gross annual profits as his remuneration. .For the assessment years, 1951 52, 1952 53 and 1953 54, the appellant claimed the amounts paid to the technical adviser as admissible allowances under section 10(2)(xv) of the Income tax Act, 1922. The Income tax Officer found, that the technical adviser was a doctor of medicine without any special qualification for the post, that he was not trained in the technique of enamelled ware, that he and his father in law, by the number of shares they held, were able to control the voting before the Board of Directors, that good technical experts in enamelling could have been secured for a smaller remuneration, that the remuneration agreed to be paid to the technical adviser was influenced by extra commercial considerations and therefore, disallowed a part of the amount, holding that it was expenditure not incurred wholly and exclusively for the purpose of the business. The order was confirmed by the Appellant Assistant Commissioner, the Tribunal and the High Court. In appeal to this Court. HELD : The question whether an amount claimed as expenditure was laid out or expended wholly and exclusively for the purpose of the business must be decided on the facts and circumstances of each case, and the inference drawn from the facts found is one of law. Ordinarily, an employer, in fixing the remuneration of his employee, is entitled to take into consideration the extent of his business, the nature of duties to be performed, the special aptitude of the employee, the future prospects of the business and other related circumstances, and the taxing authorities cannot substitute their own view as to the reasonable remuneration which should have, been agreed to be paid to the employee. But, the taxing authority may disallow an expenditure claimed, on the ground that the payment is not real or is not incured by the assessee in the course of his business or that it is not laid out wholly and exclusively for the pur pose of the business. In doing so, the authority does not substitute its own view of how the assessee 's business affairs should be managed, but proceeds to disallow the expenditure, because, the condition of its admissibility is absent. [316 B, D; 317 F H ', 318 A, D] Swadeshi Cotton Mills Co. Ltd. vs C.I.T., U.P. , followed.

ivil Appeal Nos. 1724/69 and 1732 of 1971. Appeals by Special Leave from the Judgment and Order dated 12 5 69 of the Allahabad High Court in Special Appeal Nos. 492 and 437 of 1968. Naunit Lal and Faqir Chand for the Appellant in CA Nos. 1724/69. G. N. Dikshit, O. P. Rana for Respondent No.1 in C.A. 1724/69 J. P. Goyal, section M. Jain and section K. Jain for Respondent No.2 in CA Nos. 1724/69 Miss Meera Bali for the Appellant in C.A. 1732/71 G. N. Dikshit and O.P. Rana for the Respondents in CA 1732/71 The Judgment of the Court was delivered by SEN J. These two appeals by special leave, directed against the judgment of the Allahabad High Court dated May 12, 1969 raise common questions and therefore, are disposed of by this common judgment. By separate notifications issued under section 3 of the U.P. Mahapalika Adhiniyam, 1959, the State Government constituted Municipal Corporations in five cities in the State, namely Kanpur, Agra, Varanasi, Allahabad and Lucknow w.e.f. February 1, 1960. The appellant in the present appeal, Mohd. Rashid Ahmad was a permanent Assistant Engineer in the Development Board, Kanpur, constituted under the Cawnpore Urban Area Development Act, 1945. In 1953, an Administrator was appointed of both the Development Board and the Municipal Board, Kanpur, constituted under the U.P. Municipalities Act, 1916, under the U.P. Local Bodies (Appointment of Administrators) Act, 1953. The two local bodies, however, continued to have separate legal existence and their officers and servants continued as the employees of the respective bodies. The appellant Mohd. Rashid Ahmad was appointed as Offg. Executive Engineer by the Administrator of the Municipal Corporation, Kanpur, for a period of one year on September 12, 1960. He has since then continued to function in the same capacity, on a purely temporary arrangement under s.577(ee), that is, for so long as no substantive appointment could be made to that post under s.106. The Uttar Pradesh Public Service Commission, however, considered that he was not fit for appointment for the post of the Executive Engineer, Municipal Corporation, Kanpur. 831 The appellant in the connected appeal, Ashfaq Hussain was a permanent Sanitary Inspector in the Municipal Board, Kanpur. After the constitution of the Municipal Corporation, Kanpur, he continued to hold that post under section 577(e). On July 24, 1967 he was transferred in the same capacity to the Municipal Corporation, Allahabad, where he was promoted temporarily as an Assistant Engineer. He, therefore, stood provisionally absorbed under s.577(e). Both the U.P. Nagar Mahapalika Adhiniyam, 1959, and the U.P. Municipalities Act, 1916 empowered these local bodies to appoint their employees subject to certain regulatory control by the State Government. By section 12 of the U.P. Nagar Mahapalika (Sanshodhan) Adhiniyam, 1964, the State Legislature added section 112A to the U.P. NagarMahapalika Adhiniyam, 1959. Similarly, by s.37 of the U.P. Municipalities (Amendment) Act, 1964, s.698 was added to the U.P. Municipalities Act, 1916, which was identical in terms to s.112A. Section 112A of the Adhiniyam empowered the State Government to provide by rules for the creation of one or more services to be known as Centralised Palika Services, as it may deem fit and proper, common to all the Municipal Corporations and Municipal Boards, and prescribe the method for recruitment and conditions of service of persons appointed to any such service. Section 112A of the U.P. Nagar Mahapalika Adhiniyam, 1959, enacts: "112A. Centralization of services. (1) Notwithstanding anything contained in section 106 to 110, the State Government may at any time by rules provide for the creation of one or more services of such officers and servants as the State Government may deem fit, common to the Mahapalikas or to the Mahapalikas and Municipal Boards, of the State, and prescribe the method of recruitment and conditions of service of persons appointed to any such service. (2) When any such service is created, officers and servants serving on the posts included in the service, as well as officers and servants performing the duties and functions of those posts under sub clause (1) of clause (ee) of section 577 may, if found suitable, be absorbed in the service, provisionally or finally, and the services of others shall stand determined, in the prescribed manner. (3) Without prejudice to the generality of the provisions of sub sections (1) and (2), such rules may also provide for 832 consultation with the State Public Service Commission in respect of any of the matters referred to in the said sub sections." The State Government in exercise of the powers conferred by section 112A of the U.P. Nagar Mahapalika Adhiniyam, 1959 and s.69B of the U.P. Municipalities Act, 1916, made the U.P. Palika (Centralised) Services Rules, 1966, which came into force on July 9, 1966. Rule 3 created 19 Palika (Centralised) Services, covering 76 posts, common to all the Municipal Corporations and Municipal Boards. The rules provided for regulating the recruitment and conditions of service of the persons appointed to these newly created services. Rule 6 dealt with recruitment to the Centralised Palika Services. Due to inadvertence r.6 was not drafted in conformity with the requirements of s.112A and s.69B. That was because cl.(1) provided for automatic final absorption of officers and servants provisionally absorbed under s.577(e), contrary to the provisions of s.112A of the Adhiniyam and s.69B of the Municipalities Act. On September 5, 1966, the Governor promulgated the U.P. Local Self Government (Amendment) Ordinance, 1966, which was replaced by the U.P. Local Self Government Laws (Amendment) Act 1966. Section 19 of the Act reads as follows: "19. Deeming, validation, etc. The Uttar Pradesh Palika (Centralised Services Rules, 1966, shall be deemed to have been made under the provisions of the Uttar Pradesh Nagar Mahapalika Adhiniyam, 1959, and the U.P. Municipalities Act, 1916, as if the amendments made by this Act to the said Acts were always in force and be deemed to be and always to have been valid and shall, subject to any amendments made thereto, continue in force, and notwithstanding anything contained in the said Acts, the power to make amendments to the said rules may, during the period ending on September 4, 1967, be exercised retrospectively. " It, in effect, amended section 112A of the Adhiniyam and s.69B of the Municipalities Act. Section 4 of the Act provided that the U.P. Palika (Centralised) Services Rules, 1966 shall be deemed to be valid. The Act further provided that the amendments made to the rules may be given retrospective effect. The power of making retrospective rules was, however, limited to a period of one year from the commencement of the ordinance. 833 On October 10, 1966, the State Government passed the U.P. Palika (Centralised) Services (Amendment) Rules, 1966. These rules repealed and re enacted r.6 with retrospective effect from July 9, 1966. Under cl. (ii) of r.6(2) the State Government had to pass a final order of absorption, in respect of particular officers and servants of the erstwhile Municipal Boards, if they were found suitable, in accordance with s.112A of the Adhiniyam. Clause (iii) provided that such orders had to be made on or before March 31, 1967. By cl.(iv) if no orders of final absorption were passed till then, the officer or servant concerned was to be deemed to have been finally absorbed. The State Government was, however, constrained to make the U.P. Palika (Centralised) Services (Amendment) Rules, 1967 on March 30, 1967 and amend cl. (iii) of r.6(2), as the work of final absorption could not be completed by March 31, 1967. The date of passing the necessary orders in that behalf was sought to be shifted to June 30, 1967. A new cl. (iii) was accordingly substituted by this amendment effected on March, 30, 1967. But, unfortunately the amendment was made to come into effect from April 1, 1967. This created a serious legal infirmity, as on the expiry of March, 31 1967, the legal fiction embodied in cl. (iv) was brought into play. Thereafter, the State Government made the last amendment to the U.P. Palika (Centralised) Services (Amendment) Rules, 1967 on June 26, 1967, in supersession of the U.P. Palika (Centralised) Services (Amendment) Rules, 1967 made on March 30, 1967. This amendment introduced a new cl.(iii) to r.6(2), in place of the existing cl.(iii) of U.P. Palika (Centralised) Services Rules, 1966, by which the date of passing the order was shifted from March 31, 1967 to August 31, 1967, with retrospective effect from July 9, 1966. Having provided for the creation of Centralised Palika Services, the State Government had, in the meanwhile, laid down the procedure by which an office or servant provisionally absorbed under section 577 (e) of temporarily appointed under s.577(ee), were to be finally absorbed, if found suitable, under s.112A. By its three circulars dated January 11, 1967; January 31, 1967 and February 23, 1967, addressed to the Divisional Commissioners, it intimated the constitution of Divisional Committees for making necessary recommendations to the State Government in this behalf. The first circular embodied the Government policy in these terms: "Government desire that all officers and servants, whose services are proposed to be determined on grounds of unsuita 834 bility may be given an opportunity of personal interview by the Committee." After such interviews, the Committees were to finalise their recommendations and furnish the same to the Government. In view of the limited time available to the Government, for finalising action in the matter, it was desired that the first meeting of the Committees should be held in the last week of January or in the first week of February, 1967. The Divisional Commissioner were required to intimate the date to the Secretary to the Government, Local Self Government Department, so that all necessary arrangements could be made to forward the character rolls and service records of the Centralised Services officers and servants. By the second circular, the State Government re constituted the Committees, so far as the five Municipal Corporations were concerned, and directed that these Divisional Committees were to make selections for all Centralised Services except those whose starting salary was Rs. 500/ and above. Selection for the posts in the latter category were to be made by the State Selection Committee. Thus, the Government divided the officers and servants into two categories, and their cases were to be dealt with at two different levels for purposes of final absorption under r.6(2)(iii) read with s.112A. By its third circular, the State Government without disturbing the earlier categorisation of officers and servants into two classes, laid down certain broad criteria with a view to secure a reasonable uniformity in the standards to be applied by the Divisional Committees in making the selection. It may, however, be observed that the Government reiterated its declared policy that all such officers and servants, whose services were proposed to be determined on the ground of unsuitability be given an opportunity of personal interview by the Committees stating: ". the committee should interview the official concerned to judge his suitability or otherwise for absorption in the centralised services. When it is proposed to declare an official to be unsuitable for absorption on the basis of adverse entries, the divisional committee should afford an opportunity to the official concerned to appear before it and clear up his position. " It was also desired that only those adverse remarks may be considered against the official concerned, which were found to have been duly communicated to him. 835 It must at once be stated that though the State Government had by its circular dated January 31, 1967 entrusted the task of determining the suitability or otherwise of officers and servants holding Centralised Services posts drawing less than Rs. 500/ , to Divisional Committees, and reserved such function in respect of officers and servants drawing Rs 500/ or more, to the State Selection Committee, and by its subsequent circular dated February 23, 1967 maintained the classification of such officers and servants for purposes of judging their suitability for absorption in the Centralised Palika Services, the final orders of absorption in each case under s.112A were passed by the State Government. In the former class, the recommendations of Divisional Committees were scrutinised by the State Government in the Local Self Government Department, in the light of the service records of the officials concerned, and the necessary orders thereon were passed. In respect of the latter category, the Secretary to the Government, Local Self Government Department prepared a note and put it up for the Minister for passing the final orders. It is also worthy of mention that the delay in completing the work of final absorption by the State Government was mainly due to three factors, namely; (1) due to shortness of the time available at its disposal, (2) the number of officers and servants holding the Centralised Services posts under s.577(e) and (ee) was quite large, and (3) because of delay on the part of the erstwhile Municipal Boards to forward the character rolls and service records of the officers and servants concerned. On account of this, the task of absorption under s.112A could not be completed before March 31, 1967 i.e., the date originally fixed by cl.(iii) of r.6(2) of the U.P. Palika (Centralised) Services Rules 1966. The period was, therefore, subsequently extended from March 31, 1967 to June 30, 1967, and thereafter from March 31, 1967 to August 31, 1967. Eventually, the State Government in exercise of its powers under cl.(iii) of r.6(2) of the U.P. Palika (Centralised) Services Rules, 1966 determined the services of the appellant Mohd. Rashid Ahmad on July 18, 1967 and that of Ashfaq Hussain on August 27, 1967, on the ground that they were not found fit for absorption under s.112A of the Adhiniyam. The two appellants and several other employees of the erstwhile Municipal Boards and District Boards challenged the validity of the various orders passed by the State Government terminating their services before the Allahabad High Court on several grounds. Amongst others, they challenged the validity of r.6(2) (iii), framed under section 112A 836 of the Adhiniyam, on the ground that it was ultra vires the State Government as it brings about extinction of the relationship of employer and employees between them and the erstwhile Municipal Boards. It was also urged that the impugned orders were violative of Articles 14 and 16 of the Constitution because the classification made by the State Government by its circular dated January 31, 1967 entrusting the task of determination of the suitability or otherwise of officers and servants holding Centralised Services posts drawing less than Rs. 500/ to Divisional Committees, which were enjoined to give them the right of a personal hearing to have their say in the matter of final absorption, and entrusting of such function in respect of officers and servants drawing Rs. 500/ and above to the State Selection Committee without a corresponding right of hearing, was without any rational basis. It was also urged that the impugned orders were vitiated being in breach of the rules of natural justice. A Division Bench of the Allahabad High Court, however, rejected all these contentions. In view of the language of Entry 5, List II of the Seventh Schedule, the objection regarding the validity of r.6(2) (iii) was rightly not pressed before us. On the view that we take of the various circulars issued by the State Government laying down the procedure for dealing with the question of suitability or otherwise of officers and servants of the erstwhile Municipal Boards for absorption in the Centralised Services under r.6(2)(iii) the contention based on Articles 14 and 16 of the Constitution also does not arise. Learned counsel appearing for the appellants assailed the impugned orders of the State Government on two grounds, namely: 1. By reason of the legal fiction contained in cl.(iii) of r.6(2), the services of the appellants stood finally absorbed in the U.P. Palika Centralised Services on March 31, 1967 due to the failure of the State Government to pass the necessary orders in that behalf before that date. Under the legal fiction contained in cl.(iv) thereof, and the subsequent amendment made by the U.P. Palika (Centralised) Services (Amendment) Rules, 1967 which came into force on April 1, 1967, the vested rights acquired by them to hold their respective posts could not be affected to their detriment; and 2. The orders of termination of services passed by the State Government were vitiated due to its failure to give to the appellants an opportunity of hearing. 837 With respect to the first contention it is urged that the appellants stood provisionally absorbed under section 577(e) read with cl(i) of r.6(2). It is said that they would be deemed to have been finally absorbed on March 31, 1967, if no orders contemplated by cl.(ii) thereof were made with respect to them on or before that date. The argument is that the two subsequent amendments made on March 30, 1967 and June 26, 1967, by which the State Government purported to shift the date first from March 31, 1967 to June 30, 1967 and then from March 31, 1967 to August 31, 1967, were legally ineffective, as the first amendment made to cl.(iii) of r.6(2) came into force on April 1, 1967 by which date the appellants already stood finally absorbed. There was, therefore, no power in the State Government to re open the question of final absorption under section 112A(2) of the Adhiniyam. There is a fallacy in the argument. The validity of the two amendments made by the State Government in r.6(2) from time to time cannot be questioned. While it is true that a rule cannot be made with retrospective effect, the legislature by enacting s.19 of the U.P. Local Self Government (Amendment) Act, 1966, expressly conferred powers on the State Government to make retrospective rules. Indeed, the validity of the amendments was not questioned before us. Even if the first amendment of March 30, 1967 was ineffective because it was brought into force from April 1, 1967, the second amendment of June 26, 1967, which introduced a new clause (iii) to r.6(2) with retrospective effect from July 9, 1966, was fully effective. It shifted the date for passing of the order of final absorption from March 31, 1967 to August 31, 1967. Till the expiry of the date now fixed, i.e. August 31, 1967, the legal fiction contained in cl. (iv) of r.6(2) would not be brought into play. That is the inevitable legal consequence of the subsequent amendment made on June 26, 1967. It would be clear that cl. (iii) of r. 6(2), as amended on October 10, 1966, gave power to the State Government to pass an order of absorption under section 112A of the Adhiniyam, of an officer or servant of the Municipal Corporations provisionally absorbed under section 577(e) if found suitable, on or before March 31, 1967. If there was a failure on the part of the State Government to pass such an order in respect of a particular officer or servant by that date, it would, unless there was a provision to the contrary, bring into play the legal fiction contained therein, and he would, by its force, be deemed to be finally absorbed in the post held by him. 838 The State Government in their return have candidly stated that due to inadvertence, the subsequent amendment effected on March 30, 1967, was made to take effect on April 1, 1967, by which date the legal fiction under cl. (iv) had already taken effect. It, therefore, became necessary to correct the serious legal infirmity. It was for that reason that the subsequent amendment was made on June 26, 1967 by which a new cl. (iii) was substituted in place of the existing cl. (iii) to r.6(2). The amendment substituted new cl. (iii) to r. 6(2) with effect from July 9, 1966 i.e., from the very inception. It was legitimately within the powers of the State Government to give to the amended rule a retrospective effect. As a result of the amendment, the original cl. (iii) was substituted by a new cl. (iii) by which the date for passing an order of absorption by the State Government was shifted to August 31, 1967, which again introduced another legal fiction. It provided that if there was a failure on the part of the State Government to pass an order of absorption by August 31, 1967, the officer or servant concerned shall be deemed to be finally absorbed. This legal fiction was brought into force with effect from July 9, 1966. It is needless for us to stress that both the legal fictions, one created by the original cl. (iii) fixing the fictional date of absorption as March 31, 1967 and the subsequent legal fiction providing for the fictional date of absorption as August 31, 1967, could not co exist. With the subsequent amendment effected on June 26, 1967, the earlier legal fiction was never brought into play, as by reason of the amendment, the State Government had the power to pass the necessary orders till August 31, 1967. The introduction of the second fictional date i.e., August 31, 1967, was to "eclipse" the earlier fictional date of absorption. Perhaps no rule of construction is more firmly established than this that retrospective operation is not to be given to a statute so as to impair an existing right or obligation other than as regards the matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in a language which is fairly capable of either interpretation, it ought to be construed as prospective only. But where, as here, it is expressly stated that an enactment shall be retrospective, the courts will give it such an operation. It is obviously competent for the legislature, in its wisdom, to make the provisions of an Act of Parliament retrospective. That is precisely the case here. In Quinn vs Prairiedale where a subsequent enactment provided that the relevant section should be 839 deemed never to have been contained in the earlier statute, it was held to be sufficient to rebut the presumption against retrospectivity. In State of Punjab vs Mohar Singh and in Inder Sohan Lal vs Custodian of Evacuee Property Delhi & Ors.(3) this Court had to consider the effect of repeal of an enactment followed by re enactment in the light of s.6 of the . The line of enquiry, as observed in Mohar Singh 's case, would be not whether the new Act expressly keeps alive old rights and liabilities, but whether it 'manifests an intention to destroy them '. It was held that section 6 of the was not entirely ruled out when there was a repeal of the enactment followed by a fresh legislation unless the new legislation manifested an intention to the contrary. Such incompatibility had to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause was, by itself, not conclusive. In the present case, however, there can be no doubt that by the introduction of the new fictional date of absorption as August 31, 1967, there was a clear intention to destroy the earlier fictional date of March 31, 1967. It would clearly be incompatible, on consideration of subsequent amendment, for both the provisions, i.e., the original cl. (iii) fixing March 31, 1967 and the new cl. (iii) fixing August 31, 1967 to be the fictional date, to operate simultaneously. The effect of introduction of the new fictional date was to annihilate the earlier fictional date. The appellants, therefore, did not stand automatically absorbed by the failure of the State Government to pass the necessary orders by March 31, 1967, as its powers stood extended by the subsequent amendment to August 31, 1967. Before that date expired, the State Government in both these cases, passed the necessary orders terminating the services of the appellants as they were not found fit for absorption under section 112A (2) of the Act. The first contention, therefore, fails. That takes us to the second contention, namely, whether the impugned orders are vitiated on account of the failure of the State Government to afford to the appellants an opportunity of a hearing. With the establishment of Municipal Corporations in five cities in the State, namely, Kanpur, Agra, Varanasi, Allahabad and Lucknow, w.e.f. February 1, 1960, the Municipal Boards, Improvement Trusts, Development Boards etc. in these cities, ceased to exist with the 840 repeal, by s.581 of the U.P. Nagar Mahapalika Adhiniyam, 1959, of the U.P. Municipalities Act, 1916, the U.P. Town Improvement Act, 1919, the U.P. District Boards Act, 1922, the Cawnpore Urban Area Development Act 1945, the U.P. Local Bodies (Appointment of Administrator) Act 1953, with effect from that date, in relation to these cities. In consequence thereof, the existing posts held by the officers and servants of these bodies stood abolished. Consequent upon the abolition of the posts, all officers and servants of the erstwhile local bodies lost their right to hold their posts. The Adhiniyam, however, provided by s.577(e), notwithstanding anything contained in ss.106 and 107, for the provisional absorption of these officers and servants in the Municipal Corporations, till they were finally absorbed in any Centralised Services created by rules made under s.112A, or their services did not stand determined in accordance with such rules. By s.577(ee) the Administrator was authorised to make temporary appointments of officers and servants against the posts mentioned in s.106 till substantive appointments were not made thereto as provided in the Adhiniyam, and they were to be treated as on deputation with the Municipal Corporations. This was, not doubt, an ad interim arrangement until the State Government by rules framed under s.112A(1) provided for the creation of the Centralised Palika Services, common to all the Municipal Corporations and Municipal Boards, and made final absorption of officers and servants serving on the posts included in such Centralised Services under s.112A(2). In the very nature of things, the officers and servants provisionally absorbed under s.577(e) or temporarily appointed under s.577(ee) could not be automatically absorbed in the newly created Centralised Services. There had to be a screening of all such officers and servants with a view to determine their suitability or otherwise for final absorption in Centralised Services. It was particularly necessary to weed out the dead wood to bring about an overall improvement in the municipal administration in these cities. The very nature of the functions entrusted to the State Government under r.6(2) (iii) of the U.P. Palika (Centralised) Services Rules, 1966 for purposes of final absorption under s.112A of the Adhiniyam, implies a duty to act in a quasi judicial manner. It cannot be denied that an officer or servant provisionally absorbed under s.577(e) or temporarily appointed under s.577(ee) had the right to be considered for purposes of final absorption. Such officers or servants, particularly those in permanent employment who had put in 20 to 25 years of service in the erstwhile Municipal Boards or Development Boards were vitally affected in the matter of final absorption. 841 By s.112A of the Act, the legislature created a machinery for determining the suitability or otherwise of such officers or servants for absorption in the newly created Centralised Services. The entrustment of this work to the State Government under s.112A, imposed a corresponding duty or obligation on the Government to hear the officers and servants concerned. In view of this, it is rightly urged that the impugned orders, unless they conform to the rules of natural justice, were liable to be struck down as invalid. It is a fundamental rule of law that no decision must be taken which will affect the rights of any person without first giving him an opportunity of putting forward his case. In Local Government Board vs Arlidge Lord Haldane, L. C. tried to reconcile the procedure of a Government department with the legal standards of natural justice. In Ridge vs Baldwin & Ors. Lord Reid stated: "It is not suggested that he holds the position of a judge or that the appellant is entitled to insist on the forms used in ordinary judicial procedure, but he had 'a duty of giving to any person against whom the complaint is made a fair opportunity to make any relevant statement which he may desire to bring forward and a fair opportunity to correct or controvert any relevant statement brought forward to his prejudice." These decisions rest on the classical formulation of the "duty to hear" evolved by Lord Loreburn in Board of Education vs Rice. The main requirements of a fair hearing are two: (1) a person must know the case he is to meet, and (2) he must have an adequate opportunity of meeting that case. There has, ever since the judgment of Lord Reid in Ridge vs Baldwin (supra), been considerable fluctuation of judicial opinion in England as to the degree of strictness with which the rules of natural justice should be extended, and there is growing awareness of the problems created by the extended application of natural justice, or the duty to act fairly, which tends to sacrifice the administrative efficiency and despatch, or frustrates the object of the law in question. Since this Court has held Lord Reid 's judgment in Ridge vs Baldwin would be of assistance in deciding questions relating to natural justice, there is always "the duty to act judicially". There is, therefore, the insistence upon the requirement of a "fair hearing". 842 In A. K. Kraipak vs Union of India there was a reiteration of the principles, albeit in a different form, laid down by this Court in Dr. (Miss) Binapani Devi vs State of Orissa and by the House of Lords in Padfield vs Minister of Agriculture, Fisheries & Food that the executive should not arbitrarily or capriciously act and that the myth of executive discretion is no longer there. Indeed, in Kraipak 's case (supra) it was observed: "The dividing line between an administrative power and a quasi judicial power is quite thin and is being gradually obliterated. Under our Constitution the rule of law pervades over the entire field of administration. Every organ of the State under our Constitution is regulated and controlled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of the rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their function in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision. In recent years the concept of quasi judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi judicial power. " This Court pertinently drew attention to the basic concept of natural justice vis a vis administrative and quasi judicial enquiries, and stated that any decision, whether executive, administrative or judicial or quasi judicial, is no decision if it cannot be "just", i.e. an impartial and objective assessment of all the pros and cons of a case, after due hearing of the parties concerned. In the light of these principles, we have to see whether the State Government acted in breach of the rules of natural justice in passing the impugned orders. It is, however, strenuously urged on behalf of the State Government that on a true construction of the two circulars in question, while it was incumbent on the Divisional Committees to give all officers 843 and servants whose services were proposed to be determined on the ground of unsuitability, an opportunity of a personal hearing, no such duty was cast on the State Government. We are unable to agree with this line of reasoning. The first circular dated January 11, 1967 was all pervasive, and it covered all categories of officers and servants either provisionally absorbed under s.577(e) or temporarily appointed under s.577(ee), irrespective of their salary. The Government policy was made quite clear in that circular, which we have quoted earlier. At this stage, the functions of the Divisional Committees were to be purely recommendatory in nature. The Committees had to make their selection of officers and servants suitable for absorption after an interview of all such officers and servants, and forward their recommendations to the Government, for finalising action in the matter of final absorption under s.112A. The subsequent circular dated January 31, 1967, making a categorisation of the officers and servants concerned, into two groups, reserving the power of selection for final absorption to the State Selection Committee in case of all Centralised Services whose starting salary was Rs. 500/ and more, and entrusting the function to the Divisional Committees in case of those whose starting salary was less than Rs.500/ , was still subject to the Government policy already laid down. It is, therefore, not right to suggest that the State Government was absolved of the "duty to hear" the officers and servants of the erstwhile Municipal Boards and other local authorities drawing Rs. 500/ and above All the officers and servants of the erstwhile Municipal Boards and other local authorities provisionally absorbed under s.577(e) or temporarily appointed under s.577 (ee) were therefore, entitled to be heard in the matter of their final absorption under s.112A read with r.6(2) (iii), irrespective of their salary. The requirements of a fair hearing are fulfilled in the case of officers and servants of the erstwhile Municipal Boards and other local authorities drawing a salary of less than Rs. 500/ but not in the case of those drawing Rs. 500/ or more. It is accepted before us that the appellant Ashfaq Hussain was called for an interview by the Divisional Committee. The State Government in its return has placed material showing that he had a uniformly bad record and there were adverse entries in his character rolls for several years. It is not disputed that Ashfaq Hussain had been called for an interview by the Divisional Committee. We are not impressed by the submission that the adverse remarks were not put to him when he appeared before the Divisional Committee. It is clear 844 from the two circulars of the State Government dated January 11, 1967 and February 23, 1967 that in all cases in which the services of an officer or servant were to be determined on the ground of his unsuitability, they were to be given an opportunity of personal interview by the Committee. The whole purpose of the personal interview was that when it was proposed to declare such an official unsuitable for absorption, the Committee had to afford an opportunity to appear before it and clear up his position. It is reasonable to presume that when the appellant, Ashfaq Hussain, was called for that purpose, the adverse remarks in his character rolls must have been put to him. On an overall view of the record of service of Ashfaq Hussain, the Divisional Committee was not wrong in recommending to the Government to terminate his services, and the Government was within its rights in passing the impugned order of termination in regard to him. In the case of the appellant Mohd. Rashid Ahmad, it however appears from the return filed by the State Government that no such opportunity was afforded to him before the State Government passed the impugned order dated July 18, 1967 terminating his services. It is evident, no doubt, from the return filed by the State Government that the service record of the appellant was before the Government, on the basis whereof it was decided that he was unsuitable for being finally absorbed and also that the Secretary for Local Self Government in his note of July 10, 1967 recommended that he was not suitable for final absorption in the Centralised Services, but it is clear that the Minister for Local Self Government before passing the impugned order of termination dated July 11, 1967 did not give to the appellant an opportunity of a hearing. The order of termination of his services passed by the State Government, therefore, suffers from a serious legal infirmity. It was said, however, on behalf of the State Government that under s.107(1) of the Adhiniyam no appointment to a post carrying an initial salary of not less than Rs. 500/ per mensem, could be made except after consultation with the Public Service Commission, and that the Commission did not find the appellant fit for appointment as Executive Engineer, Municipal Corporation, Kanpur. It was also pointed out that under section 108 the appellant could not hold the post beyond the period of one year. It was, therefore, urged that the State Government was justified in terminating the services of the appellant as he could not be finally absorbed in the post of an Executive Engineer in the Centralised Services. It was said that the post had to be advertised for filling up the vacancy as required under section 107 of the Adhiniyam. We are afraid, the contention cannot be accepted. 845 Under section 112A (1) of the Adhiniyam, the State Government having by U.P. Palika (Centralised) Services Rules, 1966, constituted the Centralised Palika Services, the appellant Mohd. Rashid Ahmad, who was performing the duties and functions of the post of Executive Engineer under section 577(ee), was entitled to be considered, if found suitable, for absorption under s.112A(2). Admittedly, the appellant was not heard in the matter of his final absorption. It is also not in dispute that the procedure laid down in the U.P. Palika (Centralised) Services Rules, 1966, was not followed. If the appellant was at all found fit for absorption, it was for the State Government next to decide the suitable post on which he could be absorbed. The method of recruitment provided by r. 20 had to be followed. Evidently, this has not been done. In view of the fore going reasons, Civil Appeal No. 1724 of 1969 succeeds and is allowed, while Civil Appeal No. 1732 of 1971 fails and is dismissed. There shall be no order as to costs. P.B.R. C.A. 1724/69 allowed. C.A. 1732/71 dismissed.

Rule 6(2)(iii) If imposed a duty on State Government to act in a quasi judicial manner. Rules of natural justice Applicability of. The U.P. Nagar Mahapalika Adhiniyam 1959 as well as the U.P. Municipalities Act, 1916 empowered local bodies in the State to appoint their employees subject to certain regulatory control by the State Government. In 1964 section 112A was added to the 1959 Adhiniyam empowering the State Government to make rules for the creation of one or more services to be known as Centralised Palika Services common to all the municipal corporations and municipal boards and prescribe the method for recruitment and conditions of service of persons appointed to any such service. Section 69B which was added to the U.P. Municipalities Act, 1916 was in identical terms as section 112A. Section 577(e) of the Adhiniyam provided for provisional absorption of officers and servants of the erstwhile municipalities till they were finally absorbed in any centralised services created under the Act. By section 577(ee) the Administrators of Boards etc., were authorised to make temporary appointments of officers and servants till substantive appointments were made and such officers and servants were treated as on deputation with the municipal corporations. In exercise of the powers conferred under section 112A the State Government made the U.P. Palika (Centralised) Service Rules, 1966 which came into force on July 9, 1966. Since r. 6 of the Rules was found to be contrary to the provisions of section 112A and section 69B, the U.P. Local Self Government (Amendment) Ordinance, 1966 (which later became an Act) was promulgated to validate the 1966 Rules. Section 19 of the Act provided that the amendments made to the Rules might be given retrospective effect, limited to a period of one year from the commencement of the Ordinance. Thereafter the U.P. Palika (Centralised) Services (Amendment) Rules, 1966 were passed by which r. 6 was repealed and re enacted with retrospective effect from July 9, 1966. Clause (ii) of r. 6(2) empowered the State Government to pass a final order of absorption in respect of particular officers and servants of the erstwhile municipal boards if they were found suitable. Clause (iii) provided that such orders had to be made on or before March 31, 1967. 827 Since the work of final absorption could not be completed by March 31, 1967, r. 6(2) (iii) was amended shifting the date to June 30, 1967. But this amendment having been made to come into effect from April 1, 1967 the legal fiction created by cl. (iv) of r. 6 that if no orders of final absorption were passed till March 31, 1967 the officer or servant concerned was to be deemed to have been finally absorbed, came into play. Clause (iii) was, therefore, again amended shifting the date of passing the order from March 31, 1967 to August 31, 1967. The rule was made with retrospective effect from July 9, 1966. For the purpose of final absorption of all officers and servants who were found suitable in the two categories viz., those appointed under section 577(e) and section 577(ee) of the Adhiniyam, the State Government laid down a procedure. It constituted Divisional Committees for making necessary recommendations to the State Government. On January 11, 1967 the State Government issued the first Circular stating that all officers and servants whose services were proposed to be determined on the ground of unsuitability might be given an opportunity of personal interview by the Divisional Committees. The Government divided the officers and servants into two categories, those getting salary above Rs. 500/_ and those getting salary below Rs. 500/ and provided that cases of each category were to be dealt with at different levels. By this circular the Government re constituted the composition of the divisional Committees so far as the five municipal corporations which were created under the 1959 Adhiniyam were concerned and directed that these Divisional Committees should make selections for all Centralised Services except those whose starting salary was Rs. 500/ and above. The selection for this category was to be made by the State Selection Committee. With a view to secure a reasonable uniformity in the standards to be applied by the Divisional Committees in making the selection, the third Circular dated February 23, 1967 provided that the Committees should interview the official concerned to judge his suitability for absorption in the Centralised Services and that if it was proposed to declare an official to be unsuitable for absorption on the basis of adverse entries, the Divisional Committees should afford an opportunity to the official concerned to appear before it and clear up his position. It was further provided that only those adverse remarks which were found to have been duly communicated to the official concerned might be considered against him. Thus the procedure laid down was this: The recommendations of the Divisional Committees in respect of persons drawing salary less than Rs. 500/ would be scrutinised by the State Government in the Local Self Government Department and the necessary orders passed thereon while in respect of the second category officers drawing a salary above Rs. 500/ p.m. the Secretary to the Government Local Self Government Department would obtain the orders of the Minister concerned in passing the final orders. The appellant RA was a permanent Assistant Engineer in the Development Board, Kanpur. Before the coming into force of the Adhiniyam he was appointed as officiating Executive Engineer and since then he continued to function in that capacity on a purely temporary arrangement under section 577(ee). The appellant AH was a Sanitary Inspector in the Municipal Board, Kanpur and 828 continued to hold that post. He was later promoted temporarily as Assistant Engineer and he stood provisionally absorbed under section 577(e). Writ Petitions filed by the appellants and others challenging the vires of the Rules were dismissed by the High Court. On appeal to this Court it was contended that the appellants must be deemed to have been absorbed on March 31, 1967 by virtue of the fiction contained in Cl. (iv) of r. 6(2), as originally enacted, because the amendment made to the Rule shifting the date of final absorption first from March 31, 1967 to June 30, 1967 and subsequently to August 31, 1967 were legally ineffective and (2) that the impugned orders were vitiated on account of the failure of the State Government to afford to the appellants an opportunity of being heard. ^ HELD: 1. (a) The validity of the two amendments made by the State Government in r. 6(2) cannot be questioned. Although a rule cannot be made with retrospective effect, the Legislature by enacting section 19 of the U.P. Local Self Government (Amendment) Act, 1966 expressly conferred powers on the State Government to make retrospective rules. [837 D]. (b) It is well established that retrospective operation is not to be given to a statute so as to impain that existing right or obligation other than as regards matter of procedure. If the enactment is expressed in a language which is fairly capable of either interpretation, it ought to be construed as prospective only. But where it is expressly stated that an enactment shall be retrospective, courts will give it such operation. It is competent for the Legislature by retrospective legislation to make the provision contained in an carrier enactment ineffective. [838 F G] Quinn vs Prairiedate ; referred to. (c) In considering the effect of repeal of an enactment followed by reenactment in the light of section 6 of the the line of enquiry would be not whether the new Act expressly keeps alive old rights and liabilities, but whether it manifests an intention to destroy them. Any incompatibility in the provision has to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not conclusive. [839 B C] In the instant case by the introduction of the new fictional date of absorption as August 31, 1967 there was a clear intention to destroy the earlier fictional date of March 31, 1967. It would clearly be incompatible, on consideration of subsequent amendments for both the provisions i.e. the original clause (iii) fixing March 31, 1967 and the new clause (iii) fixing August 31, 1967 to operate simultaneously. The effect of introduction of the new fictional date was to annihilate the earlier fictional date. The appellants, therefore, did not stand automatically absorbed by the failure of the State Government to pass the necessary orders by March 31, 1967, as its powers stood extended by the subsequent amendment to August 31, 1967. Before that date expired the State Government, in both cases, passed the necessary orders terminating the services of the appellants as they were not found fit for absorption. [839 D F]. 829 2. (a) The entrustment to the State Government of the work of determining the suitability or otherwise of officers and servants of the erstwhile Municipal Boards and other local authorities for absorption in the newly created Centralised Services under section 112A, imposed a corresponding duty or obligation on the Government to hear the officers and servants concerned. All such officers were, therefore, entitled to be heard in the matter of final absorption irrespective of their salary. [841 A; 843 F]. (b) By virtue of the repealing provision contained in section 581 of the Adhiniyam, 1959 the various Municipal Boards and other local authorities constituted under the relevant Acts ceased to exist as a result of which the existing posts held by the officers and servants in these bodies stood abolished. Consequent upon the abolition of the posts, all the officers and servants of the erstwhile local bodies lost their right to hold their posts. The Adhiniyam, however, provided by section 577(e) and (ee) for provisional absorption or temporary appointment of these officers and servants till substantive appointments were made and these officers and servants were treated as on deputation with the Municipal Corporations. Therefore, in the very nature of things the officers and servants provisionally absorbed under these sections could not be automatically absorbed in the newly created Centralised Services. There had to be screening of all of them for determining their suitability for final absorption in the Centralised Services. [840 A; B F] (c) The very nature of the functions entrusted to the State Government under r. 6(2) (iii) of the Rules implies a duty to act in a quasi judicial manner. Unless the State Government 's orders conformed to the rules of natural justice, the orders were liable to be struck down as invalid. [840 G 841 B]. (d) It is not correct to say that it is incumbent only on the Divisional Committees to give an opportunity of personal hearing and that the State Government was absolved of the duty to hear in respect of officers drawing Rs. 500/ and above. The first Circular dated January 11, 1967 was all pervasive and the Government 's policy was made quite clear in it. The second Circular dated January 31, 1967 was equally subject to the Government policy. All the officers and servants of the erstwhile Municipal Boards and other local authorities were, therefore, entitled to be heard in the matter of final absorption irrespective of their salary. [843 E, A, D]. In the case of AH on an overall view of the records it cannot be said that the Divisional Committee was wrong in recommending to the Government to terminate his services. The Government was within its right in passing the impugned order of termination in regard to him. [844 C] In regard to RA before passing the impugned order of termination of services, the Minister for Local Self Government did not give him an opportunity of a hearing. The procedure laid down in the Centralised Services Rules was not followed. The State Government could decide on the question of his absorption only after he was found fit but that has not been done. The order passed by the State Government, therefore, suffers from a serious legal infirmity. [844 D F].

ION: Criminal Appeal No. 3 of 1954. Appeal by special leave from the judgment and order dated the 22nd June, 1951, of the Bombay High Court in Criminal Revision Application No. 1425 of 1950,arising out of the judgment and order dated the 9th September, 1950 of the court of the Presidency) Magistrate Fifth Court, Dadar, Bombay in Cause No. 7825/P of 1949. P. R. Das, section A. Desai, Shellim Samuel and I. N. Shroff, for the appellant. B. D. Boovariwala, Jindra Lal and R. H. Dhebar, for the respondent. October 8. The following Judgment of the Court was delivered by SINHA, J. The main question for determination in this appeal by special leave is whether the High Court has power, and, if so, the extent of such power, to revise an order of discharge passed by a Presidency Magistrate. The, order impugned in this case was passed by a Division Bench of the Bombay High Court (Bhagwati and Vyas, JJ.), dated June 22, 1951, setting aside the order dated September 9, 1950, passed by a Presidency Magistrate of Bombay, directing the appellants who were accused 1 and 2 before the learned magistrate, to take their trial in the Court of Session, on a charge under section 409, Indian Penal Code, as against 620 the first accused and under section 409, read with section 109, Indian Penal Code, as against the second accused. The facts leading upto this appeal, in bare outline, are as follows: On July 8, 1947, Raja Dhanraj Girji Narsingh Girji, Chairman of the Dhanraj Mills Limited, who will be referred to in the course of this judgment as the complainant, lodged a first information report before the Inspector of Police, General Branch, C.I.D., Bombay, in writing, to the effect that the Dhanraj Mills were formerly his private property which he converted into a limited concern in 1935. He is the life Chairman of the Board of Directors of the concern. Till 1937, he was the Managing Agent, but, in that year, he transferred the managing agency to Ramgopal Ganpatrai, the first appellant who converted the managing agency into a private limited concern consisting of himself and members of his family. In 1943, the first appellant floated two private limited concerns under the name and style of (1) Ramgopal Ganpatrai and Sons as the Managing Agents and (2) Ramrikhdas Balkisan and Sons Limited, as the selling agents. Thus, the first appellant came to have control of the managing agency and the selling agency as also of the Mills, all inter connected. The complainant had six annas share in the managing agency and the remaining interest therein was owned by the first appellant and his family. Differences arose between the complainant and the first appellant in respect of the affairs of the Mills. The complainant 's suspicions were aroused with respect to the accounts of the Mills, and as a result of his private enquiries, he claims to have discovered that " there were large defalcations committed in the management of this Mill". It appeared to him that during September to December, 1945, the first appellant as the Managing Agent, in the course of his large purchases of cotton bales for consumption in the Mills, had " dovetailed in these transactions about 20 bogus entries of socalled purchases of 3,719 cotton bales from fictitious merchants in the Bombay market. The cost of these purchases involved an approximate sum of Rs. 8,27,000. " Against the customary practice of the 621 Mills, the first appellant made payments in respect of those fictitious purchases by bearer cheques which were cashed by his men and the cash, thus obtained was misappropriated by him to his personal use and account. In order to cover up those fictitious and bogus purchases, false entries had been made in the books and registers and the receipts, kept by the Mills In order to balance the stock in hand of cotton bales the first appellant and his associates in the crime like the second appellant, who is described as the office manager, showed bogus sales of an equal number of bales said to contain deteriorated cotton at reduce rates. The sale price of such bogus sales amounted to Rs. 4,19,000, thus, causing a loss of over four lacs of rupees to the shareholders. The sale price is also said to have been received in cash by bearer cheques which have, likewise, been cashed by the employees of the Mills and similarly misappropriated to the appellant 's account. A third series of bogus purchases are said to have been in respect of stores, dyes an chemicals, etc., approximately of the value of five lacs of rupees " by falsely debiting various sums of money to a number of non existent parties". In order to conceal the fraud, thus perpetrated on the Mills other false entries in the books of account and other documents relating to those bogus transactions were alleged to have been made by the first appellant and his underlings. It was, further, alleged that the complainant 's suspicions were further strengthened by the false statement made at a Directors ' meeting that there was a strike and that the strikers had burnt some records of the Mills. Three persons, namely, the first appellant, Harprasad Gupta, the second appellant and A. R. Mulla Feroz who was subsequently discharged by the magistrate, were named as the three accused persons concerned in the crime of embezzlement in respect of the funds of the Mills. During their investigation, the Police had taken possession of the relevant books of account from the precincts of the Mills. On July 19, 1948, a charge sheet under section 409 and section 409/109, Indian Penal Code, was submitted by the Police, against the aforesaid three persons, for 622 defalcation of Rs. 8,97,735 and odd between August 1, 1945 to July 31, 1956. The names of 40 witnesses appear in the charge sheet. The learned Presidency Magistrate, Shri C. B. Velkar, passed a I preliminary order ' in which he considered the question whether the enquiry against the accused persons should take the form of the procedure for summons trial or for a warrant trial or commitment proceedings preliminary to their being placed on trial before a Court of Session. After a consideration of the police charge sheet and his own powers adequately to punish the offenders if their offence were made out, and the relevant provisions of the Criminal Procedure Code, he recorded the following order: ". . I hold that this case is governed by section 207 Criminal Procedure Code and as such I order that this case should be proceeded with on Sessions Form. " Thereafter, the learned magistrate examined as many as 42 witnesses for the prosecution between November, 1948 and October, 1949. He also considered the written statements of the accused persons, filed in October and December that year and a very large volume of documentary evidence, which was exhibited in the case, numbering many hundreds of exhibits and running into thousands of pages, as will presently appear. On December 17, 1949, after hearing counsel for the parties and considering their respective versions as contained in the oral and documentary evidence, the learned magistrate recorded the following order: ". . I agree with this view and order that accused No. 3 should be discharged. As regards accused Nos. 1 and 2 1 hold that there is a prima facie case to charge them and for reasons already mentioned I restrict the charges to the following counts:". Then, he framed seven separate charges in respect of much smaller sums against the two accused persons under section 409, read with section 109, Indian Penal Code. He also decided, apparently on a misunderstanding of a circular issued b the Registrar of City Civil and 623 Sessions Court, of August, 1949, to try the case himself. This, in our opinion, was a serious mistake on his part inasmuch as he lost sight of those very considerations on which he had previously, in his order of May 6, 1948, decided to bold only a preliminary inquiry " on Sessions Form The learned magistrate appears to have thought that, as an offence under section 409, Indian Penal Code, was not exclusively triable by a Court of Session, irrespective of the enormity of the offence alleged and his power properly and adequately to punish such an offence, he was empowered by the Circular aforesaid to try the case. This was a grave error in exercise of judicial discretion vested in the magistrate. The State Government of Bombay moved the High Court against the order aforesaid of the learned Presidency Magistrate deciding to try the case himself on the seven mutilated charges framed by him. The application in revision was heard by a Division Bench consisting of Bavdekar and Chainani, JJ. The High Court by its order dated March 1, 1950, remitted the proceedings to the learned magistrate, after reframing the charges which are as under: "That you, accused No. 1 Ramgopal Ganpatrai Ruia being an agent of the Dhanraj Mills Ltd., and in such capacity entrusted with property, viz., the amount of Rs. 6,06,661 3 6, being the proceeds of the cheques Nos. Exhibits J/22, J/23, J/25, H/3, H/4, J1, J/2, J/4, J15, J/30 to J/32, J/33, J/34, J/10 to /J13, belonging to the said Mills, committed at Bombay, between the dates of the 21st August, 1945 and the 31st of December, 1945, criminal breach of trust with respect to the above property, and thereby committed an offence punishable under section 409 of the Indian Penal Code and within the cognizance of the Court of Session of the City of Greater Bombay. And I further charge you, accused No. 2 Harprasad Ghasiram Gupta, and the said RamgopaI Ganpatrai Ruia, accused No. 1, between the dates of the 21st of August, 1945 and the 31st of December, 1945, at Bombay committed the offence of criminal breach of trust as an agent in respect of the amount of 624 Rs. 6,06,661 3 6, being the proceeds of the cheques Exhibits J/22, J/23, J/25, H/3 and H/4, J/1, J/2, J/4 J15, J/80 to J/32, J/33, J/34, J/10 to J/13 belonging to the said Mills, and that you between the said dates and at the same place abetted the said accused No. 1. Ramgopal Ganpatrai Ruia, in the commission of the said offence of criminal breach of trust as an agent, which was committed in consequence of your abetment, and you have thereby committed an offence punishable under section 109, when read with section 409 of the Indian Penal Code, and within the cognizance of the Court of Session, Greater Bombay." After setting out the case of the parties in some detail, the High Court acceded to the arguments made on behalf of the State that the charges framed by the learned Presidency Magistrate, required to be completely changed in form and substance. Though it did not "desire to fetter the discretion of the magistrate", it clearly expressed the view that "the case ought to be committed to the Court of Session". The High Court clearly took the view that the magnitude of the case and the amount of punishment in the event of a conviction, clearly justified a committal. But inspite of giving that clear direction in view of the fact that the magistrate himself had found a prinza facie case for the prosecution, it returned the proceedings to the learned magistrate after reframing the charges, with a direction to expedite the case. On receiving the case back from the High Court, the learned magistrate recorded the evidence of two defence witnesses in great detail, covering about 50 pages in print and accounting for the months of March to June, 1950. It appears that in spite of the expression of opinion by the High Court, as aforesaid, that it was a fit case for committal to the Court of Session, the learned magistrate decided to discharge the accused. On September 9, 1950, after hearing the arguments, he wrote a very elaborate judgment running into more than 30 pages in print. Though in form it is an order passed in commitment proceedings, it reads like a judgment after a full trial. The learned magistrate stated the prosecution case in all its details, setting 625 out the documentary evidence on which the charges were based, running into 33 paragraphs and ten pages in print. Then, he proceeded to state the defence version equally elaborately, and embarked upon a very detailed examination of the evidence in the case, to find which version is the more acceptable one. He felt convinced that the defence version depending as it did, on the large mass of documentary evidence, explained by oral evidence of both sides, was the more acceptable one. He discussed seriatim the evidence which according to the prosecution lent itself to the sinister inferences to be drawn against the accused persons, and then weighed all that evidence and balanced it as against the innocent interpretations sought to be put on that large mass of evidence on behalf of the accused. In the result, be passed the following order in the last paragraph of this judgment: "This case is pending with me for about two years and had gone on practically on the basis of audit of the mill accounts in respect of these transactions in a Criminal Court. I do not think that I will be justified in permitting the time of another court being occupied for this case unless a conviction in the case is reasonably probable. For several reasons given above and looking to the evidence of the prosecution as regards the question of delivery being taken or not, I am of the opinion that on the evidence before me no criminal court would convict the accused and I therefore hold that there are no sufficient grounds for committing the accused for trial and this is not a fit case to go to the sessions. " The Government of Bombay moved the High Court in revision against the aforesaid order of discharge against the two appellants. The revisional application was heard and disposed of by a Division Bench by its judgment and order, dated June 22, 1951, which is almost as long as that of the learned Presidency Magistrate, running into about 30 printed pages. The High Court, after going into the history of the case., set out the prosecution version and the voluminous evidence on which the prosecution case was founded. The High Court pointed out that from a cursory 626 examination of the evidence led on behalf of the prose cution, it appeared: that 3,719 bales of cotton were purported to be purchased by the Mills, and an equal number of bales of that commodity were purported to be sold on behalf of the Mills, during the months of September to December, 1945; that not only the number of bales was the same but also the classification of cotton purchased and sold; that except in two instances, in almost all cases of purchases and sales, the transactions of sales purported to have taken place some days after the alleged purchases, and that in no case did any sale purport to have taken place earlier than the purported purchase; that unlike admittedly genuine transactions, weigh ment certificates were not taken by the sellers but by the accused No. 2 to P. W. Chottey Lal; that the invoices from Chottey Lal were not taken by the sellers but by the accused No. 2; that cheques for large amounts running into thousands and lacs of rupees, prepared by, BhAt A, bank employee were not crossed and order cheques but bearer cheques; that such bearer cheques were not made over to the alleged sellers. or their agents but were taken away by accused No. 2; that those cheques were not cashed by the alleged sellers but by the employees of the Mills; that the receipts for the amounts were signed by persons like accused No. 2 for fictitious agents of fictitious vendors. These were some of the circumstances which had been strongly relied upon by the prosecution for showing that all those alleged transactions of sale and purchase of cotton bales were bogus transactions which had been entered in the books of account kept by the company with a view to benefiting the accused persons, particularly the first accused. It was also pointed out that most of the moneys obtained in the course of the alleged transactions of sales and purchases were in one thousandrupee notes. 278 of such one thousand rupee notes were traced to a bank on account of the first appellant, and 118 of such one thousand rupee notes were traced to another bank on similar account. It was also pointed out in the judgment that no previous permission of the Textile Controller was obtained in 627 respect of the movement of cotton, which, during the relevant period, was necessary under the law. Similarly, in respect of the purchases of stores, etc., the persons shown in the memoranda of purchase were not found in the market to be dealing with any such commodities and did not possess the necessary licence. The High Court also noticed the arguments advanced on behalf of the accused persons to the effect that the transactions of sales and purchases which were alleged by the prosecution to be mere fictitious transactions which had no existence in fact, were real transactions but had been in the ostensible names of some persons for the benefit of the second accused and his partners who did not think it advisable or expedient to use their own names; that the transactions have been regularly entered in the books and registers maintained by the Mills and passed through several hands in the usual course of business, as done by the Mills and as evidenced by the large number of entries relating to the transactions im peached in this case. The High Court also noticed the several explanations offered by the defence to show that the transactions had no sinister significance, and that they were capable of bearing innocent inter retstions supporting the defence version. In our opinion, the High Court need not have examined the defence version in as great a detail as they have done; but, perhaps, they took that course in view of the very elaborate judgment written by the learned Presidency Magistrate. The High Court expressed their conclusions in these terms: " We have referred to the evidence on which the prosecution relies and also to the evidence on which the defence relies. We do not wish, nor is it our function in this application, to express our views regarding its eventual acceptance or otherwise. We wish to appraise it only prima facie and from that point of view it appears to us that having regard to the mass of circumstances and evidence in the case it is not possible to say that no Court would ever convict the accused or that the Judge would withdraw the case 628 from the Jury on the (,round of there being no evidence at all." The High Court then examined the legal arguments advanced on behalf of the parties, and a number of rulings of the different High Courts in India. Upon such an examination, the High Court 's conclusion is as follows: " The correct position is not that be should commit the case to the Sessions Court only if a conviction, in his opinion, is bound to follow. If there are circumstances for and against, if there are probabilities for and against, if there is evidence for and against with which there is nothing wrong prima facie, which on an appraisement by the jury may lead to a conviction or may not, his duty is to commit the case and not discharge the accused. The test is that if there is credible evidence which, if accepted, may lead to conviction, he ought to commit. If the magistrate comes to the conclusion that the evidence is such that no Court would ever convict, he should not commit the case In the result, the High Court allowed the application setting aside the order of the learned magistrate and directing that the appellants shall stand committed to the Court of Session, the first appellant for a charge under section 409, Indian Penal Code, and the second appellant under section 409, read with section 109, Indian Penal Code, that is to say, on the charges as framed by the Division Bench of the High Court in their order dated March 1, 1950, when the matter was before them on the previous occasion. The accused persons then moved this Court and obtained special leave to appeal from the order aforesaid of the High Court, directing their committal to the Court of Session. The special leave was granted by this Court, on January 15, 1952, and further proceedings against the appellants in the Court of Session were stayed. The learned counsel for the appellants has raised three main contentions against the order passed by the High Court: (1) that this Court should not direct a trial of the persons after such a long delay 629 of about 12 years from the time the offence is alleged, to have been committed; (2) that the High Court bad no jurisdiction to revise the order of discharge passed by a Presidency Magistrate, and (3) that assuming that the High Court had such a jurisdiction, it erred. in setting aside the order of the magistrate when there was no misdirection in the order of discharge, nor had it been shown that it was an improper order in all the circumstances of the case. Under the last heading, a further contention was raised that the High Court had not considered all the grounds on which the order of discharge was passed. It is convenient to deal with the contentions in the order in which they have been raised at the Bar. As regards the delay in bringing the case to trial, it cannot be said that the blame lies all at the door of the prosecution. As will presently appear, the accused persons themselves have largely contributed to this inordinate delay in bringing the case to trial. During the period of 1948 to 1951 , the case traveled to the High Court of Bombay four times on interlocutory matters. Only two of those revisional proceedings have been noticed above, the other two not being necessary to be referred to for the purposes of this appeal. As already stated, special leave was granted by this Court in January, 1952. The records, the preparation of which lay mainly with the appellants, was not received until January, 1954. The record as prepared at the instance of the appellants and as it stands now, runs into eleven big volumes running into over 5,700 closely printed pages. Of these volumes, only the first three have been referred to in the course of the arguments at the Bar only portions of them. The remaining eight volume,% have all gone waste. This case is a very telling illustration of waste of public time and private funds. Even after the receipt of the records, the parties between them have succeeded in preventing the case from being put up for final hearing and disposal for another three years. It is not necessary to go into any further details, but the Court must look with great disfavour upon, and publicly denounce the way in which the appeal has 630 been prosecuted during the last more than 5 years that the case has remained pending in this Court. It cannot, therefore, be said that the appellants have any just grievance that the case has remained pending for more than nine years since after the submission of the charge sheet and has not yet been brought to trial. They have largely to thank themselves for this result. We cannot, therefore, for a moment, entertain the plea that on the ground of delay, the case should not proceed to trial, if this Court upholds the order of commitment made by the High Court. The most important ground of attack against the order of the High Court is that it had no jurisdiction to set aside the order of discharge passed by a Presidency Magistrate. This contention is based upon the ground, firstly that section 437 of the Code of Criminal Procedure, which specifically deals with the power to order commitment, does not, in terms, apply to a case dealt with by a Presidency Magistrate. It was, therefore, suggested that the Legislature did not intend that an order of discharge passed by such a magistrate should be interfered with at all. Secondly, it was contended that those cases, to be presently noticed, which have held that the authority of the High Court to interfere with such an order is derived from the provisions of sections 435 and 439, read with section 423 of the Code, have been wrongly decided. In other words, it is contended that on a proper construction of those sections of the Code, it should be held that there was no power in the High Court to set aside an order of discharge passed by a Presidency Magistrate, though it has been taken as settled law during the last about half a century, so far as High Courts are concerned, that such an order is revisable by the High Court. Before examining the rulings of the High Courts of Bombay and Calcutta, bearing on this controversy, we shall first examine the relevant provisions of the Code itself and find out for ourselves whether as a matter of interpretation of those sections, the contention has any force. Under section 435, the High Court or any Sessions Judge or a District Magistrate or a Subvisional Magistrate specially so empowered, has 631 been vested with the power to call for and examine the record of any proceeding before any inferior criminal court, for the purpose of satisfying itself or himself as to the correctness, legality or propriety of any finding, sentence or order. Section 436, dealing as it does with the power to direct further inquiry, need not detain us. Section 437 is equally out of the way, because it deals with the powers of a Sessions Judge or a District Magistrate, to order commitment in cases triable exclusively by a Court of Session. Section 439 is the operative section and the question now before us must be answered with reference to the terms of that section. It provides that on examining the record of "any proceeding", the High Court "may, in its discretion, exercise any of the powers conferred on a, court of appeal by sections 423. . . (omitting portions not necessary for our present purpose), except that the section does not authorise a High Court to "convert a finding of acquittal into one of conviction. " We have, therefore, to examine the terms of section 423 which contains the powers of an appellate court in dealing with appeals. The learned counsel for the appellants contended that as an order of discharge is not appealable under the Code, it can be set aside only under the specific provisions of the Code contained in sections 436 and 437 and not otherwise. It has already been pointed out that these two sections are out of the way in this appeal. In other words, the argument is that only that order is revisable under section 439 of the Code which is appealable under the Code. This argument has only to be stated to be rejected in view of the very wide terms in which section 439 has been worded. Section 439 has to be read along with section 435 so far as the present controversy is concerned. Section 435 certainly authorizes the High Court besides other courts mentioned therein, to "call for and examine the record of any proceeding before any inferior criminal court". It has not been, and it cannot be contended that a Presidency Magistrate is not such an inferior criminal court. If the High Court is empowered to call for the record of any proceeding before a Presidency Magistrate, it follows that it may examine the 632 correctness, legality or propriety of any order passed by him and if it finds that the order is not correct or is illegal or improper, it may, acting under section 439, exercise any of the powers conferred on a court of appeal by section 423. But at this stage, it has been pointed out that the power to order committal for trial is contained in clause (a) of section 423(1), and that clause begins with the words " in an appeal from an order of acquittal". It has, therefore, been contended that unless there is an appeal against an order of acquittal, the High Court 's power to order that the accused be committed for trial, cannot be exercised under section 439. But section 417 of the Code specifically deals with an appeal to the High Court against acquittal, and its powers in dealing with such an appeal are contained in section 423 (1)(a). If the appellant 's argument is well founded, section 439 becomes redundant in so far as it deals with the power of the High Court to order committal for trial. In our opinion, the fallacy of this argument lies in reading all the words of section 423 into section 439, which the latter section does not contemplate. Section 439 only authorizes the High Court in revision to exercise any of the powers conferred under, section 423. It does not further make reference to the cases in which such powers have to be exercised. The latter question does not arise because section 439 itself makes the sweeping provision that "in the case of any proceeding", the High Court may exercise the powers enumerated in section 423. We have, therefore, to look into section 423 to find out not the cases in which the High Court can interfere but only the nature of the power that it can exercise in a case, in its revisional jurisdiction, that is to say, we have to incorporate only the several powers contained in section 423, into section 439, except the power to convert a finding of acquittal into one of conviction. The argument that the power of revision contained in section 439 can be exercised only in cases of appealable orders, is also negatived by referring to section 441 which incorporates section 435. Section 441 specifically provides for the record "of any proceeding of any Presidency Magistrate" being called for by the High Court under section 435. In such a case, such a magistrate is empowered 633 to submit, along with the record, a statement setting forth the grounds of his decision or order, and the High Court shall then "consider such statement before overruling or setting aside the said decision or order. " Section 441 is so widely worded as to include the decision or order of a Presidency Magistrate in any proceeding, which the High Court may set aside in a proper case. Under the Code, a Presidency Magistrate may pass an order without recording the reasons for such an order, for example, an order under section 213 (1) committing the accused for trial. If such an order is called in question before the High Court, the Presidency Magistrate concerned, unlike other magistrates, is permitted by the Code to supplement the record by a statement setting forth the grounds of his decision or order, so that the High Court may have before it not only the order or decision in question but also a statement of the reasons therefor. It is manifest, therefore, that on a consideration of the relevant provisions of the Code, there is no warrant for th extremely wide proposition which has been canvassed before us. Until the decision of the Calcutta High Court in Malik Pratap Singh vs Khan Mahomed (1), there was a divergence of judicial opinion in that Court as to the power of the High Court under section 439 to revise an order of discharge passed by a Presidency Magistrate. The cases pro and con are discussed in that ruling and need not be specifically cited here. The learned counsel for the appellants has not drawn our attention to any decision of any High Court in India to the contrary. A Division Bench of the Bombay High Court also in the case of Emperor vs Varjivandas alias Kalidas Bhaidas (2 ), has taken the same view after discussing the Calcutta and Allahabad cases. In view of these considerations, it must be held that there is no merit in the second contention raised on behalf of the appellants. Having held that the High Court had the necessary jurisdiction, it remains to ' consider the last serious objection raised on behalf of the appellants to th (1) Cal. (2) Bom, 84. 634 exercise of that jurisdiction by the High Court. In this connection, it was contended that the High Court erred in reversing the order of the Presidency Magistrate and directing the accused to take their trial in the Court of Session, because, it was further argued, the High Court has not shown any misdirection in the well considered order passed by the Presidency Magistrate, or that it was otherwise improper. It was further urged that the sole ground on which the High Court has set aside the order of discharge was that the jury may spell out a case which was not alleged by the prosecutions case which is wholly inconsistent with the case set out in the first information report and sought to be made out in evidence. In order to appreciate the grounds on which this part of the appellants ' contentions has been rested, it is necessary to examine the relevant provisions of the Code of Criminal Procedure. Chapter XVIII deals with the procedure before a committing magistrate. Under section 208, the magistrate has to take all such evidence as may be produced by the prosecution and by the accused. Section 209 authorizes the magistrate to discharge the accused person " if he finds that there are not sufficient grounds for committing the accused person for trial. " Similarly, section 210 authorizes the magistrate to frame a charge declaring with what offence the accused is charged if he "is satisfied that there are sufficient grounds for committing the accused for trial. " If the magistrate frames a charge against the accused person as aforesaid, it is open to the latter to examine witnesses in defence. After such defence witnesses have been examined by the magistrate, section 213 authorizes him either to commit the accused for trial or to cancel the charge and to discharge the accused if he is satisfied that there are not sufficient grounds for committing him to the Court of Session. As will presently appear, there is a large volume of case law on the question as to when a magistrate should or should not commit an accused person for trial. The controversy has centered round interpretation of the words "sufficient grounds", occurring in the relevant sections of the Code, set out above. 635 In the earliest case of Lachman vs Juala (1), decided by Mr. Justice Mahmood in the Allababad High Court, governed by section 195 of the Criminal Procedure Code of 1872 (Act No. X of 1872), the eminent judge took the view that the expression "sufficient grounds" has to be understood in a wide sense including the power of the magistrate to weigh evidence. In that view of the matter, he ruled that if in the opinion of the magistrate, the evidence against the accused "cannot possibly justify a conviction" there was nothing in the Code to prevent the magistrate from discharging the accused even though the evidence consisted of statements of witnesses who claimed to be eye witnesses, but whom the magistrate entirely discredited. He also held that the High Court could interfere only if it came to the conclusion that the magistrate had committed a material error in discharging the accused or had illegally or improperly underrated the value of the evidence. Thus, he overruled the contention raised on behalf of the prosecution that the powers of the committing magistrate did not extend to weighing the evidence and that the expression "sufficient grounds" did not include the power of discrediting eye witnesses. Though the Code of Criminal Procedure was several times substantially amended after the date of that decision, the basic words "sufficient grounds" have continued throughout. That decision was approved by a Division Bench of the Bombay High Court in In re Bai Parvati(2), and the observations aforesaid in the Allahabad decision were held to be an accurate statement of the law as contained in section 209 of the Code, as it now stands. The High Court of Bombay held in that case that where the evidence tendered for the prosecution is totally unworthy of credit, it is the duty of the magistrate to discharge the accused. It also added that where the magistrate entertains any doubt as to the weight or quality of the evidence, he should commit the case to the Court of Session which is the proper authority to resolve that doubt and to assess the value of that evidence. The question of the extent of the power of a committing court under sections 209 and 210 of the Criminal 636 Procedure Code of 1882 (Act X of 1882), arose in the case of Queen Empress vs Namdev Satvaji (1), and a Division Bench of the Bombay High Court, presided over by Mr. Justice West, made the following observations which correctly laid down the legal position: ". . an accused ought to be committed when there is a prima facie case substantiated against him by the testimony of credible witnesses. According to the English law, a commitment ought to be made whenever one or two credible witnesses give evidence showing that the accused has perpetrated an indictable offence (see Hale 's Pleas of the Crown, 11, 121 ; Hawkins ' Pleas of the Crown, Ch. XVI; Cox vs Coleridge (14 Calc. W. R., Cr. Rul., 16). And the sort of prima facie case that warrants a committal is defined by Stat. and 12 Vic., Ch. 42, section 25, as one "that is sufficient to put the party upon his trial for an indictable offence." According to our Criminal Procedure Code, sections 209 and 210, the magistrate is to commit, or not, as there are or are not, in his opinion, "sufficient grounds for committing ". What are "sufficient grounds for committing" is not in any way defined, but it is manifest that they are not identical with grounds for convicting, since, taken in that sense, the provisions would enable the magistrate virtually to supersede the Court of Session to which the cognizance of the case for actual trial belongs. The true principle appears to be that expressed in the English statute. The magistrate ought to commit when the evidence is enough to put the party on his trial, and such a case obviously arises when credible witnesses make statements which, if believed, would sustain a conviction. The weighing of their testimony with regard to improbabilities and apparent discrepancies is more properly a function of the Court having jurisdiction to try the case. " A Division Bench of the same High Court dealing with a case arising under the Code of 1898 'Act V of 1898), observed that the words "sufficient grounds for committing", do not mean sufficient grounds for convicting, but have reference to a case in which the evidence is sufficient to put the accused on his trial, that is to (1) Bom. 372, 374 (1) Bom. 372, 374. 637 say, when there is credible evidence which, if believed, would sustain a conviction. Hence, a committing court has only to be satisfied that there is a prima facie case made out by the prosecution evidence. In the same High Court, on account of certain observations made in the case of Parasram Bhikha vs Emperor (1), the question of the ambit of the powers of a committing court was referred to a Full Bench presided over by Sir John Beaumont C. J. The learned Chief Justice, in the course of his judgment, overruled the previous decision in I.L.R. , to the effect that the magistrate was entitled and bound to value and weigh the evidence and that the revisional court could interfere only if the order was perverse or manifestly contrary to the evidence. He also observed that under section 209, a magistrate has the power to consider the evidence and, thus, to satisfy himself that there are sufficient grounds for committing the accused for trial, and, for that purpose, he has to look into the nature of the evidence and credibility of the witnesses, but that is not the same thing as examining evidence with a view to reaching a conclusion that a case for convicting the accused bad been made out. In other words, it is not the magistrate 's duty to try the accused, which duty is cast upon the Court of Session. In his view, if the magistrate came to the conclusion that there was evidence which required to be weighed, he ought to commit the accused for trial and he ought not to discharge the accused simply because in his view, the evidence was not sufficient for the conviction of the accused. Thus, according to the learned Chief Justice, there is a difference between the power of a committing court to consider and appreciate the evidence and its power to weigh the evidence. Rangnekar J. who delivered a separate but concurring judgment, does not appear to have agreed with the learned Chief Justice in all his observations, particularly in so far as he made a, distinction between considering the evidence and weighing the same. (See Ramchandra Babaji Gore vs Emperor (1) Bom. (2) Born. 638 It is not necessary to multiply instances where the High Courts in India have, in some cases, held that the duty of the committing court is only to satisfy itself that there are sufficient grounds for committing the accused for trial in the sense that there is prima facie evidence which, if believed by the Court of Session, may lead to conviction of the accused. Whereas, there are also cases, as laid down in the earliest case referred to above in I.L.R. 5 Allahabad 161 (judgment of Mahmood J.), to the effect that the magistrate holding a preliminary inquiry is empowered to weigh the evidence led on behalf of the prosecution, and to decide for himself whether there is a probability of the trial ending in the conviction of the accused. An examination of the large number of rulings cited before us, which we do not think it necessary to refer to in detail, shows that though it is easy to say that a magistrate should commit the accused for trial if he is satisfied that sufficient grounds for doing so have been made out, it is difficult to apply those crucial words "sufficient grounds" to individual cases. Apparently conflicting observations about the powers of a committing magistrate have been made in the reported cases, but those observations have to be read in the light of the facts and circumstances disclosed in the case then before the Court. In our opinion, the law in India and the law in England, on the question now under consideration, appears to be the same. In "Halsbury 's Laws of England", Vol. 10, 3rd ed. (Lord Simonds), in article 666 at p. 365, the law has been stated thus: "When all the evidence has been heard, the examining justices then present who have heard all the evidence must decide whether the accused is or is not to be committed for trial. Before determining this matter they must take into consideration the evidence and any statement of the accused. If the justices are of opinion that there is sufficient evidence to put the accused upon trial by jury for any indictable offence they must commit him for trial in custody or on bail. " In each case, therefore, the magistrate holding the preliminary inquiry has to be satisfied that a 639 prima facie case is made out against the accused by the evidence of witnesses entitled to a reasonable degree of credit, and unless he is so satisfied, he is not to commit. Applying the aforesaid test to the present case, can it be said that there is no evidence to make out a prima facie case, or that the voluminous evidence adduced in this case is so incredible that no reasonable body of persons could rely upon it ? As already indicated, in this case, there is a large volume of oral evidence besides an unusually large volume of documentary evidence the latter being wholly books and registers and other documents kept or issued by the Mills themselves, which may lend themselves to the inference that the accused are guilty, or to the contrary conclusion. The High Court has taken pains to point out that this is one of those cases where much can be said on both sides. It will be for the jury to decide which of the two conflicting versions will find acceptance at their hands. This was pre eminently a case which should have been committed to the Court of Session for trial, and it is a little suprising that the learned Presidency Magistrate allowed himself to be convinced to the contrary. The learned counsel for the appellants also raised a number of points bearing on the merits of the controversy on facts. In view of the fact that we do not propose to interfere with the orders passed by the High Court, directing that the accused be committed for trial, we think it inexpedient to express any opinion on those controversial matters. We do not think it desirable that any observations made by us, should prejudice either party at the trial. In our opinion, both the courts below have traveled beyond the limits proper for decision at the stage at which the case was before them. In our opinion, the accused persons did not consult their best interests when they invited the courts below to go into those questions which did not properly arise for determina tion at that stage. We do not agree with the last contention raised on behalf of the appellants that the High Court has said too little on the merits of the case. In our opinion, the High Court, in the circum 640 stances of the case, had been taken into matters which should have been left to be determined at the trial. Perhaps, they had to cover the ground which had been so elaborately discussed in the order of the learned Presidency Magistrate. For the reasons given above, we have come to the conclusion that there are no merits in this appeal. It is accordingly dismissed. It is hoped that the Court of Session, which will now be in seizing of the case, will conduct the trial and conclude the proceedings with all reasonable speed and without any avoidable delay. We hope that the inordinate delay in bringing this case to trial has not prejudicially affected the case of either party. Appeal dismissed.

The High Court has ample power under section 439, read with section 435, of the Code of Criminal Procedure to revise an order of discharge made by a Presidency Magistrate in a commitment proceeding, and to direct the committal of the accused person to the Court of Session. Section 439 of the Code contemplates all the powers of an Appellate court under section 423. Of the Code, except the power to convert a finding of acquittal into one of conviction and that such powers may be exercised in the case of any proceeding. There is, therefore, no basis for the proposition that the High Court can revise only such orders as are made appealable by the Code. Malik Pratap Singh vs Khan Mahomed, Cal. 994 and Emperor vs Varjivandas alias Kalidas Bhaidas, (19O2) I.L.R. , referred to. The words "sufficient grounds" occurring in SS. 209, 210 and 213 of the Code of Criminal Procedure do not mean sufficient grounds for the purpose of conviction but mean such evidence as would be sufficient to put the accused upon trial by the jury. In each case, therefore, the committing Magistrate has to be satisfied whether or not a prima facie case has been made out against the accused person by reasonably reliable evidence. Where he is satisfied that it has been, he has to commit the accused to the Court of Session and it is for the jury to decide which of the conflicting versions it should accept and either to convict or acquit him. Queen Empress vs Namdev Satvaji, Bom. 372 approved. Case law reviewed. Consequently, in a case where a committing Presidency Magistrate, on a full and elaborate consideration of a large volume of evidence, both oral and documentary, adduced both by the prosecution and the defence came to the conclusion that no Criminal court would convict the accused persons on such evidence and discharged them and the Hi Court in exercise of its powers 619 under section 439 of the Code of Criminal Procedure set aside the order of discharge and directed the committal of the accused persons to the Court of Session on charges under section 409 and S 409 read with section 109 of the Indian Penal Code and it could not be said that the evidence had not made out a prima facie case against the accused persons or that it could not be reasonably relied on. Held, that it was preeminently a case for committal to the Court of Session, the order of discharge made by the Presidency Magistrate was highly improper and the High Court 's order must be affirmed. Held further, that the appellants could not be allowed to make a grievance of the inordinate delay in bringing them to trial, for which they themselves were primarily responsible, and such delay could be no ground for not holding the trial at all.

Civil Appeal No. 23 of 1966. Appeal from the judgment and decree dated May 11, 1962 of the Patna High Court in Appeal from Original Decree No. 169 of 1958. U.P. Singh, for the appellants. Sarjoo Prasad and R.C. Prasad, for respondents Nos. 1 and 2. The Judgment of the Court was delivered by Bachawat J. The plaintiffs, defendants 5 to 7 and the ancestor of defendants 8 to 13 were the sixteen anna proprietors of certain villages in district Shahbad. By a registered deed dated October 3, 1944 they leased the forest rights in the villages to the defendants 1 and 2 for a period of 9 years ending Bhado 30, 1360 Fasli corresponding to September 2, 1953 at an annual. rent of Rs. 16,000. The plaintiffs had 6 annas share in the proprietary rights in the villages and Rs. 6,000 was fixed as their share of the annual rent. The defendant No. 3 was a transferee of a portion of a lessees ' interest from defendant 1. On September 3, 1954 the plaintiffs instituted a suit claiming a decree against defendants 1 and 2 for Rs. 36,405 on account of their share of the rent for 1356 to 1360 Faslis and interest thereon at 1% per annum. During the pendency of the suit, defendant 2 died and his heirs were substituted as defendants 2 and 2(a). The Trial Court decreed the suit on contest against defendants 2 and sup./69 6 362 2(a) and ex parte against defendants 1 and 3 with future interest and costs. On appeal, the High Court held that (1 ) as defendant 2 had only 4 anna share in the lessees ' interest as mentioned in the lease deed and as he had acquired another one anna share in the lessees interest subsequently, defendants 2 and 2(a) were liable to pay only 5 annas share in the annual rent, that is to say, Rs. 1,875 per annum and defendants 1 and 3 were liable to pay the balance rent; (2) as the lease deed granted a lease of forest rights, the suit was governed by article 2(b)(i) of Schedule III of the Bihar Tenancy Act, 1885 and consequently the suit in respect of rent for 1356 and 1357 Faslis was barred by limitation, and (3) in view of sec. 67 of the Bihar Tenancy Act the plaintiffs could claim interest at the rate of 61/4% per annum only. Accordingly the High Court allowed the appeal in part and ' passed a decree against defendants 2 and 2(a) for 5 annas share of the rent for 1358 to 1360 Faslis and a separate decree against defendants 1 and 3 for the balance rent for those years with interest at 61/4 % per annum. The plaintiffs have filed the present appeal after obtaining a certificate from the High Court. The appellants challenge the correctness of all the findings of the High Court. Clause 3 of the lease deed provided: "that the lessees shall pay an annual Zama of Rs. 16,000 in respect of the thika property on 1st Kuar of every year. If for any reason, the rent for two consecutive years shall fall into arrears in that case the lessors shall be competent to enter into khas possession and occupation of the thika property and to this the lessees shall ' have no objection and in case of making default the lessees shall pay an interest at the rate of Re. 1 per cent till the date of payment. The lessors either separately or jointly shall realise (the amount) to the extent of their respective shares according to their choice by instituting in court with interest thereon mentioned above from the persons and properties of the lessees. " At the end of the lease it was stated that defendant 1 had twelve anna share in the lessees ' interest and his share of the rent was Rs. 12000. It was also stated that defendant 2 had 4 anna share in the lessees ' interest and his share of the rent was Rs. 4GO0. Clause 3 of the deed clearly shows that the lessees were jointly liable to pay the annual rent of Rs. 16000. The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each of them towards the rent jointly payable by them. The joint liability of the lessees is clearly indicated by the provision that entire lease 363 would be terminable on default of payment of rent for two consecutive years. Having regard to sec. 43 of the defendants 1 and 2 were jointly and severally liable to pay the rent. It was not disputed before the High Court that the liability of defendant 3 stood on the same footing. The High Court was in error in holding that defendant 2 was liable to pay only 5 anna share in the rent. The High Court was right in allowing the defendant to raise the point of limitation, though the plea was not taken in the written statement. Under section 184 of the Bihar Tenancy Act a suit instituted after the expiry of the period of limitation is liable to be dismissed though limitation has not been pleaded learned Counsel for the appellants could not tell us what further evidence his clients could adduce on this point. In the circumstances, the absence of the plea of limitation in the written statement did not cause the appellants any prejudice. On a careful reading of the lease deed, we are satisfied that it granted a lease in respect of forest rights only. It gave the lessees the right to cut and appropriate trees of certain types and the fruits and flowers of certain fruit bearing trees. The right to open roads and to construct buildings were incidental to the right to enjoy the forest produce. The suit is for recovery of rent in respect of forest produce and saving regard to sec. 193 of the Bihar Tenancy Act is governed by article 2(b)(i) of the Schedule III thereto. This view is supported by the decisions of the Calcutta High Court in Abdulullah vs Asraf Ali(1) and Bande Ali Fakir vs Amud Sarkar(2). The special period of limitation applies though the claim for arrears of rent is rounded on a registered instrument, (see Mackenzie vs Haji Syed Muhammad Ali Khan. (3)The High Court was right in holding that the suit in respect of rent for Fasli years 1356 and 1357 was barred by limitation. Having regard to sec. 193 all the provisions of the Act applied to a suit. Section 67 (1 ) provides that arrears of rent shall bear simple interest at the rate of 61/4% per annum. The section overrides the contractual stipulation that the interest would be payable at 1% per annum. The High Court was right in holding that interest was payable at the rate of 61/4% per annum only. In the result, the appeal is allowed in part and it is declared that defendants 1, 2, 2(a) and 3 are jointly and severally liable to pay to the plaintiffs Rs. 6000 per annum on account of the plaintiffs ' share of rent for Fasli years 1358, 1359 and 1360 and simple interest thereon at the rate of 61/4% per annum upto date. We direct that a decree be drawn up accordingly. The decree will carry future interest on the principal sum at the rate of 6% (1) 7 C.L.J. 152. (2) 19C.W.N. 415. (3) I.L.R.19 Cal. 1. 364 per annum. The aforesaid defendants will pay to the plaintiffs proportionate costs of the suit in the Trial Court. The parties will bear their own costs of the appeal in the High Court and in this Court. This decree will be without prejudice to the payments, if any, made by the defendants to the plaintiffs after the institution the suit. Y.P. Appeal partly allowed.

The plaintiffs defendants 5 to 7 and the ancestor of defendants 8 to 13 leased the forest rights in theft villages to defendants 1 and 2 at an annual rental. The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each .of them towards the rent jointly payable by them. It was stated in the lease that the entire lease would be terminable on default of payment of rent for two. consecutive years and the lessee shall pay interest at Re. 1 per cent in case of default, and that the lessors either separately or jointly shall realise the amount according to their choice. Defendant 3 was a transferee of a portion of lessees ' interest from defendant 1. The plaintiff lessors flied a suit in September 1954 claiming a decree of their share of rent for 1356 to 1360 Fasli and interest thereon. The plea that suit was. barred by limitation was not taken in the written statement. Defendant 2 died and his heirs were substituted as defendants 2 and 2(a). The trial court decreed the suit. On appeal, the High Court held that (i) the defendants 1 to 3 were liable to pay the amount of the annual rent up to the extent of their respective shares; (ii) as the lease deed granted a lease of forest rights, the suit was governed by article 2(b)(1) of Schedule HI of the Bihar Tenancy Act, 1885 and consequently the suit in respect of rent for 1356 and 1357 Faslis was barred by limitation; and (iii) in view of section 67 of the Bihar Tenancy Act the plaintiffs could claim at the rate of 61/2% per annum only. In appeal. this Court, HELD: The defendants 1 to 3 were jointly and severally liable to pay the plaintiff 's share of the rent for 1358, 1359 and 1360 Faslis and simple interest thereon at 61/4% per annum up. to date. (i) The deed mentioned the share of each lessee and the annual rent for the purpose of indicating what amount would be contributed by each of them towards the rent jointly payable by them. The joint liability of the lessees was clearly indicated by the provision that the entire lease would be terminable on default on payment of rent for two consecutive years. Having regard to section 43 of the defendants 1 and 2 were jointly and severally liable to pay the rent, and the liability of defendant 3 stood on the same footing. [362 H 363B] (ii) Under section 184 of the Bihar Tenancy Act a suit instituted after the expiry of the period of limitation is liable to be dismissed though limitation is not pleaded. The respondent was rightly allowed to raise the 361 point of limitation though the plea was not taken in the written statement. [363 C] The lease deed granted a lease in respect of forest rights only. It gave the lessees the right to cut and appropriate trees of certain types and the fruits and flowers of certain fruit bearing trees. The right to open roads and to construct buildings were incidental to the right to enjoy a forest produce. The suit was for recovery of rent in respect of forest produce and having regard to section 193 of the Bihar Tenancy Act was governed by article 2(b)(1) of the Schedule III therefore. The special period of limitation applied though the claim for arrears of rent was claimed on a registered document. [363 D F] The suit in respect of rent for 1356 and 1357 was barred by limitation. Abdulullah vs Asraf Ali, 7 C.L.J. 152, Bande Ali Fakir vs Amud Sarkar, and Mackenzie vs Haji Syed Muhammad Ali Khan, I.L.R. , approved. (iii) Interest was payable at the rate of 6 1/4% per annum only. By section 193 of the Bihar Tenancy Act all the provisions of the Act applied to the suit. Section 67(1) provides that arrears of rent shall bear simple interest at the rate of 61/2% per annum. The section overrides the contractual stipulation that the interest be payable at 1% per annum.[363 F G]

N: Writ Petition (Crl.) No. 247 of 1990. (Under Article 32 of the Constitution of India). S.S. Ray, Vijay Bahuguna, S.K. Gambhir, Sunil Kr. Jain and Vijay Hansaria for the Petitioner. Ashok Desai, Solicitor General, P parmeshwaran and A. Subba Rao for the Respondents. The order of detention was issued by Nisha Sahai Achuthan, Joint Secretary to the Government of India who was specially empowered under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs & Psychotropic Substances Act and it recited that with a view to preventing the peti tioner from engaging in abetting and transportation of narcotic drugs, the said Sayyed Farook Mohd. @ Farooq @ Sayyed Farooq Isamuddin @ Anand be detained and kept in custody in the Yervada Central Prison, Pune. The grounds of detention were also served on the same day i.e. February 15, 1990 immediately after his arrest by the Customs Authori ties. On July 19, 1989 the staff of the Preventive Collector ate Customs, Bombay impounded two fiat cars bearing Nos. GJV 5440 and MHY 2625. The drivers of the said cars namely Aslam Mohammad Nazir and Mohammad Yakub Sheikh were apprehended. On search of the two cars, 100 packets of brown coloured powder purporting to be narcotic drug of Pakistan origin was found out of the dickies of the cars. The narcotic drug recovered from the dickies of the said cars weighed 100 kgs. and its value in the market is about 2.34 crores. Car No. GJV 5440 belonged to the petitioner detenu, Syed Farooq Mohammad and the other car No. MHY 2625 belonged to one C.P. Reddy, an Officer of international airport who was also apprehended and his statement u/s 108 of the was recorded. It was revealed from his statement that this car was also used for transporting heroin along with petition er 's car. The statements of Aslam Mohammad Nazir and Moham mad Yakub Sheikh who were apprehended as well as the state ment of other person i.e. Mohd. Azam Khan @ Wali Mohd. Khan @ Hameed Khan were also recorded u/s 108 of the by the Customs Officials. From these statements it appeared that these persons were known to the detenu and they used to visit often the hotel 'Fisherman ' at Worli for disco. The detenu i.e. Farooq Mohammad also used to go for disco in the said hotel 'Fisherman ' at Worli. It has been stated by Aslam Mohammad Nazir that on July 19, 1989 he was sitting in room No. 106, 2nd Floor, Kali Building near Burtan apartment, Bombay Central (residence of the detenu) along with his friend, Mohd. Yakub Sheikh, driver of the other car. Hameed also came there to meet Farooq Mohammad. Hameed asked him and Mohd. Yakub Sheikh to go along with him to Kalina. He told them that a truck had come to Kalina with some packets of contraband goods and that they were to take those packets near Jaslok hospital Thereafter, he took two fiat cars beating registration Nos. GJV 5440 and MHY 2625 from Farooq. He gave the keys of car No. GJV 5440 to him and car No. MID/2625 to Mohd. Yakub. 245 Thereafter, they drove those two cars to Kalina as per Hameed 's instructions and Hameed led them in a red maruti car bearing No. BLB 7445 where Hameed showed them one truck wherefrom four gunny bags were unloaded and kept in the dickies of the above said two cars. It further appears from his statement that as per Hameed 's instructions after the cars were parked near Jaslok Hospital, they handed over the keys of both the cars to Hameed and he told them to contact him again in the evening on telephone No. 367373 of R.K. Hotel From Farooq 's place they contacted him over the telephone. Hameed told them to wait there and he was coming there. Thereafter Hameed took them in the Maruti Car to a place near Tejpal Road, Gowalia Tank. There he showed them the same two fiat cars bearing Nos. GJV 5440 and MHY 2625. Hameed gave the keys of the car No. GJV 5440 to him and car No. MHY 2625 to Mohd. Yakub Sheikh and asked them to drive the said two cars following his car. Similar statement was made by Mohd Yakub Sheikh which was recorded by the Customs Officials. It has also been stated by them that they were told by Hameed that each of them will get Rs.5,000 as monetary consideration. Yakub also stated that similar jobs have been done by him on 4 5 occa sions and he received Rs.5,000 each time from Hameed. From the statement of Hameed recorded by the Customs Officials, it appears that on July 19, 1989 afternoon he collected two drivers namely Aslam Mohd Nazir and Mohd. Yakub Sheikh and two fiat cars from Farooq of Bombay Central. This Farooq was introduced to him by Mohd. Nasir, a narcotic drug dealer who is now detained m ' Rajasthan in connection with a drug case. The detaining authority searched the residence of the detenu on July 20, 1989 but nothing incriminating could be found therefrom. After recording the statements of these persons and examining and considering the test reports dated October 13, 1989, September 29, 1989 and November 15, 1989 which mentioned that the brown powder contained in those 100 packets is narcotic drug coming within the Narcotic Drugs and Psychotropic Substances Act, the impugned order of detention was made on December 20, 1989 and the petitioner was arrested and detained on service of the order of deten tion on February 15, 1990. The challenge to the detention order had been made in the instant writ petition principally on four grounds which are as under: ( 1 ) The impugned order of detention has been passed rely ing on 246 the incident which is absolutely stale as the incident is dated July 19, 1989 whereas the impugned order has been passed on December 20, 1989. (2) The statements of the three persons as recorded in the form of statement under section 108 of the came to the respondents on July 20, 1989. The order should have been passed immediately on 20th July, 1989 but the order has been passed on December 20, 1989 i.e. after five months. The impugned order, it is therefore contended, is illegal and has been passed on stale ground. (3) Since no order of preventive detention has been passed against C.P. Reddy on the same evidence, no order should have been passed against the petitioner as his involvement is of the same nature and to the same extent as that of C.P. Reddy. (4) Assuming that the order rejecting bail application has been considered though not evident from the grounds of detention supplied, yet the same has not been supplied to the petitioner. This indicates that a relevant document has not been supplied to the petitioner which affected his right of effective representation guaranteed under Article 22(5) of the Constitution. The petitioner after grant of bail by an order of this Court appeared before the respondents and applied for making statement u/s 108 of the . He was arrested and the order of detention was served on him. This material aspect should have been considered before serving the impugned order. As regards the first ground, the counsel for the peti tioner has vehemently urged before this Court that the statements of the two persons i.e. Aslam Mohd. Nazir and Mohd. Yakub Sheikh the drivers of the said two cars handed over by the petitioner for carrying narcotic drugs and also the statement of Hameed, did not implicate the petitioner in the transportation and smuggling of the drugs and as such there was non application of mind on the part of the detain ing authority in clamping the order of detention on the petitioner. The impugned order of detention is, therefore, vitiated by non application of mind. The learned counsel referred to certain portions of the statements recorded by the Customs Officials u/s 108 of the and con tended with great emphasis that there was nothing to say that the petitioner was implicated in the smuggling or transportation of the heroin which has been seized from the dickies of the two cars. 247 This contention of the learned counsel is totally devoid of merit in as much as the statements of these three persons as recorded by the Customs Officials u/s 108 of the clearly implicate the petitioner who knowing fully that these two cars will be used for the purpose of transporta tion of prohibited drugs i.e. heroin and for selling of the same, handed over the keys of the two cars to the said two drivers who were sitting at his residence with Hameed on the asking of Hameed for carrying the contraband goods. In these circumstances, it is meaningless to argue that the state ments of these three persons did not implicate the petition er. All the aforesaid three persons were well known to the petitioner and were sitting at the petitioner 's residence, they were given the keys of the petitioner 's car as well as the keys of the car of C.P. Reddy which was brought to his garrage for repairs by one Ravi Poojari through whom C.P. Reddy sent his car for repairs. The petitioner knowing fully well that these two cars will be used for the purpose of transporting contraband goods i.e. heroin from the truck stationed at Kalina from which four gunny bags containing the said heroin were unloaded and placed in the dickies of these two cars, handed over the keys of the cars. It is also evident from these statements recorded by the Customs Offi cials that the petitioner along with those three persons used to visit hotel 'Fisherman ' for disco regularly and they were well known to the petitioner In these circumstances, it is beyond pale of any doubt that the petitioner knowing fully well that these two cars will be used for transporting contraband goods, i.e. heroin, handed over the keys of the cars for the said purpose. Therefore, this challenge is wholly without any basis. The next ground of challenge is that the cars were impounded and the contraband goods were seized on July 19, 1989 and the statements of these three persons were recorded by the Customs Officials on July 20, 1989 and the residen tial premises of the detenu were searched on July 20, 1989 but no incriminatory articles ' were found. The detaining authority made inordinate delay in passing the impugned.order of detention against the detenu as late as on December 20, 1989 under section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Sub stances Act, 1988 to be hereinafter referred to as the 'said Act '. It has been submitted that if there was any urgent necessity to prevent the petitioner, the order should have been passed immediately on 20th July, 1989 but it has been passed on December 20, 1989 i.e. after five months. The impugned order is, therefore, illegal being passed on stale ground. This contention is, in our considered opinion, devoid of any 248 substance as we have stated hereinbefore that the two cars were impounded on July 19, 1989 and brown sugar weighing 100 kgs. was recovered from the dickies of these two cars on that day. The said three persons i.e. Aslam Mohd. Nazir, Mohammad Yakub Sheikh and Hameed were examined and their statements were recorded by the Customs Officials on the next day i.e. July 20, 1989. It is also evident that samples of the said contraband drugs were taken from each of the 100 packets and the same were sent for chemical examination. The test reports dated October 13, 1989, September 29, 1989 and November 15, 1989 were received by the Customs Department and the Customs Officials screened all these things and the detaining authority after considering all these, passed the order of detention on December 20, 1989. In these circum stances, it cannot be said that the delay of five months in making the impugned order of detention rendered the deten tion illegal and bad as it was made on stale ground. The detention order has been made with promptitude considering the relevant and vital facts proximate to the passing of the impugned order of detention. This ground of challenge is, therefore, totally unsustainable. The third ground of challenge is that the relevant document i.e. bail application of the petitioner and order made there on which might have been considered by the de taining authority were not supplied to the petitioner and as such his right of making effective representation guaranteed under Article 22(5) of the Constitution of India has been seriously prejudiced. This ground is without any substance because firstly there is nothing to show from the grounds of detention that the rejection of this bail application by the Sessions Judge, Greater Bombay on January 5, 1990 was con sidered by the detaining authority before passing the im pugned order of detention and as such this being not re ferred to in the grounds of detention, the documents had not been supplied to the petitioner, and it, therefore, cannot be urged that non supply of this document prejudiced the petitioner in making effective representation against the order of detention. Article 22(5) of the Constitution, undoubtedly, mandates that all the relevant documents re ferred to in the grounds of detention and which are consid ered by the detaining authority in coming to his subjective satisfaction for clamping an order of detention are to be supplied to the detenu. The said document was not considered by the detaining authority in coming to his subjective satisfaction and in making the impugned order of detention. The non furnishing to the detenu of the said document i.e. the bail application and the order passed thereon, does not affect in any manner whatsoever the detenu 's right to make an effective representation in compliance with the provi sions of Article 22(5) of 249 the Constitution of India. This ground, therefore, is wholly untenable. It has been contented in this connection by referring to the order made by this Court on January 22, 1990 in the Special Leave Petition filed by the petitioner before this Court against the rejection of his application of anticipa tory bail whereon this Court made an interim order while issuing show cause notice on the Special Leave Petition and directing that in the meantime the petitioner shall not be arrested, that the impugned order of detention is illegal. This order was made in the Special Leave Petition which did not challenge the impugned order of detention but questioned the rejection of the application for anticipatory bail. The order of detention was made on December 20, 1989 i.e. prior to the passing of the said order dated January 22, 1990. The said order of this Court has, therefore, nothing to do with the subjective satisfaction arrived at by the detaining authority in passing the order of detention in question. It has been urged in this connection that the facts in between the passing of the detention order and implementing the detention order have to be taken into account for consider ing whether the detention order should be served on the detenu even after passing of the order by this Court dated January 22, 1990 stating that the petitioner shall not be arrested in the meantime. The counsel for the petitioner referred the case of Binod Singh vs District Magistrate, Dhanbad, Bihar and Ors., Wherein the detenu was served with the order of detention u/s 3(2) of the National Scurity Act while he was in jail custody in connection with the criminal charge u/s 302 I.P.C. The question arose whether in such cases where the detention order which was passed before the detenu surrendered before the Court and was taken into custody in a criminal case, should be served on the detenu after he has surrendered in the criminal case and was in jail as an under trial prison er. It has been held by this Court that: " . . the power of directing preventive detention given to the appropriate ,authorities must be exercised in excep tional cases as contemplated by the various provisions of the different statutes dealing with preventive detention and should be used with great deal of circumspection. There must be awareness of the facts necessitating preventive custody of a person for social defence. If a man is in custody and there is no imminent possibility of his being released, the power of preventive detention should not be exercised . . " 250 This ruling as well as the ruling in Suraj Pal Sahu vs State of Maharashtra and Ors., ; relied upon by the counsel for the petitioner have no application to the instant case in as much as in the instant case the detenu was not arrested and imprisoned in jail till February 15, 1990 when the order of detention was served on him and he was arrested by the Customs Authorities. Considering all these, this ground of challenge is also wholly untenable. The next ground of challenge is that the detenu appeared before the respondents and applied to them to record his statement u/s 108 of the . He was then arrested and the order of detention was served on him. It is relevant to mention in this connection the averments made in para 10 of the counter affidavit filed on behalf of the respondents which is to the effect that in fact, when the petitioner presented himself, his statement was recorded on February 15, 1990 and it was only after the recording of the state ment that the petitioner was detained in pursuance of the detention order. It has also been stated in para 11 of the said affidavit that there existed sufficient grounds which impelled the detaining authority to pass the detention order against the petitioner. It has also been stated in para 12 of the said affidavit that a detention order under the Prevention of Illicit Traffic in Narcotic Drugs and Psycho tropic Substances Act, 1988 can be legally issued even if there is a single and solitary case against a person. It has also been stated that the detaining authority carefully scrutinised all the relevant documents and facts of the case and arrived at his subjective satisfaction that preventive order of detention of the petitioner is necessary to prevent him from smuggling and transporting contraband goods and as such the impugned order of detention is not at all illegal or bad and the same is not vitiated by non application of mind or non consideration of relevant materials. This ground, therefore, is not sustainable. The last ground of challenge is that there has been inordinate delay in arresting the detenu and in serving the detention order i.e. on February 15, 1990 after a lapse of 1 month and 25 days and no serious attempt was made to arrest the petitioner and to serve the order of detention on him in accordance with the provisions of Section 8 of the said Act which specially provides for enforcing the provisions of Section 82, 83, 84 and 85 of the Code of Criminal Procedure. It has been urged in this connection that this unusual delay in arresting the petitioner shows that there was no real and genuine apprehension in the mind of the detaining authority regarding the necessity of detention of the petitioner and as such continued detention of the petitioner is 251 illegal and contrary to law. It is apropos to refer in this connection to the averments made on behalf of the respond ents in para 7 of the counter affidavit. It has been stated therein that the Department served two notices, one of which was accepted by his mother and the second by his brother, Nizamuddin for handing over the same to the petitioner, as the petitioner was not available in the house. It has been submitted that the petitioner deliberately avoided making himself available to the Department and thus delayed comple tion of investigation of the case. Instead of appearing before the Department, the petitioner applied to the Ses sions Judge for anticipatory bail which was rejected on 5.1.1990. Thereafter, the petitioner approached this Court for anticipatory bail, which was granted on 22.1.1990. It is, therefore, evident that the petitioner absconded and tried to evade arrest pursuant to the order of detention even though he knew the passing of such an order by the detaining authority. It is relevant to mention here the observations of this Court in Shafiq Ahmad vs District Magistrate, Meerut and Ors., [1989] 4 SCC 556 to the follow ing effect: " . . We are, however, unable to accept this contention. If in a situation the person concerned is not available or cannot be served then the mere fact that the action under Section 7 of the Act has not been taken, would not be a ground to say that the detention order was bad." In Bhawarlal Ganeshmalji vs State of Tamil Nadu & Anr., ; an order of detention was made against the appellant u/s 3(1) of COFEPOSA Act in December, 1974. It could not be executed because the detenu was absconding and could not be apprehended despite a proclamation made under Section 7 of the Act. More than three years after the order was passed, the appellant surrendered in February, 1978. It was held that there must be a 'live and proximate link ' between the grounds of detention and the avowed purpose of detention. But in appropriate cases the Court can assume that the link is 'snapped ' if there is a long and unex plained delay between the date of the order of detention and the arrest of the detenu. Where the delay is not only ade quately explained but is found to be the result of the detenu 's recalcitrant or retractory conduct in evading arrest, there is warrant to consider the 'link ' not snapped but strengthened. It was, therefore, held that the delay in serving the order of detention on the detenu does not viti ate the order. In the instant case, it has been clearly averred in the affidavit that two notices were served, one on the petition er 's mother and another 252 on the petitioner 's brother directing the petitioner to appear before the detaining authority. The petitioner, it has been stated, has intentionally absconded and thereby evaded arrest. These averments have not been denied by the petitioner. In these circumstances it cannot be said that the delay was not explained and the rink between the grounds of detention and the avowed purpose of detention has been snapped. Reference may also be made in this connection to the decision in T.A. Abdul Rahman vs State of Kerala and Ors., ; This ground of challenge is, there fore, devoid of any merit. It has also been submitted on behalf of the petitioner that the representation made by the detenu on February 28, 1990 both to the Chairman, Advisory Board as well as to the Central Government were not disposed of till March 29, 1990 when the said representation was rejected by the Central Government. It has been submitted that this long delay of one month made the continued detention of the petitioner invalid and illegal. The counsel for the respondents has produced before this Court the relevant papers from which it is evident that after receipt of the representation of the petitioner, it was sent to the detaining authority for his comments and immediately after the comments of the detaining authority were received the same were processed and put up before the Minister concerned who rejected the representa tion after considering the comments of the detaining author ity and the State Government. It has been urged on behalf of the petitioner that the comments were not duly considered. This submission is not at all tenable in as much as it is evident from the relevant papers produced before this court that the Central Government passed the order after consider ing the comments of the detaining authority. So this submis sion is without any substance and the same is rejected. It has been further submitted that the counter affidavit was sworn not by the detaining authority but by one Shri A.K. Roy, Under Secretary in the Ministry of Finance, De partment of Revenue, New Delhi and as such this affidavit cannot be taken into consideration and the averments made therein are not relevant to explain the unusual delay in serving the order of detention as well as in rejecting the representation. In this connection some rulings of this Court have been cited at the bar. In Madan LaI Anand vs Union of India and Ors. , ; the counter affidavit filed on behalf of the respondents had been af firmed by Kuldip Singh, Under Secretary to the Government and not by the detaining authority himself. It was urged that the counter affidavit being not sworn by the detaining authority, the averments made therein should not be taken notice of. It was held 253 that there being no personal allegation of mala fide or bias made by the detenu against the detaining authority in per son, the omission to file affidavit in reply by itself is no ground to sustain the allegation of mala fides or non appli cation of mind. Similar observation has been made by this Court in Mohinuddin vs District Magistrate, Beed and Ors. , ; which is to the following effect: " . . In return to a rule nisi issued by this Court or the High Court in a habeas corpus petition, the proper person to file the same is the District Magistrate who had passed the impugned order of detention and he must explain his subjective satisfaction and the grounds therefore; and if for some good reason the District Magistrate is not available, the affidavit must be sworn by some responsible officer like the Secretary or the Deputy Secretary to the Government in the Home Department who personally dealt with or processed the case in the Secretariat or submitted it to the Minister or other officer duly authorised under the Rules of Business framed by the Government under Article 166 of the Constitution to pass orders on behalf of the govern ment in such matters. " Reference has also been made therein to the cases of Niran jan Singh vs State of Madhya Pradesh, ; ; Habibullah Khan vs State of West Bengal, ; Jagdish Prasad vs State of Bihar, ; and Mohd. Alam vs State of West Bengal, ; In the instant case, the counter affidavit has been filed by Shri A.K. Roy, Under Secretary to the Government, Ministry of Finance, Department of Revenue, New Delhi al though the order of detention was made by Nisha Sahai Achu than, Joint Secretary to the Government of India, Ministry of Finance. It is evident that the said Under Secretary was dealing with the papers relating to the particular order of detention and he placed those papers before the Minister concerned. In these circumstances, the counter affidavit filed on behalf of the respondents cannot but be considered and there is no allegation of mala fide or malice or extra neous consideration personally against the detaining author ity in making the impugned order of detention. This conten tion is, therefore, not tenable. 254 In the premises aforesaid we dismiss the writ petition and hold that the impugned order of detention is quite in accordance with law and the same is valid. The observations made herein are confined to this application. T.N.A. Petition dismissed.

On July 19, 1989, the Customs Department seized narcotic drugs from two cars one belonging to the petitioner detenu and the other to his associate. The statements of the driv ers were recorded under Section 108 of the on the very next day. Reports of the chemical examination of the seized drugs confirmed that they were narcoting drugs under the prevention of Illicit Traffic in Narcotic Drugs & Psychotropic Substances Act, 1988. Accordingly, with a view to preventing the petitioner from engaging in abetting and transportation of narcotic drugs the detaining authority passed a detention order under Section 3(1) of the Act on 20th December, 1989 i.e. after about 5 months of seizure of the narcotic drugs. But the petitioner was arrested and detained on service of the order of detention on 15th Febru ary, 1990. The petitioner filed a writ petition in this Court challenging the validity of the detention order contending; (1) that it was illegal because 241 (a) there was inordinate delay in serving the detention order and arresting the detenu; (b) it was passed on stale ground i.e. after five months of the seizure of narcotic drugs; and (c) there was long delay in disposing the dete nu 's representation; (2) the non supply of relevant docu ments i.e. bail application and the order made thereon to the detenu seriously prejudiced his right to make effective representation under Article 22(5) of the Constitution; (3) the averments made in the counter affidavit cannot be taken into consideration because it was not sworn by the detaining authority himself and (4) the detention order was vitiated for non application of mind. Dismissing the writ petition, this Court, HELD: 1. There must be a 'live and proximate link ' between the grounds of detention and the avowed purpose of detention. But In appropriate cases the Court can assume that the link is 'snapped ' if there is a long and unex plained delay between the date of the order of detention and the arrest of the detenu. Where the delay is not only ade quately explained but is found to be the result of the detenu 's recalcitrant or refractory conduct in evading arrest, there is warrant to consider the 'link ' not snapped but strengthened [25 IF G] 2.1 In the instant case, the averments that the Depart ment served two notices one on the petitioner 's mother and another on his brother directing him to appear before the detaining authority have not been denied by the petitioner. Instead he intentionally absconded and thereby evaded ar rest. Therefore, it cannot be said that the delay was not explained and the link between the grounds of detention and the avowed purpose of detention has been snapped. [251H; 252A B] Shafiq Ahmad vs District Magistrate Meerut and Ors., [1989] 4 SCC 556; Bhanwarlal Ganeshmalji vs State of Tamil Nadu & Anr., ; and T.A. Abdul Rahman vs State of Kerala and Ors., ; , relied on. In the instant case the cars containing brown sugar were impounded on July 19, 1989 and statements of the driv ers were recorded next day. Reports of the chemical examIna tion of contraband drugs were received on 29th September, 1989, 13th October, 1989 and 16th November, 1989. The cus toms officials screened all these thIngs and the detaInIng authority after considering all these things passed the order of detention on December 20, 1989. There fore, it cannot be held that the delay of five months in making the impugned order of detention 242 rendered the detention illegal and bad as it was made on stale ground. The detention order has been made with promp titude considering the relevant and vital facts proximate to the passing of the impugned order of detention. [248A C] 3. It is evident from the record that after receipt of the representation of the petitioner, it was sent to the detaining authority for his comments and immediately after the comments of the detaining authority were received the same were processed and put up before the Minister concerned who rejected the representation after considering the com ments of the detaining authority and the State Government. It is also evident that the Central Government passed the order after considering the comments of the detaining au thority. Therefore, the contention that the detention order was passed by the Central Government without considering the comments of the detaining authority and there was long delay in disposing the detenu 's representation affecting the validity of detention is without any substance. [252C D; E F] 4. Article 22(5) of the Constitution mandates that all the relevant documents referred to in the grounds of deten tion and which are considered by the detaining authority in coming to his subjective satisfaction for clamping an order of detention are to be supplied to the detenu. [248F] 4.1 In the instant case the relevant document i.e. the bail application and the order made thereon was not consid ered by the detaining authority in coming to his subjective satisfaction and in making the impugned order of detention. Therefore, the non furnishing to the detenu of the said document does not affect in any manner whatsoever the dete nu 's right to make an effective representation in compliance with the provisions of Article 22(5) of the Constitution of India. [248U; 249A] Binod Singh vs District Magistrate, Dhanbad, Bihar & Ors., and Suraj Pal Sahu vs State of Maha rashtra & Ors. ; , , held inapplicable. In the absence of personal allegation of mala fide or bias made by the detenu against the detaining authority in person, the omission to file affidavit in reply by itself is no ground to sustain the allegation of mala fides or non application of mind. In the absence of detaining authority, the affidavit must be sworn by some responsible officer who personally dealt with or processed the case in the Secre tariat or submitted it to the Minister. [253A; D] 243 5.1 In the instant case, the counter affidavit has been filed by the officer who was dealing with the papers relat ing to the particular order of detention and he placed those papers before the Minister concerned. Therefore, the counter affidavit filed on behalf of the respondents cannot but be considered and there is no allegation of mala fide or malice or extraneous consideration personally against the detaining authority in making the impugned order of detention. [253G H] Madan Lal Anand vs Union of India & Ors. , ; ; Mohinuddin vs District Magistrate, Beed and Ors., ; ; Niranjan Singh vs State of Madhya Pradesh, ; ; Habibullah Khan vs State of West Bengal, ; Jagdish Prasad vs State of Bihar, ; and Mohd. Alam vs State off West Bengal; , , relied on 6. The persons examined under section 108 of the were well known to the petitioner. The statements of these persons clearly implicate the petitioner who know ing fully that the two cars will be used for the purpose of transportation of prohibited drugs i.e. heroin and for soiling of the same, handed over the keys of the two cars to the driven Therefore, the contention of the petitioner that the detention order was vitiated by non application of mind is devoid of merit. [247A B; 246F] 7. Accordingly, the impunged order of detention is quite in accordance with law and the same is valid. [254A]

riminal Appeal No. 3 of 1957. Appeal from the judgment and order dated August 14, 1956, of the former Judicial Commissioner 's Court, Ajmer, in Criminal Appeal No. 2 of 1956, arising out of the judgment and order dated January 11, 1956, of the Special Judge, Ajmer, in Criminal Case No. I of 1955. R. Ganapathy Iyer and R. H. Dhebar, for the appellant. B. D. Sharma, for the respondent. April 22. The Judgment of the Court was delivered by WANCHOO, J. This appeal is on a certificate granted by the Judicial Commissioner of Ajmer. One Shivji Lal Joshi (hereinafter called the accused) was prosecuted under section 161 of the Indian Penal Code and section 5 (2) of the Prevention of Corruption Act, No. II of 1947. He was convicted by the Special Judge on both counts and sentenced to suffer rigorous imprisonment for a total period of six months. He filed an appeal before the Judicial Commissioner of Ajmer. The appeal was allowed on the ground that the accused was not a public servant, though the Judicial Commissioner agreed with the findings of the Special Judge so far as the facts were concerned. The State applied for a certificate under Art, 134 (1) (c) of the Constitution to enable it to appeal to this Court. This certificate was granted ; and that is how the appeal has come before us. The facts which have been found by both the courts are these. The accused was a teacher in the railway school at Phulera. Prem Singh who was the complainant was known to the accused for about a year before the incident which took place on October 6, 1954. He was in search of a job and the accused had told him a number of times that he would procure a job for him in the Railway Running Shed at Abu Road, if Prem Singh paid him Rs. 100. On October 5, 1954, the accused had met Prem Singh at Kaiserganj 742 in Ajmer and told him that Dusehra holidays were approaching and if he paid Rs. 100 the accused would go to Abu Road to secure a job for him. Eventually. it was agreed between the two that Prem Singh would pay him Rs: 50 on the next day while the remaining Rs. 50 would be paid after the job had been secured. After this agreement, Prem Singh went to the Deputy Superintendent Police (Special Police Establishment), and made a complaint to the effect that the accused had told him that he could secure employment for him at Abu Road Loco Shed as he bad considerable influence there and had demanded Rs. 100 as illegal gratification for that purpose. Prem Singh also said that it had been settled that be would pay Rs. 50 in advance and Rs. 50 after his appointment. Conse quently, Prem Singh wrote out an application addressed to the Divisional Mechanical Engineer, Abu Road, and also produced five ten rupee notes before the Deputy Superintendent Police. The numbers of these notes were noted down and the Deputy Superintendent Police arranged that one Nathu Singh should accompany Prem Singh as a cousin when Prem Singh met the accused next day to pay him the money. On October 6, 1954, Prem Singh accompanied by Nathu Singh met the accused as arranged and the accused asked him for an application. Prem Singh gave him the application which he bad already written out and the accused said that that would serve the purpose. The accused then asked Prem Singh for the money and he handed over the five ten rupee notes, adding that he would pay the remaining Rs. 50 after getting service and assuring him that he would keep to his part of the bargain. Thereafter Prem Singh gave the pre arranged signal and the police party headed by the Deputy Superintendent of Police arrived. The Deputy Superintendent Police disclosed his identity and searched the person of the accused. In that search, the application which Prem Singh had written for the Divisional Mechanical Engineer, Abu Road, and the five ten rupee notes were recovered. Thereafter the accused was prosecuted as already mentioned above. 743 The accused admitted that the application as well as the five ten rupee notes were recovered from him by the police. His explanation was that one Jiwan Ram had given him the application which was in English and which was said to be a letter for a friend of Jiwan Ram at Abu Road. The accused did not know English and took the application to be a letter to be delivered to the friend of Jiwan Ram. Jiwan Ram also gave him five ten rupee notes to be given to that very friend of his when the accused went to Abu Road. As already stated, both the courts below have accepted the prosecution version set out above and disbelieved the explanation given by the accused. The Special Judge convicted the accused on the basis of the prosecution story. The Judicial Commissioner, though he accepted the prosecution story to be true, held that the accused was not a public servant and therefore ordered his acquittal. The main question that has been raised on behalf of the appellant therefore in this appeal is that the Judicial Commissioner erred in holding that the accused was not a public servant within the meaning of section 21 of the Indian Penal Code. The question whether the accused is a public servant under section 21 of the Indian Penal Code depends upon the interpretation of the last part of the Ninth clause of that section, which is in these terms: , ". . every officer in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty." The Judicial Commissioner seems to have overlooked this part of the Ninth clause, for he says that it had not been shown that it was the duty of the accused to take, receive, keep or expend any property on behalf of the Government so that he may come under the Ninth clause of section 21. This only refers to the earlier part of the Ninth clause and the last part which we have set out above does not seem to have been considered at all. This very question came up for consideration in this Court in G. A. Monterio vs The State of Ajmer (1) and it was laid down that the true (1) ; 744 test in order to determine whether a person is an officer of the Government, is: (1) whether he is in the service or pay of the Government and (2) whether he is entrusted with the performance of any public duty. ' It is not disputed in this case that the accused was in the service of Government and was being paid by Government. It cannot also, in our opinion, be doubted that he was entrusted with the performance of a public duty inasmuch as he was a teacher in a school maintained by Government and it was part of his public duty to teach boys. In these circumstances the Judicial Commissioner was in error in holding that the accused was not a public servant within the meaning of the Ninth clause of section 21. This, however, does not dispose of the matter. Learned counsel for the accused has urged that even if the accused is held to be a public servant, he cannot be held guilty on either of the charges framed against him. We shall first take the charge under section 5(2) of the Prevention of Corruption Act read with section 5(1) (d). The charge was that the accused by corrupt or illegal means or by abusing his position as a public servant obtained pecuniary advantage for himself inasmuch as he took As. 50 from Prem Singh on October 6, 1954. Mere receiving of money by a public servant even if it be by corrupt means is not sufficient to make out an offence under section 5 (2) read with section 5(1)(d). The relevant part of section 5(1)(d) reads as follows: " A public servant is said to commit the offence of criminal misconduct in the discharge of his duty, if he, by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage The offence under this provision consists of criminal misconduct in the discharge of his duty. In order, therefore, that this offence is committed there should be misconduct by the public servant in the discharge of his duty. In other words the public servant must do something in connection with his own duty and thereby obtain money for himself or for any other person by corrupt or illegal. means or by otherwise abusing 745 his position. If a public servant takes money from a third person in order to corrupt some other public servant and there is no question of his misconducting himself in the discharge of his own duty, that action may be an offence under section 161 of the Indian Penal Code but would not be an offence under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act. The essence of an offence under section 5(2) read with section 5(1)(d) is that the public servant should do something in the discharge of his own duty and thereby obtain any valuable thing or pecuniary advantage for himself or for any other person by corrupt or illegal means or by otherwise abusing his position. The words " by otherwise abusing his position " read along with the words " in the discharge of his duty " appearing in section 5(1)(d) make it quite clear that an offence under that section requires that the public servant should misconduct himself in the discharge of his own duty. In the present case, the accused was a teacher and it was no part of his duty to make appointments in the Running Shed at Abu Road. There would, therefore, be no question of his committing misconduct in the discharge of his duty when he took money for procuring a job for Prem Singh in the Running Shed. So far therefore as the charge under section 5(1)(d) is concerned, we are of opinion that there was no question of the accused misconducting himself in the discharge of his own duty in the circumstances of this case and it must fail. Now we turn to the charge under section 161 of the Indian Penal Code. The relevant part of that section (omitting the unnecessary words) for the purpose of this case is in these terms: " Whoever, being a public servant, accepts from any person for himself any gratification whatever other than legal remuneration as a motive or reward for rendering or attempting to render any service or disservice to any person with any public servant ". This requires that the person accepting the gratification should be (1) a public servant, (2) he should accept gratification for himself, and (3) the gratification 94 746 should be as a motive or reward for rendering or attempting to render any service or disservice to any person with any other public servant. The charge under section 161 of the Indian Penal Code which was trained in this case stated that the accused being a public servant accepted on October 6, 1954, a sum of Rs. 50 from Prem Singh " as illegal gratification as a motive for securing a job for him in the Railway Running Shed ". Now the first two ingredients set out above are clearly established in this case; but the third ingredient, (namely, that the gratification should have been taken as a motive or reward for rendering or attempting to render any service with any public servant) is not even charged against the accused. The charge merely says that he took the money as a motive for securing a job for Prem Singh in the Railway Running Shed, Abu Road. It does not disclose who was the public servant whom the accused would have approached for rendering or attempting to render service to Prem Singh in securing a job for him. Even in the complaint made by Prem Singh to the Deputy Superintendent Police all that was said was that the accused told Prem Singh that he would secure a job for him at Abu Road because he had considerable influence there. It was not disclosed as to who was the public servant on whom the accused had influence and whom he would approach in order to tender service to Prem Singh. In his statement also Prem Singh did not say that the accused had told him that he had influence on any particular public servant at Abu Road whom he would influence in order to render this service to Prem Singh, namely procuring him a job. It is true that the application was addressed by Prem Singh to the Divisional Mechanical Engineer and was given to the accused who said that it was all right; but Prem Singh did not even say that the accused had asked him to address the application to the Divisional Mechanical Engineer. It seems that the application was addressed to the Divisional Mechanical Engineer, simply because he was obviously the officer in charge of the Railway Running Shed at Abu Road. Thus Prem Singh did not say either in his complaint or in 747 his statement that the accused had told him that he would render service to him by approaching a particular public servant. In the charge sheet submitted by the police as well as in the charge framed by the court, it was not disclosed whether any public servant would be approached to render service to Prem Singh, i.e., by securing him a job. In the circumstances one of the ingredients of the offence under section 161 was neither alleged nor charged nor proved against the accused. The mere fact that a person takes money in order to get a job for another person somewhere would not by itself necessarily be an offence under section 161 of the Indian Penal Code unless all the ingredients of that section are made out. As in this case one of the main ingredients of that section has not been made out, the accused would be entitled to acquittal. However, it has been urged on behalf of the State that presumption under section 4(1) of the Prevention of Corruption Act arises in this case as money passed hands from Prem Singh to the accused and section 4(1) provides that if an accused person has accepted any gratification for himself or for any other person, it shall be presumed unless the contrary is proved that he accepted that gratification as a motive or reward as is mentioned in section 161 of the Indian Penal Code. Assuming that this presumption can be raised even when all that is proved is mere passing of money, the question still remains whether a presumption as to the motive or reward such as is mentioned in section 161 of the Indian Penal Code can be raised in this case at all, when we know as a fact that Prem Singh never said in the complaint that the accused had told him that he would influence any public servant and did not even say so in his statement in court and there was no mention in the charge sheet by the police or in the charge framed by the court that the accused was going to influence any public servant in order to secure a job for Prem Singh at Abu Road. We are of opinion that if the evidence had disclosed that the accused had indicated that he would influence any public servant in order to secure a job for Prem Singh a presumption as to the motive or reward might have 748 been drawn under section 4(1), assuming again that such a presumption can be drawn where there is simple passing of money. But when there is no indication whatever that any public servant was to be approached or influenced by the accused there can, in our opinion, be no question of making a presumption that the payment was as a motive or reward for endering service with any public servant. In this view of the matter we are of opinion that the offence under section 161 of the Indian Penal Code is not made out against the accused, for one of its essential ingredients is missing and no presumption can be drawn in the circumstances in that connection. We therefore dismiss the appeal though for reasons different from those which commended themselves to the learned Judicial Commissioner. Appeal dismissed.

The respondent who was a teacher in a railway school was prosecuted under section 161 of the Indian Penal Code and section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act, 1947. The (1) , 222. 740 prosecution case was that the respondent offered to secure a job for the complainant in the Railway Running Shed at Abu Road, if the latteR paid him Rs. 100, that the complainant agreed to this, and that on October 5, 1954, the complainant wrote out an application addressed to the Divisional Mechanical Engineer, Abu Road., and handed it to the respondent and gave him Rs. 50 promising to pay the balance of Rs. 50 after the Job had been secured. The Special judge who tried the case accepted the prosecution story and convicted the respondent on both the charges, but, on appeal, the High Court acquitted him on the ground that he was not a public servant. The State appealed to the Supreme Court. It was contended for the respondent that even if he were considered to be a public servant he could not be held guilty on either of the charges framed against him. It was found that neither in the charge framed under section 161 of the Indian Penal Code nor in the evidence was there anything to show that the respondent intended to approach any public servant in order to secure a job for the complainant. Held : (1) that the respondent was a public servant within the meaning of the ninth clause of section 2I of the Indian Penal Code as he was in the service of Government,, was being paid by it and was entrusted with the performance of a public duty inasmuch as he was a teacher in a school maintained by Government and it was part of his public duty to teach boys. G. A. Monterio vs The State of Ajmer, ; , followed. (2) that in view of the words " by otherwise abusing his position " read along with the words " in the discharge of his duty " in section 5(1)(d) of the Prevention of Corruption Act, 1947, an offence under that section requires that the public servant should misconduct himself in the discharge of his duty. In the present case, as the respondent was only a teacher it was not part of his duty to make appointments in the Railway Running Shed at Abu Road, and consequently when he took money for procuring a job for the complainant he was not committing misconduct in the discharge of his duty. Accordingly, a conviction under section 5(2) read with section 5(1)(d)of the Prevention of Corruption Act, 1947, was not valid. (3) that the mere fact that a person takes money in order to get a job for another person somewhere would not by itself be an offence under section 161 of the Indian Penal Code and that as the charge under section 161 did not disclose who was the public servant whom the respondent would have approached for rendering or attempting to render service to the complainant in securing a job for him, the prosecution under that section was not maintainable; and, (4) that the presumption under section 4(1) of the Prevention of Corruption Act, 1947 could not, arise in the present case as section 161 of the Indian Penal Code was not applicable.

Appeal No. 133 of 1965. Appeal from the judgment and decree dated February 17, 1962 of the Madhya Pradesh High Court in First Appeal No. 89 of 1959. LI 3 Sup. CI/68 7 596 S.N. Anand, for the appellant. S.S. Shukla, for legal representatives for respondent No. 1. B.C. Misra and M.V. Goswami, for respondent No. 2. The Judgment of the Court was delivered by Bachawat, J. M.R. Malhotra was working as a contractor to the military and other authorities. He needed funds for the execution of his contracts. The appellant Bank formerly known as the Bharat Bank Ltd., agreed to finance the contracts and to advance monies to Malhotra against his bills for supplies under the contracts. For the purpose of carrying out this arrangement Malhotra executed an irrevocable power of attorney in favour of the appellant on July 13, 1946. The power of attorney recited: "Whereas we are working as contractors to the Government in its various departments and have entered into certain contracts and will in future enter into other contracts and whereas an agreement dated 13 7 1946 has been made between us and the Bharat Bank Ltd., in pursuance of which the attorneys have agreed to finance contracts and to advance us sums of money, against supply bills for payments to be received by us under the contracts issued by the Government in various departments on conditions mentioned therein; and whereas we, for the purpose of carrying out the terms of the said arrangement more effectively and to secure the interest of the attorneys are desirous of appointing the Bharat Bank Ltd., as our lawful attorneys in all matters relating to the receipt of all payments under the contracts made or to be made hereafter." The document appointed the appellant to be the attorneys of Malhotra "to present and submit supply bills regarding our contracts to the proper officer and/or authority of the Government Departments concerned; to obtain cheques for sums payable to us under the contracts directly in their own name or in our names in payment of such bills or other amounts and to cash and to receive the amount thereof and appropriate such receipts towards and in repayment of the advances made or to be made hereafter and all other monies due from us to the attorneys in any account what soever." The appellant was also authorised to sue for, recover and receive the monies due in connection with the contracts with the approval of MaLhotra, to conduct and defend proceedings in consultation with him and to take steps in his name and on his behalf. Malhotra promised and declared that "all powers hereby granted are and shall be irrevocable as long as any claims of the attorneys against, us whether for principle, interest, costs, charges or otherwise remain outstanding and unpaid. " Intimation of the power of attorney was given by the appellant to the military authorifles. On July 19, 1948 Malhotra made out a bill on the military authorities for Rs. 49,633/8/7 then due to him in respect of his supplies under the contracts during 1945 46 and handed over 597 the bill to the appeLlant for collection. On the bill, Malhotra made, the following endorsement: "Please pay to Bharat Bank Ltd. ,Jabalpur. " The appeLlant sent the bill to the military authorities for payment. Before the appellant received the payment, the amount due under the bill was attached by Takhatmal in execution of a money decree obtained by him against Malhotra. The appeLlant filed objections in the execution proceedings. On September 11, 1952 the objections were dismissed. On December 12, 1952 the appellant filed a suit in the court of the 1st Additional District Judge, Jabalpur, against Malhotra and Takhatmal asking for a declaration that the appellant was an assignee of the biLl and that Takhatmal had no right to attach it. The Trial Court held that the appellant was the assignee of the bill and decreed the suit. Takhatmal filed an appeal against the decree. The High Court of Madhya Pradesh allowed the appeal and dismissed the suit. The present appeal has been filed by the plaintiff after obtaining a certificate from the High Court. The sole question in this appeal is whether the power of attorney dated July 13, 1946 coupled with the endorsement on the bill dated July 19, 1948 amounts to an equitable assignment of the monies due under the bill in favour of the appellant. There are many decisions on the question as to what constitutes an equitable assignment. The law on the subject admits of no doubt. In Palmer vs Carey(1) Lord Wrenbury said : "The law as to equitable assignment, as stated in Rodick vs Candell , 777, 778) is that: The extent of the principle to be deduced is that an agreement between a debtor and a creditor that the debt owing shall be paid out of a specific fund coming to the debtor, or an order given by a debtor to his creditor upon a person owing money or holding funds belonging to the giver of the order, directing such person to pay such funds to the creditor, will create a valid equitable charge upon such fund, in other words, wfll operate as an equitable assignment of the debts or fund to which the order refers." In construing the power of attorney it is necessary, to bear in mind that the relationship of the two parties, Malhotra and the Bank was that of borrower and lender and that the document was brought into existence in connection with a proposed transaction of financing of Malhotra 's contracts. The loans were to be advanced by the Bank against Malhotra 's bills for supplies under the contracts. The obvious intention of the parties was to provide protection for the lender and to secure repayment of the loans. With that object in view the lender was authorised to receive pay (1) ; at 706. 598 ment of the bills and to appropriate the receipts towards repayment of the loans. As the lender had an interest in the fundS the power of attorney was expressed to be irrevocable. On a proper construction of the document the conclusion is irresistible that there was an agreement between the lender and the borrower that the debt owing to the lender would be paid out of a specific fund of the borrower in the hands of the Government authorities. The power of attorney coupled with the endorsement on the bill dated July 19, 1948 was a clear engagement by Malhotra to pay the appellant Bank out of the monies receivable under the bill and amounted to an equitable assignmen of the fund by way of security. The question whether a document amounts to an equitable assignment or not is primarily one of construction but we may mention a few decisions which throw light on the matter. Jagabhai Lallubhai vs Rustamji Nauserwanji(x) the Bombay High Court held that an agreement to finance the borrower and a power of attorney of even date to receive the monies due to the borrower under certain contracts had the effect of an equitable assignment of the funds. In Loonkaran Sethiya vs State Bank of Jaipur(2) this Court held that a power of attorney authorizing a lender to execute a decree then passed in favour of the borrower or which might be passed in his favour in a pending appeal and to credit to the borrower 's account the monies realised in execution of the decree amounted to an equitable assignment of the funds. In the last case the Court held that there was no transfer of the decree, or of the claim which was the subject matter of the pending appeal as the borrower continued to be the owner and the lender was merely authorised to act as his agent. Nevertheless the Court held that the power Of attorney amounted to a binding equitable assignment. An actionable claim may be transferred under section 130 of the Transfer of Property Act. Where a document does not amount to a transfer within section 130 it may apart from and independently of the section operate as an equitable assignment of the actionable claim. In the present case the power of attorney authorised the appellant to receive all monies due or to become due to Malhotra in respect of pending or future contracts with the government authorities. Counsel argued that there was no engagement to pay out of specific fund and therefore there was no assignment. We find no substance in the contention. There can be a valid equitable assignment of future debts, see Tailby vs Official Receiver(3). As and when the debt comes into existence it passes to the assignee, (1) Born. (2) ; (3) 599 As a matter of fact when the debt due to Malhotra came into existence, he specifically appropriated it for payment to the appellant. On July 19, 1948 he made out a bill for the monies then due to him and endorsed on it: "Please pay to Bharat Bank Ltd., Jabalpur. " The bill with the endorsement was sent to and acknowledged by the military authorities. Counsel submitted that this document was a pay order. Now there is an essential distinction between a pay order and an assignment. A pay order is a revocable mandate. It gives the payee no interest in the fund. An assignment creates an interest in the fund and is not revocable. Read in the light of the power of attorney the endorsement on the bill dated July 19, 1948 created an interest in a specific fund and was irrevocable. There was thus a sufficient equitable assignment of a specific fund in favour of the appellant. The High Court was in error in holding that there was no equitable assignment. In the result, the appeal is allowed, the decree passed by the High Court is set aside and the decree passed by the 1st Additional District Judge, Jabalpur, is restored. The respondents who are the legal representatives of Takhatmal shall pay out of his assets in their hands the costs of this appeal as also the costs in the courts below. Y.P. Appeal allowed.

The appellant Bank, agreed to finance the contracts undertaken by M. and to advance monies against his bills for supplies under the contracts. For the purpose of carrying out this arrangement M executed an irrevocable power of attorney in favour of the appellant authorising the latter to receive all monies due or to become due to M in respect of pending or future contracts. M made a bill, endorsed it in favour of the appellant for collection, and handed it over to the appellant for collection. Before the appellant received the payment, the amount under the bill was attached by the first respondent in execution of a money decree obtained by him against M. The appellant filed a suit for a declaration that he was the assignee of the bill and the first respondent had no right to attach it. The suit was decreed, but in appeal, the High Court dismissed the suit. In appeal, on certificate, this Court: HELD: The appeal must be allowed. The power of attorney coupled with the endorsement on the bill was a clear engagement by M to pay the appellant Bank out of the monies receivable under the bill and amounted to an equitable assignment of the fund by way of security. The obvious intention of the parties was to provide protection for the lender and to secure repayment of the loans. With that object in view the lender was authorised to receive payment of the loans. As the lender had an interest in the funds the power of attorney was expressed to be irrevocable. [597 D, H] There can be a valid equitable assignment of future. debts. A pay order is revocable mandate. It gives the payee no interest in the fund. An assignment creates an interest in the fund and is not revocable. Read in the light of the power of attorney the endorsement on the bill created an interest in a specific fund and was irrevocable. There was thus a sufficient equitable assignment of a specific fund in favour of the appellant Bank. [598 H; 599 B] Loonkaran Sethiya vs State Bank of Jaipur, ; followed. Palmer vs Carey ; at 706; Tailby vs Official Receiver, , applied, Jagabhai Lallubhai vs Rustamji Nauserwanji, Bom. 311, referred to.

N: Criminal Appeal No. 181 of 1971 Appeal by special leave from the judgment and order dated the 25th and 28th September, 1970 of the Bombay High Court Nagpur Bench in Criminal Appeal No. 24 of 1968 with Crl. A. No. 100 of 1968. Harjinder Singh, for the appellant section B. Wad and M. N. Shroff, for the respondent The Judgment of the Court was delivered by SHINGHAL, J. This is an appeal of Ninaji Raoji Boudha (hereinafter referred to as Ninaji) and Raoji Gianu Boudha (hereinafter referred to as Raoji), against the appellate judgment of the Bombay High Court dated September 25/28, 1970. The Additional Sessions 429 Judge of Khamgaon convicted them of offences under sections 325 and A 147 I.P.C. and sentenced them to rigorous imprisonment for five years and a fine of Rs. 50/ for the offence under section 325, and to rigorous imprisonment for six months and a fine of Rs. 25/ for the offence under section 147 I.P.C. The High Court held, on appeal, that they were guilty of the offence under section 302 read with section 34 I.P.C. and sentenced them to imprisonment for life by setting aside their acquittal for " the offence of murder of Bhonaji. Ninaji and Raoji were also convicted for an offence under s 325 read with s.149 I.P.C. for participating in the unlawful assembly which was held to be responsible for causing grievous injuries to Bhonaji 's sons Samadhan and Rambhau, Mr. Harjinder Singh, Amicus Curiae, stated on behalf of the appellants that he did not think it worthwhile challenging the conviction of appellants Ninaji and Raoji for that offence, and that he would confine the appeal to their conviction for the offence under section 302/ 34 I.P.C. for causing the death of Bhonaji. We would therefore concern ourselves with the incident which resulted in Bhonaji 's death and the conviction of the appellants therefor. Appellants Ninaji and Raoji were two out of nine accused who were challaned for the commission of various offences in an incident which took place in mauza Narkhed in Buldana district on September 29, 1966, as a result of some petty quarrel between Bhonaji and his sons Samadhan and Rambhau on the one hand and the appellants and ;their party on the other. It was alleged that on September 29, 1966, at about 6 p.m., there was a quarrel between the two factions at `Gothan ', near the house of Bhonaji, because of the impounding of a she but also of Ananda (who was one of the nine accused in the case) by Bhonaji 's third son Madhukar and of the cow of Ninaji 's nephew Narain. lt was alleged that the nine accused, including the present appellants, went to 'gothan '. There was some altercation between accused Ananda and Samadhan and the parties beat each other. r Samadhan and his relations then went to their house, which was close by. Samadhan, who had received some injuries at 'gothan ', went inside his house to dress them up. His father Bhonaji sat on an 'oota ' in front of the house. It is alleged that appellants Ninaji and Raoji, and accused Parashram, gave a beating to Bhonaji at the oota as a result of which he fell down, and the remaining accused forcibly took Samadhan to a place near the house of one Trimbak and beat him there. Reports of the incident were lodged at the police station. Bhonaji succumbed to his injuries on October 2, 1966. The police investigated and challaned nine accused including appellants Ninaji and Raoji. The Additional Sessions Judge convicted them all, but acquitted Parashram and Ram Das. While accused Ninaji and Raoji were convicted and sentenced as aforesaid the remaining five accused were convicted and sentenced for offences under sections 325 and 147 I.P.C. Or/ and 325/149 and 147 I.P.C. As has been stated, this appeal is by Ninaji`and Raoji in regard to the incident which took place in front of the house of Bhonaji and resulted in his death. It has been argued by Mr. Harjinder Singh that in its appellate judgment the High Court lost sight of the fact that Bhonaji was present 13 L522SCI/76 430 at the incident which took place at 'gothan ', and that it erred in thinking that there was another incident in front of the house of Bhonaji and that he was fatally beaten there while sitting in his 'oota '. We have been taken through the evidence on the record, and we find that there is no justification for the argument that the fatal injury was caused to Bhonaji at 'gothan ', and not in front of his house. We have gone through the appellate judgment of the High Court, and we are satisfied that while Bhonaji 's house was quite near the 'gothan ', there can be no doubt that the accused went to his house, after tho beating which had taken place at 'gothan '. As we shall show in a while, there is also satisfactory evidence to prove that Bhonaji was sitting in front of his house when he was beaten there. The other argument of Mr. Harjinder Singh, which however requires serious consideration, is whether the appellants Ninaji and Raoji have rightly been convicted by the High Court for the offence under section 302 1[ ' read with section 34 I.P.C. The finding of the High Court in this respect is as follows, "The evidence very clearly shows that these two persons . were responsible for assaulting Bhonaji as a result of which Bhonaji died. It may be that they had in the beginning no common object or intention to assault Bhonaji but it does appear from the circumstances that these two persons, and i ' may be Parashram, formed a common intention at that moment and both of them dealt blows on Bhonaji which were on vital parts of the body such as head and neck. The blows were given by sticks though the description of the sticks cannot be known because the sticks which have been recover ed in this case cannot be said to be sticks connected with the crime as such. But from the nature of the blows which were given on the person of Bhonaji, it appears that the sticks were quite heavy and the blows of the sticks actually resulted in the death of Bhonaji. When the blows were . , given the accused must have intended to cause those injuries to Bhonaji. They must be taken to have knowledge that Bhonaji was an old man and on account of the blows given by these accused his death was likely to be caused, particularly when the blows were given on vital parts of the body. They must be taken to have knowledge that the injury they intended to cause to Bhonaji was likely to result in the death of Bhonaji. The post mortem examination of Bhonaji shows that there were several fractures and fissures in the p head and the blows must have been dealt with quite an amount of force. The accused Nos. 6 and 7 Ninaji and Raoji, therefore, would be guilty of an offence which would come under section 300, fourthly, because the accused Nos. 6 and 7 ought to have known that their act was so imminently dangerous having regard to the age and condition of the victim Bhonaji that their act must in all probability r ;. cause death or such bodily injury as is likely to cause death. " 431 A perusal of the judgment shows that while the High Court took A the view, in the beginning, that the appellants had no common object or intention to assault Bhonaji, it took the view that they, and may be Parashram, "formed a common intention at that moment. " It is not clear from the judgment at what moment of time such a common intention could be said to have been formed by them. Moreover, the High Court has taken the view that both the appellants dealt blows on vital parts of Bhonaji 's body which resulted in his death and that when the blows were given the accused "must have intended to cause those injuries to Bhonaji" with the knowledge that he was an old man and his death was likely to be caused by those blows. Therefore the question which requires consideration is whether it could be said that there was any evidence to show that more than one blow was inflicted on any vital part of Bhonaji 's body and whether both the assailants could be said to have inflicted the fatal injury with the knowledge that it was likely to cause death. The High Court has stated that the post mortem examination showed that there were several fractures and assures in the head and that the "blows" must have been dealt with quite an amount of force. Then t it has been further held by the High Court that the accused ought to p have known that their action in inflicting the injury was "so imminently dangerous" as to cause the death of an old person like Bhonaji. As we shall show, there is justification for the argument that in arriving at this decision the High Court misread the evidence in vital particulars and committed an apparent error of law as well. It is not disputed before us that there was an incident at 'gothan ' where there was a beating between the parties of the accused and Samadhan, and that Samadhan and his father Bhonaji returned to their house thereafter. Samadhan (P.W.19) has himself stated that he went inside his house while his father Bhonaji sat outside, and that; when he (Samadhan) was tying a towel on his head to cover the injury which had been inflicted at 'gothan ', the party of the accused came to his door and called him out. Sri Ram (P.W. 5) and Sukhdev (P.W. 7) have stated much to the same effect. The evidence on record therefore showed that the common intention of the appellants was to settle their scores with Samadhan, and not Bhonaji. In fact the High Court has also held as follows, "It does not appear that any of these persons had initially any idea of assaulting either Bhonaji or Rambhau, but they seemed to be only after Samadhan. While Samadhan was being asked to come out of the house, the deceased Bhonaji must have abused or said something which infuriated some OF the accused persons and it is on account of this, it appears that Ninaji and Raoji and perhaps Parashram directed their attention to Bhonaji. " It cannot therefore be said that the common intention of the accused was to cause the death of Bhonaji. In fact the statement of Sri Ram (P.W. 5) shows that at the time when the accused came to Bhonaji 's house in search of Samadhan, Bhonaji was sitting on the platform or 432 'oota '. Sukhdev (P.W. 7) has also stated to the same effect, and the statement of Samadhan (P.W. 19) also shows that his father was sitting in front of the steps of the house when they asked Samadhan to come out of the house. It is therefore quite clear that the accused did not give a beating to Bhonaji even though he was sitting on the platform outside his house. On the other hand, they passed him by, while calling Samadhan to come out. They could not therefore be said to have the common intention or object of inflicting any injury on the person of Bhonaji till then. It will be recalled that the High Court has not stated at what point d time they could be said to have formed the common intention of causing the death Bhonaji. It appears from the statements of Rambhau (P.W. '1) and Tulsi Ram (P.W. 10) that on returning from 'gothan ' Bhonaji asked Tulsi Ram, who was a chowkidar, to make a report of the incident to the Patil and also to get a bullock cart ready for going to the police station. That appears to be the point of time when the accused diverted their attention to him and gave him a beating, but there is nothing to show that their intention was to inflict any fatal injury. As has been stated, the High Court has taken the view that more than one blow was given on vital parts of Bhonaji 's body and that caused several fractures and fissures in the head. We have examined the correctness of that finding. It has been stated by Dr. Garge (P.W. 40) that he performed the post mortem examination on the dead body of Bhonaji and that on external examination he noticed only one contusion 2" in diameter on the right temporal region of the head. He made an internal examination and found that there was a depressed fracture of the skull, partly of the right temporal bone and right parietal bone, and fissured fractures of the left parietal, frontal and occipital bones the lines of which were "starting from the border of depressed fracture No. (1) and going away in different bones. " The witness stated further that the depressed and fissured fractures were "due to blow by some hard and blunt substance, or by a fall from height with head downwards on a hard substance. " It is therefore quite clear that there was only one blow on the head which caused Bhonaji 's death, and the High Court misread the evidence in taking the view that more than one blow was given on the head of the deceased. This has made it necessary for us to examine the further question whether the High Court was justified in holding that both the appellants were guilty of the offence under section 302 read with section 34 I.P.C. Here again, we find that the evidence on the record has not been read correctly. Kalawati (P.W. 2), Smt. Deoki Bai (P.W. 3), SA Ram (P.W. S) and Sukhdev (P.W. 7) have been examined as eye witness of the beating which was given to Bhonaji. The High Court has held that their evidence was "acceptable", and that there was "nothing to cast any doubt" on their evidence. Kalawati (P.W. 2) stated in the trial court that appellant Ninaji gave two blows to Bhonaji with a stick, but did not state on what parts of the body those blows were inflicted. She stated further that appellant Raoji gave a 433 blow with a stick on Bhonaji 's back, near the neck: She however admitted during her cross examination that she could not, explain why she did not mention in her statement to the police that Ninaji and Raoji gave blows on any particular part of Bhonaji 's body. Her statement could not therefore go to prove that appellants Ninaji and Raoji inflicted injuries on the head of the deceased. We have examined the statement of Smt. Deoki Bai (P.W. 3) also. She is the daughter in law of the deceased, being the wife of Rambhau. She stated that she had heard the noise, but came out only after feeding her child and saw that Bhonaji` hat fallen down on his face and the appellants were running away. While her statement may go to prove the presence of the appellants at the place of incident, it does not prove that both of them dealt blows on the head of the deceased. Sri Ram (P.W. 5) stated that appellant Ninaji gave two blows with a stick on the head of Bhonaji, and that appellant Raoji gave a blow with a 'khunt ' near his neck. In his cross examination he admitted that he did not state before the police about the place where the appellants dealt blows with their sticks on the person of Bhonaji. His statement could not also therefore prove the infliction of blows by both the appellants on the head of the deceased. That leaves the statement of Sukhdev (P.W. 7) for consideration. He merely stated that while he could not state the exact number of the accused or their features, he saw that, out of seven or eight persons, three beat Bhonaji with sticks. He did not state about the infliction of any injury on the head, by any of the appellants. It would thus appear that the High Court could not possibly have reached the conclusion, on the basis of the statements of Smt. Kalawati (P.W. 2), Smt. Deoki Bai (P.W. 3), Sri Ram (P.W. S) and Sukhdev (P.W. 7) that more than one blow was inflicted on the head of the deceased, or that the one blow which was found there as a result of the post mortem examination was inflicted by the one or the other of the two appellants. The evidence on record therefore went to show that the, appellants did not have the common intention of giving a beating to Bhonaji when they reached his house for, as has been shown, they found him sitting outside the house on his 'oota ' but passed him by in search of Samadhan who was dressing his injuries inside the house. Bhonaji asked Tulsi Ram Chowkidar to make a report and to get ready a bullock cart for going to the police station. It was then that injuries were inflicted an his person by the appellants Ninaji and Raoji. Out of those injuries, one was a forceful blow on the head which caused a depressed fracture and fissures all over, and resulted in the ultimate death of Bhonai; The other injuries were on the neck (back side), knees and the right elbow of the deceased and were simple injuries. As has been shown. there was no reliable evidence on the record to prove whether the fatal blow on the head was caused by Ninaji or Raoji. The other blows did not fall on any vital part of the body and, in the absence of evidence to establish that their common intention was to cause death it appears that the appellants had the common intention of causing grievous injury with the lathi and the 'khunt '. They could therefore be convicted of an offence under section 325 read with section 34 I.P.C. and not section 302 read with section 34 I.P.C. 434 It may also be mentioned that while the High Court stated at one place that the appellants must be taken to have the knowledge that the injury which they intended to cause to Bhonaji was "likely to result" in his death, it observed at another place that the appellants were guilty of an offence falling under section 300, fourthly, because they "ought to have known that their act was so imminently dangerous having regard to the age and condition of the victim Bhonaji that their act must in all probability cause death or such bodily injury as is likely to cause death." No categorical finding has therefore been given by the High Court one way or the other. On the other hand, as has been shown, the liability of the accused has not been examined with due regard to the facts and circumstances which had been clearly established on the record and to which reference has been made above. The appeal is therefore allowed to the extent that the conviction of the appellants Ninaji and Raoji is altered from section 302/34 I.P.C. to one under section 325/34 I.P.C. and they are sentenced to rigorous imprisonment for five years thereunder. Their sentences shall run con currently. V.P.S. Appeal allowed in part.

Nine accused were charged with offences of murder and causing hurt. The trial Court acquitted two and convicted the others under sections 325 and 147, I.P.C. on appeal by the State, the High Court convicted the two appellants also under section 302 read with 8. 34. I.P.C. Partly allowing their appeal to this Court, ^ HELD: The High Court has not examined the liability of the accused with due regard to the facts and circumstances of the case. Instead of giving a categorical finding, the High Court stated at one place in its judgment that the appellants must be taken to have had the knowledge that the injury which they intended to cause to the victim was "likely to result" in his death, and in an other place, that the appellant were guilty of an offence under section 300, fourthly, because they "ought to have known that their act was so imminently dangerous having regard to the age and condition of the victim that their act must in all probability cause death or such bodily injury as is likely to cause death. " But the evidence on record shows that the appellants did not have the common intention of giving a beating to the deceased when they reached his house but were only bent upon settling scores with his son. It was only when the deceased asked another witness to get ready a bullock cart for making a complaint about the beating of his son that the appellants inflicted injuries on him. But there was nothing to show that their intention was to inflict any fatal injury. Only one of the injuries was a forceful blow on the head of the deceased and it resulted on his death. But the other injuries were on the back of the neck, knees and right elbow of the deceased and not on any vital part of the body. Therefore, the appellants had only the common intention of causing Grievous hurt. Since there was no reliable evidence to show which of the two appellants gave the fatal blow, the appellants could only be convicted of an offence under section 325 read with section 34, I.P.C. [431F; 432C D, P G; 433E 434C]

Appeal No. 459 of 1958. Appeal by special leave from the judgment and decree dated June 29,1955, of the former Andhra High Court in Second Appeal No. 730 of 1949. A.V. Viswanatha Sastri and 'P. V., R. Tatachari, for the appellants. K. Bhimasankaram and G. Gopalakrishanan, for the respondents. September 29. The judgment of Wanchoo, Das Gupta and Shah, JJ., was delivered Wanchoo, J., Dayal J. delivered a separate 912 WANCHOO, J. This is an appeal by special leave from the judgment and decree of the Madras High Court. The appellants were defendants in a suit brought by the respondents for possession of certain properties which originally belonged to one Subbarayudu. The case of the respondents was that Subbarayudu executed a will dated September 15, 1885. Under that will the property passed on hit; death to his wife with life interest and after her death absolutely to his daughter Krishnavenamma who was in enjoyment thereof till her death in 1933. The daughter executed a will on March 24, 1933, in favaur of her step son Nagaraju who came into possession of the property on her death soon after. Nagaraju in his turn executed a will on August 16, 1933, by which he gave life interest to his wife who was the first plaintiff (now the first respondent before us) and thereafter the property was bequeathed absolutely to his daughters. The second respondent is the tenant of the first respondent. Nagaraju died soon after executing the will and the case of the first respondent was that she came into possession of the property on his death and was in enjoyment thereof till she was forcibly ejected in 1943 by the appellants who claimed to be the purchasers of the property from Seetaramayya and Ramakotayya who in their turn claimed to be the reversioners of Subbarayudu. Consequently, the suit out of which the present appeal has arisen was filed in June, 1944, for possession and mesne profits. The suit was resisted by the appellants, and their case was that they had purchased the property from the reversioners of Subbarayudu in 1942. It was further contended on their behalf that on the death of Krishnavenamma the reversioners came into possession of the property through the tenants who had been in possession from before under a lease granted to them by Krishnavenamma. These tenants remained in possession till the sale deed in favour of the appellants and attorned to the 913 appellants thereafter. Later the two tenants surrendered possession to the appellants who thus came into actual possession of the property in suit. The appellants also contended that the so called will executed by Subbarayudu was a forgery and the first respondent had no title to the property. On these pleadings, the main point that arose for decision was whether the first respondent had title to the property and was in possession of it till she was dispossessed in 1943. Further the title set up by the appellants was also gone into and their claim as to possession came up for consideration. The trial court found that the will said to have been executed by Subbarmyudu was not proved. In consequence of this finding, it came to the conclusion that the title of the first respondent which depended upon the proof of this will was not a legal title. Further it found that it was not established that Seetaramayya and Ramakotayya were the next reversioners to the estate of Subbarayudu. The result of these findings was that no title was found in either party. These findings have been upheld by the Subordinate Judge and also by the High Court in second appeal and therefore it must now be accepted that both the parties have no title to the property in suit. The main contest therefore centred round possessory title which was also asserted by both the parties in the trial court. On this question the trial court found that after the death of Krishnavenamma, the name of the first respondent was entered in the revenue papers in her place but the property was actually in possession of the two tenants by virtue of the lease executed in their favour by Krishnavenamma in 1929 for six years. Therefore, there was a kind of race between respondent No. I and Seetaramayya and Ramakotayya who set themselves up as reversioners to obtain the favour of these two tenants, and the so. called reversioners managed to obtain in June, 1933, a kadapa from the two tenants for five years 914 ending with May, 1938. They also executed a cowle in favour of the tenant,% and both these documents were registered in July, 1933. But the finding of the trial court was that there was no payment of rents in the years 1933 'and 1934 and that the real fight for the land started towards the end of 1935 or the beginning of 1936 and although documents were taken from the tenants by the so called reversioners no actual payment of rent was made to them. It also held that in this game of winning the favour of the tenants the real gainers were the tenants who paid no rent to either the first respondent or the so called reversioners. The trial court further held that it was in 1936 that the first respondent managed to dispossess the tenants forcibly through her tenant Moka Subbarao who seems to have been a person of some influence in the village. Thereafter the first respondent remained in possession through her tenant till she was dispossessed in November, 1943, forcibly by the present appellants after they had purchased the lands from the go called reversioners. In effect, therefore. the finding of the trial court was that neither party was in Possession. of the property up to 1936 and it was only in 1936 that the first respondent came into possession through Moka Subbarao by dispossessing the tenants who were holding the land from the time of Krishnavenamma and had paid no rent to anybody after her death In consequence the trial court hold that as the possession of the first respondent was earlier she was entitled to succeed at least on the ground of possessory title. Incidentally it also held that although the title of the first respondent was defective for the reason that Krishnavenamma did not have absolute right in the property it was not :void but was only voidable at the instance of the nearest reversioner or some one else having better title, which the appellants or their predecessors in interest did not have. In the result the suit was decreed with mesne profits. 915 This was followed by an appeal to the Subordinate Judge by the present appellants. We have already said that the Subordinate Judge upheld the findings of the trial court on the title of the parties and came to the conclusion that the title of neither party was proved. He also rejected the view of the trial court that the first respondent at any rate had some title though defective it might be. He then addressed himself to the question of possessory title and considered whether the finding of the trial court that the first respondent was in possession ' earlier than the appellants and was therefore entitled to recover possession on the basis of her. possessory title, was correct. He. came to the conclusion that the so called reversioners had got possession of the property peacefully immediately after the reversion opened. in 1933 and therefore the appellants were entitled to maintain their possession as they derived their title from the so called reversioners who had earlier possession than the first respondent. In coming to this conclusion the Subordinate Judge relied on the Kadapa executed by the tenants in favour of the so called reversioners in June, 1933, and the cowle executed by the so called reversioners in favour of the tenants. But the Subordinate Judge did not consider the further question which was considered by the trial court,. namely, whether after the execution of the Kadapa and the cowle the so called reversioners. ever collected rents from the tenants who were there from the time of Krishnavenamma between 1933 and 1936. This question had been specifically considered by the trial court and it had come to the conclusion that though the kadapa and the cowle had been executed they were mere paper transactions and the so called reversioners had never collected rents during this period and the tenants had never paid the rent to anybody during this period. The Subordinate Judge, however, allowed the appeal and dismissed the 916 suit on the view taken by him that the so called reversioners had come into possession of the property after the death of Krishnavenamma end were forcibly ejected in 1936 by Moka Subbarao as the tenant of the first respondent. This was followed by a second appeal by the respondents. The High Court took the view that the finding of the Subordinate Judge that the so called reversioners were in possession from 1933 to 1936, could not be accepted. According to the High Court, the main question was whether the tenants who were there from before really attorned to the reversioners. The High Court then went into some of the evidence and held that various matters which should have received the attention of the Subordinate Judge in coming to a conclusion on this important point of fact were not considered by him; therefore it was not prepared to accept the finding of the Subordinate Judge in second appeal and required the Subordinate Judge to submit a fresh finding on this question. When the ' matter went back to the Subordinate Judge he examined the entire evidence and came to the conclusion that the so called reversioners in order to create evidence of possession had taken the kadapa from the tenants after winning them over to their side, perhaps by a promise not to collect rent from them. He also came to the conclusion that the so called reversioners were not in possession of the property after the death of Krishnavenamma from 1933 to 1936 and that it appeared that during that period neither party was in possession and only 'the tenants who were there from the time of Krishnavenamma continued to being possession but without paying rent to anybody. He further held that in the circumstances the possession of the tenants could only 'be treated as that of the rightful owner which neither party was in this case. Finally he came to the conclusion that it was for the first time in 1936 that Moka Subbarao took possession of the 917 land as the tenant of the first respondent and the appellants got possession for the first time in 1943. Therefore he held that as the first respondent 's possession was earlier it must be restored. This finding was accepted by the High Court with the result that the second appeal was allowed and the order of the trial court restored. The appellants have come to this Court by special leave. The main contention urged before us on behalf of the appellants is that the High Court had no jurisdiction in second appeal to reverse the finding of fact arrived at by the first appeal court as to possession, and inasmuch as the High Court indirectly reversed that finding by calling for a further finding on the question of possession, the judgment of the High Court should be set aside as without jurisdiction. On the other hand it has been urged on behalf of the respondents that though the first order of the High Court calling for a finding looks as if it was interfering with a finding of fact as to possession, a close examination of the circumstances and the findings of the trial court and the first appellate court will show that in fact there was no finding by the first appellate court on the crucial question which arose in the suit resting on possessory title and therefore the High Court was justified in calling for a finding in the matter. It is urged that where the case is based on possessory title only, a party must establish effective possession before it can succeed on its possessory title. On the question of effective possession the trial court had found that though there was a kadapa by which, it may be said, the tenants who were there from before had attorned to the so called reversioners, that was a mere paper transaction and the tenants never paid rents to the so called reversioners; as such,the reversioners never had effective possession between 1933 and 1936. According to the respondents, this finding of the trial court should have been specifically considered by the Subordinate 918 Judge; but all that 'the Subordinate Judge did 'was" to rely on the kadapa and hold on the basis of that document that the so called reversioners had come into possession peacefully. It is said that whatever may be said about the value of attornment: made in favour of the true owner the position. is different where attornment is in favour of a person who is not the true owner. In such case before the person in whose favour an attornment has been made, can establish that , his possession was effective it must also be shown that he was paid rent by the tenants who attorned to him. Therefore, it is urged that, as there was no finding by the Suboridnate Judge on this crucial question the, High Court was justified in sending the case back to the Subordinate Judge for a finding in this regard. As such, it is urged that this is not a case where the High Court had reversed, a finding of fact by the first appellate court which it is admitted it has no jurisdiction to 'do; but it is a case where there was no finding on the crucial question of fact by the Subordinate Judge and the High Court therefore hid jurisdiction to call for a finding in this regard. We are of opinion that though on a first reading of the High Court judgment calling for,a finding it does look as if the High Court was reversing the finding of fact as to possession ' when it called for a further finding on the question, a closer examination of its Judgment calling for a finding along with the findings by the Munsif and the Subordinate Judge on the crucial question involved in this case shows that it held that there was no 'finding by the Subordinate Judge on that crucial question,, though the trial court had given a finding in favour of the first respondent in that respecter, As both parties were relying on possessory title, it was necessary that they should prove effective possession over the, property in order to succeed on the basis of possessory title. By effective possession we mean either ' actual possession or 919 possession through a tenant who must have paid rent voluntarily or under a decree to the person claiming possessory title. The kadaps by the previously existing tenants in favour of the so called reversioners all along been treated as an attornment by all the three courts and we therefore accept it as such. If the so called reversioners Third title in the sense that they were the next reversioners, then attornment by the kadapa would have been sufficient to establish their possession over the property; but where the person in whose favour the attornment bad been made has no title,, a mere paper attornment would not be enough to establish as against third parties the possession of the person in whose favour attornment has been made and it will still have to be shown that the possession. was effective in, the sense that the person who attorned also paid rent voluntarily or under a , decree to the person in whose favour he made the attornment. The fact that, the tenants who had executed the kadapa may be estopped from challenging the title of the so cAlled reversioners, if a suit was brought Against them makes no difference to the position stated above. The finding of the Munsif was that no rent had been paid to anyone by the tenants; further no suit had, been brought by the so called reversioners, to recover the rent before the first respondent got into possession. The kadaps therefore remained a mere paper transaction and attornment through it would not be sufficient to put the so called reversioners in effective possession and confer possessory title on them which could be taken advantage of by the appellants to show earlier possessory title as against the undoubted Possessory title of the first respondent from 1936. It seems to us that, that is what the High Court meant when it said that the crucial question in this case was "whether the tenants really attorned to the reversioners". We emphasise the word "really" Which shows that the High Court was not satisfied With mere paper attornment which was all 920 that was found by the Subordinate Judge and rightly required in a case based on possessory title only that the attornment should be a real attornment, i. e., one in which the person attorning should also have paid rent either voluntarily or under a decree to the person in whose favour the attornment was made. The Subordinate Judge, however, had merely considered the paper attornment and had not considered the evidence as to payment of rent, which was, there and which had been considered by the trial court. The trial court had come to the conclusion after considering the evidence relating to payment of rent that in fact there was no payment though the attornment was made through the kadapa. The trial court therefore held that from 1933 to 1936, only the tenants were in possession but they never paid rent to anybody and thus neither party was in possession through them. This aspect of the finding of the trial court was completely overlooked by the Subordinate Judge who decided the question of possession merely on the paper attornment (namely, the kadapa). What the High Court seems to have meant when it said that the real question was not properly considered by the Subordinate Judge therefore was that he was merely satisfied with paper attornment in a case based on possessory title which was not enough in law and had not given any finding as, to whether the attornment was a reality in the sense that the rent was paid and would thus result in effective possession of the so called reversioners through the tenants. It seems to us therefore that though the form in which the High Court expressed itself when it called for a finding was not happy, what the High Court really did was to hold that there was no finding by the Subordinate Judge on the question of effective possession of the so called reversioners after a consideration of the evidence relating to payment of rent etc.; it therefore called for a finding on the question of effective, possession after 921 consideration of the entire evidence. This in our opinion the High Court was justified in doing because the trial court had considered the entire ,evidence and had come to the conclusion that the so called reversioners had no effective possession and the attornment through the kadaps was a mere paper transaction. In these circumstances it cannot be said that the High Court had no jurisdiction to call for a finding. It is not disputed that if the High Court had jurisdiction to call for a finding the final order of the. High Court allowing the appeal based on the finding which was submitted was not open to question. We therefore dismiss the appeal but in the circumstances pass no order as to costs of this Court. RAGHUBAR DAYAL, J. I agree that the appeal be dismissed, but for different reasons. If Narasimhulu and Ramudu alias Mark, who were in possession of the land in suit under the lease, exhibit P 6, dated May 6, 1929, for six years from Josyula Krishnavenamma, had attorned to Ramakotiah and Seetharamiah by executing the Kadapa (Kabuliat) exhibit D 4, on March 16, 1933, I do not think that any further payment of rent was necessary to make the attornment effective and am of opinion that in that case the view of the learned Subordinate Judge to the effect that the predecessors in interest of the defendants appellants were in possession through their tenants over the land in suit, Was correct. The High Court did not decide by its first order remitting the point No. 2, viz., ,whether the plaintiffs got into possession of the suit properties earlier than the defendants and their predecessor in title and whether they are entitled to recover possession of the suit properties on the strength of their Possessory title ' for a fresh finding that the attornment by the execution of the deed of Kadapa was not good attornment without the executants paying rent to Ramakotiah and Seetharamiah. The learned Judge simply said: 922 "Apart from 'the question whether the principle of law adopted by the learned. Judge is welf founded or not, on which I express no opinion at present it seems to me that the finding of the learned Judge that,, the first defendant bad prior, possession from 193 to 1936 cannot be accepted in second appeal" The finding about the prior possession, of the learned Subordinate Judge was not accepted by the High Court because it considered that the Subordinate Judge bad not closely scrutinized the evidence in the case on the very crucial question in issue between the parties. This crucial question was formulated as 'whether the tenants really attorned to the reversgioners and the reversioners recognized the possession of the tenants as theirs. ' What was want by the High Court from this question, is not clear to me. If the execution of the deed, exhibit D 4, amounted to the attornment by the tenants in favour of Seetharamiah and Ramakotiah, who claimed to be the heirs of Krishnavenamma, and the execution of the cowle, exhibit D 5, by those two persons in favour of the tenants, to the recognition of the tenants as their tenants, no further question of scrutiny of any other evidence on record could have arisen. The other evidence on record about which the High Court expressed its opinion, and that too not in a final form, as a fresh finding was being called on the basis of that evidence, mainly consisted of the evidence in favour of the defendant,%. Non consideration of that evidence could have been a grievance to the defendants, but not to the plaintiffs appellants before the High Court. Expression of opinion in that form on such evidence wag detrimental to the interest of the defendant in a fresh 'consideration of that evidence by the Subordinate Judge, who,, naturally, in his fresh finding, followed a practically similar line of criticism against "that evidence. The mere fact that certain evidence had not been closely scrutinized or, in other orders, not scrutinized, in & manner, in which the second 923 appellate Court desires, it to be scrutinized, cannot be round for interference with the finding of fact in the second appeal. If the High Court considered, is being now urged for the respondent, that without proof of the tenants actually paying rent to,, Seetharamiah and Ramakotiah, who laid claim as heirs but have been proved to be not heirs of Rat Krishnavenamma, there was no valid attornment, the order for a fresh finding about attornment could be justified on the ground that the Subordinate Judge had not referred to the evidence having a hearing on the question of the payment of rent by the tenants and its receipt by the new landlords Seetharamiah and Ramakotiah. I however find it difficult to put such a construction on the High Court 's order when it did not decide upon the principle of law adopted by the first appellate Court. "Attornment, in its strict sense, is an agreement of the tenant to a grant of the reversion made by the landlord to another, or, as it has been defined ', 'the act of the tenants putting one person in the place of another as his landlord" see paragraph 732, Foa 's General Law of Landlord and Tenant. This means that in the first instance attornment is made in favour of the person who has derived his title or supposed ' title from the Original landlord. It implies a continuity of the tenancy created by the original landlord in favour of the tenant. It is in these circumstances that the existing tenant, for the rest of the period of his Tenancy, agrees to acknowledge the new landlord as his landlord. Such an agreement of the tenant amounts to attornment and by such an attornment the tenant by his act substitutes the new landlord in place of the previous one. Such attornment is complete the moment the tenant agrees to acknowledge the new landlord to be his landlord. Any future payment or non payment of rent does not affect the relationship created by the attornment. The new landlord will have his remedies with respect to the rents falling in arrears. 924 Again, it is stated in paragraph 745 at page 475 : "With regard to the title of person from whom the possession was not obtained, but who has been recognised as landlord by the tenant, such recognition may be by express agreement, by attornment, or other formal acknowledgment (as by paying a nominal sum of money), by payment of rent, or of a. nominal sum as rent, or by submission to a distress. " The attornment is here described as one mode of recognising a person as one 's landlord, just as payment of rent is another mode for the purpose. Expression to similar effect is to be found in paragraphs 746, and also 747 where it is further noted : "But the tenant is not allowed to impeach the title of a person to whom he has paid rent, or whose title he has otherwise recognised, without showing a better title in some other person. Thus he cannot, after attorning to a person who derives his title under a will, contend merely that upon a true construction o f the will he had no title; nor can he, after paving him rent, dispute his title merely on the ground that the devise to him was void, owing to the incapacity of the testator. " In krisna Proshad Lal Singha Deo vs Baraboni Coal Concern (1) the Privy Council said at page 318, when considering the scope of section 116 of the Indian Evidence Act: "Whether during the currency of a term the tenant by attornment to A who claims to have the reversion, or the landlord by acceptance of rent from B who claims to be entitled to the term, is estopped from disputing the ' claim which he has once admitted,, we important questions, but they are instances of cases which are outside section 116 altogether. " (1) (1937) L. R. 64 I. A. 311. 925 And again, at page 319 "In the ordinary case of a lease intended as a present demise which is the case before the Board on this appeal the section applies against the lessee, any assignee of the term and any sub lessee or licencee. What all such persons are precluded from denying is that the lessor had a title at the date of the lease, and there is no exception even for the case where the lease itself discloses the defect of title. The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversion, though in such cases there may be other grounds of estoppel, e.g., by attornment, acceptance of rent etc. In this sense it is true enough that the principle only applies to the title of the landlord who let the tenant in ' as distinct from any other person claiming to be reversioner." These observations make it clear that simply by attornment the tenant is estopped from questioning the derivative title of the claimant 's successor just as the acceptance of rent will create an estoppel against the landlord from denying the person, who paid the rent, to be his tenant. These observations do not indicate that any actual payment of rent by the tenant who has attorned is necessary to make the attornment effective. If it was otherwise, the new landlord in whose favour the tenant has attorned, will not be able to take successfully any action against that person till that person had made the first payment of rent. I am therefore of opinion that on co the tenant has agreed to accept the person claiming title from the previous landlord, that amounts to effective attornment in favour of the landlord and is no more dependent on the future conduct of the tenant by way of payment of rent or otherwise. 926 A person can establish his possessory title by establishing that he had been in actual possession of the land in suit or had been in possession through tenants. So long as the persons in actual possession are deemed to be his tenants on account of their conduct in recognising that person as their landlord and are estopped to question his title, I see no good reason why their possession be not taken to be, the possession on behalf of that person, irrespective of the fact whether that person bad legal title or not. If he had legal title, no question of relying on possessory title would ever arise. It is only in the case of his failure to establish his legal title that he has to fall back upon possessory title. I see no good reason why the possession of tenants who had attorned to a person having no title be not considered to be his possession in determining whether he had preferential possessory title to that of another, who too has no title and secured possession of the land subsequent to the attornment. In this view of the matter, I am of opinion that the High Court was wrong in asking for a fresh finding on the question of possession when it bad not decided that the tenants had not, in law, attorned to Seetharamiah and Ramakotiah, on the basis of the two documents Kadapa exhibit D 4 and Cowle exhibit D 5, and when according to the first appellate court, the effect of those documents was that the tenants had attorned to them. I am, however, of opinion, though the point was not raised, that the Kadapa exhibit D 4 is not an agreement by tenants simply accepting the claimants to be the new landlords as, by this document, they do not just substitute the new landlords in the place of the old. They really took a new lease from those two persons. The terms of the new lease were different from those of the lease of Krishnavena The unexpired period of the tenancy was two years. Under the Kadapa, the new tenancy was to continue for five years from June, 1933. The lease does not cover just the land which they held under 927 their previous tenancy, but included some other land as well. The amount of rent they were to pay also differed. It was much reduced. Such a document is not a deed of attornment but is a document accepting fresh tenancy. Seetharamiah and Ramakotiah could not in law lease the land in suit to those tenants as they had no tit ,in themselves, they being not heirs of Krishnavenamma. Any lease executed by them created no right. These lessors were not in actual possession of the land at any time. They could not have, therefore, conveyed possession to their tenants. As the new lesseess got no title under the lease, their continued possession over the land in suit could not be possession under the lease on behalf of the new lessors, especially when their possession can be traced to the valid tenancy under the deed, exhibit P 6, in favour of Krishnavenamma and will be deemed to be on behalf of legal heir. Seetharamiah and Ramakotiah, therefore, cannot be held to be in possession of the land in suit through their tenants between June, 1933, and some time in 1936, when those tenants were dispossessed by Moka Subba Rao on behalf of plaintiff No. 1. It follows that the predecessors in interest of the defendants have been rightly held to be not in possession of the land in suit prior to plaintiff No. 1, 'who too. , had no title, getting possession of the land in suit and that the order under appeal is correct. Appeal dismissed.

In the present suit for possession the courts found that none of the parties had a legal title to the property in the dispute and in determining which of the parties had possessory title to the said property the trial court found that on the death of the daughter of the original owner the so called reversioners got a Kodaha (Kabuliyat) executed in their favour by two tenants of the last possessory of the property and themselves executed a cowle in their favour but the said tenants did not pay any rent to the so called reversioners. The trial court held that,though there was a kadapa by which it might be said that the tenants who were there from before had attorned to the so called,reversioners it was a mere paper transaction as no rent was paid. On appeal the first appellate court relying, on the Kadapa and, cowle, found that the so called reversioners got peaceful possession of the property but did not enter into the question whether any rent was paid to them by the tenants. On, second appeal the High Court held that the real question was whether the tenants really attorned to the reversioners and as the, first appellate court did not consider whether there: was.real attornment by, payment, Of rent sent back the case to the said court for a fresh finding,on that question whereupon that court returned a finding in favour of the respondent on the question of possession. The contention of the appellant on appeal by special leave was that the High Court had no jurisdiction in second appeal to reverse a finding of fact arrived at by the first appellate Court and as the high Court indirectly reversed that finding of fact by calling for a further finding on the question of possession the judgment, of the High Court should be set aside. Held (per K. N. Wanchoo, K.C Das Gupta and K.J.C. Shah, JJ.) that if the so called reversioners had title in the sense that they were the next reversioners, then attornment by the Kadapa would have been sufficient but where a person in whose favour attornment had been made had no title, a mere paper attornment would not be sufficient unless there was a real attornment in the sense that the person who attorned also paid rent voluntarily or under a decree to the 911 person in whose favour the attornment was, made. The first appellate court had merely considered the paper attornment and had not considered the evidence as to the payment of 'rent which was there and had been considered by the trial court. The High Court was therefore, justified in calling for. a finding on a question which was not considered by the lower appellate court. Per Raghubar Dayal, J. Once a tenant agreed, to accept the person claiming title from the previous landlord, that amounted to attornment in favour of the new landlord and was no more dependent on the future conduct of the tenant by way of payment of rent or otherwise., Krishna Prasad Lal Singha Deo vs Baraboni Coal Concern, (1937) L. R. 64 I. A. 31 I , referred to. There was no good reason why the possession of tenants who had attorned to a person having no, title be not considered to be, his possession in determining whether he had preferential possessory title to that of another who too had no title. The mere, fact that certain evidence had not been closely scrutinised in other words, not scrutinised in a manner in which the second appellate court desired it to be scrutinised, could not be a ground for interference with a finding of fact in second appeal. In the present case the Kadapal the terms of which were different from those of the old one was not a deed of attornment merely substituting the new landlord in place of the old but was a document accepting fresh. tenancy but as the new lessors had no title to the property the ' lease executed by the created no right.

N: Criminal Appeal No. 329 of 1979. From the Judgment and Order dated 9 4 1979 of the Gujarat High Court in Criminal Appeal No. 270/76. 511 Rajandra Prasad Singh, M/s. K. G. Vakharia, P. H. Parekh and Ratan Karanjawala for the Appellants. T. U. Mehta, M. N. Shroff and Himantika Wahi for the Respondent. The Judgment of the Court was delivered by PATHAK, J. This appeal, preferred under the , is directed against the judgment and order of the High Court of Gujarat setting aside the judgment and order of acquittal passed by the trial court and convicting and sentencing the appellants for offences under section 302 read with section 34, Indian Penal Code, and under section 326 read with section 34 of the Code. The appellants, Ajit Singh and Balwant Singh, are father and son. Another son is Mohan Singh. All three were charged with the murder of Manilal and with causing injuries to Parmabhai, Bhulabhai and Natwarlal. The prosecution case is that Manilal, Bhulabhai and Bhikabhai were three brothers residing in a chawl belonging to the appellant Ajit Singh, that on 9th April, 1975 Manilal drew his salary from the factory where he worked and at about 6.45 p.m. on returning to his room in the chawl he was met by the appellants and Mohan Singh. They demanded payment of rent but Manilal said he would pay it only on the next day. His refusal to make immediate payment is alleged to have infuriated Balwant Singh who, it is said, inflicted two kirpan blows on him. Upon this Manilal started running away, pursued by the three accused, and headed towards the room of Parmabhai. Further kirpan blows were inflicted on him there by the appellants. Parmabhai, who had emerged from his room, was also attacked and given a kirpan blow. Manilal, meanwhile, turned and entered the house of Shanabhai. Ajit Singh is alleged to have struck him further blows there in consequence of which he fell down. Bhulabhai, who arrived on the scene, was also struck a kirpan blow. Mohan Singh is alleged to have wielded a bamboo stick and hit Natwarlal on the head with it. All three accused are said to have run away from the place then, leaving their bicycles behind. Manilal was removed to the hospital and declared dead. Parmabhai was admitted as an indoor patient. Shanabhai telephoned the police control room and informed them of the incident, and the Gomtipur Police Station recorded a complaint made by Bhulabhai. 512 The three accused were tried by the learned Additional Sessions Judge, Ahmedabad (Rural), who after considering the evidence on the record acquitted the accused by his judgment and order dated 15th October, 1975. On 26th April, 1976 the State filed an appeal in the High Court and prayed for condonation of the delay in filing it. The High Court condoned the delay, considered the appeal on its merits and allowed it against Ajit Singh and Balwant Singh. They were convicted under section 302 read with section 34 of the Code and sentenced to imprisonment for life. They were also convicted under section 326 read with section 34 of the Code but no separate sentence was passed thereunder. The appeal against the acquittal of Mohan Singh was dismissed. At the outset, it is urged by learned counsel for the appellants that the High Court erred in condoning the delay in filing the appeal, and the appeal should have been dismissed as barred by limitation. We have examined the facts carefully. It appears that initially the State Government took a decision not to file an appeal and it allowed the period of limitation to lapse. Subsequently, on certain observations made by the High Court while considering a revision petition by Bhulabhai that it was a fit case where the State Government should file an appeal and on notice being issued by the High Court to the State Government in the matter, the appeal was filed. It was filed three months after limitation had expired. A faint attempt was made to show that when the initial decision was taken not to file an appeal all the papers had not been considered by the department concerned, but we are not impressed by that allegation. The truth appears to be that the appeal was not filed at first because the State Government saw no case on the merits for an appeal, and it was filed only because the High Court had observed and that was long after limitation had expired that the case was fit for appeal by the State Government. Now, it is true that a party is entitled to wait until the last day of limitation for filing an appeal. But when it allows limitation to expire and pleads sufficient cause for not filing the appeal earlier, the sufficient cause must establish that because of some event or circumstance arising before limitation expired it was not possible to file the appeal within time. No event or circumstance arising after the expiry of limitation can constitute such sufficient cause. There may be events or circumstances subsequent to the expiry of limitation which may further delay the filing of the appeal. But that the limitation has been allowed to expire without the appeal being filed must be traced to a cause arising within the period of limitation. In the present case, there was no such cause, and the High Court erred in condoning the delay. 513 It is pointed out that the High Court could have sent for the record in the exercise of its revisional jurisdiction and examined the case. That is quite another matter and raises other questions. We are concerned here with the question whether the delay in filing the appeal could have been condoned. But quite besides this, there was also no merit in the appeal filed before the High Court. The trial court wrote a careful judgment, exhaustively considering all the evidence and on painstaking analysis reached conclusions which, in our opinion, are pre eminently reasonable and support the order of acquittal. It found that the evidence did not establish that the injury suffered by Bhulabhai could have resulted from a kirpan, that the panch witnesses to the recovery of the two kirpans did not support the prosecution, that of the six eyewitnesses one of them, Ramiben, widow of Manilal, was not present on the scene at all, that all the eye witnesses had indulged in palpable falsehood in attempting to implicate Mohan Singh when plainly he was not there (the State appeal against his acquittal was dismissed by the High Court), that there were material contradictions between the different eye witnesses concerning the sequence of events, the exact places where the blows were struck, and the role played by each accused, that the information given by one eye witness, Shanabhai, to the police control room mentioned merely that four or five "sardarjis" had come to the chawl and had injured two persons with a knife, and although admittedly Shanabhai had known the accused by name for the last four or five years he did not mention their names in that report. It is also in evidence that it was already dark when the incident took place and there were no municipal lights within the limits of the chawl. The trial court has further adverted to the circumstance that four bicycles were seized by the police at the scene, which is inconsistent with the prosecution case that three persons, the accused, were involved. As regards the complaint filed by Bhulabhai, the trial court has found that it could not be admitted in evidence under section 154, Code of Criminal Procedure, and there was ample material to show that the eye witnesses had plenty of time to confer with one another before the complaint was drawn up. The trial court also adverted to the fact that the police did not record the statement of the remaining eye witnesses that very night. The Prosecuting Inspector also admitted in cross examination that during the investigation all the eye witnesses came forward with "stereotype" statements. One other significant fact remains. According to the evidence the incident was witnessed by several other people, but not a single independent witness has come forward to support the prosecution. The eye witnesses produced are either related or members 514 of the same community; members of other communities also lived in the chawl and admittedly were on cordial terms with the complainant Bhulabhai and the other witnesses. The trial court pointed out that the eye witnesses were, already prior to the incident, extremely hostile to the accused. There was a running war between them in the matter of payment of rent, and disputes had arisen concerning ownership of the property and criminal proceedings had been taken. At this point, it is relevant to note that Ajit Singh used to employ one Shivram for collecting rents. In all the circumstances, the trial court observed that when the witnesses could not identify the four or five Sardarjis who had come to the chawl, they put their heads together and decided to involve Ajit Singh and his two sons. Holding that the evidence was untrustworthy and it would be highly unsafe and hazardous to convict the accused on such testimony the trial court gave them the benefit of doubt and acquitted them. We may observe that the High Court had before it an appeal against an order of acquittal. The approach to be adopted by the High Court when exercising its appellate powers in such a case has been defined in a long line of cases. As long ago as Warren Ducane Smith vs The King the Privy Council declared that the High Court must give proper weight and consideration to "such matters as (1) the view of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt; and (4) the slowness of an appellate Court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses. " The approach has been endorsed by this Court repeatedly, and in a very recent decision, Ganesh Bhavan Patel & Anr. vs State of Maharashtra to which one of us (Sarkaria, J.) was party, it was also observed: "Where two reasonable conclusions can be drawn on the evidence on record, the High Court should as a matter of judicial caution, refrain from interfering with the order of acquittal recorded by the Court below. In other words, if the main grounds on which the Court below has based its order acquitting the accused, are reasonable and plausible, and cannot be entirely and effectively dislodged or demolished, the High Court should not disturb the acquittal. " 515 The legal position is well settled and, indeed, has been adverted to by the High Court. But after specifically referring to it the High Court appears to have overlooked the limitations imposed on it and has embarked on a course not warranted by law. It has taken into particular regard a few considerations which seemed to it to assume importance. It has referred to the recovery of a bloodstained slipper and a diary from the scene of the offence, and has inferred that they belong to Ajit Singh. We are not satisfied that the connection has been truly established. The papers found in the diary do not necessarily show that the diary belongs to him. Nor is there sufficient proof that the slipper is his. The High Court has concentrated on some of the material only, omitting to consider in the process that the integrality of the evidence alone can ensure whether the accused are guilty. We are satisfied that the High Court erred in interfering with the judgment of the trial court. The appeal must, therefore, be allowed, the judgment and order of the High Court set aside and the judgment and order of the trial court restored. These are the reasons which persuaded us to make the order disposing of the appeal. N.V.K. Appeal allowed.

The two appellants who were father and son alongwith another son, who was acquitted were charged with the offence of committing the murder of the deceased and of causing injuries to his two brothers all of whom were residing in a chawl belonging to the first appellant. The prosecution alleged that on the fateful day the appellants demanded payment of rent from the deceased and refusal to make immediate payment infuriated the second appellant who inflicted two kirpan blows on him. When the deceased started running to the room of his brothers he was pursued and further kirpan blows were inflicted on him. His brothers were also attacked by the three accused. After the incident all the accused ran away from the place leaving their bicycles behind. The deceased succumbed to his injuries in the hospital and one of his brothers was admitted as an indoor patient. The three accused were tried by the Addl. Sessions Judge. As there were material contradictions in the 'eye witnesses ' account of the sequence of events, the exact places where the blows were struck, and the role played by each accused and the seizure of four bicycles by the police at the scene being inconsistent with the prosecution case that three persons, the accused were involved the Sessions Judge held the evidence to be untrustworthy and being of opinion that it was unsafe and hazardous to convict the accused on such testimony he gave them the benefit of doubt and acquitted them. No appeal was filed at first because the State Government saw no case on the merits for an appeal. However, in a revision petition filed by one of the brothers of the deceased the High Court declared that the case was a fit case where the State Government should file an appeal. Thereafter, the State Government filed an appeal, in the High Court and prayed for condonation of the delay in filing the appeal. The High Court condoned the delay considered the appeal on its merits, and allowed it against the two appellants. The appeal against the acquittal of the third accused was dismissed. Allowing the appeal to this Court: ^ HELD: 1(i) There was no sufficient cause for the State not filing the appeal within time, and the High Court erred in condoning the delay. [512 F H] 510 (ii) A party is entitled to wait until the last day of limitation for filing an appeal. But when it allows limitation to expire and pleads sufficient cause for not filing the appeal earlier, the sufficient cause must establish that because of some event or circumstance arising before limitation expired it was not possible to file the appeal within time. No event or circumstance arising after the expiry of limitation can constitute such sufficient cause. There may be events or circumstances subsequent to the expiry of limitation which may further delay the filing of the appeal. But that the limitation has been allowed to expire without the appeal being filed must be traced to a cause arising within the period of limitation. [512 G] 2(i) The High Court erred in interfering with the judgment of the trial court. [515 D] (ii) The approach to be adopted by the High Court when exercising its appellate powers in a case of appeal against an order of acquittal has been defined in a long line of cases. As long ago as 1934, the Privy Council declared that the High Court must give proper weight and consideration to "such matters as (1) the view of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any doubt; and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses". The approach has been endorsed by this Court repeatedly and in a very recent decision it has been held that if the main grounds on which the Court below has based its order acquitting the accused, are reasonable and plausible, and cannot be entirely and effectively dislodged or demolished, the High Court should not disturb the acquittal. [514D F; H Warren Ducane Smith vs The King A.I.R. 1934 P.C.227 & Ganesh Bhavan Patel & Anr. vs State of Maharashtra ; , referred to. (iii) The High Court after specifically referring to the aforesaid legal position, overlooked the limitations imposed on it and embarked on a course not warranted by law. It took into particular regard a few considerations which seemed to it to assume importance and has concentrated on some of the material only, omitting to consider in the process that the integrality of the evidence alone can ensure whether the accused are guilty. [515A, C] In the instant case the High Court referred to the recovery of a blood stained slipper and a diary from the scene of the offence, and inferred that they belonged to the first appellant. This connection has not been properly established. The papers found in the diary do not necessarily show that the diary belonged to him. Nor is there sufficient proof that the slipper is his. [515 B] 3 The trial court wrote a careful judgment, exhaustively considering all the evidence and on painstaking analysis reached conclusion which are preeminently reasonable and support the order of acquittal. [513 B]

Appeal No. 165 of 1953. Appeal by special leave from the judgment and order dated October 3, 1950, of the former Travancore Cochin High Court in A. section No. 288 of 1120(T) arising out of the judgment and order dated the 3rd Thulum 1120 of the 2nd Judge, District Court, Quilon in C.M.P. No. 2391 dated 15 8 1103 in I.P. 3/1100. K. section Krishnaswamy Iyengar, Alladi Kuppuswami and M. section K. Sastri, for the appellant. N. C. Chatterjee, M. R. Krishna Pillai and Sardar Bahadur, for respondent No. 1. 1957, May 24. The Judgment of the Court was delivered by SINHA J. This appeal by special leave is directed against the concurrent orders of the Courts below allowing the Official Receiver 's application under section 35 of Travancore Regulation VIII of 1090 (= 1915), to which we shall refer in the course of this judgment as the Insolvency Regulation, for annulling the usufructuary mortgage (exhibit I) for Rs. 75,000 dated August 18, 1924, executed by a number of persons who may now be conveniently described as the insolvents. The main question for determination in this appeal on behalf of the transferee is whether the transaction in his favour is within the third exception to section 35 aforesaid. (In this judgment we shall use the dates with reference to the Gregorian Calendar equivalent to the dates maintained under the Malayalam Calendar). 259 In order to appreciate the arguments in this appeal it is necessary to state the following facts. Koya Kunju was a flourishing merchant at Quilon carrying on trade in piece goods, yarn, provisions etc. He died in or about the year 1921 leaving him surviving his widow, two sons and two daughters, who jointly carried on the ancestral business through the eldest son under a power of attorney. They added to the family business a tile factory and an oil mill. In June July 1924 the sons approached the appellant 's father, who was a flourishing money lender living about fifty to sixty miles away from Quilon at a place called Mankompu. He agreed to advance the sum of Rs. 75,000 on the usufructuary mortgage of certain immovable properties in and near Quilon belonging to the family, for the purpose of carrying on their trade and business after his two sons had made certain enquiries at Quilon about the status and means of the borrowers and whether the transaction would be worth their while. After a draft had been made at the instance of the creditor, the mortgage bond and a lease deed granting a lease of the mortgaged properties to the mortgagors themselves bearing the same date, namely, August 18, 1924, were executed and registered by the heirs aforesaid.said of Koya Kunju. The purpose of the loan is stated in the document to be the family necessity, namely, carrying on trade etc. In lieu of interest on the Rs. 75,000 advanced at the rate of nine per cent. per annum for a period of three years the mortgaged properties, namely, buildings, fields and coconut orchards etc., were said to have been delivered to the mortgagee who in his turn granted a lease back to the mortgagors on payment of a stated sum by way of annual rents, viz., Rs. 6,750, equivalent to interest at nine per cent. on the principal sum advanced. It was also stipulated in the lease deed that if rent was in arrears for two years, the lessees would surrender the properties to the lessor and accrued arrears of rent also would be a charge on those properties. It is common ground that the mortgaged properties were unencumbered at the date of the transaction, but soon after a hypothecation deed in favour of a third party named Kadir Moideen 260 Rowther was executed on August 30, 1924, for the sum of Rs. 78,859 15 0, hypothecating the equity of redemption in respect of the properties mortgaged to the appellant and certain other properties. The second bond which will hereinafter be called the hypothecation bond, to distinguish it from the usufructuary mortgage bond in question, was admittedly executed to liquidate the outstanding debts due to the hypothecatee himself in respect of dealings in cloth, yarn and iron goods between the parties to that transaction. It appears that those two parties were having dealings in those commodities from about the year 1911. Hence they were very well known to each other on account of their business dealings, whereas the mortgagee in respect of the usufructuary mortgage bond in question was a complete stranger to the family of the mortgagors. On September 15, 1924, one of the business creditors of the family of the mortgagors,S. M. Sheikh Mohideen Rowther, made an application in the District Court of Quilon for adjudicating them as insolvents. He implement the mortgagors, the five heirs aforesaid of Koya Kunju. Amongst the acts of insolvency were mentioned the transactions between the insolvents and the appellant and the hypothecation bond aforesaid. In his affidavit in answer, the first counter petitioner for himself and as agent of the other members of the family admitted their joint trading business and the debts incurred by his firm. He also admitted the debts due under the usufructuary mortgage bond in question and the hypothecation bond aforesaid and ended by saying that the debts of the counter petitioners including the debts covered by the said usufructuary mortgage bond and the hypothecation bond amounted to two and a half lakhs of rupees and that their assets were worth not less than seven lakhs of rupees. He denied that they had committed any acts of insolvency or had done anything to delay or defeat their creditors and expressed their readiness to pay the debts due to the petitioning creditor. A number of other creditors also made similar applications for adjudicating the mortgagors as insolvents. All those proceedings appear to have been 261 consolidated and the District Judge by his orders dated August 29, 1927, adjudged the counter petitioners insolvents. About the contents and effect of this order of adjudication something more will have to be said in the course of this judgment while dealing with the most important question of law raised by the learned counsel for the Official Receiver. By his orders dated October 19, 1924, the District Judge appointed the Official Receiver as the interim receiver in respect of the insolvent 's properties to take immediate possession thereof. The interim receiver, Sri V. N. Narayana Pillai, made a report to the court on February 11, 1925, stating inter alia that the total yield of the properties mortgaged to the appellant could be estimated at Rs. 1,600 per year and that the insolvents were not prepared to continue in possession of the mortgaged property at a rent of Rs. 6,750 as stipulated in the lease deed aforesaid; and that, therefore, the mortgaged property was not expected to fetch an income equivalent to nine per cent. on the mortgage bond as stipulated. The rent having fallen in arrears over two years, the mortgagee instituted a suit against the mortgagors, impleading the Official Receiver also for recovery of arrears of rent with interest, as also for recovery_ of possession of the mortgaged property ; and the suit appears to have been decreed for the reliefs prayed for. Since then the mortgagee appears to have been in direct possession of the property. It does not appear that in that suit any question as to the want of consideration or of bona fides of the mortgage bond was raised either by the mortgagors themselves or by the Official Receiver. It was on March 28, 1928, that the Official Receiver made his application to the court praying "that the court may be pleased to declare the transfers described in schedule A, void as against your petitioner". Schedule A comprised the usufructuary mortgage bond aforesaid and the lease deed, as also the hypothecation bond for Rs. 78,859 15 0. It is remarkable that no allegations of fact bearing on the bona fides of the transactions impeached are made in respect of the mortgage bond in question. After stating the insolvency 262 proceedings and the fact of the execution of the deeds in schedule A and that the insolvency petition on which the order of adjudication was passed had been filed in court within two years after the dates of transfer, the only relevant statement made in the petition is para. 4 to the following effect: "That the said transfers are void as against your petitioner under sections 35 and 36 of the Insolvency Regulation. " This petition of the Official Receiver was opposed by the mortgagee 's son, N. Krishna Iyer, on his father 's behalf, ' chiefly on the ground that the mortgage was a bona fide transaction for valuable consideration which was not affected by the Insolvency Regulation, that there was a misjoinder of parties and causes of action, apparently objecting to the Receiver filing a single petition in respect of the usufructuary mortgage deed arid. the hypothecation bond; and that it was barred by limitation and estoppel. A number of issues were raised on July 24, 1929, the most important of them being the first issue to the following effect : " Whether the otti and lease deeds impeached by the Receiver were executed in good faith and for valuable consideration ?" Other issues related to the formal issues in bar of the proceedings. Before the learned District Judge (Mrs. Anna Chandy) a preliminary objection was raised on behalf of the Receiver to the effect that in view of the decision of the Judicial Committee of the Privy Council in Mahomed Siddique Yousuf vs Official Assignee of Calcutta (1), the matter was res judicata between the parties and the order of adjudication could be questioned only by an appeal against it, which had not been done. The learned Judge gave effect to that objection and held that the transferee was precluded from agitating the matter and that his only remedy was by way of appeal against the order of adjudication. This point has been very prominently raised by the learned counsel for the respondent, the Official Receiver, at the forefront of his arguments and will (1) (1943) L. R. 70 I. A. 93. 263 have to be dealt with at the proper place. The learned Judge held on the merits that exhibit I, the usufructuary mortgage bond, was not for the full consideration stated in the deed but that only Rs. 20,000 had been paid to the mortgagors and that in any event the transaction did not represent a bona fide transfer. As the hypothecation bond is not the subject matter of this appeal, it is no more necessary to follow the course of the proceedings in respect of that transaction. The Receiver 's application was therefore allowed, both on the ground of incompetency of the transferee to challenge the adjudication order and on the finding that it was a "fraudulent transfer". On appeal by the mortgagee, the learned Judges of the High Court dis agreed with the trial Judge and held that the decision in Mahomed Siddique YOUSUF 's case (1) could not stand in the way of the appellant and that the entire consideration of Rs. 75,000 had been proved to have been paid to the mortgagors but agreed with the trial Judge in holding that the transaction was not made in good faith in the sense that it had not been entered into with due care and attention. In the result the appeal was dismissed. The transferee prayed for a certificate of fitness to appeal to this Court, but the High Court refused that application. The appellant then moved this Court and obtained special leave to appeal. A number of points were raised on behalf of the appellant and at the threshold of the arguments it was contended, and in our opinion rightly, that the courts below had erred in throwing the burden on the transferee of proving affirmatively that the transaction impeached, namely, the usufructuary mortgage bond dated August 18, 1924, was supported by good faith and valuable consideration. The Judicial Committee of the Privy Council laid it down in the case of Official Assignee vs Khoo Saw Cheow (2), that upon a true construction of the Bankruptcy Ordinance of the Straits Settlements, section 50, sub section (3), which in terms is similar to the provisions of section 35 of the Insolvency Regulation, the onus is upon the Official Assignee to prove that a conveyance which he was seeking to set aside was not made in good faith and for valuable consideration. In (1) (1943) L.R. 70 I.A. 93. (2) 264 that case the trial Judge had ruled that the onus of proof lay upon the transferee and had set aside the transaction upon failure of proof led by the transferee. On appeal it was held that the trial Judge had misdirected himself as to the onus and that as the result of the misdirection was very serious in that it had coloured the whole outlook as to the facts and had substantially prejudiced the appellant 's case a retrial was necessary. The Privy Council affirmed the decision of the Appeal Court and dismissed the Official Assignee 's appeal, the respondent transferee not appearing before the Judicial Committee. In the same year the Judicial Committee followed the aforesaid precedent in the case of Official Receiver vs P.L.K.M.R.M. Chettyar Firm (1), which was a case under the . On a consideration of the provisions of section 53 of the Act their Lordships reaffirmed the proposition laid down in the earlier case of that very year reported in Official Assignee vs Khoo. Saw Cheow(2). Their Lordships examined the terms of section 53 and section 50 of Ordinance No. 44 of the Straits Settlements dealt with in that previous decision and came to the conclusion that they were in substance the same. The third decision of their Lordships of the Privy Council to the same effect is reported in Pope vs Official Assignee, Rangoon (3). This case went up in appeal from a decision of the Rangoon High Court under the provisions of section 55 of the Presidency Towns Insolvency Act. In this case their Lordships observed further that if the transaction impeached was a real and not fictitious one, the receiver could not be said to have brought the case within the section unless he proved that the transferee knew that the transferor was insolvent at the time the transfer was made, even though the transfer was of the entire assets of the transferor. These three decisions of the Judicial Committee settled the law in this country contrary to what had been the consensus of judicial opinion previously, that the initial burden of proving that the transaction impeached had not been made (1) (1930) L. R.58 1. A. 115. (2) (3) (1933) L.R. 60 I.A. 362, 265 in good faith and for valuable consideration lies on the party seeking to set aside the transaction. The learned counsel for the respondent was not able to adduce any reasons to the contrary and it must therefore be taken that it is settled law in insolvency proceedings that the burden of proof lies on the Official Assignee or Receiver who challenges the transaction. In this case, as already pointed out, the issue framed in terms laid the burden of proof on the transferee, the appellant. He led the evidence recording of which began on November 21, 1930, and the evidence of his witnesses, C. P. Ws. 1 to 7 was recorded between November 21, 1930 and November 20, 1932, on different dates. C. P. W. 8, one of the insolvents, appears to have been examined in the interest of the second mortgagee, that is to say, in support of the hypothecation bond. He was crossed on behalf of the petitioning creditor, as also of the appellant. He was examined and crossexamined in February and March 1933. It was then for the first time that it was alleged on behalf of the mortgagors that only Rs. 20,000 out of Rs. 75,000 secured under the mortgage in question had actually been paid and that the remaining Rs. 55,000 had so far remained unpaid. More will have to be said about this aspect of the case later. C. P. W. 10, one of the other mortgagors was examined on the same lines as his brother, C.P.W. 8. C.P.W. 12 is the younger brother of S.K. Kadir Moideen Rowther, the second mortgagee, who had taken the hypothecation bond. He was examined on October 9, 1935. Curiously enough, nothing appears to have happened until the first Official Receiver, V. N. Narayana Pillai, aged 64 years, was examined as C.P.W. 13 on November 29,1943. It was he who had started the annulment proceedings in respect of the mortgage bond in question. His evidence and conduct of the proceedings will have to be dealt with presently. We have pointed out the extremely dilatory way in which the proceedings in the Insolvency Court were conducted. The annulment proceedings commenced in 1928 and were determined by the Court of first instance by its orders dated October 19, 1944, 34 For a period of more than sixteen years the annulment proceedings were kept hanging. For whose benefit it does not appear. We would fain believe that this extremely dilatory way of dealing with litigation involving the business community is not a habit in that part of the country and that the present case is only an exception. On appeal the High Court has noticed the delay but without any apparent disapproval. We have not been able to discover any reasons, valid or otherwise, for this callous disregard of public time and litigants ' interest. Realising that the annulment proceedings had taken a dubious course on an issue wrongly throwing the onus of proof on the transferee, the learned counsel for the Receiver sought to support the order annulling the encumbrance on the short ground that the matter was res judicata between the Receiver and the incumbrancer on the authority of the decision of the Privy Council in Mahomed Siddique Yousuf vs Official Assignee of Calcutta (1). That was an appeal from the Calcutta High Court in a case arising under the Presidency Towns Insolvency Act, III of 1909. In that case the Judicial Committee, following the well established rule in England as laid down in the leading case of Ex parte Learoyd In re Foulds (2), has held that the order of adjudication based on the allegation that one of the several acts of insolvency was the impugned transfer was conclusive against the transferee in subsequent proceedings taken by the Official Assignee to set aside the transfer by virtue of section 116, sub section (2) of the Presidency Towns Insolvency Act, 1909. Their Lordships have pointed out in the course of their judgment that the provisions of the Presidency Towns Insolvency Act then before their Lordships were in terms similar to those of the Bankruptcy Act of 1869 which had been repeated in the subsequent Acts of 1883 and 1914. They also point out that it is rather anomalous that the decision should adversely affect a party who was not before the court when the adjudication order was made. But they held that the words of the statute and the requirements of public policy in relation to (1) (1943) L.R. 70, I.A. 93. (2) 267 adjudication proceedings were enough to outweigh any considerations of hardship to individuals. On this view they affirmed the decision of the Calcutta High Court and overruled that of the Madras High Court in Official Assignee of Madras vs O.R.M.O.R.S. Firm(1). Naturally very strong reliance was placed by the learned counsel for the respondent Receiver on that case. It was argued that as the order of adjudication dated August 29, 1927, had with reference to the transaction in question, amongst others, held that the debtors had committed acts of insolvency by executing the deed (exhibit I) with a view to defeat or delay their creditors, it was no more an open controversy and the findings then recorded were conclusive in the present proceedings. There are, in our opinion, insurmountable difficulties in the way of the respondents on this aspect of the case. It was stated by the petitioning creditors that the counter petitioners (insolvents) had executed the usufructuary mortgage bond in question and the hypothecation deed in respect of almost all their properties with a view to defeat or delay the other creditors. Issue 5 was raised in these terms: " Have the defendants committed acts of insolvency as alleged in the petition ? " and the finding of the court was that those were acts of insolvency " with intent to defeat or delay their creditors. " It is said that these findings are resjudicata between the Receiver and the appellant. Even so, there is no finding that the transferee was privy to such acts. It was not necessary to find at that stage, and it has not in terms been found, that the transaction impugned in this case was not bonafide so far as the transferee is concerned or without consideration matters which directly arise for determination in the annulment proceedings leading up to this appeal. Hence, even assuming that the rule laid down by their Lordships of the Judicial Committee in Mohomed Siddique Yousuf vs Official Assignee of Calculta(2) in a case arising under the Presidency Towns Insolvency Act, applies to a case like the present governed by the Insolvency Regulation, which follows more closely the (1) Mad. 541. (2) (1943) L.R. 70 I.A. 93. 268 and not the Presidency Towns Insolvency Act, the present controversy is not barred by any finding in the order of adjudication. In this appeal we are concerned with the bona fides of the transferee. Nor has it been found that there was no valuable consideration for the mortgage. Hence, without pronouncing on the applicability of the decision aforesaid of the Judicial Committee it must be held that the question under section 35 is still open. Having disposed of the preliminary questions raised on behalf of the parties, we have now to determine the main question in controversy, namely, whether it has been proved that the usufructuary mortgage bond dated August 18,1924, was not made in good faith and for valuable consideration. Section 35 of Travancore Regulation VIII of 1090 (= 1915) is in these terms: "Any transfer of property not being(i) a transfer made before, or at, and in consideration of, marriage, (ii)or a transfer made to, or for, the wife or children of the transferor of property that has accrued to the transferor in consideration of the marriage or in right of his wife, (iii)or a transfer made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, shall, if the transferor is adjudged insolvent within two years after the date of the transfer, be void against the receiver, and may be annulled by the Court. " This section is equivalent to section 36 of the (III of 1907) and to section 53 of the (V of 1920), except for the addition of the second exception which was apparently added in the Travancore law to make it in consonance with local laws relating to devolution of family property, and secondly that the word "void" in the last clause of the section in the Insolvency Regulation and in section 36 of the of 1907 has been changed into "voidable". Regulation VIII of 1915 aforesaid has been replaced by Travancore 269 Regulation VIII of 1108 (1932). Section 53 of the latter has taken the place of section 35 of the former and is exactly in the same terms except for the fact that the word "void" has been changed into "voidable", thus bringing the Regulation of 1932 in line with the Act of 1920. It is not necessary for the purposes of this case to go into the question of whether any legal significance attaches to the change of the word " void" into " voidable ". The legislative history of the law relating to annulment of transfers or encumbrances made or created by a person who has since been declared insolvent, indicated above, shows that the law in the united State of Travancore and Cochin was the same as the law in what used to be called British India. The question now is, has the Receiver on whom the burden of proof lay, as shown above, been successful in discharging that burden. It has not been argued before us by the learned counsel for the Receiver that the courts below were not in error in discussing the evidence and deciding this controversy on the basis that the burden Jay on the transferee to prove that the transfer in his favour was bona fide and for consideration. If the burden lay on the transferee, he would have to show not only that he paid some consideration but that he paid valuable consideration and that consideration was paid bona fide. As to what is the legal import of " bona fide" will be discussed presently. But we are in this case proceeding on the law so far settled in this country after the decisions aforesaid of the Privy Council that the burden lies on the Receiver. The contrary proposition has not been pressed upon us and we need not therefore pronounce upon that. If the burden lay on the Receiver, in our opinion, his application for annulment can be allowed on proof either that there was no consideration for the transaction or that the consideration was so inadequate as to raise the presumption of want of good faith. Alternatively, the Receiver may also succeed on showing that though there was valuable consideration for the transaction impeached, there was want of good faith in the sense 270 that the transferee knowing all the circumstances of the,, transferor who had since been adjudged an insolvent entered into the transaction with a view to screening the assets of the insolvent from the Receiver in whom the insolvent 's property vests for the benefit of the creditors. Such will be mostly cases of benami transactions in favour of some relative of the insolvent or a person in whom he has full confidence that he will hold it ultimately for the benefit of the insolvent or persons in whom he may be interested. Or it may be that a person finding himself over head and ears in debts wishes to convert his assets into liquid assets with the collusion or connivance of the transferee. In both cases the intention clearly is to shield the assets against the claims of creditors and in such cases, though the transfer may have been for consideration, either adequate or otherwise, but having been entered into with a view to defraud or delay the creditors, the transferor and the transferee sharing the common intention, the transaction must be annulled and the assets must be brought into the common hotchpotch for the benefit of the insolvent 's creditors. Though the learned District Judge held that only Rs. 20,000 had been paid by the mortgagee to the insolvents and Rs. 55,000 out of Rs. 75,000, the stated amount of the mortgage money, had remained unpaid, the High Court has found that the entire consideration passed. If this finding is correct, then the fact that such a large amount had been paid by the mortgagee would take him a long way to success in proving the bona fides of the transaction. But it has been argued by the learned counsel for the respondent Receiver that, finding is not correct. It has been strenuously argued on behalf of the respondent that the mortgage bond in question was without consideration. The Official Receiver had also filed a memorandum of objections in the High Court challenging the correctness of the finding by the learned District Judge that Rs. 20,000 had as a matter of fact been paid to the transferors. As on the question of consideration the two courts below have materially differed in their conclusions, the question is open 271 before us. We have, therefore, to examine how far the transaction in question was for valuable consideration. Before advancing this large sum of money the creditor had deputed his two advocate sons, C.P. Ws. 1 and 2, to make enquiries into the antecedents of the persons who had applied for the loan and as to whether they were financially sound and otherwise desirable persons to deal with. The two young men who had just entered upon their legal career went and stayed with a relation of theirs who has been examined as C. P. W. 6, Venkitarama Iyer Ramakrishna Iyer, who was at the relevant dates posted as Assistant Excise Commissioner at Quilon. This gentleman being interested in the welfare of the family of the intending lenders, claims to have made confidential enquiries from respectable merchants at Quilon and told his two young guests that the borrowers were persons of position and good business reputation and that they had ample unencumbered properties on the security of which advance up to a lakh of rupees could be made. The two sons of the mortgagee having satisfied themselves that the proposed mortgagors were persons of good status in society and sound financial position reported to their father who on the strength of the reports by his sons agreed to lend Rs. 75,000 on a first mortgage of properties reportedly worth more than at least a lakh of rupees. The mortgagee also examined himself as C.P.W. 7. The father and the two sons have given evidence in support of their case that out of the Rs. 75,000 agreed to be advanced on the mortgage when some of the mortgagors went with the registered document to the mortgagee 's place, Rs. 55,000 was paid in cash to them on the basis of the receipt (exhibit LIV) dated August 20, 1924. The remaining Rs. 20,000, according to the evidence, was paid later. Those payments were made in six instalments between September 1, and September 9, 1924, as evidenced by receipts (Exs. LVII and LVIII) and endorsements on letters, Exs. LIX(a), LXI(a), LXIV(a) and LXV(a). All these payments are also supported by the corresponding entries in the books of account regularly kept by 272 the mortgagee and proved in court as Exs. LXVII to LXXII series. Of the six instalments paid as aforesaid, some of them were paid to the mortgagors ' creditors and some of those creditors have been examined. C.P.W. 4 admits having received Rs. 2,500 and endorsed receipt of the same, exhibit LIX(a). C.P.W. 3 similarly speaks of having received Rs. 1,500 and endorsed receipt of the same, exhibit LXIV(a) and is corroborated by his accountant, C.P.W. 9, who proves the ledger and day book, Exs. LXXX and LXXXI. Thus we have not only the evidence of the mortgagee and his relations but also of third parties, creditors of the insolvents, proving the passing of consideration. The case does not rest only upon oral testimony. It is amply corroborated by contemporaneous entries in books of account maintained by the lender himself and by third parties who have been paid by him on account of the mortgagors. This considerable body of oral and documentary evidence is supported by the admissions of the mortgagors, not in the mortgage bond itself which stand rebutted, but by a series of admissions of receipt of the entire consideration money in the several receipts and endorsements made by some of them. All this voluminous evidence has been very carefully considered by the learned Chief Justice at pages 31 to 34 of the judgment of the High Court. We need not repeat all that has been said by the High Court for recording the finding that it was coiistrained to differ from the conclusions of the learned District Judge and to hold that exhibit I "is fully supported by consideration ". As already indicated, neither the mortgagors themselves nor the Official Receiver in their pleadings made out a case that the transaction was unsupported by consideration or that the consideration paid was not full amount shown in the document as having been advanced or that a much smaller sum like only Rs. 20,000 had been actually paid. It has been shown above with reference to the dates of the examination of witnesses that C.P. Ws. 1 to 7 had been examined and their evidence recorded between November 21, 1930, and November 20, 1932. Until that date it was not even suggested to those 273 witnesses in cross examination that only Rs. 20,000 had been paid and no more. For the first time on February 4, 1933, when one of the mortgagors was examined as C.P.W. 8, it was alleged that only Rs. 20,000 had been received by the mortgagors, which amount they paid to their creditors. C.P.W. 10, the second of the mortgagors, was examined on June 12, 1933. He does not in any way improve the Receiver 's case that the transaction was without con sideration. He does not even say that only Rs. 20,000 out of the consideration stated in the mortgage bond had been received by the mortgagors. Lastly, the then Receiver himself was examined as C. P. W. 13 on November 29, 1943. This gentleman, who is described in the judgments below as one of the leading advocates, does not appear to have taken his duty as a Receiver very seriously. He does not appear to have examined the insolvents themselves or their books of account carefully to find out the exact financial position of this trading family. He seems to suggest in his evidence that at the material dates the Quilon Bank was functioning and that the insolvents "did not get additional accommodation in the said bank or the other hundi shops during 1099" (1923 24). These statements, to put it mildly, are disingenuous. In the first instance, they would suggest that the insolvents had borrowings from the Quilon Bank or other hundi shops and secondly that their financial position was so embarrassed that the said bank or other hundi shops had refused to give them any further advance of money. As a matter of fact, it is nobody 's case that the insolvents had at any time any dealings with the Quilon Bank. We know from the evidence that the insolvents owed to the Imperial Bank anything between Rs. 30,000 to, Rs. 40,000. Either a portion or the whole of the dues of the Bank have been liquidated. The evidence is not specific. One of the mortgagors claims to have paid a portion of the Imperial Bank 's dues by selling ornaments of the ladies of his family, thereby directly suggesting that no portion of the mortgagee 's money was utilised for payment of the dues of the Imperial 35 274 Bank. The High Court rightly refused to accept the mortgagors ' belated attempt to prove by their bare testimony that any amount out of the consideration of the mortgage bond in question had remained unpaid. The Receiver 's evidence was directed mostly to making statements suggesting that the mortgagee had not made such enquiry about the financial position and status of the mortgagors as a reasonable man of business would do. He has not made any definite statement that the mortgage bond in question was without consideration. In cross examination he has been constrained to admit that he did not remember to have examined the mortgagor who was in charge of the business (first counter petitioner). He admits that it is usual for an Official Receiver to examine the insolvent. He has said further that he did not consider it necessary to examine the insolvents regarding the subject matter of the petition for annulment. He also admitted that he had not examined any of the accounts to see whether the insolvents had received the entire consideration of the mortgage in question, and that "the mortgagee Nilakanta Iyer is a very rich man. My information is that the insolvents had no dealings with him before the insolvency. " He was also questioned as to the insolvents ' dealings with the Imperial Bank and he gave the very vague answer that he was not sure as to what amount was due to the bank. He also admitted that he had never seen the mortgagee under exhibit 1, nor bad he asked him anything in connection with the mortgage, and that the mortgagee had obtained a decree and in execution of the said decree he took delivery of the property which was in his possession as Receiver. According to him, the properties covered by the usufructuary mortgage bond and the hypothecation bond would be worth about a lakh and a half rupees. It would thus appear from the statements of the Receiver himself as C.P.W. 13 examined about 19 years after the insolvency proceedings began, that he had not made such enquiries as he was bound to make as Official Receiver. From what has been said above there cannot be the least doubt that if the burden lay on the Receiver 275 to prove that the transaction in question was without consideration, he has hopelessly failed to discharge that burden. We are prepared to go further and say that even if the burden were on the transferee to show affirmatively that he had paid the full consideration, we would have no hesitation in confirming the findings of the High Court on this part of the case which have been arrived at after a very full and fair consideration of the evidence on the record, pro and con, though there is very little evidence adduced in support of the allegation that the mortgage bond in question was without consideration or full consideration. The finding on the question of consideration being entirely in favour of the appellant mortgagee, the, only other serious question which remains to be considered is whether the transaction was bona fide. We have already indicated that it is settled law not only of the Insolvency Acts in England but also in this country that it is not necessary in annulment proceedings to prove that the transferor who has been subsequently adjudged an insolvent should have been honest and straightforward in the matter of the transaction impeached. If lie was really so, there would not be much difficulty in coming to the conclusion that the transaction as a whole was bona fide. Even if the mortgagors were wanting in bona fides and assuming that to be so in the present case, the crucial question still remains to be answered. Unless it is found that the transferee was wanting in bona fides in respect of the transaction in question, he cannot be affected by the dishonest course of conduct of the transferor. Has it been shown by the evidence on the record that the mortgagee was a party or privy to the dishonest intentions of the mortgagors in so far as they may have intended to defeat or delay their creditors by executing the mortgage bond? The courts below, and particularly the High Court, have taken the view that the mortgagee had failed affirmatively to prove his bona fides. This conclusion is based upon the consideration that the General Clauses Act (II of 1072)=(1897), in cl. (6) of section 2 provides that "Nothing is said to be done or believed in good faith which is done or believed 276 without due care and attention. " Applying this definition of "good faith" to the present case, the High Court came to the conclusion that the mortgagee has not proved that the mortgage transaction was entered into with "due care and attention". The United State of Travancore and Cochin Interpretation and General Clauses Act (VII of 1125)=(1950) repeats the same definition which appears to have been taken from the definition of the term from the Madras General Clauses Act (1 of 1891). The definition of "good faith" in the Indian General Clauses Act (X of 1897) is in these terms: " A thing shall be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or not." The High Court was of the opinion that if the definition of "good faith" contained in the Indian General Clauses Act quoted above were to apply to the case, different considerations might arise. But the definition of that term as quoted above in the Travancore Cochin Act is different. Applying that definition to the present case, the High Court 's conclusion was that the appellant mortgagee had not shown due care and attention while entering into the transaction. In this connection it is necessary to determine whether the High Court was right in applying the test aforesaid in determining the question of bona fides. We have to find which of the two tests, the one laid down in the General Clauses Act of Travancore Cochin or the other laid down in the Indian Act, is more appropriate to proceedings in insolvency. Act 11 of 1070 (1897), even as Act VII of 1125 (1950), contains the following saving clause "Unless there be something repugnant in the subject or context. " As a matter of fact, these words or words to similar effect are to be found in all General Clauses Acts. The question, therefore, naturally arises whether there is anything in the subject or context of the Insolvency Regulation which is repugnant to the idea of applying the test of due care and attention. The law of insolvency aims at a just and equal distribution of the assets of a person, who has suffered loss 277 in trade or business or otherwise, amongst his creditors whose debts are provable under the law; and provides a machinery for expeditious disposal of his assets amongst those entitled. The law is calculated to advance the interest of the business community. On the one hand, it protects the creditors by compelling the insolvent to place all his assets at the disposal of the court without concealing any of his assets. Similarly it protects the interests of an honest alienee or an honest secured creditor of the insolvent. On the other hand, it protects an honest debtor from harassment by creditors who may take simultaneous proceedings for realization of their debts from their common debtor even by sending him to civil prison. It is necessary for the promotion of trade and commerce that an honest debtor should be released from his multifarious obligations as soon as his assets have been placed at the disposal of the court for the benefit of his creditors. It also lays down penal provisions for punishing a dishonest debtor. It also makes provisions for saving the debtor and his creditors from the unscrupulous conduct of persons who may have entered into unconscionable bargains with a person who is financially involved. The law of insolvency is aimed against a dishonest debtor but not necessarily against a debtor who has suffered loss in his trade or business as a result of transactions which may not have been done with due care and attention. Business sometimes is an adventure and very often involves risks which cannot be easily foreseen even by persons of common prudence. Annulment proceedings are aimed at transactions between a debtor who has become insolvent and a creditor who, knowing the true state of the debtor 's crashing business, has taken undue advantage of the embarrassed financial position of the debtor. In view of these considerations, in our opinion, the test of honesty is more appropriate than the test of due care and attention. It may be added that a General Clauses Act is enacted in order to shorten language used in parliamentary legislation and to avoid repetition of the same words in the course of the same piece of legislation. Such an Act is not meant to give 278 a hide bound meaning to terms and phrases generally occurring in legislation. That is the reason why the definition section contains words like "Unless there is anything repugnant in the subject or context. " Words and phrases have either a very narrow significance or a very wide significance according as the context and subject of the legislation requires the one or the other meaning to be attached to those words or phrases. The books contain many illustrations showing that the same words have been used in different senses in different contexts. The significance attaching to the expression " good faith " in the Travancore Cochin General Clauses Act is, in terms of the definition of that phrase in the Indian Penal Code and in the Indian Limitation Act. The Indian General Clauses Act applies to all legislation after the coming into effect of that Act. The definition of "good faith" in the Indian General Clauses Act would have been applicable to the Indian Limitation Act also but the legislature in its wisdom has given a special definition of "good faith " different from the one in the Indian General Clauses Act advisedly. The Indian Penal Code which came into existence earlier than the Indian General Clauses Act contains its own definitions to serve its own special purposes. The Travancore Cochin General Clauses Act, 1950, of course, applies by virtue of s.2 to all enactments then in force or passed after the commencement of the Act unless there was anything repugnant in the subject or context. Hence it cannot be said that the definition of " good faith " as contained in the General Clauses Act of 1950 must apply in the same sense to every piece of legislation to which it may apply irrespective of the subject or the context. The Insolvency Regulation is on the same lines as the and therefore must be understood in the same sense. If that is the correct approach to the law of in solvency, a secured creditor who has advanced money to a debtor honestly, even though he may not have taken all due precautions, would not come within the mischief of section 35. It must, therefore, be held that the test of good faith as laid down in the law generally applicable to Indian 279 Statutes is more appropriate to proceedings under the insolvency law. That being so it must also be held that the courts below have approached the question of bona fides from a wrong standpoint and have applied a wrong test. Having come to the conclusion that honesty is the test to be applied in judging the bona fides of the creditor, a secured creditor in this case, we have to see how far he has satisfied that test. In this connection it has to be remembered that it is common ground that the mortgagee had absolutely nothing to do with the mortgagors before the mortgage transaction was concluded. There is no blood relationship or any other kind of relationship which could be urged as the motive for entering into a dishonest transaction in the sense that the creditor had joined hands with the debtors in screening the property against the claims of the latters ' creditors. It may be that the debtors were financially involved; but there is no evidence on the record even to suggest that the mortgagee was aware or apprised of their true financial position. We have no doubt in our mind that if the mortgagee had the least suspicion that he would have to face a prolonged litigation to realise his money from the debtors, he would have been the last person to enter into the transaction in question. He was certainly interested in earning good interest on his capital. But that is not the same thing as saying that he had entered into a dishonest deal with persons who were about to crash in their business. It is also noteworthy that the insolvent 's ancestor had died only about three years before the transaction in question. During this period of three years they had added to their business by having a file factory and an oil mill. That is not the conduct of a family which was about to crash. It may be that they were much too ambitious to become rich quickly. But it has not been suggested or found that they had indulged in unscrupulous dealings in the way of their business. At least that was not their reputation at about the time the mortgage transaction was entered into. Otherwise C.P.W. 6, the Assistant Commissioner of Excise, the mortgagee 's 280 relation, would certainly not have advised them, being their well wisher, to enter into a hazardous transaction. We have not been shown any evidence which could lead us to believe that the insolvents ' reputation at that time in the way of their trade and business was anything but sound, notwithstanding the ipse dixits of the receiver, the last witness, examined 19 years after the proceedings had started. It is very easy to be wise after the event. But there were no indications until August 1924, so far as the mortgagee is concerned, that he was dealing with a party who was about to crash. Whatever may have been the intentions or the course of conduct of the insolvents, there is nothing to attribute that intention or course of conduct to the mortgagee. His evidence, as also of his two sons who helped him in entering into this transaction, has impressed us as truthful and straightforward. Assuming that the courts below were right in applying the test of due care and attention, what is there to show that the mortgagee was wanting in that respect ? Being a complete stranger to the family of the borrowers, he deputed his young lawyer sons to make such enquiries as they could from persons who were expected to know them and their business dealings and after satisfying themselves that the borrowers had a good reputation and had unencumbered properties of much greater value than the sum proposed to be advanced, the mortgage transaction was finalized. It must be remembered in this connection that even the test applied to a lender while lending money to the karta of a joint Hindu family does not insist upon the creditor seeing to the application of the funds advanced. In the instant case the borrowers represented to the creditor that they required funds in the way of their business. Their enquiry yielded the information that they had borrowings to the extent of Rs. 30,000 to Rs. 40,000 and outstanding claims against their debtors to a much larger extent. That is the state of affairs in a normal trading family. The fact that all their immovable properties worth, according to the Receiver, more than a lakh and a half rupees till then were unencumbered was another indication of the 281 apparent solvency of the family. But it has been argued on behalf of the respondent that the mortgagee was put on his enquiry by the very fact that the debtors ' account books disclosed debts against them. Therefore, it is said, the mortgagee should have pursued his enquiry further. It was suggested that the business houses in the town of Quilon and the Quilon Bank itself should have been contacted in order to ascertain the financial position of the debtors. It has already been pointed out that they had no business dealings with that Bank. The mortgagee 's sons have deposed that they made enquiries of respectable persons named, as also of two leading hundi houses which may have been expected to know about the financial position of the borrowers ' family. It was further argued that it was not specifically stated in the mortgage bond itself that the money was intended for payment to creditors specifically named. Ordinarily a trading firm has no fixed list of its creditors or its debtors. It is always a floating list. Hence when it was said that money was being borrowed with a view to carrying on the business of the trading family, that was comprehensive enough to include the necessity of paying the outstanding debts of the firm. Unless the lender had reasons to suspect that the money was not intended for carrying on the business of the firm but was meant to corner the same with a view to defeating or delaying creditors, it would not ordinarily be the look out of the lender dealing at arm 's length to try to pry into the business secrets of the borrower. In our opinion, therefore, it was not necessary for the lender either to insist upon a list of the borrower 's creditors to be specifically mentioned in the deed or upon paying the money directly to those creditors. That would be throwing too great a burden on a lender honestly dealing with a trading family and it would be equally an irksome thing for a trading family to be dealt with on those terms. It cannot, therefore, be said that the lender had not shown such care and attention as a reasonable person in those circumstances would do. The learned counsel for the respondent further pointed out certain discrepancies in the statements in the 36 282 mortgage deed and in the oral evidence adduced by the mortgagee as pointing to the conclusion that the lender had not been careful and cautious and was therefore wanting in good faith. Those are very speculative arguments which cannot be the foundation for a finding that the Receiver had succeeded in disproving good faith. In this connection it was also pointed out that there was no satisfactory evidence as to how the lender raised Rs. 55,000 which he paid soon after the registered mortgage bond was delivered to him. There is evidence in the shape of an entry in the passbook in the name of the mortgagee issued by a respectable hundi shop in Alleppey, exhibit LXVI (a), showing that Rs. 40,000 was withdrawn by him on August 19, 1924, just the day previous to the date of payment of Rs. 55,000. It is the mortgagee 's case that he paid the sum of Rs. 55,000 to the mortgagors with the amount of Rs. 40,000 thus withdrawn to which was added Rs. 15,000 which he had with him already. There is no reason to doubt the truth of this version which has been accepted by the High Court. It must, therefore, be held that the evidence adduced by the mortgagee apart from the question of burden of proof has affirmatively proved the passing of consideration for the mortgage and that there are no circumstances which could throw any suspicion on the bona fides of the transaction. It had been argued on behalf of the appellant that his case had been seriously prejudiced by the joint trial, so to say, of the issue relating to his transaction with the one relating to the hypothecation bond dated August 30, 1924. It was also argued that the mortgage bond in question had been executed and registered and given effect to beyond two years from the date of adjudication and that therefore this transaction could not be brought within the mischief of section 35 of the Insolvency Regulation. In view of our findings on the other and more direct and important issues it is not necessary to pronounce upon these additional grounds urged on behalf of the appellant. In view of our findings on the main issues in the case, the appeal must be allowed, the judgments and 283 orders of the courts below annulling the usufructuary mortgage bond in question set aside and the transaction held binding on the estate of the insolvents. It follows that the lease back to the mortgagors being a part of the same transaction is equally binding on the estate of the insolvents. The appellant is entitled to his costs throughout, to come out of the estate in the hands of the Official Receiver who must pay his own costs. Appeal allowed.

An usufructuary mortgage in favour of the appellant 's predecessor in interest was sought to be annulled by the Official Receiver as having been executed within two years of the adjudication of the mortgagors as insolvents, under section 35(iii) of the Travancore Regulation VIII of 1090 (=1915) as not having been entered into in good faith and for valuable consideration. By an issue framed in the case the burden of proving affirmatively that the transfer was supported by good faith and valuable consideration was thrown on the transferee. There was also a preliminary objection by the Receiver that the usufructuary mortgage having been found to be an act of insolvency in the insolvency proceedings, that finding was res judicata between him and the transferee. The trial judge found in favour of the Receiver. On appeal by the transferee, the High Court affirmed the order of the trial judge allowing the Receiver 's application for annulment solely on the ground that the appellant had failed to prove his bona fides in the sense that he had entered into the transaction without due care and attention within the meaning of section 2(6) of the Travancore and Cochin General Clauses Act. Held: that the courts below had erred in placing the onus on the transferee and their orders must be set aside. It is the settled law in insolvency proceedings that the burden of proving that a particular transaction is not supported by good faith and valuable consideration lies on the Official Receiver who challenges the transaction. Official Assignee vs Khoo Saw Cheow, , Official Receiver vs P.L.K.M.R.M. Chettyar Firm, (1930) L.R. 58 I.A. 115 and Pope vs Official Assignee, Rangoon, (1933) L.R. 60 I.A. 362, relied on. Held further, that there was no scope for the application of the principle of res judicata in the instant case as the matter that directly arose for determination in it was whether the impugned transaction was not bona fide or for valuable consideration so far as the transferee was concerned and that was not in issue in the 33 258 insolvency proceedings, nor had he been found in such pro ceedings to be privy to any act of insolvency intended to defeat or delay the creditors. Mahomed Siddique Yousuf vs official Assignee of Calcutta, (1943) L.R. 70 I.A. 93, considered. The crucial question for decision in such a case would be whether the transferee was wanting in bona fides in respect of the transfer sought to be annulled and the correct test would be the one of honesty as laid down by section 2(22) Of the Indian General Clauses Act and not that of due care and attention as contemplated by section 2(6) of the Travancore and Cochin General Clauses Act.

ivil Appeal No. 1430 of 1990. From the Judgment and Order dated 21.10.1989 of the Central Government Industrial Tribunal, New Delhi in I.D. No. 40 of 1986. N.B. Shetye and A.M. Khanwilkar for the Appellant. Ashok H. Desai, R.P. Bhatt. P.H. Parekh and Mrs. Sumita Sharma for the Respondents. The Judgment of the Court was delivered by PUNCHHI, J. This appeal by special leave is directed against the Award of the Central Government Industrial Tribunal, New Delhi, in I.D. No. 40 of 1986 published in the Gazette of India, New Delhi dated 21.10 89. The appellant is the Mathura Refinery Mazdoor Sangh (here after referred to as 'Union '). The contesting respondent is the Indian Oil Corporation Ltd., Mathura Refinery Project, Mathura, U.P. (hereafter referred to as the 'Refinery '). The Union represents about 900 casual labourers working in the Refinery. These labourers are contract labourers coming under the Contract Labour (Regulation & Abolition) Act, 1971. The nature of their work has grouped them .Some of the labourers have formed themselves into cooperative societies and those societies have entered into labour contracts with 470 the Refinery. Other labourers are working under labour contractors who have contracts with the Refinery. Theirs is not a constant relationship with one contractor and these labourers keep shifting from one contractor to another. However it is claimed that these casual labourers, have been working in the Refinery for so many years in the past ranging between ten to fifteen years but they are denied wages and other benefits as also other beneficial service conditions enjoyed by workmen who are regular employees of the Refinery. Claiming that they had a right to be treated at par with regular employees, the Union filed Writ Petition No. 2876 of 1985 under Article 32 of the Constitution of India in this Court which was disposed of on January 16, 1986 by directing the Central Government to refer to the Industrial Tribunal for adjudication the following questions: 1. Whether, in law, the petitioners and the 48 workmen whose services have been terminated are employees of the Indian Oil Corporation, Mathura Refinery Project, Mathura? 2. Whether the termination of the services of 48 workmen was justified? and 3. To what relief are the workmen entitled?" Status quo was ordered to be maintained and the services of the workmen were ordered not to be terminated. At that time, the services of 48 workmen alone were involved but as is evident the adjudication of the Tribunal would have affected others too. Pursuant to the order of this Court, the Central Government referred and the Industrial Tribunal decided the above referred questions holding that the workmen were not employees of the Refinery and were rather the employees of the contractors. With regard to the termination of the services of the workmen and to what relief they were entitled, the Tribunal, after answering the questions against the Union and in favour of the Refinery, suggested the following steps in the interest of Industrial harmony: (i) Though the Union should have pressed their demand for abolition of the contract labour system in the Refinery to the Central Advisory Board constituted under the Act, and even though it had been pursuing its remedies before this Court and the Tribunal, suggestions were made to the Refinery to approach 471 the Advisory Board to make a study with regard to the desirability of continuance of the contract labour system in the Refinery. (ii) Till the Central Advisory Board makes its recommendations and the action is taken, the management of the Refinery to ensure that the contract labour is paid at least the minimum of the pay scale of its regular employees performing the same or similar duties as the workmen of the contract labour and further that the workmen among the contract labour who have put in 5 years or more of work at the Mathura Refinery shall be continued to be employed in the same work even if there is a change in the contractor and such workmen shall not be terminated except as a punishment inflicted by way of disciplinary action for misconduct, etc., voluntary retirement or retirement on reaching the age of superannuation (which may be taken as the superannuation age for the I.O.C. employees) or on ground of continuous ill health. (iii) Refinery to give preference to those workmen in its employment by waiving the requirement of age and other qualifications wherever possible and it may also consider the creation of a benevolent fund for the contract labour wherein it may make a lumpsum contribution initially and then make equivalent or even more contribution to match the contribution made by the workmen of the contract labour. Having suggested these, the Tribunal has clarified that these ameliorative steps, if taken by the Refinery, shall not be taken to mean that the contract labour has become the direct employees of the Refinery. Learned counsel for the appellant says that though the above suggestions, which have the colour of directions, are in accord with the decision of this Court in 13HEL workers Association, Hardwar and Others etc. vs Union of India and Others, [ ; yet they fall short of the expectancies of the Union and in particular to the wide sweep of the principles laid down by this Court in Dharwad Distt P.W.D. Literate Daily Wage Employees Association and Others vs State of Karnataka and Others, [ ; and prayed for directions such as those given to the State of Karnataka in the Dharwad 's case (supra). The argument of the learned counsel has barely to be noted and 472 rejected. The Tribunal has given to the appellant Union the maximum which could be given in the facts and circumstances of the, case. In Dharwad 's case (supra), the State of Karnataka had itself come out with a scheme to absorb the casual workers in regular government service in a phased manner and though it did not satisfy all concerned, yet it was given a workable final shape. This Court observed as follows: "Though the, scheme so finalised is not the ideal one but it is the obligation of the court to individualise justice to suit a given situation in a set of facts that are placed before it. Under the scheme of the Constitution the purse remains in the hands of the executive. The legislature of the State controls the Consolidated Fund out of which the expenditure to be incurred, in giving effect to the scheme, will have to be met. The flow into the Consolidated Fund depends upon the policy of taxation depending perhaps on the capacity of the payer. Therefore, unduly burdening the State for implementing the constitutional obligation forth with would create problems which the State may not be able to handle. Therefore, the directions have been made with judicious restraint. " Those casual workers were under the employment of the State and the State came out with a scheme for phased absorption and a graded financial responsibility. In the instant case before us, the contract labourers are not, and have also not been found to be, having a direct connection with the Refinery, even though it is a State for the purpose of enforcement of fundamental rights. The suggestions/directions given by the Tribunal, appear to us to be the only relief which was due to the appellant and its members in the given situation and circumstances. Therefore, the impugned Award of the Tribunal cannot be improved upon. Finding no merit in the appeal, we dismiss the same. No costs. T.N.A. Appeal dismissed.

The appellant Union, representing about 900 casual labourers falling under the Contract Labour (Regulation and Abolition) Act, 1971 some of whom formed Co operative societies and entered into contracts with the respondent refinery while others worked for contractors who had contracts with the refinery, filed a writ petition in this court claiming parity in wages and service conditions with the regular workmen of the respondent refinery. This Court disposed the petition by directing the Central Government to refer to the Industrial Tribunal for adjudication the questions whether the petitioners and some of the workmen whose services were terminated were employees of the refinery; whether their termination was justified and to what relief they were entitled to. The Government referred and the Tribunal decided the questions against the appellant union by holding that the labourers were employees of the contractors and not of the refinery and their termination was justified. But the Tribunal gave certain directions by way of relief for consideration by the Advisory Board about the desirability of continuance of the contract system in the refinery, for providing minimum pay of scale of regular employees to the contract labour and giving them preference in the regular employment. Against the award of the Industrial Tribunal, the Union filed an appeal in this Court praying for directions to the refinery to absorb and regularise the casual labourers in a phased manner. Dismissing the appeal, this Court, 469 HELD:The contract laboures are not, and have also not been found to be, having a direct connection with the Refinery, even though it is a State for the purpose of enforcement of fundamental rights. The directions given by the Tribunal was the only relief which was due to the appellant_union and its members. Hence the Tribunal has given to the appellant union the maximum which could be given in the facts and circumstances of the case. Therefore, the impugned Award of the Tribunal cannot be improved upon. [472E F] BHEL Workers Association, Hardwar and Ors. vs Union of India and Ors. , ; , referred to. Dharwad Distt. P.W.D. Literate Daily Wage Employees Association and Ors. V. State Of Karnataka and Ors. , ; , distinguished.

Appeal No. 49 of 1961. Appeal by special leave from the judgment and order dated August 11, 1960, of the Bombay High Court in Civil Revision Application No. 320 of 1959. M.C. Setalvad, Attorney General for India, Ramesh. war Nath, section N. Andley and P. L. Vohra, for the appellants. C.K. Daphtary, Solicitor General of India, Naushir Barucha and K. R. Choudhuri, for the respondent. April 21. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is a tenant 's appeal, with the special leave of this Court, against an order of Naik, J., of the High Court of Bombay in Civil Revision Application No. 320 of 1959, by which he 161 disallowed certain pleas raised by the appellants. The respondent is the landlord. On September 11, 1942, the appellants had executed a rent note, under which they were in occupation of the premises in dispute. The period of the tenancy was 15 years, and it expired by efflux of time on, March 14, 1957. The landlord thereupon filed a suit on April 25, 1957, for possession of the premises, in the Court of the Joint Civil Judge (Junior Division), Erandol. Meanwhile, under section 6 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, (to be called the Act, in this judgment), a notification was issued, applying Part II of the Act to the area where the property is situated. The appellants claimed protection of section 12 in Part 11 of the Act, which deprived the landlord of the right of possession under certain circumstances. The Civil Judge framed three preliminary Issues, which were as follows: "1. Whether this Court has jurisdiction to try the suit? 2.Whether the plaintiff 's suit for possession of the suit property is maintainable in view of the Notification issued by the Government of Bombay on 16th August, 1958, applying Part II of the Bombay Rents, Hotel and Lodging House Rates Control Act? If not, what order should be passed? 3.What order?". These Issues were decided against the appellants. They filed a revision petition before the High Court of Bombay, which was dismissed by the order under appeal. Naik, J., who heard the revision, followed a previous Full Bench ruling of the Bombay High Court reported in Nilkanth Ramachandra vs Rasiktal (1). In that case, Chagla, C. J. (Gajendragadkar and Tendolkar, JJ., concurring) had held that section 12 of the Act was prospective and did not apply to pending cases. Reliance was also placed by Naik, J., on the decision of this Court in Chandrasingh Manibhai vs Surjit Lal Sadhamal Chhabda (2), where the opinion of the Full Bench of the Bombay High Court was approved. (1) (2) ; 21 162 Two Questions have been raised in this appeal, and they are (1) whether by virtue of the first proviso to section 50 of the Act, all the provisions of Part 11 including section 12 were not expressly made applicable to all suits; and (2) whether by virtue of section 12(1) of the Act, which applied independently by the extension of the Act to the area where the property is situate, the suit was not rendered incompetent and the landlord deprived of his remedy of possession. Before we deal with these contentions, it is necessary to see some of the relevant provisions of this Act. The Act was not the first to be passed on the subject of control of houses, etc. Previously, there were two other Acts in force in the State of Bombay, viz., the Bombay Rent Restriction Act, 1939 and the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944. By section 50 of the Act, these Acts were repealed. The first proviso, however, enacted (omitting unnecessary parts): "Provided that all suits and proceedings between a landlord and a tenant relating to the recovery or fixing of rent or possession of any premises to which the provisions of Part 11 apply. . which are pending in any Court, shall be transferred to and continued before the Courts which would have jurisdiction to try such suits or proceedings under this Act or shall be continued in such Courts, as the case may be, and all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings. " It is this proviso which, it is claimed, has retrospective effect and section 12 of the Act which is in Part II is said to apply to all pending cases, whenever the Act is extended to fresh areas. Section 12 of the Act reads as follows: "12.(1) A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act. 163 (2)No suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the . (3)(a) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub section (2), the Court may pass a decree for eviction in any such suit for recovery of possession. (b)In any other case, no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court. (4)Pending disposal of any such suit, the Court may out of any amount paid or tendered by the tenant pay to the landlord such amount towards payment of rent or permitted increases due to him as the Court thinks fit. Explanation. In any case where there is a dis pute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub section (2), he makes an application to the Court under sub section (3) of section II and thereafter pays or tenders the amount of rent or permitted increases specified in the order made by the Court. " 164 By sub sections (1) and (2) of the second section, which dealt with the extent of the application of the Act, it was provided that Parts I and IV of the Act shall extend to the pre Reorganisation State of Bombay, excluding transferred territories, and Parts II and III shall extend respectively to the areas specified in Schs. I and II to the Act, and shall continue to extend to any such area, notwithstanding that the area ceased to be of the description therein specified. By sub section (3), the State Government was authorised, by notification in the Official Gazette, to extend to any other area, any or all the provisions of Part II or Part III or of both. It would appear from this that Parts I and IV came into operation throughout the territories of the pre Reorganisation State of Bombay. Part II came to be extended to this area by the notification, and after that extension, Parts 1, 11 and IV of the Act began to apply, while the suit was pending. We are not concerned in this appeal with Part 111. The contention on behalf of the appellants is that by the latter part of the proviso to section 50, relevant portions of which have been quoted earlier, all the provisions of Part II were extended to this area, and that all pending suits and proceedings were governed, no matter when filed. The notification extending Part II of the Act to this area had, it is contended, also the same effect independently of the first proviso to section 50. It is contended, therefore, that sub section (1) of section 12, which prohibits a landlord from recovering possession of any premises so long as the tenant pays or is ready and willing to pay the amount of the standard rent and permitted increases, if any, and is also observing the other conditions of the tenancy in so far as they are not inconsistent with the provisions of the Act, applies to the present case and the tenants are protected. It is also contended that if the first proviso to section 50 was limited to such suits only as were pending on the date of the passing of the Act, section 12(1), on its own terms, is applicable to the present case, and being retrospective in character, leads to the same result. These two contentions were apparently raised in the Court of the Civil Judge and before the High 165 Court. The High Court, however, ruled that section 12 was prospective in character and did not apply to pending suits or proceedings. It is contended by the learned Attorney General what the construction placed by the High Court upon the first proviso to section 50 is erroneous. Though he section concedes that the proviso must be read as qualifying what the substantive part of section 50 enacts, he urges that the proviso goes beyond that purpose and enacts a substantive law of its own. He relies upon the following observations of Lord Loreburn, L. C., in Rhondda Urban Council vs Taff Vale Railway (1), where a pro viso to section 51 of the Railway Clauses Consolidation Act, 1845, was under consideration: "It is true that section 51 is framed as a proviso upon preceding sections. But it is also true that the latter half of it, though in form a proviso, is in substance a fresh enactment, adding to and not merely qualifying that which goes before.", and contends that the latter portion of the proviso, in question, being a substantive enactment, comprehends not only those suits which were pending on the date of repeal but also those cases, which came within the language of the latter part of the proviso, whenever the Act was extended to new areas. On behalf of the landlord, the learned Solicitor General argues that the proviso should be read as a proviso only to the substantive enactment, and must be taken to qualify the substantive portion of section 50 only to the extent to which it makes an exception to the repeal and but for the proviso would be governed by the repealed Acts. He relies upon Craies on Statute Law, 5th Edn., pp.201 202, where the following passage occurs: "The effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within it and such a proviso cannot be construed as enlarging the scope of an enactment when it can be fairly and (1) , 258.166 properly construed without attributing to it that effect. " He also relies upon the following observations of Lush, J., in Mullins vs Treasurer of Surrey (1): "When one finds a proviso to a section, the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso." The law with regard to provisos is well settled and well understood. As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment, and ordinarily, 'a proviso is not interpreted as stating a general rule. But, provisos are often added not as exceptions or qualifications to the main enactment but as savings clauses, in which cases they will not be construed as controlled by the section. The proviso which has been added to section 50 of the Act deals with the effect of repeal. The substantive part of the section repealed two Acts which were in force in the State of Bombay. If nothing more had been said, section 7 of the Bombay General Clauses Act would have applied, and all pending suits and proceedings would have continued under the old law, as if the repealing Act had not been passed. The effect of the proviso was to take the matter out of section 7 of the Bombay General Clauses Act and to provide for a special saving. It cannot be used to decide whether section 12 of the Act is retrospective. It was observed by Wood, V. C., in Fitzgerald vs Champneys(2) that saving clauses are seldom used to construe Acts. These clauses are introduced into Acts which repeal others, to safeguard rights which, but for the savings, would be lost. The proviso here saves pending suits and proceedings, and further enacts that suits and proceedings then pending are to be transferred to the Courts designated in the Act and are to continue under the Act and any or all the provisions of the Act are to apply to them. The learned Solicitor General contends that the savings clause enacted by the proviso, even if treated as substantive law, must be taken to (1) , 173.(2) ; E.R. 958.167 apply only to suits and proceedings pending at the time of the repeal which, but for the proviso, would be governed by the Act repealed. According to the learned Attorney General, the effect of the savings is much wider, and it applies to such cases as come within the words of the proviso, whenever the Act is extended to new areas. These arguments are interesting, and much can be said on both Bides, particularly as the Legislature has by a subsequent amendment changed the proviso. But, in our opinion, they need not be considered in this case, in view of what we have decided on the second point. The second contention urged by the learned Attorney General that section 12(1) applied from the date on which the Act was extended to the area in question is, in our opinion, sound. Section 12(1) enacts a rule of decision, and it says that a landlord is not entitled to possession if the tenant pays or shows his readiness and willingness to pay the standard rent and to observe the other conditions of the tenancy. The word "tenant" is defined in the Act to include not only a tenant, whose tenancy subsists but also any person remaining, after the determination of the lease, in possession with or without the assent of the landlord. The present appellants, as statutory tenants, were within the rule enacted by section 12(1) and entitled to its protection, if the sub section could be held applicable to this suit. Both the Bombay High Court and this Court had, on the previous occasions, observed that section 12 of the Act was prospective. In those cases, the learned Judges were concerned with the interpretation of sub sections (2) and (3) only, which, as the words of those subsections then existing show, were clearly prospective, and were applicable to suits to be instituted after the coming into force of the Act. But a section may be prospective in some parts and retrospective in other parts. While it is the ordinary rule that substantive rights should not be held to be taken away except by express provision or clear implication, many Acts, though prospective in form, 168 have been given retrospective operation, if the intention of the legislature is apparent. This is more so, when Acts are passed to protect the public against some evil or abuse. (See Craies on Statute Law, 5th Edn., p. 365). The sub section says that a landlord Shall not be entitled to the recovery of possession of any premises so long as the tenant pays or is ready and willing to pay the standard rent etc., and observes and performs the other conditions of the tenancy. In other words, no decree can be passed granting possession to the landlord, if the tenant fulfils the conditions above mentioned. The Explanation to section 12 makes it clear that the tenant in case of a dispute may make an application to the Court under sub section(3) of section 11 for fixation of a standard rent and may thereafter pay or tender the amount of rent or permitted increases specified in the order to be made by the Court. The tenants, in the present case, have expressed their readiness and willingness to pay, and it is clear that they fulfil the requirements of sub section(1) of section 12, and the landlord is, therefore, not entitled to the relief of possession. Both the High Court as well as this Court in their previous decisions, referred to above, were not called upon to interpret sub section (1) of the Act. They were dealing with appeals arising out of decrees already passed. The observations that section 12 was prospective were made with reference to sub sections (2) and (3) and not with respect to sub section(1), which did not even find a mention in those judgments. The question then was whether section 12 by itself or read with the proviso to section 50 was applicable retrospectively to appeals. That is not the question which has arisen here. Then again, section 12(1) enacts that the landlord shall not be entitled to recover possession, not "no suit shall be instituted by the landlord to recover possession". The point of time when the sub section will operate is when the decree for recovery of possession would have to be passed. Thus, the language of the sub section applies equally to suits pending when Part 11 comes into force and those to be filed subsequently. The contention of the respondent that the operation of section 12(1) 169 is limited to suits filed after the Act comes into force in a particular area cannot be accepted. The conclusion must follow that the present suit cannot be decreed in favour of the respondent. The decisions of the High Court and the Court of First Instance are thus erroneous, and must be set aside. In the result, the appeal is allowed, and the two preliminary Issues are answered in favour of the appellants. Under the orders of this Court, the judgment of the Civil Judge was stayed. The suit will now be decided in conformity with our judgment. The respondent shall pay the costs of this Court and of the High Court. Appeal allowed.

On the expiry of the appellant 's tenancy for the occupation of the premises indispute, the respondent who was the landlord filed a suit for possession of the premises. Meanwhile under section 6 of the Bombay Rents, Hotel and Lodging House Rates Control , a notification was issued applying Part 11 of the Act to the area where the property was situated. The appellants claimed protection of section 12, Part 11 of the Act, which deprived the landlord of the right of possession under certain circum stances. The Court of first instance decided the suit against the appellant and the High Court ruled that section 12 was prospective in character and did not apply to pending suits or proceedings. On appeal by special leave Held, that the point of time when sub section (1) of section 12 operates is when the decree for recovery of possession has to be passed. The language of the sub section which provides that the landlord is not entitled to recover possession if the tenant pays or shows his willingness to pay the standard rent and to observe the other conditions of the tenancy is such that it applies equally to suits pending when Part It comes into force and those to be filed subsequently and is not limited only to suits filed after the Act comes into force in a particular area. A section may be prospective in one part and retrospective in another part. Sub sections (2) and (3) of section 12 were clearly prospective but the words of the first sub section showed retrospective operation. Nilkanth Ram Chandra vs Rasiklal, and Chandra Singh Manibhai vs Surjitlal Sudhamal Chhabda, ; , distinguished. Rhonda Urban Council vs Taff Vale Railway, , Mullins vs Treasury of Surrey, and Fitzgerald vs Champneys, ; , referred to.

Civil Appeal No. 1109 of 1973. Appeal by Special Leave from the Judgment and order dated the 10th March., 197 ' ' of the Punjab and Haryana High Court in L.P.A. No. 714 of 1970 and Civil Appeals Nos. 1411 1314, 872, 873, 1369 and 1582 of 1974. F. section Nariman (In C.As. 1109 and 1582), Harbans Singh (in C.A. No. 1109/73) and O. P. Sharma, (In all the appeals), for the appellants. Hardyal Hardy, section K. Mehta and M. Qamarrudin, for respondents No. 1 & 8. V. C. Mahajan, Urmila Sirur, section C. Agarwala and V. J. Francis, for respondents Nos. 2 5, 9 12 and 15 21 (in C.A. No. 1109/73). Urmila Sirur, for respondents 2 7, 12, 13, 15 18, 20 22 26, 27 30, 32 36, 38, 41, 44 46, 50 57 & 59 62 (In C.A. Nos. 1411 1412/ 74) and for all the respondents in (In C.A. No. 1414/74) Except Respondent No. 113 and respondents Nos. 1. 3 16 and 18 23 (In C.A. No. 1369/74). F. V. C. Mahajan and Urmila Sirur, for respondents Nos. (All respondents in C.A. No. 872/74), and respondents Nos. 1, 2, 4 54, 5681, 83 and 85, (In C.A. No. 873/74) and respondents Nos. 1 214 (In C.A. No. 1582/74). Balak Ram, for respondent No. 245 (In C.A. No. 1582/74). G The Judgment of the Court was delivered by RAY, C.J. These appeals are by special leave from the judgment dated 10 March, 1972 of the Punjab and Haryana High Court. The respondents were teachers in the former State of Pepsu. On 1 November, 1956 the former State of Pepsu merged in the State of Punjab. These teachers claim the revised scale of pay as well as the posts of Masters. Their claims are based on these grounds. First they have taken the Degrees in Bachelor of Teaching or its equivalent. Second, the letter dated 23 July, 1957 which became effective from 531 1 May, 1957 entitles them to the revised grade if they took the Degrees in Bachelor of Teaching or its equivalent. Third, the letter dated 7 November, 1958 entitles the respondents to the posts of Masters to the extent of 25 per cent of the vacancies. The letter dated 23 July, 1957 is addressed by the Secretary to the Punjab Government. The letter is on the subject: "Revision of Scales of pay of low paid Government servants". The letter states that after carefully considering the recommendations made by Pay Revision Committee it has been decided that the existing scales of pay of certain categories of posts should, with effect from 1 May, 1957, be revised as shown therein. It is, thereafter stated that it has been decided that all teachers according to their qualifications should placed in the following two broad categories: Category 'A ' B.A./B.Sc./B.Com./B.Sc. (Agriculture) and B.T./ Diploma in Physical Education/Diploma in Senior Basic Training. Category 'B ' consists of four groups. The first group consists of Matriculates with Basic Training (including Junior Teachers). The second group consists of Junior School Teachers (including Assistant Mistresses with B.A./Inter Matric Plus J.A.V. Training). Groups III and IV are also mentioned which are not relevant for the purposes of these appeals. Thereafter the crucial portions in the letter are these. For category 'A ' the scale of pay is Rs. 110 8 19/10 250 with a higher start for M.A. Or M.Sc. as at present. The existing per centage of posts fixed by Government for the scales of Rs. 110 8 190/ 10 250 and Rs. 250 10 300 should remain unchanged at 85 per cent and 15 per cent respectively. It may be stated here that the scale of pay of Head Masters being item (1) in Appendix is Rs. 250 10 350. The scale of pay of Masters, Science Masters, Agriculture Masters, Clerical and (Commercial Master and Assistant District Inspector of Schools is Rs. 250 10 300. The scale of pay of Second Master, Masters, Physical Training Masters Assistant District Inspector of Schools. Agriculture Masters, Clerical and Commercial Masters and Science Masters being item (2) is Rs. 110 8 190 10 250 with a start of Rs. 126/ to M.A./M.Sc./M.III/B T. and Rs. 150/ to M.A./ M.Sc./M.Ed.(11)/B.T. and Rs. 150/ to M.A./M.Sc./M.Ed. (11)/B.T '. The second letter on which the respondents relied is. dated 7 November 1958. This letter is from the Deputy Director (Schools) to the Inspector of Schools. The subject is: Promotion of the so called unadjusted B.A. B.T./B.Ed., teachers to the posts of Master on Rs. 110/250 grade It is stated there that it has been decided that 25 Per cent posts of B.T./B.Ed. Masters in Rs. 110 250 grade should be filled by promotion from amongst the teachers working in the lower grade who have passed the B.A. B.T./B.Ed. Examinations. The selection is to be made on the basis of seniority cum merit. 532 Two of the relevant rules in Punjab Educational Service Class III A school Cadre Rules, 1955 which were in force with effect from 23 May, 1957 are numbered 7 and 10. Rule 7 speaks of the method of recruitment. The methods of recruitment are: (a) by direct appointment, or (b) by transfer of an official from other Services or posts of Government in the Education Department of any Government in India, or (c) by promotion from lower grades in the service. The manner of appointment shall be strictly by selection etcetera as mentioned there. Rule 10 states that "members of the service will be entitled to such scales of pay as may be authorised by the Government from time to time. The scales of pay in force are specified in Appendix 'A ' against each post". Appendix 'A ' is an appendix to the Rules. This Appendix mentions Masters as item No. 2. The scale of pay given in item No. 2 for the posts of Masters, who are ordinary graduates with 'degree of Bachelor of Teaching or equivalent thereof is Rs. 110 8 190/10 250 whereas for M.As. and M.Scs. with the degree of Bachelor of Teaching or Masters of Teaching or their equivalent, the start of the grade is higher as already mentioned. The letter dated 23 July, 1957 revised the scales of pay with effect from 1 May, 1957. These appeals concern teachers who are in category 'A '. The revised scale given to teachers in category 'A ' is Rs. 110 8 190/10 250. Any teacher who would satisfy the test mentioned in category 'A ' would be entitled to the scale of pay. Counsel on behalf of the State contended that there was not to be a mass increase of all teachers to that grade of pay but the letter dated 23 July, 1957 meant that a teacher who passed Bachelor of Teaching examination would be entitled to be appointed a Master and on being so appointed would be entitled to the scale of pay. With regard to the letter dated 7 November 1958 which stated that 25 per cent posts of B.T./B.Ed. Masters in Rs. 110 250 grade should be filled by promotion from amongst the teachers who were in lower grade, counsel for the State contended that teachers who were qualified by possessing B.T. B.Ed. degrees would be entitled to get 25 per cent of the posts provided the respective posts according to their subject combination were vacant. Rule 10 entitles the teachers to such scales of pay as may be authorised by the Government from time to time. The letter dated 23 July, 1957 shows that teachers who possess the degree of Bachelor of Teaching or its equivalent on 1 May 1957 will be entitled to scales of pay mentioned therein. Those who will pass the examination of Bachelor of Teaching thereafter will be entitled to their revised scale of pay with effect from the date they pass the examination. The contention of the State that there was not to be a mass increase of scale of pay is unsound. Teachers who possessed degrees became entitled to scales of pay according to category 'A '. The High Court rightly referred to the letter of the Secretary of the Department dated 24 September, 1957 that teachers holding B.A., 533 B.T./B.A., B.Ed. qualifications would hence forth be placed in category 'A '. The High Court rightly came to the conclusion that the scale of pay of Rs. 110 250 would be effective either from the date when the teachers would pass the examination of Bachelor of Teaching or its equivalent or 1 May, 1957, whichever is later. The High Court, however, gave the teachers the scales of salary confined to a period of 3 years and 2 months counting back from the date of the presentation of the writ petition. In other words, the High Court did not allow the teachers any claim prior to 1967. The letter dated 7 November, 1958 was necessary because in spite of the revised grade of Rs. 110 250 having been granted to Bachelor in Teaching or equivalent thereof, they were not being appointed by process of promotion to the posts of Masters. The letter stated that "selection is to be made on the basis of seniority cum merit, due regard being paid to good reputation regarding character, popularity among students and parents and capacity to maintain discipline". The respondents claimed that according to the letter those of them who were Bachelor in Teaching or Bachelor in Education were entitled to be appointed to the posts of Masters. The teachers could not claim vacancies by promotion exceeding 25 per cent. Their claim for appointment by promotion had to take into consideration not merely their seniority but also their merit. This percentage of 25 as fixed by the letter is covered by Rule 7(ii) and the principle of selection for appointment is covered by Rule 7 clause (iii). Therefore, the earlier letter dated July 23, 1957 fixed the scale of pay on the basis of academic qualifications. The subsequent letter dated 7 November, 1958 recognised the right of promotion to the posts of Masters to the extent of 25 per cent. The High Court said that the contention of the State that the teachers could not be considered for promotion unless they satisfied the condition of subject combination namely, that if they were ordinary graduates with training qualifications, they must have studied two out of the four subjects, namely, History Geography, Economics and political Science is not supported by the letter dated 7 November, 1958. The High Court rightly said that the letter does not speak of any limitation of subject combination for promotion. Some of the teachers were from time to time promoted to the posts of Masters but never continuously beyond a period of six: months. After completion of six months, there was a break to avoid continuity in service for the posts of Masters beyond six months. The State contended that the teachers could not be considered for promotion unless the Board were satisfied that the teachers if ordinary graduate with training qualifications`must have also studied two out of four subjects of History, Geography, Economics and Political Science. The teachers on the other hand contended that once the State Government had taken a decision as embodied in the letter dated 7 November, 1958 the policy of not allowing the teachers to continue beyond six months on 534 temporary basis was nullifying the letter and spirit of the decision of the letter dated 7 November, 1958. The teachers also contended that the promotion of teachers to Masters is completely independent of any consideration like the combination of subjects. The High Court rightly held that letter dated 7 November, 1958 was subject only to two limitations. One was that teachers could not claim more than one fourth of the vacancies of the posts of Masters and the other was that the claim by way of promotion would be considered by the appointing authority on the basis of seniority cum merit. The High Court rightly held that the letter dated 7 November, 1958 was not subject to the condition of subjects combination being fulfilled. There are three categories of teachers Science Masters, Mathematics Masters and Social Studies Masters. No condition of combination of subjects can be read into the letter of 7 November, 1958. The second conclusion of the High Court is correct that the teachers were to be treated as serving in that scale of pay continuously and not on six months basis. The third conclusion which the High Court arrived is correct that the teachers were to be considered for appointment to the posts of Masters to the extent of 25 per cent quota as recognised for their category of teachers on the basis of seniority cum merit without being subjected to the condition of subject combination. The judgment of the High Court is affirmed. The appeals are dismissed. The respondents will be entitled to one set of costs. P.B.R. Appeals dismissed .

Promotion from lower grades in the service to a higher grade is one on the methods of recruitment under r. 7 of the Punjab Educational Service Class III School Cadre Rules, 1955 Rule 10 of the rules states that members of the service would be entitled to such scales as may be authorised by the government from time to time. The State Government issued letter dated 23rd July, 1957 on the subject of revision of scales of low paid government servants in which it was stated that the then existing scales of pay of certain categories of posts should, with effect from 1 May, 1957, be revised as shown therein. In that letter teachers according to their qualifications were placed in categories A and B, and the respective scales o pay to which they were entitled were mentioned. The letter dated 7 November, 1958 issued by the Deputy Director (Schools) to the Inspector of Schools stated that 25% of the posts of B.T./B.Ed. masters should be filled by promotion from amongst teachers working in the lower grade who have passed the above examinations and that the selection was to be made on the basis of seniority cum merit. The respondents who were teachers were promoted from time to time as masters but were never allowed continuously beyond six months to avoid continuity in service and were not given the revised scales. They claimed the revised scales of pay as well as the posts of masters on the ground that they had taken the degrees in Bachelor of Teaching or its equivalent, that the letter dated 23 July, 1957 which became effective from 1 May, 1957 entitled them to the revised grade if they took the degree of Bachelor of Teaching or its equivalent and that the letter of 7 November 1958 entitled them to the posts of masters to the extent of 25% on the vacancies. The High Court allowed their prayers. In appeal to this Court it was con tended by the State that (1) there was not to be a mass increase of pay of all teachers to that grade of pay but what the letter dated 23 July, 1957 meant was that a teacher who passed B.T. examination would be entitled to be appointed a master and on being so appointed would be entitled to the scale of pay. and (ii) that according to the letter of 7 November 1958 teachers who were qualified by possessing B.T./B.Ed. degrees would be entitled to get 25% of the posts provided the respective posts, according to their subject combination, were vacant. Dismissing the appeals, ^ HELD: The letter dated 23 July, 1957 fixed the scale of pay on the basis of academic qualifications while the letter dated 7 November 1958 recognised the right of promotion to the posts of masters to the extent of 25%. [533E] 1.(a) Rule 10 entitles the teachers to such scales of pay as may be authorised by the Government from time to time. Letter dated 23 July,. 1957 showed that teachers who possessed the degree of B.T. Or its equivalent on 1 May, 1957 would be entitled to scales of pay mentioned therein. Those who will pass the examination of ' B.T. thereafter would be entitled to their revised scale of pay with effect from the date they passed the examination. [532G] (b) The contention of the State that there was not to be a mass increase of scales of pay is unsound. Teachers who possessed degrees became entitled to the scales of pay according to category A. [532H] 530 (c) The High Court rightly came to the conclusion that the scale of pay would be effective either from the date when the teachers would pass the examination of B.T. Or its equivalent or I May, 1957, whichever is later. [533B] (2) The High Court rightly held that the letter dated 7 November, 1958 was subject only to two limitations namely (1) that teachers could not claim more than one fourth of the vacancies of posts of masters, and (ii) the claim by way of promotion would be considered by the appointing authority on the basis of seniority cum merit. No condition of combination of subjects could be read into the letter of 7 November 1958. The High Court was also correct in holding that the teachers were to be treated as serving in that scale of pay continuously and not on six months basis, and that the teachers were to be considered for appointment to the posts of masters to the extent of 25% quota as recognised for their category of teachers on the basis of seniority cum merit without being subjected to the condition of subject combination. [534A D]

(Criminal)No. 1339 of 1991. (Under Article 32 of the Constitution of India). R.K: Jain, A. Mariarputham, Ms. Aruna Mathut, Udai Lalit, Shankar C. Ghosh and Ms. Chanchal Ganguli for the Petitioner. The Judgment of the Court was delivered by K.N. SINGH, J. Smt. Shashi Nayar wife of Raj Gopal Nayar who has been awarded death sentence for offence under Sec tion 302 of the Indian Penal Code [ 'IPC ' for short] has approached this Court by means of this petition under Arti cle 32 of the Constitution challenging the constitutional validity of death penalty. Raj Goapal Nayar, the petitioner 's husband was tried for offence under Section 302, IPC for having killed his father and step brother. The Sessions Judge by his judgment and order dated 24.4.1986 convicted Raj Gopal Nayar and awarded sentence of death. On appeal, the High Court confirmed the death penalty and dismissed Raj Gopal 's appeal against the order of the Sessions Judge. Raj Gopal thereafter filed a special leave petition before this Court challenging the judgment and order of the Sessions Judge and the High Court, but the special leave petition was also dismissed by this Court. Review petition filed by him was also dismissed. Consequently, his conviction and the sentence of death stood confirmed by all the courts. Thereupon, he filed mercy petitions before the Governor of Jammu & Kashmir and the President of India, but the same were rejected. 'He chal lenged the order of the President of India rejecting the mercy petition before this Court by means of a writ petition under Article 32 of the Constitution, but the same was also dismissed. Another writ petition under Article 226 of the Constitution was filed before the Jammu & Kashmir High Court for quashing the sentence imposed on him but the same was also rejected. As the legal proceedings before the court failed, he was to be hanged on 26.10.1991. Shashi Nayar, the petitioner, thereupon filed the present petition under Article 32 of the Constitution before this Court challenging the validity of the capital punishment with a prayer for the quashing of the sentence awarded to Raj Gopal Nayar. The petition was entertained by a Division Bench on 25.10.1991 and the matter was referred to the Constitution Bench for consideration, and meanwhile the execution of the condemned prisoner was stayed. Mr. Ravi K. jain, learned counsel for the petitioner made the following submissions: 106 (1) Capital punishment is violative of Article 21 of the Constitution of India as the Article absolutely prohibits deprivation of a person 's life. (2) Capital punishment does not serve any social purpose and in the absence of any study, the barbaric penalty of death should not be awarded to any person as it has no deterrent effect. (3) The penalty of death sentence has a dehumanising effect on the close relations of the victims and it deprives them of their fundamental rights under Article 21 of the Constitution, to a meaningful life. (4) The execution of capital punishment by hanging is barbaric and dehumanising. This should be substituted by d some other decent and less painful method in executing the sentence. The questions raised by Shri Jain have already been consid ered by this Court in detail on more than one occasion. In Jagmohan Singh vs State of U.P.,[1973] 1 SCC 20 and in Bachan Singh vs State of Punjab, , this Court has on a detailed consideration, held that the capital punishment does not violate Article 21 of the Constitution. In Bachan Singh 's case (supra), the court considered all the questions raised in this petition except question No.4, and the majority judgment rejected the same by a detailed rea soned order. Since we fully agree with those reasons, we do not consider it necessary to reiterate the same. Learned counsel further urged that the view taken in Jagmohan Singh 's and Bachan Singh 's cases (supra) is incor rect and it requires reconsideration by a larger Bench. He, therefore, requested us to refer the matter to a larger Bench as the question relates to the life of a citizen. He urged that the award of death penalty is a serious matter as it deprives a citizen of his life in violation of Article 21 of the Constitution and as such the court should consider the matter again. We are fully conscious of the effect of the award of capital punishment. But we are of the opinion that the capital punishment as provided by the law is to be awarded in rarest of the rare cases as held by this Court. The procedure established by law for awarding the death penalty is reasonable and it does not in any way violate the mandate of Article 21 of the Constitution. Since we agree with the view taken by the majority in Bachan Singh 's and Jagmohan Singh 's cases (supra), we do not find any valid ground to refer the matter to a larger Bench. Learned coun sel urged that the majority opinion in Bachan Singh 's case (supra) was founded upon the 35th Report of the Law Commis sion submitted in 1967, which summarises the recommendations in the following words: 107 "Having regard, however, to the conditions in India, to the variety of the social upbringing of its inhabitants, to the disparity in the level of morality and education in the coun try, to the vastness of its area, to the diversity of its population and to the para mount need for maintaining law and order in the country at the present juncture India cannot risk the experiment of abolition of capital punishment." Shri Jain urged that the above Report indicates that in 1967 the Law Commission was of the opinion that the country should not take the risk of experimenting abolition of capital punishment. However, since then much water has flown. Further, there is no empirical study before the Court to show that the situation which prevailed in 1967 is still continuing. Hence, the Court should reconsider the matter. We do not find any merit in this submission. The death penalty has a deterrent effect and it does serve a social purpose. The majority opinion in Bachan Singh 's case (supra) held that having regard to the social conditions in our country the stage was not ripe for taking a risk of abolishing it. No material has been placed before us to show that the view taken in Bachan Singh 's case(supra) requires reconsideration. Further, a judicial notice can be taken of the fact that the law and order situation in the country has not only not improved since 1967 but has deteriorated over the years and is fast worsening today. The present is, therefore, the most in opportune time to reconsider the law on the subject. Hence the request for referring the matter to a larger Bench is rejected. As regards the method of execution of the capital pun ishment by hanging, this Court considered the same in detail in Deena alias Deen Dayal & Ors. etc., vs Union of India & Ors. etc. , [1983] 4 SCC 645 and held that hanging by neck was a scientific and one of the least pain ful methods of execution of the death sentence. We find no justification for taking a different view. Shri Jain, howev er, brought to our notice that a learned Judge of this Court while sitting during vacation had issued notice to the State on the question as to whether the execution by hanging is a cruel and unusual procedure. Hence, he urged that we should entertain this petition and reconsider the question. Since the question of the mode of execution of capital punishment has already been considered in detail by this Court m Deen Dayal 's case (supra), we do not find any good reason to take a different view. The question of reasonableness in the award of the capital punishment to Raj Gopal Nayar has been considered by the High Court and this 108 A Court at various stages and consistently it has been answered against the prisoner. Hence the petition fails and is accordingly dismissed. Interim relief order dated 25.10. 1991 is vacated. V.P.R. Petition dismissed.

The petitioner 's husband was tried under Section 302, IPC for having killed his father and step brother. The Sessions Judge convicted awarding sentence of death. On appeal, the High Court confirmed the death penalty against which a special leave petition before this Court was filed and same was also dismissed. The Review Petition filed by him was also dismissed. His mercy petitions filed before the Governor of Jammu & Kashmir and the President of India, were rejected. He chal lenged the order of the President of india rejecting the mercy petition before this Court in a writ petition under Article 32 of the Constitution, which was also dismissed. Another writ petition under Article 226 of the Constitu tion was filed before the Jammu & Kashmir High Court for quashing the sentence imposed on him. The High Court dis missed the same. The husband of this petitioner, the condemned prisoner, was to be hanged on 26.10.1991. The petitioner, filed the present petition under Article 32 of the Constitution challenging the validity of the capital punishment 104 with a prayer for the quashing of the sentence awarded to her husband. The petition was entertained by a Division Bench on 25.10.91 and the matter was referred to the Constitution Bench for consideration staying the execution of the condem ned prisoner. Petitioner contended that capital punishment was violative of Article 21 of the Constitution of India as the Article absolutely prohibits deprivation of a person 's life; that capital punishment did not serve any social purpose and the barbaric penalty of death should not be awarded to any person as it had no deterrent effect; that the penalty of death sentence had a dehumanising effect on the close rela tions of the victims and it deprived them of their fundamen tal rights under Article 21 of the Constitution, to a mean ingful life; that the execution of capital punishment by hanging was barbaric and dehumanising and it should be substituted by some other decent and less painful method in executing the sentence. Dismissing the petition, this Court, HELD: 1. The capital punishment as provided by the law is to be awarded in rarest of the rare cases. The procedure established by law for awarding the death penalty is reason able and it does not in any way violate the mandate of Article 21 of the Constitution. Hanging by neck was a scien tific and one of the least painful methods of execution of the death sentence. [106 G, 107 F] 2. The death penalty has a deterrent effect and it does serve a social purpose, having regard to the social condi tions in our country the stage was not ripe for taking a risk of abolishing it. [107 C D] 3. A judicial notice can be taken of the fact that the law and order situation in the country has not only not improvided since 1967 but has deteriorated over the years and is fast worsening today. The present is, therefore, the most inopportune time to reconsider the law on the subject. [107 E] Jagmohan Singh vs State of U.P.,[1973] 1 SCC 20; Bachan Singh vs State of Punjab, ; Deena alias Deen Dayal & Ors. vs Union of India & Ors. etc. , [1983] 4 SCC 645, referred to. 105

ition No. 3783 of 1978. (Under Article 32 of the Constitution of India) R.K. Garg and V.J. Francis for the Petitioner. M.M. Abdul Khader, Mrs. Shobha Dikshit and Miss A. Subhashini for the Respondents. The Judgment of the Court was delivered by PATHAK, J. The Petitioners are Radio operators Grade (lII) (Naik) in the Signals branch of the Central Reserve Police Force. They complain that under the Central Civil Services (Revised Pay) Rules, 1973 they have been placed in the pay scale Rs. 225 308 when they were entitled to the pay scale Rs. 260 430. 3 When the writ petition came on for hearing in the first instance, a Bench of this Court made an order on December 19, 1979 providing an opportunity to the petitioners to put in a representation before the Government and requiring the Government to dispose of the representation. The petitioners did make the representation and the Government considered it but the relief claimed by the petitioners was denied. In accordance with the further directions contained in the order dated December 19, 1979 this writ petition has now come on for consideration on its merits. The Central Reserve Police Force forms a part of the Ministry of Home Affairs in the Government of India, and it has a Signals branch in which one of the categories is that of Radio operators Grade III (Naik). The petitioners say that Naik Radio operators are appointed either by direct recruitment, in which case the candidate is required to be a Matriculate or his equivalent, or by promotion from the rank of Constable, in which case the Constable should have passed the Radio operators Grade III course. Originally, members of the Central Reserve Police Force of the rank of Naik enjoyed the pay scale Rs.85 110, and Naik Radio operators were given a special pay of Rs. 30 in view of their special qualifications and the specialised nature of their duties. By its order dated April 23, 1970 the Central Government appointed the Third Pay Commission to make recommendations in regard to the structure of the emoluments and the conditions of service of different classes of Central Government employees. The Commission submitted its final report to the Central Government on March, 31, 1973. Paragraph 30 of Chapter 29 of Part I of Volume 2 contains the recommendations in respect of Radio Mechanics in the Central Reserve Police Force. It states : "30. Post of Radio Mechanic, Grade I in the CRP and Sub Inspector (Radio Mechanic) in the BSF are on the scale of Rs. 150 10 290 15 380, but the Diploma holders are given the scale of Rs. 180 10 290 15 380. We recommend for these posts the scale of Rs. 380 560 but the Diploma holders working on these posts should be remune rated on the scale of Rs. 425 700. Below this level, posts of Radio Mechanic, Grade II and. the Radio operators are on 4 the scale of Rs.150 10 210 or on the scale of Rs. 125 3 131 4 155 with a special pay of Rs. 35 per month and we recommend that these posts should be given the scale of Rs. 330 480. For the posts of Radio Fitter on the scale of Rs. 125 3 131 4 155 we recommend the scale of Rs. 320 400. " Admittedly, no reference has been made therein to Radio operators Grade III (Naik). Following the recommendations of the Third Pay Commission the Central Government framed the Central Civil Services (Revised Pay) Rules, 1973 which came into force on January 1, 1973. The petitioners exercised their option in favour of the revised pay scales. They were paid a salary of Rs. 250 with a special pay of Rs. 30 from January, 1975 for a few months, together with arrears on that basis for the years 1973 and 1974. The petitioners accepted the revised pay and special pay although, they say, it fell short of the pay to which they were entitled. Subsequently, in April 1975, the petitioners were placed in the revised pay scale Rs. 225 308 given to Naiks and the excess amount paid earlier to them was sought to be recovered by deducting from future payments of their salary. Aggrieved by the refixation of their pay and the deduction of the excess already paid, they have filed the present writ petition. So far as the deduction is concerned, this Court has already directed by its order dated December 19, 1979 that the Government should restore to the petitioners the excess amount already recover ed from them. Nevertheless, it will be necessary to examine the validity of the refixation of the salary now paid to the petitioners inasmuch as that question is relevant for the period commencing from the date from which salary has been actually paid on the refixed basis. The question whether the petitioners have been properly placed in the pay scale Rs. 225 308 must be examined, therefore, from two aspects; 1, Their claim to the Pay scale Rs. 260.430 and 5 2. Alternatively, their claim to the pay of Rs. 250/ and the special pay of Rs. 30 paid to them before the refixation of their salary. On the first point, a few facts may be briefly stated. On the basis of the recommendations of the Third Pay Commission the pay scales of all Central Government employees, including personnel in the para military forces, were revised with effect from January 1, 1973. Under the original pay scales, Naik Radio operators were placed on the scale Rs.85 110 with a special pay of Rs. 30 in view of their special qualifications and the specialised nature of their duties. They were entitled to allowances calculated on the aggregate of their basic pay and special pay. The Commission prescribed a scale of Rs. 225 308 for the post of Naik, but did not make any separate recommendation in respect of the post of Radio operator Grade III (Naik). Inasmuch as before the revision of the pay scales the scale of a Naik and Radio operator Grade III (Naik) was the same, that is to say, Rs. 85 110, the revised pay scale for the post of Radio operator Grade III (Naik) was raised to the same level as that prescribed for the post of Naik, that is to say, Rs. 225 308, and in view of their special qualifications and the specialised nature of their duties Radio operators Grade III (Naik) were given a special pay of Rs. 30 also. The petitioners urge that posts in other departments of the Central Government, for which the minimum qualification was the Matriculation examination and an additional requirement of training, carried the pay scale of Rs. 260 430 and since that requirement was also the basis of appointments to the post of Radio operators Grade III (Naik) they should also be held entitled to that pay scale. Now the revised pay has been given with effect from January 1, 1973 and on that date the qualification in the case of a Naik was the Middle School examination, and it was only with effect from January 24, 19 75 that the qualification was raised to the Matriculation examination. As Naiks and Radio operators Grade III (Naik) had been uniformly treated at par in the matter of that basic s qualification it is not open to the petitioners to base their claim with reference to a qualification which did not exist on January 1, 1973. In support of their claim to the pay scale Rs. 260 430, the petitioners have drawn our attention to the circumstance that the 6 immediately next senior category, Radio operators Grade II, carries the revised scale Rs. 330 480 and, it is contended, the revised pay scale in the case of Radio operators Grade III should not be far below It is not for this Court, we think, to examine how far below should be the revised pay scale of the Radio operators Grade III. If the Government has prescribed a particular pay scale in respect of them, all that the court can do is to merely pronounce on the validity of that fixation. In the event that the court finds that the prescription is contrary to law it will strike it down and direct thee Government to take a fresh decision in the matter. It is a very different case from one where this Court has sought to prescribe pay scales in appeals directly preferred from an award of the Labour Court dealing with such a matter. In the latter case, this Court in its appellate jurisdiction can be regarded as enjoying all the jurisdiction which the Labour Court enjoys. That is not so in the present case. We are satisfied that Radio operators Grade III (Naik) have to be considered substantially on the same basis as Naiks in the Central Reserve Police Force, and it is because of their special qualifications and of the specialised nature of their duties that they have been provided a special pay in addition. It may be mentioned that ever since 1975 Radio operators Grade III (Naik) are selected only from the rank of Constables on the General Duty Side The revised pay scale of Radio operators of the rank of Head Constable as well as Head Constables on General Duty is Rs. 260 350, with a special pay of Rs. 40 to Head Constables (Radio operators). This post is the immediately next higher post above the rank of Naik, and it is apparent that there would be no justification of giving to the petitioners, who are junior in rank, the pay scale Rs. 260 430. The petitioners have also contended that they should be paid at par with comparable Government employees on the civil side. This claim is refuted by the respondents who point out that the petitioners are entitled to certain benefits not available to the others. Learned counsel for the respondents bas listed before us a number of such benefits. It is pointed out that the petitioners are entitled to casual leave for a period of twenty days as against casual leave for a period of twelve days for Government employees on The civil side, earned leave for a period of sixty days as against earned leave for a period of thirty three days for Government employees on the civil side, and rent free accommodation or house 7 allowance at 10% of the salary in contrast to Government employees on the civil side who are liable to pay 10% of the salary if accommodation is provided. We are not satisfied that the petitioners are entitled to the pay scale Rs. 260 430. The second point requires us to consider the validity of the refixation of the pay of the petitioners when they were receiving Rs. 250 with a special pay of Rs. 30 According to the recommendations of The Third Pay Commission, the existing pay scale of a Government servant drawing basic pay upto Rs. 1800 per month was to be augmented by an amount representing five per cent of the basic pay subject to a minimum of Rs. 15 and a maximum of Rs. 50. The Government of India Memorandum No. F. 67/II/23/ 74 lC dated May 17, 1974 directed that special pay was not to be included in the existing emoluments for the purpose of determining the accretion where in addition to the revised pay the Government servant was to be given a special pay also. The revised pay actually paid to the petitioners initially was computed in error inasmuch as when fixing the pay in the revised scale the special pay was taken into account for the purpose of computing the accretion. It, therefore, became necessary to recompute the amount payable to the petitioners and to reduce it to the level now paid to them. It has not been shown to us that the basis adopted for refixation of the pay is invalid. In the result, this petition fails and is dismissed, but in the circumstances there is no order as to costs. This will not affect the order dated December 19, 1979 directing the Government to restore to the petitioners the excess paid to them earlier and subsequently recovered from them. H.L.C. Petition dismissed.

An identical scale of pay was being enjoyed by both Naiks and Radio operators Grade III (Naik) in the antral Reserve Police Force before the revision of scales of pay of Central Government employees with effect from January 1,1973 consequent upon the recommendations of the Third Pay Commission. However, Radio operators Grade III (Naik) were entitled to a special pay of Rs. 30. The Pay Commission recommended the scale of pay of Rs. 225 308 for the post of Naik but did not make any separate recommendation in respect of Radio operator Grade III (Naik). The petitioners who were Radio operators Grade III (Naik) were initially paid a salary of Rs. 250 with a special pay of Rs. 30 from January 1,1973. They were subsequently placed in tho revised scale of pay of Rs. 225 308 given to Naiks with a special pay of Rs. 30 and the excess amount paid earlier was sought to be recovered from them. The petitioners contended: (i) that they were entitled to the scale of pay of Rs. 260 430 as that was the scale of pay prescribed for posts in other departments for which matriculation was the minimum qualification, (ii) that their scale of pay could not be far below the scale of pay of Rs. 330 480 prescribed for the next immediate senior post of Radio operator Grade II and (iii) that they should be paid at par with comparable government employees on the civil side. In the alternative, the petitioners contended that they were entitled to the pay of Rs. 250 and the special pay of Rs. 30 paid to them before refixation of their salary. Dismissing the petition, ^ HELD: 1. The minimum qualification prescribed for the post of Naik as on January 1,1973 was Middle School Examination and it had been raised to Matriculation Examination only from January 24, 1975. As Naiks and Radio operators Grade III (Naik) had been uniformly treated at par in the matter of that basic qualification, it was not open to the petitioners to base their claim with reference to a qualification which had not existed on January 1, 1973. [5 E G] 2 2. It was not for the Court to examine how far below should be the revised scale of pay of Radio operators Grade Ill as compared to that of Radio operators Grade II. If the Government had prescribed a particular pay scale in respect of them, all that the Court could do was to merely pronounce on the validity of that fixation. If the prescription was found contrary to law, the Court would strike it down and direct the Government to take a fresh decision in the matter. This case was very different from one where the Court had sought to prescribe scales of pay in appeals directly preferred from an award of the Labour Court dealing with such a matter. In the latter case, the Court in its appellate jurisdiction could be regarded as enjoying all the jurisdiction which the Labour Court enjoyed. [6 A C] 3. Radio operators Grade Ill (Naik) had to be considered substantially on the same basis as Naiks and it was because of their special qualifications and of the specialised nature of their duties that they had been provided with a special pay in addition. Ever since 1975 Radio operators Grade III (Naik) had been selected only from the rank of Constables on the General Duty Side. The revised pay scale of Radio operators of the rank of Head Constable as well as Head Constables on General Duty was Rs. 260 350 with a special pay of Rs. 40 to the former. As this post was the next immediate higher post above the rank of Naik. it was apparent that there was no justification for giving to the petitioners, who were junior in rank, the scale of pay of Rs. 260 430. [6 D F] 4. The petitioners could not claim to be paid at par with comparable government employees on the civil side as they were entitled to certain benefits which were not available to the latter. [6 G H; 7 A B] 5. The revised pay initially paid to the petitioners had been computed in error inasmuch as when fixing the pay in the revised scale the special pay had been wrongly taken into account. [7 D E]

Appeal No. 145 of 1955. Appeal from the judgment and decree dated the February 10, 1953, of the Bombay High Court in 65 Appeal No. 742 of 1951 from Original Decree, arising out of the judgment and decree dated July 31, 1951,, of the Court of the Senior Civil Judge, Poona, in Special ' Suit No. 89 of 1950. H. D. Banaji, R. A. Gagrat and G. Gopalakrishnan, for the appellant. H. N. Sanyal, Additional Solicitor General of India, H. J. Umrigar and R. H. Dhebar, for the respondent. January 16. The Judgment of the Court was delivered by DAS, C. J. This is an appeal from the judgment and decree of the High Court of Bombay dated February 10, 1953, setting aside the judgment and decree of the Court of Civil Judge, Senior Division, Poona dated July 31, 1951, in Special Suit No. 89 of 1950 and dismissing the appellant 's suit against the respondent with costs throughout. This appeal has been filed under a certificate of fitness granted by the High Court of Bombay. The facts leading up to this appeal may shortly be stated. The appellant is a public limited company registered under the Indian Companies Act, 1913. It is a lessee of two cinema Houses known respectively as " West End " and " Capitol " situated within the limits of Poona cantonment area. It exhibits in the said two Houses cinematograph films, both foreign and Indian. On March 20, 1947, a notice was issued by the respondent whereby, in exercise of the powers conferred on it by section 60 of the (11 of 1924), the respondent proposed to make, with the previous sanction of the Central Government, certain amendments in the notification of the Government of Bombay in the General Department No. 4160 dated June 17, 1918, and intimated that the draft amendments would be considered by the respondent on or after April 21, 1947, and invited objection in writing within 30 days from the publication of that notice. One of the items of amendments was as follows: "(ii) 'V Tax on Entertainments ' 9 66 1. Cinemas, Talkies or Rs. 5 0 0 per dramas Rs. 10 0 0 show 2. Circus Rs. 20 0 0 per show 3. Horse Races Rs. 100 0 0 per day of race meeting. 4. Amusement park Rs. 20 0 0 per day provided as follows: 1. The said tax shall be levied at the rate of Rs. 10 0 0 per show in the case of the West End and Capitol Talkies and at the rate of Rs. 5 0 0 per show in other cases ". It appears that the Cinematograph Exhibitors Association of India submitted certain objections to the proposals. The Cantonment Executive Officer, Poona, by his letter dated July 8, 1947, informed the Secretary of the Cinematograph Exhibitors Association of India that the latter 's letter had been submitted to the Government of India in original along with the respondent 's proposals and that the imposition of the entertainments tax on cinemas had been approved by the Government of India, Defence Department notification No. 1463 dated May 7, 1947. On June 17,1948, a notification was issued by the Government of Bombay to the effect that in supersession of the notifications of Government noted on the margin and of all other notifications on the same subject, the Governor in Council, with the previous sanction of the Governor General in Council was pleased to impose certain taxes in the Cantonment of Poona with effect from July 15, 1948. One of the taxes thus imposed was as follows: " V Tax on entertainments. Cinemas, Talkies or dramas Rs. 10.0 0 :in the case of the West End per show and Capitol In other cases Rs. 5 0 0 per show 2. Circus Rs. 2 0 0 per show 3. Horse Races Rs. 100 0 0 per day of race meetings. 4. Amusement park Rs. 20 0 0 per day. " 67 The appellant paid the tax under protest and on or about April 19, 1950, filed a suit (being suit No. 89 of 1950) against the respondent in the Court of the Civil Judge, Senior Division, Poona for a declaration that the levy, collection or recovery of the said tax by the respondent was illegal and invalid, for a permanent injunction restraining the respondent from levying, collecting or recovering the said tax, for refund of the sum of Rs. 45,802 0 0 being the total amount of tax collected from the appellant, for costs and interest on judgment. By its judgment dated July 31, 1951, the trial court decreed the suit in full. The respondent preferred an appeal before the High Court against the said judgment and decree of the trial court and the High Court by its judgment and decree dated February 10, 1953, allowed the appeal and dismissed the appellant 's suit with costs throughout. The High Court, however, granted to the appellant a certificate of fitness for appeal to this Court and hence this final appeal questioning the validity of the said tax. At all times material to this appeal the respondent was governed by the (Act 11 of 1924). Section 60 of that Act runs as follows: " 60(1) The Board may, with the previous sanction of the local Government, impose in any Cantonment any tax which, under any enactment for the time being in force, may be imposed in any municipality in the province wherein the Cantonment is situated. (2) Any tax imposed under this section shall take effect from the date of its notification in the official gazette ". The enactment under which shortly after the date of passing of the , tax could be imposed by the municipal boroughs in the province of Bombay was the Bombay Municipal Boroughs Act, 1925 (Bom. XVIII of 1925). Therefore the powers of the respondent to. levy and collect taxes under the provisions of the were co extensive with the powers of the Borough Municipalities under the Bombay Municipal Boroughs Act, 1925. Section 73 of the last mentioned Act specified the taxes which 68 might be imposed by a municipality. The relevant portions thereof, prior to its present adaptation, were as follows: " Subject to any general or special orders which the Provincial Government may make in this behalf and to the provisions of sections 75 and 76, a municipality may impose for the purposes of this Act any of the following taxes, namely: (xiv) any other tax (not being a toll on motor vehicles and trailers. , save as provided by section 14 of the Bombay Motor Vehicles Tax Act, 1935) which under the Government of India Act, 1935, the provincial Legislature has power to impose in the province. " The question is whether the provincial legislature of Bombay had power to impose the tax which is under consideration in this appeal. Under section 100 of the Government of India Act, 1935 read with entry 50 in Sch. VII thereto the provincial legislature had power to make law with respect to " taxes on luxuries, including taxes on entertainments, amusements, betting and gambling ". Learned counsel for the appellant contends that the impugned tax is not covered by this entry at all. This entry, according to him, contemplates a law imposing taxes on persons who receive or enjoy the luxuries or the enter tainments or the amusements and, therefore, no law made with respect to matters covered by this entry can impose a tax on persons who provide the luxuries, entertainments or amusements, for the last mentioned persons themselves receive or enjoy no luxury or entertainment or amusement, but simply carry on their profession, trade or calling. Learned counsel urges that the impugned law is really one with respect to matters specified in entry 46, namely, taxes on professions, trades, callings and employments and, there fore, cannot exceed Rs. 100 per annum under section 142A of the Government of India Act, 1935 and Rs. 250 per annum under article 276(2) of the Constitution. We are unable to accept this argument as sound. 69 As pointed out by this ' Court in Navinchandra Mafatlal vs The Commissioner of Income Tax, Bombay City (1), following certain earlier decisions referred to therein, the entries in the legislative list should not be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. It has been accepted as well settled that in construing such an entry conferring legislative powers the widest possible con struction according to their ordinary meaning must be put upon the words used therein. In view of this well established rule of interpretation, there can be no reason to construe the words " taxes on luxuries or entertainments or amusements " in entry 50 as having a restricted meaning so as to confine the operation of the law to be made thereunder only to taxes on persons receiving the luxuries, entertainments, or amusements. The entry contemplates luxuries, entertainments, and amusements as objects on which the tax is to be imposed. If the words are to be so regard ed, as we think they must, there can be no reason to differentiate between the giver and the receiver of the luxuries, entertainments, or amusements and both may, with equal propriety, be made amenable to the tax. It is true that economists regard an entertainment tax as a tax on expenditure and, indeed, when the tax is imposed on the receiver of the entertainment, it does become a tax on expenditure, but there is no warrant for holding that entry 50 contemplates only a tax on moneys spent on luxuries, entertainments or amusements. The entry, as we have said, contemplates a law with respect to these matters regarded as objects and a law which imposes tax on the act of entertaining is within the entry whether it falls on the giver or the receiver of that entertainment. Nor is the impugned tax a tax imposed for the privilege of carrying on any trade or calling. It is a tax imposed on every show, that is to say, on every instance of the exercise of the particular trade, calling or employment. If there is no show, there is no tax. A (1) [1955] 1 S.C.R. 829. 70 lawyer has to pay a tax or fee to take out a license irrespective of whether or not he actually practises. That tax is a tax for the privilege of having the right to exercise the profession if and when the person taking out the license chooses to do so. The impugned tax is a tax on the act of entertainment resulting in a show. In our opinion, therefore, section 73 is a law with respect to matters enumerated in entry 50 and not entry 46 and the Bombay legislature had ample power to enact this law. The only other point urged before us is that the notification is violative of the equal protection clause of our Constitution in that it has picked out the appellant 's cinema houses for discriminatory treatment by imposing on it a tax at the rate of Rs. 10 per show, while a tax of only Rs. 5 per show is imposed on other cinema houses. The meaning, scope, and effect of the provisions of article 14 of our Constitution have been fully dealt with, analysed and laid down by this Court in Budhan Choudhury vs The State of Bihar (1) and Shri Rama Krishna Dalmia vs Shri Justice section R. Tendolkar (2). It appears, however, from the record that no issue was raised and no evidence was adduced by the appellant before the trial court showing that there were other cinema Houses similarly situate as that of the appellant 's cinema Houses. It may not be unreasonable or improper if a higher tax is imposed on the shows given by a cinema house which contains large seating accommodation and is situate in fashionable or busy localities where the number of visitors is more numerous and in more affluent circumstances than the tax that may be im. posed on shows given in a smaller cinema house containing less accommodation and situate in some localities where the visitors are less numerous or financially in less affluent circumstances, for the two cannot, in those circumstances, be said to be similarly situate. There was, however, no material on which the trial court could or we may now come to a decision as to whether there had been any real discrimination in the facts and circumstances of this case. It (1) (2) ; 71 may be that the appellant may in some future proceeding adduce evidence to establish that there are other cinema houses similarly situate and that the imposition of a higher tax on the appellant is discriminatory as to which we say nothing; but all we need say is that in this suit the appellant has not discharged the onus that was on him and, on the material on record, it is impossible for us to hold in this case that there has been any discrimination in fact. For reasons stated above this appeal must be dismissed with costs.

The appellant, a public limited company, was the lessee of wo cinema houses, " West, End " and " Capitol " situated within the Poona cantonment area. , By a notification dated June 17, 1948, the Bombay Government with the sanction of the Governor General in Council imposed certain taxes in the cantonment of Poona including an entertainment tax of Rs. 10 per show on the appellant 's cinema houses and Rs. 5 per show on others. The appellant, who paid the tax under protest, brought the suit, out of which the present appeal arose, for a declaration that the 64 imposition of the said tax by the respondent was illegal, for a permanent injunction restraining it from levying the tax and for the refund of Rs. 45,802, paid as tax by the appellant. The trial Court decreed the suit but the High Court, on appeal by the respondent, reversed the decision of the trial Court and dismissed the suit. ' Under section 60(1) of the (11 Of 1924), read with section 73 (xiv) Of the Bombay Municipal Boroughs Act, 1925 (Bom. XVIII of 1925), the respondent had the power to impose any other tax which the Bombay Provincial Legislature could impose on the province. The question, therefore, was whether the Bombay Legislature had the power to impose the tax in question. It was contended on behalf of the appellant that although the Provincial Legislature had undoubtedly the power under section 100 of the Government of India Act, 1935, read with Entry 50 in Sch. VII thereto, to make law with respect to " taxes on luxuries, including taxes on entertainments, amusements, betting and gambling ", the said entry contemplated a law imposing taxes on persons who enjoyed the luxuries, entertainments or amusements and not on persons who provided them. Such a tax, if levied on the latter would be one on profession, trade or calling as contemplated by Entry 46 of the said Schedule and could not exceed Rs. 100 per annum under section 142A of the Government of India Act, 1935, and Rs. 250 per annum under article 276(2) of the Constitution. Held, that the contention must be negatived. It is well settled that in construing an entry conferring legislative powers, the widest possible construction according to their ordinary meaning must be given to the words used. There could be no reason, therefore, in construing Entry 50, to differentiate between the giver and the receiver of the luxuries, entertainments or amusements and both must be held to be amenable to the tax. Navinchandra Mafatlal vs The Commissioner of Income tax, Bombay City, , referred to. Although an entertainment tax was regarded as a tax on expenditure, there was no warrant for holding that Entry 50 contemplated only a tax on moneys spent on luxuries, entertainments or amusements. What it had in view were these matters, and not either the giver or the receiver of them, as the real objects of legislation. The impugned tax was distinguishable from a tax on a pro fession or calling. It was a tax imposed on an actual show, and not on a profession or calling whether there was an exercise of it or not.

on rule 12.14(3) of the Punjab Police Rules, 1934 which provided that "sons and near relatives of person who have done good service in the Punjab Police or in the Army shall, subject to the consideration imposed by rule 12.12 have preference over the other candi dates for police employment". Under rule 30 of the Rules any relaxation should be made by the Administrator (Lt. Governor of the Union territory of Delhi) and not by the Deputy Commissioner of Police. Thus no reliance can be placed on the order of relaxation passed by the Deputy Commissioner of Police on 3.10.1981 and since by the letter dated April 3, 1982 the Delhi Administration had imposed an additional condition in respect of the wards of Delhi 53 Policemen/Class IV employees that only one son of police personnel/ Class IV employee would be considered for gram of such relaxation the appellants cannot claim that they were entitled to be recruited because admittedly their brothers had already been recruited in the Delhi Police service on the basis of an earlier order of relaxation. [63C F] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2547 of 1985. From the Judgment and Order dated 15.5.1984 of the Delhi High Court in L.P.A. No. 157 of 1983 S.A.K. Dar and P.D. Sharma for the Appellants. Anand Prakash, N.D. Garg, Miss Sushma Relan for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, J. The above appeal by special leave arises out of a writ petition filed by the appellants in the High Court of Delhi for the issue of a direction to the Delhi Administration to appoint them as police Constables. Prior to the coming into force of the (Act No. 34 of 1978) (hereinafter referred to as 'the Act ') with effect from the 1st day of July, 1978, there was in force in the Union territory of Delhi the . On the commencement of the Act, the , 186 1 ceased to be in force in Delhi by virtue of section 149 of the Act. The first proviso to section 149(1) of the Act, however, provided that all rules and standing orders (in cluding the Punjab Police Rules, as in force in Delhi) made under the would be in solar as they were consistent with the Act be deemed to have been respectively made under the Act. Accordingly the Punjab Police Rules, 1934 as in force in Delhi which had been enacted under the continued to be in force even after the commencement of the Act. Chapter 12 of the Punjab Police Rules, 1934 contained the rules relating to the appointments and enrolments of Assistant Superintendents of Police, Deputy Superintendents of Police, Inspectors, Sergeants, Assistant Sub Inspectors, Range Auditors, Head Constables and Constables. Recruitment to the cadre of Constables was done under rules 12.12 to 12.22 of the Punjab Police Rules, 1934. Rules 12.14 and 12.15 dealt with the status of the recruits, 54 the qualifications, age and the physicial standards which the recruits had to satisfy. Rules 12.14 and 12.15 of the Punjab Police Rules, 1934 read as follows: "12.14. Recruits Status of. (1) Recruits shall be of good character and great care shall be taken in selecting men of a type suitable for police service from candidates present ing themselves for enrolment. (2) The enlistment in the police of Gurkhas of Nepalese nationality is absolutely forbidden. The enlistment of Gurkhas, who can prove British nationality or continuous domicile, is permitted, but only with the formal sanction of the Deputy Inspector General. Before giving sanction the Deputy Inspector General should verify the nationality of the proposed recruit by a reference to the recruiting Offi cer for Gurkhas. (3) Sons and near relatives of persons who have done good service in the Punjab Police or in the Army shall, subject to the consideration imposed by rule 12.12 have preference over the other candidates for police employment. 12.15. Recruits age and physical standards of. (1) Recruits shall be not more than 25, or less than 18 years of age, at the time of enrolment, and shall have a minimum height of 5 ' 7" and normal chest measurement of 33", with expansion of 11/2 inches. These,physical standards shall not be relaxed without the general or special sanction of the Deputy Inspector General. A general reduction of the stand ard may be allowed by Deputy Inspectors General in the case of special castes or classes, which provide desirable re cruits, but whose general height does not come up to that prescribed. In such cases a standard of chest measurement and general physique shall be fixed, which will permit the enlistment of strong and well proportioned youths of the class in question. (2) The greatest care shall be taken to ensure that the age of every police officer is correctly recorded at the time of his enrolment and appointment. The record then made becomes of utmost importance when the question arises of 55 an officer 's fight to pension, and is accepted as decisive in the absence of full proof both that the original entry was wrong and that the date of birth originally given was due to a bona fide mistake. A copy of this rule shall be pasted inside the cover of the recruit register (form 12.13) and the attention of the Civil Surgeon shall be drawn to it. " Section 147 of the Act authorises the Administrator (Lt. Governor of the Union territory of Delhi) to make rules for carrying out the purposes of the Act. Clause (a) of section 147 (2) of the Act expressly states that such rules may provide for recruitment to, and the pay, allowances and all other conditions of service of the members of, the Delhi police under clause (b) of section 5. In exercise of the said power the Administrator (Lt. Governor of the Union territory of Delhi) promulgated the Delhi Police (Appoint ment and Recruitment) Rules, 1980 (hereinafter referred to as "the Rules") providing for the appointments of Inspec tors, Sub Inspectors, Assistant Sub Inspectors, Head Consta bles and Constables. Rule 9 of the Rules laid down the procedure for the recruitment of the Constables. The said rule, as it was originally promulgated, read as follows: "9. Recruitment of Constables. Delhi being a cosmopolitan city, it is imperative to attract candidates from all parts of the country. (ii) The recruitment of constables shall be done twice a year in the months of January and July by the Board to be nominated by Commissioner of Police as per rule 8. (iii) The Commissioner of Police may also order special recruitment at any time if there are sufficient number of vacancies and the panels prepared earlier have exhausted. (iv) A panel shall be drawn up of selected candi dates on the basis of existing and anticipated vacancies. This panel shall be valid till the next recruitment is held. (v) Physical, educational, age and other standards for recruitment to the rank of constables shall be as under: 56 (a) Age 18 21 years Relaxable by 5 years for (i) Scheduled Caste/Scheduled Tribes candidates (ii) Sportsmen of distinction. (iii) Ex servicemens per rule 28 of these rules. (b) Height 170 Centi Relaxable by 4 centimeters meters for residents of Hill area e.g. Gurkhas, Garwalis. (c) Chest 170 Centi Relaxable by 2 centimeters meters for residents of hill areas. (d) Educa Matric/ Relaxable up to 9th pass tional Higher only for: Qualifi Secondary (i) Bandsmen, buglers, cation 10th of mounted Constables, drivers, 10 plus 2 despatch riders etc. (ii) for sons of police personnel who die in service. (e)Physical Sound state No relaxation permissible. standard of health, free from defect/ deformity/ disease, vision 6/12 without glasses both eyes, free from colour blindness. (f) Reserva (i) For Scheduled Castes, tion of Scheduled Tribes, Ex service vacancies men etc. as per orders issued by Government from time to time. (ii) For sons of police personnel not more than 5 % of vacancies. 57 (vi) The Commissioner of Police shall frame stand ing orders prescribing application forms and detailed proce dure to be followed for conducting physical efficiency, physical measurement, written tests and viva voce for regu lating the above mentioned recruitment. The Rules were amended by the Administrator (Lt. Gover nor of the Union territory of Delhi on May 2, 1983 and one of the amendments made on that occasion was the addition of rule 32 to the Rules. The new rule 32 of the Rules read as follows: "All provisions contained in the Punjab Police Rules as applicable to the Union territory of Delhi, relating to appointments and recruitment of employees are hereby re pealed, subject to the provisions as contained in the provi sos to sub section (1) and (2) of section 149 of the . " The Rules were again amended in 1985. On that occasion rule 9 of the Rules which provided for the recruitment of the Constables was amended but we are not concerned with these amendments made in the year 1985 since we are con cerned in this case with the rules which were in force prior to the above said amendment. Rule 30 of the Rules which is relevant for purposes of this case reads as follows: "30 Power to relax. When the Administrator is of the opinion that it is necessary or expedient so to do, he may, by order, for reasons to be recorded in writing, relax any of the provisions of these Rules with respect to any class, category, or persons or posts or in an individual case. " As stated at the commencement, this appeal arises out of the writ petition bearing No. C.W .P. No. 1891 of 1982 on the file of the High Court of Delhi filed under Article 226 of the Constitution. The said writ petition was filed by 23 petitioners, who were applicants for the posts of Constables in the Delhi Police Force governed by the Act. They prayed for the issue of a writ to the Delhi Administration to appoint them as Constables and for other consequential reliefs. None of them was fully qualified to be recruited as a Constable under the Rules. But being the sons of Delhi policemen, they depended upon an order date 3.10.1981 passed by the Deputy Commissioner of Police Headquarters (I) Delhi under which he had relaxed the rules relating 58 to the qualifications in favour of the sons or wards of Delhi policemen. The relevant part of the said order dated 3.10.1981 reads thus: "The wards of Delhi policemen should be given the following concessions in age, educational qualifications and physical standards, etc., for recruitment as Constables in Delhi Police: 1. Age Upto 25 years 2. Educational 9th Pass Qualifications 3. Height 5 ' 5" 4. Chest 2" Relaxation. All those wards of Delhi Police Personnel who conform to the qualifications laid down above should be ' allowed to appear in the physical and written tests. Their forms should be accepted as it was being done before the introduction of New Rules. The last date for acceptance of forms may be enhanced from 3rd Oct., 1981 to 15th October, 1981 and forms should be sold during holidays also. sd/ A.K. Aggarwal Deputy Commissioner of Police, HQ (1) Delhi No. 19512 45/SIP dated Delhi, the 3 10 81. " The appellants were eligible to be considered for the appointment as Constables in the light of the order of relaxation referred to above but even then they were not sent up for training which they had to undergo before the appointment because six of them were found to be ineligible since their brothers had already been recruited in the Police Department by relaxing the rules of appointment in their favour. 15 of them were refused permission to join the training course on the ground that the Administrator (Lt. Governor of Union territory of Delhi) had not relaxed the qualifications in their cases. Two of them, however, had in fact received a letter stating that the Administrator (Lt. Governor of the Union territory of Delhi) had accorded sanction for relaxation for recruitment in their cases and they could join the training course with effect from 15.6.1982 but later on they 59 were also denied admission into the Police force because their brothers had been recruited earlier the Delhi Police service after according relaxation. The order of relaxation in their favour had, therefore, been withdrawn. The appel lants who were thus aggrieved by the denial of admission into the service preferred the above mentioned writ petition in the High Court for the issue of writ of mandamus to the Delhi Administration to appoint them as Constables on the ground that they satisfied the qualifications prescribed by the rules read with the order of relaxation dated 3.10.1981 referred to above. The petition was resisted by the Delhi Administration. It was contended on behalf of the Delhi Administration that the order of relaxation which had been passed on 3.10.1981 was not a valid one because (i) it had been passed on the assumption that rule 12.14(3) of the Punjab Police Rules, 1934 was in force on the date on which it was passed but in fact the said rule stood repealed on the coming into force of the Rules on 31.12.1980 framed under section 147 of the Act and (ii) under rule 30 of the Rules relaxation of quali fications could be made by the Administrator (Lt. Governor) not by the Deputy Commissioner of Police. The Delhi Adminis tration further alleged that Standing Order No. 2 12 of 198 1 had been issued in connection with the recruitment of Constables in Delhi Police and clause 10 of the said Stand ing Order No. 212 read as follows: "10. RELAXATION: (i) No relaxation in qualifications/standards mentioned in this Standing Order shall be given except in the cases and manner as laid down in the Delhi Police (Appointment and Recruitment) Rules, 1980. (iii) Children of Police officers of subordinate rank serv ing or those who die in office will be granted 5 marks in the written test as bonus. Relaxation in other standards will not be given excepting with the sanction of competent authority. ' ' Standing Order No. 212 of 1981 referred to above was further amended as follows: "The wards of the Delhi Policemen will, however, be given 60 the following concessions in age, educational qualifications and physical standards, to enable them to take the physical and written tests: (1) Age Upto 25 years (2) Educational 9th Pass Qualification (3) Height 5 ' 5" (4) Chest 2 inches relaxation However, their enlistment would be done only in case of relaxation being granted by the competent authority and mere fact that a candidate has qualified in the test will not in itself give him a right to enlistment. " The Delhi Administration, however, agreed to grant relaxation to the wards of Delhi Policemen/Class IV employ ees only upto the limit of 71/2% of the total selection. Accordingly the Police authorities in charge of the selec tion of candidates recommended cases of 259 candidates out of a total of 420 candidates who came within the category of wards of Policemen/Class IV employees (within the limit of 71/2 % of the total selection) to the Delhi Administration for seeking approval of the competent authority on the basis of the following criteria: "(i) Only one son of police personnel/class IV employee to be considered for grant of such relaxation. (ii) First preference to be given to wards of deceased, retired and incapacitated policemen and class IV employees. (iii) Selection of the remaining candidates to be done, in order of merit in the tests within the maximum permissible limit of 7 11/2% provided that they do not need relaxation in more than two standards. (iv) With regard to Scheduled Castes and Scheduled Tribes candidates who are the wards of Delhi Police person nel, the lowering of the limit of qualifying percentage would also be applicable in addition. 61 The aforesaid recommendations having been accepted by the competent authority the police authorities allowed the candidates whose cases were covered by the above criteria and the fixed percentage of 71/2% of such appointment to join the training course. Since the case of the appellants were not covered by the above criteria they were treated as being not eligible to be appointed as Constables. After hearing the learned counsel for both the parties the learned Single Judge who heard the writ petition allowed it by his judgment dated July 21, 1983. He held that the Punjab Police Rules, 1934 continued to remain in force even after the promulgation of the Rules which came into force on 31.12. 1980 and the cases of the appellants were protected by the relaxation order dated 3.10.1981 issued by the Deputy Commissioner of Police and the fact that any of the brothers of the appellants had been appointed earlier under the cover of similar order of relaxation did not disentitle the appel lants to claim the benefit of the order of relaxation. The learned Judge was, therefore, of the view that the appel lants were entitled to be appointed as Constables. Since two of the appellants had already been sent for training under the two letters of relaxation issued in their favour the learned Judge issued a writ directing the Delhi Administra tion to send the remaining 21 candidates also for training and to appoint them as Constables after the completion of their training. Aggrieved by the decision of the learned Single Judge the Union of India and the Delhi Administration filed an appeal before the Division Bench of the High Court in Let ters Patent Appeal No. 157 of 1983. The Division Bench held that on the promulgation of the Rules with effect from 31.12.1980, rule 12.14(3) of the Punjab Police Rules, 1934 which dealt with the subject of appointment of Constables stood repealed. It further held that under rule 30 of the Rules the power to relax the Rules in appropriate cases having been vested with the Administrator (Lt. Governor of the Union territory of Delhi) the order of relaxation issued by the Deputy Commissioner of Police on 3.10.1981 did not give any right to the appellants for enlishment as Consta bles unless relaxation was granted by the competent authori ty i.e. the Administrator (Lt. Governor of the Union terri tory of Delhi) and the mere fact that a candidate was suc cessful in the test by itself would not give him a right to enlistment. The Court further held that since by its letter dated April 3, 1982 the Delhi Administration had decided that only one son of a police officer would be considered for grant of such relaxation the appellants whose brothers had already been employed in the police service on the basis of an earlier order of 62 relaxation were not entitled to be recruited by relaxing the Rules once again. Accordingly the judgment of the learned Single Judge was set aside by the Division Bench and the writ petition filed by the petitioners therein was dis missed. Aggrieved by the decision of the Division Bench the appellants filed this appeal by special leave. The first point which requires to be considered is whether the Punjab Police Rules, 1934 in so far as they related to the recruitment to the post of Constables was concerned were in force after the promulgation of the Rules on 31.12.1980. It is urged on behalf of the appellants that since rule 32 which provided that "all provisions contained in the Punjab Police Rules as applicable to the Union terri tory of Delhi, relating to the appointments and recruitment of employees are hereby repealed, subject to the provisions as contained in the provisos to sub sections (1) and (2) of section 149 of the " had been intro duced by an amendment of the Rules on May 2, 1983 it must be presumed that the Punjab Police Rules, 1934 in so far as they related to the recruitment and appointment of Consta bles remained in force till May 2, 1983. The contention of the Delhi Administration is that the said rule had been introduced by way of abundant caution although in fact the Punjab Police Rules, 1934 had ceased to be in force on 31.12.1980 and the mere addition of rule 32 did not have the effect of keeping the relevant Punjab Police Rules, 1934 alive after December 31, 1980. We are of the view that the Division Bench was right in accepting the plea urged on behalf of the Delhi Administration in this regard. Section 149(2) of the Act no doubt provided that the rules framed under the of 1861 would continue to be in force after the Act came into force in so far as they were con sistent with the Act but at the same time section 147 of the Act authorised the Administrator (Lt. Governor of the Union territory of Delhi) to make rules regarding recruitment to, and the pay, allowances and all other conditions of service of the members of the Delhi Police under clause (b) of section 5. It is not disputed that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 and the rules promulgated on December 31,1980 dealt with the identical subject, name ly, the appointment and recruitment of Constables to the Delhi police service. Therefore, on the promulgation of the Rules on December 31, 1980 which covered the subject dealt with by rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 had the effect of repealing by necessary impli cation rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 even though initially there was no express 63 provision in the Rules to the effect that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 stood repealed with effect from December 31, 1980. It is well settled that when a competent authority makes a new law which is totally inconsistent with the earlier law and that the two cannot stand together any longer it must be construed that the earlier law had been repealed by necessary implication by the later law. Applying the above test it has to be held in this case that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 stood repealed with effect from December 31, 1980 and rule 32 of the Rules which was introduced by way of amendment on May 2, 1983 had not the effect reviving rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 and keeping them alive beyond December 31, 1980 upto May 2, 1983. When once this conclusion is reached it follows that the appellants cannot rely upon rule 12.14(3) of the Punjab Police Rules, 1934 which provided that "sons and near rela tives of person who have done good service in the Punjab Police or in the Army shall, subject to the consideration imposed by rule 12.12 have preference over the other candi dates for police employment". Under rule 30 of the Rules any relaxation should be made by the Administrator (Lt. Governor of the Union territory of Delhi) and not by the Deputy Commissioner of Police. Thus no reliance can be placed on the order of relaxation passed by the Deputy Commissioner of Police on 3.10.1981 and since by the letter dated April 3, 1982 the Delhi Administration had imposed an additional condition in respect of the wards of Delhi Policemen/Class IV employees that only one son of police personnel/Class IV employees would be considered for grant of such relaxation the appellants cannot claim that they were entitled to be recruited because admittedly their brothers had already been recruited in the Delhi Police service on the basis of an earlier order of relaxation. The appellants have not, there fore, made out any case in support of their plea. We should, however, point out at this stage a fundamen tal defect in the claim of the appellants, namely, that rule 12.14(3) of the Punjab Police Rules, 1934 which authorised the granting of preference in favour of sons and near rela tives of persons serving in the police service became uncon stitutional on the coming into force of the Constitution. Clauses (1) and (2) of Article 16 of the Constitution which are material for this case read thus: "16. (1) There shall be equality of opportunity for all citizens in matters relating to employment or ap pointment to any office under the State. 64 (2) No citizen shall, on grounds only of religion, race caste, sex, descent, place of birth, residence or any of them, be ineligible. for, or discriminated against in respect of, any employment or office under the State. " While it may be permissible to appoint a person who is the son of a police officer who dies in service or who is incapacitated while rendering service in the Police Depart ment, a provision which confers a preferential fight to appointment on the children or wards or other relatives of the police officers either in service or retired merely because they happen to be children or wards or other rela tives of such police officers would be contrary to Article 16 of the Constitution. Opportunity to get into public service should be extended to all the citizens equally and should not be confined to any extent to the descendants or relatives of a person already in the service of the State or who has retired from the service. In Gazula Dasaratha Rama Rao vs The State of Andhra Pradesh & Others, ; the question relating to the constitutional validity of section 6(1) of the Madras Hereditary Village Offices Act, 1895 (3 of 1895) came up for consideration before this Court. That section provided that where two or more villages or portions thereof were grouped together or amalgamated so as to form a single new village or where any village was divided into two or more villages all the village officers of the class defined in section 3, clause (1) of that Act in the villages or portions of the villages or village amalga mated or divided as aforesaid would cease to exist and the new offices which were created for the new village or vil lages should be filled up by the Collector by selecting the persons whom he considered best qualified from among the families of the last holders of the offices which had been abolished. This Court held that the said provision which required the Collector to fill up the said new offices by selecting persons from among the families of the last hold ers of the offices was opposed to Article 16 of the Consti tution. The Court observed in that connection at pages 940 941 and 946 947 thus: "Article 14 enshrines the fundamental fight of equality before the law or the equal protection of the laws within the territory of India. It is available to all, irrespective of whether the person claiming it is a citizen or not. Article 15 prohibits discrimination on some special grounds religion, race, caste, sex, place of birth or any of them. It is available to citizens only, but is not re stricted to any employment or office under the State. Arti cle 16 cl. (1), guarantees equality of opportunity for all citizens in matters 65 relating to employment or appointment to any office under the State; and cl. (2) prohibits discrimination on certain grounds in respect of any such employment or appointment. It would thus appear that article 14 guarantees the general right of equality; articles 15 and 16 are instances of the same right in favour of citizens in some special circumstances. Arti cles 15 is more general than article 16, the latter being confined to matters relating to employment or appointment to any office under the State. It is also worthy of note that article 15 does not mention 'descent ' as one of the prohibited grounds of discrimination, whareas article 16 does. We do not see any reason why the full ambit of the fundamental right guaranteed by article 16 in the matter of employment or ap pointment to any office under the State should be cut down by a reference to the provisions in Part XIV of the Consti tution which relate to Services or to provisions in the earlier Constitution Acts relating to the same subject . . . . . . . . . . . . . ,. (Pages 940 941). There can be no doubt that s.6(1) of the Act does embody a principle of discrimination on the ground of de scent only. It says that in choosing the person to fill the new offices, the Collector shall select the persons whom he may consider the best qualified from among the families of the last holders of the offices which have been abolished. This, in our opinion, is discrimination on the ground of descent only and is in contravention of article 16(2) of the Constitution." (Pages 946 947). We are of opinion that the claim made by the appellants for the relaxation of the Rules in their cases only because they happen to be the wards or children or relatives of the police officers has got to be negatived since their claim is based on 'descent ' only, and others will thereby be discrim inated against as they do not happen to be the sons of police officers. Any preference shown in the matter of public employment on the grounds of descent only has to be declared as unconstitutional. The appellants have not shown that they were otherwise eligible to be recruited as Consta bles in the absence of the order of relaxation on which they relied. Hence they cannot succeed. 66 We, however, make it clear that this judgment shall not affect the appointments of sons or wards of police officers already made by relaxing the Rules and they shall remain undisturbed. In the result the appeal fails and it is dismissed. There shall, however, be no order as to costs. S.R. Appeal dis missed.

Delhi Police (Appointment and Recruitment) Rules, 1980, Whether supersedes the earlier Punjab Police Rules, 1934, though it is deemed to be in force by virtue of section 149(2) of the Delhi Police Act, 1978 Construction of a New law. , sections 147 and 149 Scope and effect of, explained Rules 30 and 32 of the 1980 Police Rules. The (Act 34/78) which came into force with effect from 1.7. 1978 by virtue of section 149 thereof repealed the earlier Act of 1861. However, the first proviso to section 149(1) provided that all rules and stand ing Orders (including the Punjab Police Rules, as in force in Delhi) made under the would be in so far as they were consistent with the Act may be deemed to have been respectively made under the Act. Consequently the said 1934 Rules continued to be in force even after the commence ment of the Act. By virtue of the authority vested under section 147(2)(a) of the 1978 Act, the Lt. Governor of Delhi promulgated the Delhi Police (Appointment and Recruitment) Rules, 1980. The said Rules which came into effect from 31.12.80 were amended twice in 1983 and 1985. By the newly added Rule 32 on 2.5.83, all provisions contained in the Punjab Police Rules as applicable to the Union Territory of Delhi were repealed. While under the earlier Rule 12.14.(3) of the Punjab Police Rules, sons and near relatives of persons who have done good service in Punjab Police or in the Army had preference in recruitment, under the new Rule 9(vi)(d)(ii) relaxation of the age limit alone was provided for "for sons of police personnel who die in service". Despite this Rule position, the Deputy Commissioner of Police Headquarters (I), Delhi, by his order dt.3. 10.81, relaxed the rules relating to the qualifications in favour of the sons or wards of Delhi 50 Policemen upto the limit of 71/2% of the total selection. Accordingly the police authorities in charge of the selec tion of candidates recommended 259 candidates out of a total of 420 candidates who came within the category of wards of Policemen/Class IV employees to the Delhi Administration for seeking approval of the competent authority. All the 23 appellants were eligible to be considered for the appointment as Constables in the light of the order of relaxation dated 3.10.81, but even they were not sent up for training which they had to undergo before the appointment because six of them were found to be ineligible since their brothers had already been recruited in the Police Department by relaxing the rules of appointment in their favour. 15 of them were refused permission to join the training course on the ground that the Administrator (Lt. Governor of Union territory of Delhi) had not relaxed the qualifications in their cases. Two of them, however, had in fact received a letter stating that the Administrator (Lt. Governor of the Union territory of Delhi) had accorded sanction for relaxa tion for recruitment in their cases and they could join the training course with effect from 15.6. 1982 but later on they were also denied admission into the Police force be cause their brothers had been recruited earlier in the Delhi Police service after according relaxation. The order of relaxation in their favour had, therefore, been withdrawn. The appellants who were thus aggrieved by the denial of admission into the service preferred the writ petition in the High Court for the issue of writ of mandamus to the Delhi Administration to appoint them as Constables on the ground that they satisfied the qualifications prescribed by the rules read with the order of relaxation dated 3.10.1981. A learned Single Judge of the Delhi High Court allowed the writ petition and held that the Punjab Police Rules, 1934 continued to remain in force even after the promulga tion of the Rules which came into force on 31.12.1980 and the cases of the appellants were protected by the relaxation order dated 3.10.1981 issued by the Deputy Commissioner of Police and the fact that any of the brothers of the appel lants had been appointed earlier under the cover of similar order of relaxation did not disentitle the appellants to claim the benefit of the order of relaxation. Aggrieved by the said decision, the Union of India and the Delhi Administration flied a Letters Patent Appeal. The appeal was allowed holding; (a) that on the promulgation of the Rules with effect from 31.12.1980, rule 12.14.(3) of the Punjab Police Rules, 1934 which dealt with the subject of appointment of Constables stood repealed; (b) that under Rule 30 of the Rules the power to relax the Rules in appro priate 51 cases having been vested with the Administrator. (Lt. Gover nor of the Union territory of Delhi) the order of relaxation issued by the Deputy Commissioner of Police on 3.10.1981 did not give any right to the appellants for enlistment as Constables unless relaxation was granted by the competent authority i.e. the Administrator (Lt. Governor of the Union territory of Delhi) and the mere fact that a candidate was successful in the test by itself would not give him a right to enlistment; (c) that since by its letter dated April 3, 1982 the Delhi Administration had decided that only one son of a police officer would be considered for grant of such relaxation the appellants whose brothers had already been employed in the police service on the basis of an earlier order of relaxation were not entitled to be recruited by relaxing the Rules once again. Hence the appeal by special leave. Dismissing the appeal, the Court, HELD: 1. 1 The claim made by the appellants for the relaxation of the Rules in their cases only because they happen to be the wards or children or relatives of the police officers has got to be negatived since their claim is based on 'descent ' only and others will thereby be discrimi nated against as they do not happen to be the sons of police officers. Any preference shown in the matter of public employment on the ground of descent only has to be declared as unconstitutional. [65F G] 1.2 While it may be permissible to appoint a person who is the son of a police officer who dies in service or who is incapacitated while rendering service in the Police Depart ment, a provision which confers a preferential right to appointment on the children or wards or other relatives of the police officers either in service or retired merely because they happen to be the children or wards or other relatives of such police officers would be contrary to Article 16 of the Constitution. Opportunity to get into public service should be extended to all the citizens equal ly and should not be confined to any extent to the descend ants or relatives of a person already in the service of the State or who has retired from the service. [64B D] Gazula Dasaratha Rama Rao vs The State of Andhra Pradesh 2.1 It is well settled that when a competent authority makes a new law which is totally inconsistent with the earlier law and that the two cannot stand together any longer it must be construed that the earlier law had been repealed by necessary implication by the later law. Apply 52 ing the above test it has to be held in this case that rule 12.14 and rule of the Punjab Police Rules, 1934 stood re pealed with effect from December 31, 1980 and rule 32 of the Rules which was introduced by way of amendment on May 2, 1983 had not the effect reviving rule 12.14 and rule 12. 15 of the Punjab Police Rules, 1934 and Keeping them alive beyond December 31, 1980 upto May 2, 1983. [63A C] 2.2 Rule 32 of the Delhi Police (Appointment and Re cruitment) Rules, 1980 had been introduced by way of abun dant caution, although in fact the Punjab Police Rules, 1934 ceased to be in force on 31. 12. 1980 and the mere addition of Rule 32 did not have the effect of keeping the 1934 Rules alive after 31.12.80. [62D E] 2.3 Section 149(2) of the no doubt provided that the rules framed under the of 1861 would continue to be in force after the Act came into force in so far as they were consistent with the Act but at the same time section 147 of the Act authorised the Administra tor (Lt. Governor of the Union territory of Delhi) to make rules regarding recruitment to, and the pay, allowances and all other conditions of service of the members of the Delhi Police under clause (b) of section 5. It is not disputed that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 and the rules promulgated on December 31, 1980 dealt with the identical subject, namely, the appointment and recruitment of Constables to the Delhi Police service. Therefore, on the promulgation of the Rules on December 31, 1980 which covered the subject dealt with by rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 had the effect of repealing by necessary implication rule 1,2.14 and rule 12.15 of the Punjab Police Rules, 1934 even though initially there was no express provision in the Rules to the effect that rule 12.14 and rule 12.15 of the Punjab Police Rules, 1934 stood repealed with effect from December 31, 1980. [62D H;63A]

Appeal No. 364 of 1957. Appeal from the judgment and order dated February 22, 1956, of the former Bombay High Court in I.T.R. No. 31/1955. N. A. Palkhivala and I. N. Shroff, for the Appellants. A. N. Kripal and D. Gupta, for the Respondent. 1960. November 22. The Judgment of the Court was delivered by SHAH, J. This is an appeal by seven appellants with leave granted by the High Court of Judicature at Bombay certifying that it involves a question of importance. The appellants held 570 out of a total issue of 800 shares of the Navjivan Mills Ltd., Kalol, a public limited company hereinafter referred to as the Mills. Between the years 1943 47, the Mills purchased 5,000 shares of the Bank of India Ltd. At an extraordinary general meeting of the shareholders of the Bank of India held on May 6, 1948, a resolution was passed increasing the share capital of the Bank and for that purpose offering new shares to the existing shareholders in the proportion of one new share for every three shares held by the shareholders. The face value of the new shares was to be Rs. 50, but the shares were issued at a premium of Rs. 50. The shareholders had to pay Rs. 100 for each new share. The Mills as the holder of 5,000 shares became entitled to receive 1,6662 shares of the Bank of India at the rate of Rs. 100 per share. The Bank of India communicated its resolution by letter dated May 25, 1948 and enclosed therewith three forms, form A for acceptance, form 586 B for renunciation and 'form C which may compendiously be called a form for allotment to nominees. On receiving the circular letter, the Directors of the Mills passed the following resolution: "Resolved that the company having a holding of 5,000 ordinary shares in the capital of the Bank of India Ltd. having now received an intimation from the said Bank that this company is entitled to get 1,6662 more ordinary shares on payment of Rs. 50 as capital and Rs. 50 as premium per each share and it is considered proper to invest in the said issue of the said Bank the funds of this company to the extent of 66 shares only and to distribute the right of this company to the remaining 1,600 shares of the said issue amongst the shareholders of this company in the proportion of the shares held by them in this company. IT IS HEREBY RESOLVED that the funds of this company may be invested in the 66 shares out of 1,666 shares offered by 'the Bank of India Ltd., and the right to the remaining 1,600 shares is hereby distributed among 800 shares of this company in the proportion of right to two shares of the Bank per one ordinary share held in this company. The Managing Agents may take steps to intimate the shareholders to exercise the right if they like to do so. " Accordingly, the Mills exercised the right to take over only 66 shares out of the shares offered and resolved that the right to the remaining 1,600 shares be distributed amongst its 800 share holders. The seven appellants as holders of 570 shares of the Mills became entitled to 1,140 shares of the Bank of India. The appellants agreed to the allotment of these shares and ultimately transferred them to a private company Jesinghbai Investment Co. ' Ltd. The assessment of the seven appellants and of other shareholders of the Mills was reopened under section 34(1)(a) of the Indian Income Tax Act by the Income Tax Officer on the footing that, the release by the Mills of the shares of the Bank of India amounted to a distribution of "dividend" and the value of the right released in favour of the shareholders though taxable 587 under section 12 of the Act, had escaped tax. The order of the Income Tax Officer reassessing the income of the seven appellants was confirmed in appeal by the Appellate Assistant Commissioner and by the Appellate Tribunal. At the instance of the appellants, the i following question was submitted by the Tribunal to the High Court at Bombay under section 66(1) of the Income Tax Act: "Whether on the facts and circumstances of the case the distribution of the right to apply for the shares of the Bank of India by Navjivan Mills Ltd. in favour of the assessees amounted to a distribution of "dividend" within the meaning of section 2(6A) of the Indian Income Tax Act. " The High Court reframed the question as follows: "Whether on the facts and circumstances of the case, the distribution of the right to apply for the shares of the Bank of India by Navjivan Mills Ltd., in favour of the assessees amounted to a distribution of "dividend"?" and answered it in the affirmative. The High Court observed that the definition of "dividend" in section 2(6A) was an inclusive and not an exhaustive definition, and even if the distribution of the right to the shares of the Bank of India could not be regarded as dividend within the extended meaning of that expression in section 2(6A), it was still dividend within the ordinary meaning of that expression and was taxable as income in the hands of the appellants. Counsel for the appellants contended that the High Court was not justified, having regard to the form of the question which expressly related to the distribution of the right to the Bank of India shares being dividend within the meaning of the definition in section 2(6A) of the Income Tax Act, in enlarging the scope of the question and in answering it in the light of its ordinary meaning. There is no substance in this contention. "Dividend" is defined in section 2(6A) as inclusive of various items and exclusive of certain others which it is not necessary to set out for the purpose of this appeal. "Dividend" in its ordinary meaning is a 588 distributive share of the profits or income of a company given to its shareholders. When the Legislature by section 2(6A) sought to define the expression "dividend" it added to the normal meaning of the expression several other categories of receipts which may not otherwise be included therein. By the definition in section 2(6A), "dividend" means dividend as normally understood and includes in its connotation several other receipts set out in the definition. The Tribunal had referred the question whether the distribution of the right to apply for the Bank of India shares amounted to distribution of dividend within the meaning of section 2(6A) and in answering that question, the High Court had to take into account both the normal and the extended meaning of that expression. In the question framed by the Tribunal, there is nothing to indicate that the High Court was called upon to advise on the question whether the receipts by the appellants amounted to dividend only within the extended definition of that expression in section 2(6A). It was also urged that in nominating its shareholders to exercise the option to purchase the new issue of the Bank of India, the Mills did not distribute any dividend. The Mills were, it is true, not obliged to accept the offer made by the Bank of India, however advantageous it might have been to the Mills to accept the offer: it was open to the Mills to renounce the offer. The Mills had three options, (1) to accept the shares, (2) to decline to accept the shares, or (3) to surrender them in favour of its nominee. It is undisputed that when the shares were offered by the Bank of India to its shareholders, the right to apply for the shares had a market value of Rs. 100 per share. The face value of the new share was Rs. 50 but the shareholders had to pay a premium of Rs. 50, thus making a total payment of Rs. 100 for acquiring the new share. The new shares were quoted in the market at more than Rs. 200: and the difference between the amount payable for acquiring the shares under the right offered by the Bank of India and the market quotation of the shares was indisputably the value of the right. The Mills could not be compelled to obtain 589 this benefit if it did not desire to do so: it could accept the shares or decline to accept those shares or exercise the option of surrendering them in favour of its nominees. This last option could be exercised by nominating the persons who were to take over the shares and that is what the Mills did. The Mills requested the Bank of India to allot the shares to its nominees, and the request for allotment to its nominees amounted to transfer of the right. By its resolution, the Mills in truth transferred a right of the value of Rs. 200 for each share held by its shareholders. This was manifestly not distribution of the capital of the Mills. It was open to the Mills to sell the right to the shares of the Bank of India in the market, and to distribute the proceeds among the shareholders. Such a distribution would undoubtedly have been distribution of dividend. If instead of selling the right in the market and then distributing the proceeds, the Mills directly transferred the right, the benefit in the hands of the shareholders was still dividend. Dividend need not be distributed in money; it may be distributed by delivery of property or right having monetary value. The resolution, it is true, did not purport to distribute the right amongst the shareholders as dividend. It did not also take the form of a resolution for distribution of dividend; it took the form of distribution of a right which had a monetary value. But by the form of the resolution sanctioning the distribution, the true character of the resolution could not be altered. We are therefore of the view that the High Court was right in holding that the distribution of the right to apply for and obtain two shares of the Bank of India (at half their market value) for each share held by the shareholders of the Mills amounted to distribution of dividend. The appeal fails and is dismissed with costs. Appeal dismissed.

The appellants were shareholders of a company known as Navjivan Mills Ltd. which held a large number of shares of the Bank of India. The Bank with the object of increasing their share capital offered some more shares to the Mills for a price including premium which was about half the market value. The Mills purchased a small number of the shares so offered with their own funds and distributed their right to acquire the remaining shares to their shareholders in the proportion of two shares of the Bank for one share held by them. The assessment of the appellant was reopened by the Income Tax Officer under section 34(1)(a) of the Income tax Act on the footing that the release of the right to the shares of the Bank of India amounted to distribution of dividend. Appeals against the order of the Income Tax Officer having failed, the High Court at the instance of the appellants framed the following question: "Whether on the facts and circumstances of the case, the distribution of the right to apply for the shares of the Bank of India by Navjivan Mills Ltd. in favour of the assessees amounted to a distribution of "dividend"? 585 The High Court answered the question in the affirmative. On appeal with a certificate of the High Court, Held, that the view taken by the High Court was correct. The distribution to the shareholders of the Mills of the right to obtain two shares of the Bank of India for each share held by them at half the market value amounted to distribution of "dividend" which was liable to be taxed.

Appeals Nos. 507 508 of 1963. Appeal by special leave from the judgment and order dated November 4, 1950, of the Orissa High Court in Special Jurisdiction Cases Nos. 38 and 39 of 1958. R.Ganapathy Iyer and R. N. Sachthey, for the appellant (in both the appeals). 817 B.Sen and section N. Mukherjee, for the respondents (in both the appeals). April 21, 1964. The Judgment of the Court was delivered by SIKRI, J. The respondent, hereinafter referred to as the the dealer, filed a return for the quarter ending June 30, 1951, under the Orirsa Sales Tax Act (Orissa Act XIV of 1947) (hereinafter referred to as the Act). He claimed a deduction of Rs. 2,40,000/ under section 5(2)(a)(ii) in respect of the goods sold to a registered dealer, named M/s. Lal & Co. Ltd., BA 1335. Similarly, for the quarter ending September 30. 1951, he claimed a deduction of Rs. 15,677/1/3. By two assessment orders passed under section 12(2) of the Act, the Sales Tax Officer, Cuttack III circle, Jaipur, Orissa, determined the tax payable allowing the deduction of Rs. 2,40,000/ and Rs. 15,677/l/3, under section 5(2)(a)(ii). The dealer filed appeals to the Assistant Collector, Sales Tax, challenging the assesment on grounds which are not relevant. The dealer later filed revisions against the decision of the Assistant Collector. While the revisions were pending, the legislature amended the Orissa Sales Tax Act, in 1957, by Orissa Sales Tax (Amendment) Act (Orissa Act XX of 1957). The effect of this amendment was that revisions were treated as appeals to Sales Tax Tribunal, and it enabled the Government to file cross objec tions. The State of Orissa, in pursuance of this amendment, filed memorandum of cross objections challenging the deduc tion of Rs. 2,40,000/ and Rs. 15,677/l/3, on the ground that the dealer had not produced any declaration, as required under r. 27(2) of the Orissa Sales Tax Rules, 1947, as evidenced from the Check Sheet kept on record. The Tribunal upheld this objection and directed that fresh assessments be made. Certain other questions were raised before the Tribunal by the dealer, but as nothing turns on them as far as these appeals are concerned, they are not being mentioned. The Tribunal stated a case to the High Court and one of the questions referred to was "whether the assessing officer was not wrong in allowing deduction of Rs. 2,40,000/ for the quarter ending on 30 6 51 and Rs. 15,677/1/3 for the quarter ending on 30 9 51 from the respective gross turnover of the applicant. " The High Court, following its earlier decision in Member, Sales tax Tribunal, Orissa vs Messrs section Lal & Co. Limited (1) answered the question in the affirmative. The State of Orissa having obtained special leave from this Court, these appeals are now before us for disposal. Mr. Ganapathy lyer, on behalf of the State of Orissa, has contended before us that it is clear that r. 27(2) was not complied with, and, therefore, the Sales Tax Officer was wrong (1) (1961) 12 S.T.C. 25. 818 in allowing the said deduction. The answer to the question referred depends on the correct interpretation of section 5(2)(a)(ii), Co. and r. 27(2). They read thus: "section 5(2)(a)(ii) sales to a registered dealer of goods specified in the purchasing dealer 's certificate of registration as being intended for resale by him in Orissa and on sales to a registered dealer of containers or other materials for the packing of such goods. Provided that when such goods are used by the registered dealer for purposes other than those specified in his certificate of registration, the price of goods so utilised shall be included in his taxable turnover." "Rule 27(2). Claims for deduction of turnover under sub clause (ii) of clause (a) of sub section (2) of section 5 A dealer who wishes to deduct from his gross turnover on sales which have taken place in Orissa the amount of a sale on the ground that he is entitled to make such deduction under sub clause (ii) of clause (a) of sub section (2) of section 5 of the Act, shall produce a copy of the relevant cash receipt ,or bill according as the sale is a cash sale or a sale .on credit in respect of such sale and a true declaration in writing by the purchasing dealer or by such responsible person as may be authorised in writing in this behalf by such dealer that the goods in question are specified in the purchasing dealer 's certificate of registration as being required for resale by him or in the execution of any contract: Provided that no dealer whose certificate of registration has not been renewed for the year during which the purchase is made shall make such a declaration and that the selling dealer shall not be entitled to claim any deduction of sales to such a dealer. " It is, plain from the terms of section 5(2)(a)(ii) that a selling ,dealer is entitled to a deduction in respect of sales to a registered dealer of goods, if the goods are specified in the purchasing dealer 's certificate of registration as being intended for re sale by him in Orissa. No other condition is imposed by the above section. The proviso deals with consequences that follow if the purchasing dealer uses them for purposes other than those specified in his certificate of registration, and ,directs that, in that event, the price of goods so utilised shall 819 be included in his turnover. Therefore, there is nothing in the section itself that disentitles a selling dealer to a deduction, but if the contingency provided in the proviso occurs, them the price of goods is included in the taxable turnover of the buying dealer. But Mr. Ganapathy lyer says, be it so, but the rule making authority is entitled to make ruler, for carrying out the purposes of the Act, and r. 27(2) is designed to ensure that a buying dealer 's certificate of registration does, in fact, mention that the goods are intended for resale by him, and for that purpose it has chosen one exclusive method of proving the fact before a Sales Tax Officer. He further urges that no other method of proving that fact is permissible. Rule 27(2) is mandatory and if there is breach of it the selling dealer is not entitled to deduction. The learned counsel for the res pondent, on the other hand, contends that r. 27(2) is directory. He points out that the word 'shall ' should be read as 'may ', in the context. He further says that supposing the selling dealer brought the original certificate of registration of a buying dealer and produced it before the Sales Tax Officer, according to the appellant, this would not be enough, but this could never have been intended. In our opinion, r. 27(2) must be reconciled with the section and the rule can be reconciled by treating it as directory. But the rule must be substantially complied with in every case. It is for the Sales Tax Officer to be satisfied that, in fact, the certificate of registration of the buying dealer contains the requisite Statement, and if he has any doubts about it, the selling dealer must satisfy his doubts. But if he is satisfied from other facts on the record, it is not necessary that the selling dealer should produce a declaration in the form required in r. 27(2), before being entitled to a deduction. We are, therefore, of the opinion that the High Court came to a correct conclusion. The High Court is correct in holding that the production of a declaration under r. 27(2) is not always obligatory on the part of a selling dealer when claiming the exemption. It is open to him to claim exemption by adducing other evidence so as to bring the transaction within the scope of section 5(2)(a)(ii) of the Act. In this case, the Sales Tax Officer was satisfied by a mere statement of the dealer and it has not been shown that in fact the registration certificate of the buying dealer, M / s section Lal & Co., did not contain the statement that the goods were intended for resale by him in Orissa. The appeals accordingly fail and are dismissed with costs. One set of hearing fee. Appeals dismissed.

Assessment orders were passed by the Sales Tax Officer allowing the deductions of two amounts claimed by the respondent dealer under section 5(2)(a)(ii) of the Orissa Sales Tax Act in respect of goods sold to a registered dealer. The respondent dealer filed appeals to the Assistant Collector Sales Tax, challenging the assessment on grounds which were not relevant and against those decisions revisions were filed by the dealer. While the revisions were pending the Orissa Sales Tax Act was amended by Orissa Sales Tax (Amendment) Act (Orissa Act, 10 of 1957) with the result that revisions were treated as appeals to the Sales Tax Tribunal, and it enabled the Government to file cross objections. In pursuance, the State filed cross objections challenging the deductions on the ground that the dealer had not produced any declaration as required under r. 27(2) of the Orissa Sales Tax Rules, 1947. The Tribunal upheld this objection and directed that fresh assessments be made. On statement of the case, the High Court answered that the assessing officer was not wrong in allowing the deductions. On appeal by special leave). Held:(i) There is nothing in section 5 (2) (a) (ii) itself that disentitles a selling dealer to a deduction, but if the contingency provided in the proviso occurs, then the price of goods is included in the taxable turnover of the buying dealer. (ii)The production of a declaration under r. 7(2) is not always obligatory on the part of a selling dealer when claiming the exemption. It is open to him to claim exemption by adducing other evidence so as to bring the transaction within the scope of section 5(2)(a)(ii). Rule 27(2) must be reconciled with the section and the rule can be reconciled by treating it as directory. But the rule must be substantially complied with in every case. It is for the Sales tax Officer to be satisfied that, in fact. the certificate of registration of the buying dealer contains the requisite statement, and if he has any doubts about it, the selling dealer must satisfy his doubts. But if he is satisfied from other facts on the record, it is not necessary that the selling dealer should produce a declaration in the form required in r. 27(2). before being entitled to a deduction. Member Sales tax Tribunal, Orissa vs Mls. section Lai & Co. (1961) 12 S.T.C. 25, referred to.

Appeal No. 1734 of 1967. Appeal by Special Leave from the Award dated the May 19, 1967 of the Industrial Tribunal (1) at Allahabad in Adjudication Case No. 15 of 1960. section V. Gupte, D. N. Mukherjee and Gautam Banerjee, for the appellant. G. C. Bhattacharyaand M. V. Goswami, for respondents Nos. 1 and 3 to 8. O. P. Rana, for respondent No. 9. The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave from an award of the Industrial Tribunal, Allahabad, dated May 19, 1967. 757 The material facts May be stated, The appellant, which is a limited liability company and which later on went into voluntary liquidation, was carrying on the business or undertaking of generation, distribution and supply of electricity. One of such undertakings was the Electric Supply Undertaking at Allahabad in the State of Uttar Pradesh. Its affairs and business were being% looked after and managed by Martin Bum & Co. I Ad., Calcutta. Some of the appellant 's workmen in Allahabad and its surrounding area were members of Bijli Mazdoor Sangh a trade union registered under the Indian Trade Union Act, 1926. The U.P. State Electricity Board compulsorily acquired and took over the assets of the appellant 's aforesaid undertaking or business with effect from 16/17th September 1964. In accordance with the provisions of the , hereinafter called the 'Act and the U.P. Industrial Employment (Standing Orders) Rules 1946 the appellant submitted draft Standing Orders defining the conditions of employment of its employees. On July 14, 1951 these Orders 'were certified by the Certifying Officer. Clause 32 of the Standing Orders was in the following terms : "32. RETIREMENT An employee who has served 30 years or who has reached the age of 55 will be retired, but exemption to this may be granted by the Company in special cases". The workmen through the Bijli Mazdoor Sangh preferred an appeal under section 6 of the Act from the order of (the Certifying Officer to the State Industrial Tribunal which was the. appellate authority under the Act. That appeal, however,, was dismissed. The Agra Electric Supply Co. Ltd., Agra and Benaras Electric Light & Power Co. Ltd., Varanasi, which is the appellant in the connected appeal (C.A. 164/68) also got certified Standing Orders in similar terms. These electric undertakings, were also under the management of Martin Burn & Co. Ltd. On July 16, 1959 notices were served on seven worlen with effect from September 1, 1959 on the ground that they had attained the age of superannuation or completed 30 years of service and they were retired by reason of their having attained the age of superannuation. Out of these workmen one of them Haider Ali died during the pendency of proceedings. The other six employees have been impleaded as respondents Nos. 1 to 6 in the present appeal. According to the appellant these, respondents accepted all the accumulations due to them in respect of Provident Fund contributions made by the appellant in respect of them and by themselves and were also paid gratuities credited to them in their res 758 pective Provident Fund accounts for their services prior to their becoming members of the Provident Fund. By an order dated February 22, 1960 made under section 4 K of the U.P. Industrial Disputes Act 1946 the Government of U.P. referred to the Industrial Tribunal (1) at Allahabad for adjudication an industrial dispute alleged to exist between the appellant and its workmen on the following issues : "Whether the employers have wrongfully arid/or unjustifiably retired their workmen, mentioned in the Annexure, with effect from 1st August, 1959 ? If so, to what relief are the workmen entitled ?" Respondents 1 to 6 and Haidcr Ali (since deceased) were the workmen mentioned in the Annexute. The case of the workmen before the Industrial Tribunal was that they had entered service of the appellant prior to the certification of the Standing Orders. At the time of their appointment there was no condition that they would be liable to retirement after attaining any prescribed age or after putting in any fixed period of service. A practice was in vogue that the workmen would continue in service till he was physically fit. Accordingly clause 32 of the certified Standing Orders was neither binding nor enforceable. The Industrial Tribunal made an award on May 2, 1960 finding, interalia, (a) the employers were within their rights in retiring, the workmen concerned. (b) The act of the employers in compulsorily retiring the concerned workmen, from service could not be characterised as wrongful, illegal or unjustified and (c) the workmen were entitled to no relief. On June 14, 1960 the Bijli Mazdoor Sangh moved an appli cation under section 10(2) of the Act for amendment and modifica tion of clause 32 claiming fixation of retirement age at 60 years. On September 20, 1960 the Union also filed a writ petition in the Allahabad High Court for quashing the award. On April 22, 1961 the Certifying Officer modified clause 32 and fixed the ago, of retirement at 58 years. On September 10, 1961 the appellate authority refixed the age of retirement at 55 years. Similarly appeals were filed by the Agra Electric Co. and the Banaras Electric Light and Power Co. Ltd. in which similar orders were made. On July 12, 1966 the, High Court recorded an order quashing the award. It was held that Standing Order 32 was not applicable to the employees Who had entered service before the certification of the Standing Orders. The Industrial Tribunal was directed to reheat the case and after giving an opportunity to the parties of being heard give an award in accordance with law. Finally the award against which the appeal has been brought 759 was given on May 19, 1967. It was held in the award that all the seven workmen had been wrongfully and unjustifiably retired and that they should be deemed to have continued in service till September 16, 1964 from which date they would be taken to Wave been retrenched. The appellant having been taken over by the U.P. State Electricity Board, it was directed that the employers should pay full wages from the period August 1, 1959 to September 16, 1964 and retrenchment compensation within section 25 F read with section 25 FF and section 25 J of the . While deciding the writ petition the High Court relied on three decisions of this Court for holding that where there is no age of superannuation prescribed for the employees of a concern a provision in the Standing Orders certified subsequent to the date of employment regarding compulsory retirement will not be applicable to them. The first decision is in Guest Keen, Williams Private Ltd. vs P. J. Sterling & Others(1). In that case after the enforcement of the Act the industrial concern submitted its draft Standing Orders for certification to the Certifying Officer. That Officer certified the Standing Orders after giving the trade union of workmen an opportunity to be heard and after considering their objections. The Standing Orders relating to retirement provided that the workmen shall retire from the service of the company on reaching the age of 55 years. The company gave notice to forty seven of its workmen who were over the age of 55 years retiring them and a dispute was raised about their retirement which was referred to the Tribunal for adjudication It was ultimately held, by the Labour Appellate Tribunal that those workmen who were in employment prior to the date of certification of the Standing Orders would not be governed by it and their retirement was illegal. This Court examined the scheme of the Act including the relevant provisions. Notice wag taken, in particular, of the fact that when the standing Orders were submitted to the Certifving Officer all that he could do was to satisfy himself that they made provision for other matters set out in the schedule to the Act and that they were otherwise in conformity With its provisions. Under section 4, as it was orignally enacted the Certifying Officer could not adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders. This section was subsequently amended in 1956 and the effect of the amendment was that the Certifying Officer was enabled to adjudicate upon the fairness or reasonableness of the provisions of the Standing Orders. It was pointed out by the court that the scope for enquiry before the Certifying Officer prior to the amendment of section 4 was extremely limited. The only way in which the employees could claim modification of the standing Orders prior to the amendment of section 4 was by raising an industrial dispute in that (1) ; 760 behalf. Subsequent to the amendment the employees could raise the same dispute before the Certifying Officer and in a proper case they could apply for its modification under section 10(2) of the Act. It was observed that the Standing Orders certified under the Act became part of the terms of the employment by operation of section 7 but if an industrial dispute arose in respect of such Orders and it was referred to the Tribunal by the appropriate Government the Tribunal had the jurisdiction to deal with it on the merits. It was, therefore, held that the Tribunal had to consider not only the propriety, reasonableness and fairness of the rule but it had also to deal with the question as to whether the said rule could and should be made applicable to employees who had already been employed without any limit as to age of retirement. The decision in this case was followed in Workmen of Kettlewell Bullen & Co. Ltd. vs Kettlewell Bullen & Co. Ltd.(1). The next case in which a similar question arose in Salem Erode Electricity Distribution Co. Ltd. vs Salem Erode Electricity Distribution Co. Ltd. Employees Union(2). It was claimed by the company which was the employer there that the urgent need for increased production and supply of electrical energy could be met if the existing rules embodied in two of its certified Standing Orders relating to holidays and leave were suitably amended. The amendments proposed sought to introduce different rules relating to holidays and leave for employees who were appointed before a specified date and those who joined service after that date. Both the Certifying Officer and the appellate authority disallowed the amendments. The company appealed, to this Court and the scheme of the Act was examined once again. It was emphasised that after the amendment of section 4 of the Act made in 1956 jurisdiction had been conferred on the Certifying Officer as well as the appellate authority to adjudicate upon the fairness or easonableness of the provisions of the Standing Orders. Thus the jurisdiction had been widened. Moreover under section 10(2) as originally enacted it was only the employer who could make an application to the Certifying Officer to I have the Standing Orders modified. By the amendment made in 1956 even workmen were enabled to exercise that right. Addressing itself to the question whether it was permissible for an industrial establishment to have two sets of Standing Orders to govern the relevant terms and conditions of its employees it was laid down after an examination of the scheme of the relevant provisions of the Act in the light of the matters specified in the Schedule that there was no scope for having separate Standing Orders in respect of any one of them, It was said ". . the conclusion appears to be irresistible that the object of the Act is to certify Standing Orders in (1) (2) ; 761 respect of all the matters covered by the schedule and having regard to these matters Standing Orders so certified would be uniform and would apply to all Workmen alike who are employed in any industrial establishment". It was considered that Guest Keen Williams Pvt. Ltd.(1) could afford no asistance because that matter came to this Court from an industrial dispute which was the subject matter of industrial adjudication and all that this Court did was to fixed the age of superannuation for workmen who had been employed prior to the date of the certification of the relevant Standing Orders. That course was adopted in the special and unusual circumstances of that case. In the next decision Agra Electric Supply Co. Ltd. vs Sri Alladin & Ors.(2) one of the main questions was whether three workmen who had been employed long before 1951 when the cornpany 's Standing Orders were certified could be retired under Standing Orderwhich prescribed the age of superannuation as 55 years. ThisCourt took a view which seemingly runs counter to Guest KeenWilliams Pvt. Ltd.(1). It was held that the Standing Orders when certified would be binding on the employers as well as all the workmen who were in employment at the time the Standing Orders came into force and those employed thereafter as uniform conditions of service. The process of reasoning which prevailed was (1) the Act is a beneficient piece of legislation, its object being to require employers in industrial establishments to define with sufficient precision the condtions of employment of workmen employed therein and to make them known to such workman. (2) Before the passing, of the Act there was nothing in law to prevent an employer having different con tracts of employment with workmen which led to confusion and made possible discriminatory treatment. This was also clearly incompatible with the principles of collective bargaining. (3) Section 3 of the Act was enacted to do away with such diversity and bargaining with each individual workman. (4) Section 4 indicates that particulars of workmen in the employment on the date of the submission of the draft Standing Orders or certification and not of those only who could be employed in future after certification were to be given. (5) Sections 4 and 5 show that draft orders are certifiable if they provide for all matters set out in the schedule and are otherwise in conformity with the Act and if they are adjudicated as fair and reasonable by the Certifying Officer or the appellate authority. The Certifying Officer has also to forward a copy of the draft Standing Orders to the Union (1) ; (2) ; 762 or to the workmen in the prescribed manner and has to decide whether or not any modification or addition should be made after hearing the, Union or the, workmen concerned. Sections 6, 7, 9 and 10 contain provisions for appeal by aggrieved persons as also for sending of authenticated copies by the Certifying Officer to the parties where no appeal is filed and further the employer has to post the Standing Orders as finally certified in the manner prescribed. The employer or the workmen can even apply for modification after expiry of six months from the date on which the Standing Orders or the last modification thereof comes into operation. (7) The schedule, sets out the matters which the Standing Orders must provide for. For the reasons given above this Court held that the Act was meant to enable Standing Orders to be made to bind not only those who were employed subsequent to their certification but also those who were already in employment. If any other result were to follow there would be different conditions of employment for different classes of workmen which would render the conditions of their service as indefinite and diversified as befoe the ,enactment of the Act. Support was derived from the decision in Salem Erode Electricity Distribution case(1) in which departure was made from the view previously taken in the case of Guest Keen William,s Pvt. Ltd.(2) It has been urged before us on behalf of the respondents that the decision in Guest Keen Williams Pvt. Ltd. (2) still holds the field and the point which was decided there and which arises in the present case did not come up for consideration in Salem Erode Electricity Distribution Co. Ltd.(1). In our opinion the principle applied in the latter case is fully supported by the scheme of the Act and was rightly extended and applied 'in Agra Electric Supply Co. Ltd. (3). We concur with the view expressed therein that it was not intended by the legislature that different sets of conditions should apply to employees depending on whether a workman was employed before the Standing Orders were certified or after, which would defeat the very object of the legislation. In the preamble it is stated in categorical terms "whereas it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them and to make the said conditions known to workmen employed by them". Not only the object but the scheme of the Act is such that the employers must define precisely the ponditions of employment of all the employees and have the same certified by the Certifying Officer against whose orders an appeal lies to the appellate authority. The, right given to workmen to express their (1) ; (3) ; (2) ; 763 view and to raise objections is of great significance. They can even ask for modification of the Standing Orders in accordance with section 10 of the Act. Every possible safeguard has been provided for keeping the workmen informed about their conditions of service so that they can take whatever steps they desire or are advised to take in their interest before the Certifying Officer or the appellate authority. It is also very difficult to conceive, taking each individual item in the schedule how there can be different conditions for different employees depending upon the point of time when they came to be employed; for instance item 3 relates to shift working. It is possible to suggest that for the same kind of work employees who were in employment before the Standing Orders were certified would have different hours of shift from the other employees who were employed subsequently. In the very nature of things a great deal of irritation and annoyance between employees inter se would result if any such discrimination is made in any of the items in the schedule. It has been rightly pointed out in Agra Electric Supply Co. Ltd. that this would only lead to industrial unrest and not industrial peace, the latter being the principal object of legislation. It must be remembered that in Guest Keen Williams Pvt. Ltd. the Certifying Officer could not go into the reasonableness or fairness of the Standing Orders according to section 4 of the Act as it stood at the material time. The law was changed only in 1956. Perhaps that was one of the main reasons which prompted the court in taking the view it did. But after the amendment of the law in 1956 the Certifying Officer and the appellate authority are duty bound to examine the question of fairness of the Standing Orders and there can be no justification now not to give, effect to the principle of uniformity of conditions of service which is clearly conte mplated by the provisions of the, Act. The next question for determination is whether clause 32 of the Standing Orders relating to age of retirement could be certifled in July 1951. On behalf of the respondents it has been pointed out that there is no item in the schedule which covers the case of retirement or superannuation. Items 8 and 9 are in these terms "8. Termination of employment and the notice thereof to be given by employer and workmen, 9. Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct. " The model Standing Orders framed by the Central Government and by the Government of the State of Uttar Pradesh did not contain any clause relating to retirement or superannuation. It was for the first time that on November 17,1959 item 11 C 764 relating to superannuation and retirement was introduced by the State of U.P. in exercise of the rule making powers conferred by section 15 of the Act. In other States the item relating to age of retirement or superannuation was introduced either by legislation or by the exercise of rule making power. In the State of Bombay section 19 of the Industrial Employment (Standing Orders) (Bombay Amendment) Act 1957 provided for insertion of item 10 A in the Schdule which was "age for retirement or superannuation". According to counsel for the respondents there was no item until the introduction of item 11 C in November 1959 in the schedule under which any Standing Orders could be framed and got certified relating to the age of retirement and superannuation. It has been maintained that items 8 and 9 cannot possibly include retirement and superannuation and therefore till item 11 C was added in the schedule so far as the State of U.P. was concerned in November 1959 no Standing Orders could be legally or validly framed and certified providing for age of retirement and superannuation. In Saroj Kumar Ghosh vs Orissa State Electricity Board(1) the Orissa High Court considered this question a some length and expressed the view that where a Standing Order has been certified by the Certifying Officer containing a clause relating to superannuation not covered by the schedule of the Act norr by the model Standing Orders such certification cannot be valid under section 4 of the Act. The clause 'termination of employment ' in item 8 of the schedule cannot be equated with the word "superannuation". According to the Orissa High Court, superannuation is an event which comes more or less in an automatic process. An age is fixed on the reaching of which the holder of office has no option but to go out of office. There is no volition involved in that act. The employer and the employee have notice of the matter long before the event is to occur and the event is such that it cannot be arrested by either one of them if the rule is to be followed. On the other hand termination is a positive act by which one party even against the desire of the other can bring about the end of employment. The judgment of the learned single. judge in Management of the "HINDU", Madras vs Secretary Hindu Office & National Press Employees Union and another(2) was dissented from. In that case the expression "termination of employment" in item 8 was considered to be wide enough to include retirement of an employee at the age of superannuation. The learned Madras Judge sought support from para 16 of the model Standing Orders which is as follows "Every permanent workman shall be entitled to a service certificate at the time of his dismissal discharge ' or retirement from service". , (1) A.I.R. 1970 Orissa 126. (2) 765 In the model Standing Orders there was no clause providing for superannuation or retirement on attaining a certain age. In our judgment much assistance or help cannot be derived from para 16 of the model Standing Orders as contained in schedule 1 to the Industrial Employment (Standing Orders) Central Rules 1946. Retirement which is mentioned there may be under the terms of contract of employment entered into between the employer and the employees. Section 2(oo) of (the throws a certain amount of light on the matter. It is reproduced below :, "Retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of, superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf;" It shows, firstly, that termination 'of service of a workman is distinct from retirement on reaching the age of superannuation; secondly, retirement can take place on resch & the age of superannuation under the terms of the contract of employment entered into between the employer and the workman. Therefore, the word "retirement" in para 16 cannot be regarded as conclusive of the question whether termination of: employment includes retirement and superannuation. In the schedule to the Act item 8 covers termination of employment and the notice to be given either by the employer or the workman and item 9 relates to sus pension or dismissal for misconduct etc. Item 8 by virtue of the language employed does not appear to cover the case of superannution which does not depend on any notice and which covers an event which is automatic and which must be given effect to without any volition on the part of the employer or the workmen as pointed out in the Orissa judgment. If termination is to be read in a wide sense as meaning employment coming to an end there was a necessity to have item 9 because dismissal would then be covered by termination. In the context in which the word ",termination" is used in item 8 it cannot mean each and every form of termination or cessation of employment. From para 13 of the Model Slanding Orders contained in schedule 1 to the Industrial Emtployment (Standing Orders) Central Rules 1946, it is apparent that item 8 is confined to termination of employment by notice in writing and does not contain any mention L1061 Sup. CI/72 766 of superannuation or retirement. It was perhaps this difficulty which prompted the state or U.P. to introduce item 11 C in exercise of the rule making powers conferred by section 15 of the Act and the bombay legislature to make similar amendment by legislation. it would follow that unless an employer can include a clause relating to the age of retirement and superannuation and the Certifying Officer can certify it even though no such item appears in the schedule to ,the Act clause 32 as certified in 1951, in the present case, could not be regarded to be valid. The Madras High Court in the case of Management of the 'Hindu ', Madras(1) made some observations to the effect that there was no bar to the Standing Orders making a provision for matters other than those specifically mentioned in the schedule so long as ,the Certifying Officer certifies them on he ground that they are fair and reasonable. The Orissa High Court, however, in Sarojkumar Ghosh 's(2) case did not subscribe to this view. Learned counsel for the appellant, apart from relying on the Madras decision, has not addressed any arguments on the larger and wider question as to whether even in the absence of any item in the schedule Standing Orders can be framed on certain matters which may be regarded as fair and reasonable and which may be so certified by the Certifying Officer. it is, however, unnecessary to decide this point in the present case because clause 32 of the Standing Orders on which the appellant has relied was certified in July 1951 when according to the express language of section 4 of the Act the Certifying Officer or the appellate authority was debareed from adjudicating upon the fairness or, reasonableness of the provisions of any Standing Orders. It is difficult to understand how the Certifying Officer at that point of time and before the amendment of section 4 in 1956 could have possibly certified ;my Standing Order which did not relate to any item in the schedule on the ground that it was fair or reasonable Indeed the function of the Certifying Officer, before the amendment of 1956, was very limited as is clear from section 3 (2) of the Act which says : "Provision shall be made in such draft for every matter set out in this schedule which may be applicable to the industrial establishment and were model Standing Orders have been prescribed, shall be, so far is practicable, in conformity with such model". We must, therefore, hold that, clause 32 of the Standing Orders as certified in July 1951 was not valid and cannot be binding on the respondents. However, after item 11 C was introduced in the schedule so far as the State of U.P. was concerned an item was added providing for the age of retirement and superannuation. The Certifying Officer, when lie modified clause 32 and (1) (2) AIR 1970 Orrissa 126. 767 fixed the,:retiring age at 58 on April 22, 1961 could have validly certified such clause as modified by him. The necessary consequence will be that the respondents could not have been relied 'on the ground of superannuation in July 1959 and they could be validly retired only on or after April 22, 1961 in accordance ,with clause 32 as modified by the Certifying Officer. In other words, those out of the present respondent who had attained the age of 58 years on April 22, 1961, could be regarded as having been validly retired having reached the age of superannuation on that date under that clause. In view of the previous decisions of this Court and in particulaw that of Guest Keen Williams Pvt. Ltd.(1) it has not been disputed that in the industrial dispute which was referred it was open ' 'to the Industrial Tribunal or the Labour Court to determine the age of retirement or superannuation notwithstanding that clause 32 of the Standing Orders as certified in 1961 had been legally ,And validly certified indeed in Guest keen Williams Pvt. Ltd.(1) It was not disputed that even this. Court could give an appropriate direction which might 'be considered reasonable with regard to 'the age of superannuartion as stated before according to clause 32 of 'the Standing Orders, as certified in April 1961, the age of superannuation was fixed at 58. The appellant 'filed an appears that in the cage of Agra Electric Supply Co.(2) also a appears that in the case of Agra Electric supply Co.(4) also a similar Standing order had been certified and on appeal the age of retirement was reduced from 58 to 55 years by the appellate 'authority. This Court in that case held the Standing Order fixing the age at 55 years applicable not only to those employees who were employed subsequently but also to all workmen who were in employment at the time when the 'Standing Orders became legally applicable. It does not appear in that case that any such argument was raised that the matter should be remitted either to the Industrial Tribunal or the Labour Court to fix the age of superannuation or that this Court itself might do so as was the course followed in the case of Guest keen Williams Pvt. Ltd.(1) in which the age was fixed at 60 years with regard to those employees who had raised the dispute on the ground that the Sanding Orders could not govern them as they had been employed before the Standing Orders became applicable. After considering the entire material and keeping in mind the fact that according to the appellate authority even the age of retirement at 55 was fair and reasonable we are of the view that the age of superannuation of the respondents, in the present case, should be 58 years. In other words. it will be the same as was fixed by the Certifying Officer by modifying clause 32 on April 22, 1961. (1) ; (2) ; 768 Lastly we must deal with the contention raised on behalf of the respondents that the order of the Allahabad High Court made on July 12, 1966 quashing the award after following the decision of this Court in Guest Keen Williams Pvt. Ltd.(1) should be deemed to be final and should debar any fresh consideration or decision of that point by virtue of the rule or principle of res judicata. It is noteworthy that the order of the Allahabad High Court was not final against which the matter could have, been taken in appeal either to a division bench of the High Court or to this Court. Reliance has been placed on a decision of this Court in Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal Rajasthan, Jaipur and Another(2), where reference had been made by the State Government to the Industrial Tribunal on the Railway Workers ' Union having raised an industrial dispute against the Management of the Northern Railway Cooperative Society Ltd. The society filed a writ petition on the ground that the dispute having been raised by the Railway Workers ' Union and not by the Society 's own employees the reference to the Tribunal was not competent. The High Court dismissed the petition. thereafter the Tribunal heard the matter and gave its deci sion in favour of the workman concerned. The society appealed to this Court by special leave. It was held that the order of the High Court was not interlocutory but was a final order in regard to the proceedings under article 226. The appropriate remedy for the appellant in that case was to appeal against the High Court 's order and that not having been done the appellant 's plea relating to the competency of the reference was barred by res judicata as the same had been raised before the High Court and had been rejected. The present case is clearly distinguishable inasmuch as the order made by the High Court was not final and a remand had been directed presumably under article 227 of the Constitution. That order in fact did not finally terminate any proceedings at all. The proceedings were terminated only by the award against which the present appeal has been brought by special leave. We are unable to see how the decision in the aforesaid case can afford any assistance to the respondents before us. Indeed the case which is more apposite in Satyadhyan Ghosal & Ors. vs Smt. Deorajin Debi & Another ( 3 ) . There an order of remand had been made by the High Court while exercising powers under section 115 of the Code of Civil Procedure. It was observed, after referring to the various decisions of the Privy Council, that the order of remand was interlocutory and did not pumort to dispose of the case. A party is not bound to appeal against every interlocutory order which is a step in the procedure that leads up to a final decision or award. (1) ; (3) ; (2) ; 769 The following observations from this case may be reproduced with advantage "Interlocutory judgments which have the force of a decree must be distinguished from other interlocutory judgments which are a step towards the decision of the dispute between parties by way of a decree or a final order". We are unable, therefore, to accede to the contention that the rule of res judicata could be invoked by the, respondent in the present case. In the result the appeal is allowed and the order of the Industrial Tribunal is hereby set aside. According to our decision the workmen concerned could not have been retired on the ground of superannuation in accordance with clause 32 of the Standing Orders till it was certified after necessary modification on April 22, 1961. Even otherwise it has been held by us that the proper age of retirement in ,he case of those employees who joined service prior to April 22, 1961 should be 58 years. The award, therefore, will be that the concerned workmen should be deemed to have continued in service of the appellant till they had at attained the age of 58 years. It is declared that they shall be entitled to be paid full wages and all other dues to which they are entitled under ,the terms of their employment till they attained the age of 58 years. As regards any payments received by the workmen pursuant to the award or after the notice of termination those shall also be adjusted accordingly and the appellant undertakes not to claim_refund of any amounts which have already between received by them in excess of the amounts due. No order as to costs. V.P.S. Appeal allowed.

In accordance with the provisions of the , and the U.P. Industrial Employment (Standing Orders) Rules, 1946, the appellant substituted draft standing defining the conditions of employment of its employees and they were certified bythe Certifying Officer in 1951. Clause 32 of the Standing Orders provided that an employee who has served 30 years or who has reached the age of 55 years will be retired, but, exemption from this may be granted by the company in special case. In 1959, notices were served on the respondent workmen that they were retired by reason of their having attained the age of superannuation as per cl. 32. The workmen contended that the clause was not binding or enforceable as far as they were concerned, because, they had entered the service of the appellant prior to the certification of the Standing Orders and there was no condition that they would be liable to retirement after attaining any prescribed age or any fixed period of service, and that they were entitled to continue in service as long as they were physically. The industrial dispute was referred to the Industrial Tribunal and the Tribunal held in favour of the appellant. The respondents filed a writ petition in the High Court They also applied in 1960, under s ' 10(2) of the , for amendment and motification of cl. 32 claiming fixation of retirement age at 60. The Certifying Officer modified the clause and fixed the age of retirement at 58, but the appellate authority refixed it at 55. The High Court, in the writ petition, on the basis of the decision or this Court in Guest Keen Williams Pvt. Ltd.; , her that Cl. 32 was not applicable to the employees and directed the Tribunal to rehear the case. The Tribunal thereafter held that the respondent. workmen were wrongfully and unjustifiably retired. In appeal to this Court, HELD : (1) It was not intended by the Legislature that different sets of conditions should apply to employees depending on whether workman was employed before the Standing Orders were certified by after, as that would defeat the object of the legislation. The objection and 755 scheme of the Act is that the employers must define precisely the conditions of employment of all the employees and have them certified by the Certifying Officer. The right given to be workmen to express their views, to raise objections, to appeal to the appellate authority and to ask for modification of the Standing Orders under section 10 of the Act, show that every possible safeguard has provided in the interests of the workmen. Moreover, the individual items in the Schedule to the Act show that there cannot be different conditions for different employees depending upon the point of time when they came to be employed, for that would result in a great deal of heart burning between the employees inter se. [762 F H; 763 A D] Salem Erode Electricity Distribution Co. Ltd. vs Its Workers; ; , and Agra Electric Supply Co. Ltd., vs Sri Alladin & Ors. ; , followed. (2) The decision in Guest Keen Williams Pvt. Ltd. that the Industrial Tribunal had to consider not only the propriety, reasonableness and fairness of a Standing Order but that it had also to deal with the question as to whether a particular Standing Order could be made applicable to employees who had already been employed without any limit as to age of retirement was delivered under the unamended section 4 of the Act, under which the Certifying Officer or the appellate authority could not go into the reasonableness or fairness of the Standing Orders. But after the amendment of the section in 1956, the Certifying Officer and the appellate authority are bound to examine the question of fairness of the standing orders, and therefore, there can be no justification now for not giving effect to the principle of uniformity of conditions of service which is clearly contemplated by the provisions of the Act. [763 D F] (3) But cl. 32 of the Standing Orders as certified in 1951 was not valid and could not be binding on the respondents, because, there was then 'no item in the Schedule to the Act covering cases of superannuation or retiretirement, with respect to which Standing Orders could be made. [766 E F, G H] Item 8 and 9 of the Schedule deal with the termination of employment and notice thereof, and suspension or dismissal for misconduct. The language of item 8 shows that it does not cover the case of superannuation, which does not depend on )any notice and which covers an event which is automatic and which must be given effect to without any volition on the Part of the employer or workmen. If termination is to be read in a wide sense as meaning 'employment coming to an end ' there was no necessity to have item 3, because, dismissal would then be covered by termination. From the paragraph 13 of the Model Standing Orders contained in the Schedule to Rules it is apparent that item 8 is confined to termination of employment by notice in writing and 'does not refer to superannuation or retirement. It was only in 959 that item 11(C) was introduced in the Schedule enabling the framing of Standing Orders in relation to the age of retirement and superannuation. [765 F H; 766 A C] Saroj Kumar vs Orissa State Electricity Board, A.I.R. 1970 Orissa, 126, approved. Management of the Windu ' vs Secretary Hindu Office & National Press Employees Union, , disapproved. (4) No assistance can be derived by the use of the word 'retirement ' in para, 16 of the Model Standing Orders, because, it may well refer to 756 retirement under the terms of the contract of employment entered into between the employer and the employees. [765 A B, E] (5) Since before the amendment of section 4 the Certifying Officer and the appellate auhority were debarred from adjudicating upon, the fairness or reasonableness of the Standing Orders, the Certifying Officer at that time, could not certify any Standing Order on the ground that it was reasonable or fair. Therefore, in 1951, when the Standing Orders were certified, cl. 32 could not have been framed because there was no item in the Schedule relating to superannuation and the Certifying Officer could not certify it on the ground it was fair and reasonable because he bad no power to do so. [766 D F] (6) The Certifying Officer, however, when be modified cl. 32 and fixed the retirement age at 58 (after section 4 was amended) could have validly certified such clause as modified by him. This Court could also give an appropriate direction with regard to fixing the age of superan , nuation. In the circumstances of this case the age of superannuation should be 58 years. Therefore, the concerned workman should be deemed to have continued in service of the appellant till they had attained the age of 58 years. [767 A C, G H] (7) The order of the High Court in the writ petition did not finally termingte the proceedings at all. The proceedings were terminated only by the award of the Industrial Tribunal after remand. Therefore, the order of the High Court following Guest Keen William 's case did not debar a fresh consideration of the question by virtue of the rule or principle of res judicata. [768 A B, E F] Satyadhyan Ghosal vs Smt. Deorajan Devi, [1960] 3 S.C.R. 590, followed. Management, of N. Railway Co operative Society vs Industrial Tribunal, ; , explained.

Appeal No. 1406 of 1969. Appeal from the judgment and order dated April 17, 1969 of the Delhi High Court in Civil Writ No. 611 of 1968. The appellant appeared in person. Jagadish Swarup, Solicitor General, R. L. Mehta and R. N. Sachthey, for the respondents. The Judgment of the Court was delivered by Ray, J. This appeal by certificate from the judgment of the High Court at Delhi challenges the order dated 5th July, 1968 placing the appellant under suspension. The appellant canvassed two grounds : first, that the order of suspension was passed on a report which was made mala fide, and, therefore, the order of suspension was bad; secondly, the order of suspension was made under sub rule (1) of Rule 7 of the All India Service (Appeal and Discipline) Rules, 1955, and is, therefore, liable to be quashed. The appellant was appointed to the Indian Police Service in the year 1935. He was posted as Inspector General of Police of the State of Andhra Pradesh, on 1 November, 1956. He was ,confirmed as Inspector General of Police, Andhra Pradesh in the year 1957. On 14 May, 1966, he reached the age of 55 years. 'He, however, continued to work as Inspector General of Police, Andhra Pradesh up to 1 August, 1967. He was then posted as Special Inspector General of Police for the revision of Police Standing Orders. 123 Some time in the year 1967 the Chief Minister of Andhra Pradesh ordered that the Chief Secretary should make an enquiry with regard to certain allegations against the appellant. The Chief Secretary recommended that the Vigilance Commissioner in the State of Andhra Pradesh might be requested to look into the matter. The Vigilance Commissioner advised that the enquiry should be conducted by an independent agency like the Central Bureau of Investigation. The Central Bureau of Investigation thereafter made an enquiry. The appellant was given allegations to answer. The appellant submitted explanation and was examined. The Central Bureau of Investigation made a report on the enquiry. On 1 1 July., 1968 the Government of India, Ministry of Home Affairs made an order placing the appellant under suspension. The appellant alleged as follows. The Chief Minister of the State of Andhra Pradesh was inimical and hostile to the appellant since the time of the General Elections in the year 1967. The investigation by the Central Bureau of Investigation was conducted by persons who were hostile to the appellant. The Ministry of Home Affairs ' Government of India, should not have relied on the report because the initiation and the conduct of the enquiry were motivated mala fide on the part of the Chief Minister of the State and other persons. The other contention of the appellant was that under sub rule (1) of Rule 7 of the All India Service (Appeal and Discipline) Rules, 1955 the order of suspension could be made only if disciplinary proceeding was initiated and the Government was satisfied that there should be an order and in the present case the order did not satisfy the provisions of the rule, and therefore, the order is bad. The pre eminent question in this appeal is whether the order of suspension is in infraction of Rule 7. Rule 7 is as follows "(1) If having regard to the nature of the charges and the circumstances in any case the Government which initiates any disciplinary proceeding is satisfied that it is necessary or desirable to place under suspension the member of the Service against whom such proceedings are started that Government may (a) if the member of the Service is serving under it pass an order placing him under suspension, or (b) if the member of the Service is serving another Government, request that Government to place him under suspension, pending the conclusion of the inquiry and the passing of the final order in the case 124 Provided that in cases where there is a difference of opinion between two State Governments the matter shall be referred to the Central Government whose decision thereon shall be final. (2). . . . . (3) A member of the Service in respect of or against whom, an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge, if the charge is connected with his position as a Government servant or is likely to embarrass him in the discharge of his duties or involves moral turpitude". Rule 7 sub rule (1) contemplates suspension when disciplinary proceeding is initiated and the Government is satisfied that it is necessary to place a member of the Service under suspension. It was contended by the appellant that the order of suspension was made under sub rule (1) in the present case without any disciplinary proceedings. The order does not have any reference to sub rule (1) of Rule 7. The order recites first that there are ' serious allegations of corruption and malpractice against the appellant, secondly that the enquiry made by the Central Government revealed that there is a prima facie case and thirdly that the Government of India after considering the available material and having regard to the nature of the allegations against the appellant, the circumstances of the case is satisfied that it is necessary and desirable to place the appellant under suspension. At the hearing of the appeal Mr. Solicitor General produced the correct copy of the First Information Report dated 17 August, 1967 under section 154 of the Code of Criminal Procedure. It will appear from the report that the appellant was charged with offences under the Prevention of Corruption Act, 1947 and the time of occurrence was the period 1960 to 1967. Sub rule (3) of Rule 7 states that a member of the Service in respect of, or against whom, an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge. The appellant contended that the appellant was not suspended under sub rule (3) of Rule 7. That is a contention The facts are that there was an investigation and the trial is awaiting relating to a criminal charge against the appellant. The order of suspension has to be read in the context of the entire case and 1 2 5 combination of circumstances. This order indicates that the Government applied its mind to the allegations, the enquiries and ;the circumstances of the case. The appellant has failed to establish that the Government acted mala fide. There is no allegation against any particular officer of the Government of India about acting mala fide. The order or suspension was made under subrule (3) and does not suffer from any vice of infringement of Rule 7. The appellant made allegations against the Chief Minister of Andhra Pradesh and other persons some of whose names were disclosed and some of whose names were not disclosed. Neither the Chief Minister nor any other person was made a party. The appellant filed an affidavit in support of the petition. Neither the petition nor the affidavit was verified. The affidavits which were filed in answer to the appellant 's petition were also not verified. The reason for verification of affidavits are to enable the Court to find out which facts can be said to be proved on the affidavit evidence of, rival parties. Allegations may be true to knowledge or allegations may be true to information received from persons or allegations may be based on records. The importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations. In essence verification is required to enable the Court to find out as to whether 'it will be safe to act on such affidavit evidence. In the present case, the affidavits of all the parties suffer from the mischief of lack of proper verification with the result that the affidavits should not be admissible in evidence. The affidavit evidence assumes importance in the present case because of allegations of mala fide acts on the part of the respondents. The appellant alleged that the Union of India made the order of suspension because of the pressure of the Chief Minister of the State of Andhra Pradesh. The appellant, however, did not name any person of the Union of India who acted in that manner and did not implied the Chief Minister as a party. In order to succeed on the proof of mala fides in relation to the order of suspension, the appellant has to prove either that the order of suspension was made mala fide or that the order was made for collateral purposes. In the present case, the appellant neither alleged nor established either of these features. The appellant contended that the report of the Central Bureau of Investigation was made mala fide. The appellant appeared before the investigation authorities. We ate not concerned with the correctness and the propriety of the report. We have only to examine whether the order of suspension was warranted by the rule and also whether it was in honest exercise of powers. The order of suspension satisfied both the tests in the present case. 126 In view of the fact that the criminal case is pending, it is desirable not to express any opinion on the merits and demerits of the charges as also the rival contentions of the parties because such an opinion may cause prejudice. The appellant raised a contention as to the vires of the and the validity of the investigation. In view of the fact that sanction for the trial is pending pursuant to the investigation under the First Information Report dated 17 August, 1967 the appellant did not want a decision on this point in this appeal because the appellant would raise that contention in the criminal case. We have, therefore, left open the contention as to the to enable the appellant to agitate that contention, if so advised, in the criminal trial. The appeal, therefore, fails and is dismissed. In view of the fact that there was no order as to costs in the High Court, we are of opinion that each party should bear its costs in this Court. G.C. Appeal dismissed.

The appellant was appointed to the Indian Police Service in 1935. in November 1956 he was posted in Andhra Pradesh as Inspector General of Police and in August 1967 he was posted as Special Inspector General of Police for revision of Police Standing Orders. In that year the Chief Minister of Andhra Pradesh ordered the Chief Secretary to make an enquiry with regard to certain allegations against the appellant. The Chief Secretary recommended that the matter be referred to the Vigilance Commissioner who advised that the matter be investigated by the Central Bureau of Investigation. Thereafter the said Bureau made an enquiry, considered the appellant 's explanations and made a report. In July 1968 the Government of India, Ministry of Home Affairs placed the appellant under suspension. The appellant filed a writ petition in the High Court at Delhi and failing there filed an appeal in this Court. The appellant 's contentions that fell for consideration were (i) that under sub r. (1) of R. 7 of the All India Service (Appeal and Discipline) Rules, 1955 the order of suspension could be made only if disciplinary proceeding was initiated and the Government was satisfied that there should be an order; in the present case the order did not satisfy this condition and was therefore bad; (ii) that the Chief Minister of Andhra Pradesh was hostile to him and the investigation by the Central Bureau of Investigation was conducted by persons hostile to him; the Ministry of Home Affairs should not have relied on the report since the enquiry was initiated and conducted mala fide. HELD, : (i) The order in question had no reference to sub r. (1) of R. 7, but was an order under R. 7(3) which states that a member of the service in respect of or against whom an investigation inquiry or trial is pending may, at the discretion of the Government under which he is serving be placed under suspension until the termination of all proceedings relating to the charge. The appellant, as appeared from the First Information Report against him stood charged with offences, under the Prevention of Corruption Act and the time of occurrence was the period 1960 to 967. There was an investigation and the trial was awaiting relating to the criminal charge against the appellant. The order of suspension had to be read in the context of the entire case and the combination of circumstances. This order indicated that the Government applied its mind to the allegations, the enquiries and the circumstances of the case. The appellant had failed to establish that the Government acted mala fide. There was no allegation against any particular officer of the Government of India about being mala fide. The order of suspension, thus made under sub r. (3) did not suffer from any vice of infringement of R. 7(1). [124 D 125 B] (ii)The affidavits of the parties in the present case suffered from the mischief of lack of verification with the result that the affidavits should C.I./70 9 122 not be admissible in evidence. The importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations. in essence verification is required to enable the court to find out as to whether it will be safe to act on such affidavit evidence. [125 C E] The affidavit evidence assumed importance in the present case because of allegations of mala fide acts on the part of the respondents. The appellant did not name any person of the Union of India who acted in that manner and did not implied the Chief Minister as a party. In order to succeed on the proof of mala fides in relation to the order of suspension, the appellant had to prove either that the order of suspension was made mala fide or that the order was made for collateral purposes. The appellant had neither alleged nor established either of these features. [125 F G] The allegation of mala fide against the Central Bureau of Investigation did not arise for consideration because what was in question was not its report but the order of suspension which satisfied R. 7(3) and was in honest exercise of powers. [125 H]

ivil Appeal (C) No. 137 of 1991. From the Judgment and Order dated 20.2.1989 of the Allahabad High Court in W.P. No. 3096 of 1980. Yogeshwar Prasad and Ms. Shoba Dixit for the Appellants. R.B. Datar, R.K. Khanna and Surya Kant for the Respondent. The Judgment of the Court was delivered by SINGH, J. Leave granted. This appeal is directed against the judgment of the Allahabad High Court (Lucknow Bench) setting aside the order dated 23.9.1980 terminating the respondent 's services. The sole question which falls for consideration in this appeal is whether the order dated 23.9.1980 terminating the respondent 's services, who was admittedly an ad hoc and temporary employee is vitiated in law. The High Court has held that since juniors to the respondent were retained in service while the respondent 's services were terminated, the order of termination was discriminatory in nature. It further held that since the order of termination was founded on an adverse entry awarded to the respondent his character roll without giving him any opportunity on the ground that he was not suitable, the order "cannot be said to be a decision given in good faith. " The High Court further observed: "Even if any punishment was to be awarded, it should have been proportionate to the alleged offence , if any." On these findings the High Court held that the order of termination suffered from apparent error of law, it accordingly allowed the respondent 's writ petition and quashed the order of termination. The factual matrix of the case is in a short compass. The respon 32 dent, was appointed on ad hoc basis on 18.2.1977 as an Assistant Auditor under the Local Funds Audit Examinater of the State of Uttar Pradesh, for a fixed period ending on 31.8.1977. In December, 1977 the respondent was again appointed on ad hoc basis for a period ending on 28.2.1978. Since the regular appointment could not be made in time, the respondent 's services were extended from time to time. The last extension was granted on 21.1.1980 and the extended period of service was to expire on 28.2.1981. The terms and conditions of respondent 's service as contained in the order of appointment stated that the appointment was ad hoc, purely temporary for the term fixed in the order and his services were liable to be terminated at any time without assigning any reason. He was awarded an adverse entry in his character roll for the year 1977 78. The entry stated that the respondent 's work was poor and he should work hard and take interest in the work. The respondent made representation against the entry but the same was rejected. The respondent and Rajendra Prasad Pandey another Sub Auditor both were deputed to audit the accounts of Raja Raghunbar Dayal Inter College, Sitapur for the year 1979 80. While carrying on the Audit the respondent and Rajendra Prasad Pandey both are alleged to have acted in excess of their authority in auditing the "Boys Fund Accounts" of that College for the year 1978 79 on their own accord without any authority for the same. They issued audit note under their own signatures and also irregularly demanded a high amount of Rs. 13,250.70 as audit fee and collected an amount of RS. 2,000 as audit fee for which they issued receipts under their own signatures. On receipt of complaint a preliminary inquiry was held that it was found that the allegations against the respondent and Rajendra Prasad Pandey were correct and both of them had acted beyond their authority and collected a sum of Rs. 2,000 as audit fee for the audit of the Boys Fund Accounts, although the Boys Fund of the Institution did not fall within the purview of audit of the Local Funds Audit and no fee was chargeable for the audit of such Fund. After the preliminary inquiry report, the respondent was relieved from his duties from Sitapur and directed to join his duties at Allahabad, but the respondent proceeded on leave and did not join his duties at Allahabad. Ultimately, the respondent 's services were terminated by the order dated 32.9.1980 and on the same day by another order, service of Rajendra Prasad Pandey were also terminated. Both the aggrieved persons filed writ petitions in the High Court at Lucknow Bench under Article 226 of the Constitution contending that their termination orders were illegal, having been passed in violation of Article 311 of the Constitution. The writ petition filed by Rajendra prasad pandey was dismissed but the respondent 's writ petition was allowed by a 33 Division Bench of the High Court on the ground as noted earlier. There is no dispute that the respondent was an ad hoc and temporary employees and the terms and conditions of his employment were regulated by the U.P. Temporary Government Servant (Termination of Services0 Rules, 1975. The contract of service as contained in the appointment letter also stipulated the terms and conditions of the respondent 's employment that his services were liable to be terminated at any time without assigning any reason or compensation. In the counter affidavit filed before the High Court the order of termination was defended on the ground that the respondent 's work and conduct were not satisfactory and he was unsuitable for the service, therefore his services were terminated. To support that contention the appellant placed reliance on the adverse entry awarded to the respondent in the year 1977 78 and also on the allegations made against him with raged to the audit of the Boys Fund of Raja Raghubar Dayal Inter College. The High Court held that since junior persons to the respondent in service were retained, the order of termination was rendered illegal. In our opinion, the principle of 'last come first go ' is applicable to a case where on account of reduction of work or shrinkage of cadre retrenchment takes place and the services of employees are terminated on a count of retrenchment. In the event of retrenchment the principle of 'last come first go ' is applicable under which senior in service is retained while the junior 's services are terminated. But this principle is not applicable to a case where the services of a temporary employee are terminated on the assessment of his work and suitability in accordance with terms and conditions of his service. if out of several temporary employees working in a department a senior is found unsuitable on account of his work and conduct, it is open to the competent authority to terminate his services and retain the services of juniors who may be found suitable for the service. Such a procedure does not violate principle of equality, enshrined under Articles 14 and 16 of the Constitution. if a junior employees is hard working, efficient and honest his services could not be terminated with a view to accommodate the senior employee even though he is found unsuitable for the service. if this principle is not accepted there would be discrimination and the order of the termination of a junior employee would be unreasonable and discriminatory. On the admitted set of facts, the order of termination in the instant case, could not be rendered illegal or unjustified on the ground of juniors being retained in service. The view taken by the High Court is not sustainable in law. 34 The High Court held that the termination of respondent 's services on the basis of adverse entry in the character roll was not in good faith and the punishment imposed on him was disproportionate. it is unfortunate that the High Court has not recorded any reasons for this conclusion. The respondent had earned an adverse entry and complaints were made against him with regard to the unauthorised audit of the Boys Fund in an educational institution, in respect of which a preliminary inquiry was held and thereupon, the competent authority was satisfied that the respondent was not suitable for the service. The adverse entry as well as the preliminary inquiry report with regard to the complaint of unauthorised audit constituted adequate material to enable to competent authority to form the requisite opinion regarding the respondents suitability for service. Under the service jurisprudence a temporary employee has no right to hold the post and his services are liable to be terminated in accordance with the relevant service rules and the terms of contract of service. If on the perusal of the character roll entries or on the basis of preliminary inquiry on the allegations made against an employee, the competent authority is satisfied that the employee is not suitable for the service whereupon the services of the temporary employee are terminated, no exception can be taken to such an order of termination. A temporary Govt. Servant has no right to hold the post, his services are liable to be terminated by giving him one month 's notice without assigning any reason either under the terms of the contract providing for such termination or under the relevant statutory rules regulating the terms and conditions of temporary Govt. servants. A temporary Govt. servant can, however, be dismissed from service by way of punishment. Whenever, the competent authority is satisfied that the work and conduct of a temporary servant is not satisfactory of that his continuance in service is not in public interest on account of his unsuitability, misconduct or inefficiency, it may either terminate his services in accordance with the terms and conditions of the service or the relevant rules or it may decide to take punitive action against the temporary Government servant. if it decides to take punitive action may hold a formal inquiry by framing charges and giving opportunity to the Govt. servant in accordance with the provisions of article 311 of the Constitution. since, a temporary Govt. servant is also entitled to the protection of Article 311(2) in the same manner as a permanent Govt. servant, very often, the question arises whether an order of termination is in accordance with the contract of service and relevant rules regulating the temporary employment or it is by way of punishment. It is now sell settled that the form of the order is not conclusive 35 and it is open to the Court to determine the true nature of the order. in Parshotam Lal Dhingra vs Union of India; , a Constitution Bench of this Court held that the mere use of expressions like 'terminate ' or 'discharge ' is not conclusive and in spite of the use of such expressions, the Court may determine the true nature of the order to ascertain whether the action taken against the Govt. servant is punitive in nature. The Court further held that in determining the true nature of the order the Court should apply two tests namely: (1) whether the temporary Govt. servant had a right to the post or the rank or (2) whether he has been visited with evil consequences; and if either of the tests is satisfied, it must be held that the order of termination of a temporary Govt. servant is by way of punishment. It must be borne in mind that a temporary Govt. servant has no right to hold the post and termination of such a Govt. servant does not visit him with any evil consequences. The evil consequences as held in Parshotam Lal Dhingra 's case (supra) do not include the termination of services of a temporary Govt. servant in accordance with the terms and conditions of service. The view taken by the Constitution Bench in Dhingra 's case has been reiterated and affirmed by the Constitution Bench decisions of this Court in the State or Orrisa and anr. vs Ram Narayan Das; , ; R.C. Lacy vs The State of Bihar & Ors., C.A. No. 590/62 decided on 23.10.1963; Champaklal Chimanlal Shah vs The Union of India, ; Jagdish Mitter vs The Union of India, ; A.G. Benjamin vs Union of in`ia, C.A. No. 1341/66 decided on 13.12.1966 and Shamsher Singh & Anr. vs State of Punjab,[1975] 1 SCR 814, These decisions have been discussed and followed by a three Judge Bench in State of Punjab & Anr. vs Shri Sukh Raj Bahadur, ; Learned counsel for the respondent urged that the allegations made against the respondent in respect of the audit of Boys Fund of an educational institution were incorrect and he was not given any opportunity of defence during the inquiry which was held ex parte. had he been given the opportunity, he would have placed correct facts before the inquiry officer. His services were terminated on allegation of misconduct founded on the basis of an ex parte enquiry report. He further referred to the allegations made against the respondent in the counter affidavit filed before the High Court and urged that these facts demonstrate that the order of termination was in substance, an order of termination founded on the allegations of misconduct, and the ex parte enquiry report. In order to determine this question, it is necessary to consider the nature of the respondent 's right to hold the post and to ascertain the nature and purpose of the inquiry held against 36 him. As already observed, the respondent being a temporary Govt. servant had no right to hold the post, and the competent authority terminated his services by an innocuous order of termination without casting any stigma on him. The termination order does not indict the respondent for any misconduct. The inquiry which was held against the respondent was preliminary in nature to ascertain the respondent 's suitablity and continuance in service. There was no element of punitive proceedings as no charges had been framed, no inquiry officer was appointed, no findings were recorded, instead a preliminary inquiry was held and on the report of the preliminary inquiry the competent authority terminated the respondent 's services by an innocuous order in accordance with the terms and conditions of his service. Mere fact that prior to the issue of order of termination, an inquiry against the repondent in regard to the allegations of unauthorised audit of Boys Fund, was held does not change the nature of the order of termination into that of punishment as after the preliminary inquiry the competent authority took no steps to punish the respondent instead it exercised its power to terminate the respondent 's services in accordance with the contract of service and the Rules. In State of Orissa & Anr. vs Ram Narain Dass, ; a Constitution Bench of this court considered the question and indicated "the fact of the holding of an inquiry is not decisive of the question. What is decisive is whether the order is by way of punishment in the light of the tests laid down in Purshottam Lal Dhingra 's case." In Jagdish Mitter 's case (supra) a Constitution Bench of this Court held that every order terminating the services of a temporary public servant does no amount to dismissal or removal from service merely because an inquiry was held before the order of termination was passed. The Court observed that the appropriate authority has power to terminate a temporary public servant either by discharging him under the terms of contract or the relevant rules or by holding departmental disciplinary inquiry and dismissing him from service. Before passing order of termination the competent authority may hold inquiry in fairness to ascertain whether the temporary servant should be continued in service or not. While discussing the nature of preliminary inquiry the Court observed as under: "There is no element of punitive proceedings in such an enquiry; the idea in holding such an enquiry is not the punish the temporary servant but just to decide whether he 37 deserves to be continued in service or not. If as a result of such an enquiry, the authority comes to the conclusion that the temporary servant is not suitable to be continued, it may pass a simple order of discharge by virtue of the powers conferred on it by the contract or the relevant rule; in such a case, it would not be open to the temporary servant to invoke the protection of article 311 for the simple reason that the enquiry which ultimately led to his discharge was held only for the purpose of deciding whether the power under the contract or the relevant rule should be exercised and the temporary servant discharged. " In Champaklal chiman lal Shah 's case (supra) the appellant therein was a temporary employee of the Union Government. His services were terminated without assigning any reasons and without affording him opportunity of showing cause. Before passing the order of termination the competent authority had issued a notice to Champaklal Chimanlal Shah calling upon him to explain certain irregularities and to show cause why disciplinary action should not be taken against him. In response to the notice, he submitted his explanation thereupon, certain preliminary enquiries were held, but he was not given opportunity to place his case during the preliminary enquiry. However, after the preliminary enquiry to regular departmental enquiry was held instead proceedings for departmental enqiury were dropped and the services of Chimanlal Shah were terminated in accordance with the terms and conditions of service of a temporary Govt. servant. The termination order was assailed on the ground that the order of termination was in substance an order of punishment. the Constitution Bench held that the order of termination was not an order of punishment and the appellant was not entitled to the protection of Article 311(2) of the Constitution. The Court emphasised that when a preliminary enquiry is held against a temporary Govt. employee, it must not be confused with the regular departmental inquiry which usually follows the preliminary inquiry, after the government decides to frame charges and to get a departmental enquiry made, with a view to inflict one of the three major punishments on the Govt. servant. So far as the preliminary enquiry is concerned, there is no question of it being governed by Article 311(2) of the Constitution, as it is made for the purpose of collection of facts to enable to the competent authority to decide whether punitive action should be taken or action should be taken in terms and under the contract of service or the rules applicable to a temporary government servant. A Govt. servant has no right to insist for affording him opportunity during such enquiry and such an 38 ex parte enquiry is not initiated in law in view of the purpose and object of preliminary enquiry. On an elaborate discussion, the Court observed as under: "In short a preliminary enquiry is for the purpose of collection of facts in regard to the conduct and work of a government servant in which he may not be associated so that the authority concerned may decide whether or not to subject the servant concerned to the enquiry necessary under article 311 for inflicting one of the three major punishments mentioned therein. Such a preliminary enquiry may even be held ex parte for it is merely for the satisfaction of government, though usually for the sake of fairness, explanation is taken from the servant concerned even at such an enquiry. But at that stage he has no right to be heard for the enquiry is merely for the satisfaction of the Government, and it is only when the government decides to hold a regular departmental enquiry for the purposes of inflicting one of the three major punishments that the government servant gets the protection of article 311 and all the rights that protection implies as already indicated above. There must therefore be no confusion between the two enquiries and it is only when the government proceeds to hold a departmental enquiry for the purpose of inflicting on the government servant one of the three major punishments. indicated in article 311 that the government servant is entitled to the protection of that Article. That is why this Court emphasised in Parshotam Lal Dhingra 's case (supra) and in Shyamlal vs The State of Uttar pradesh; , that the motive or the inducing factor which influences the government to take action under the terms of the contract of employment or the specific service rule is irrelevant. " The above principles were reiterated by another Constitution Bench of this Court in R.C. Lacy 's case (supra) dealing with the case of reversion of a permanent Govt. servant officiating on a higher post. The Bench observed that the Government might find it necessary to terminate the services of a temporary employee if it is not satisfied with the conduct or work of an employee and the same reasoning applies to a public servant who is reverted from a higher post to his substantive lower post, if the higher post was held in a temporary nature. Before terminating the services of a temporary servant or reverting the person 39 officiating in a higher post to his substantive post, the Govt. may hold a preliminary enquiry to form the requisite satisfaction for the continuance of the officiating govt. servant. Such an inquiry does not change the nature of the order of the termination or reversion. In A.G. Benjamin 's case (supra) the appellant was temporarily employed as a Store Officer in the Central Tractor Organisation, his services were terminated under the Central Civil Service (Temporary Service) Rules, 1949 by granting him one month 's salary in lieu of notice. Benjamin contended that the order of termination was in fact an order of punishment, which had been passed without affording him the protection under Article 311(2) of the Constitution. In that case before the issue of termination order, a notice had been issued to Benjamin for showing cause as to why disciplinary action should not be taken on the allegations made against him in respect of which the charges had been framed and an enquiry officer had been appointed. After the charges were framed and the explanation of Benjamin was obtained, the Chairman of the Central Tractor Organisation submitted a note to the Government that the departmental proceedings may take much longer time and he was not sure that after going through all the formalities of departmental enquiry Benjamin will be dealt in the way he deserved, therefore, he suggest that action should be taken under Rule 5 of the Central Civil Service (Temporary Service) Rules, 1949 for terminating his services by giving him one month 's salary in lieu of notice as he was a temporary Govt. servant. The Minister concerned accepted the recommendations, whereupon, order of termination was issued terminating the services of Benjamin. While assailing the order of termination, it was seriously contended before this Court that in view of the charges being framed and the enquiry officer having been appointed the order of termination in substance was an order of punishment and the recourse to the temporary service rules had been taken only to circumvent article 311 of the Constitution. The Constitution Bench repelled the contention and held that the preliminary enquiry held against the Govt. servant must not be taken to mean that the Govt. had taken decision to inflict major punishment on Benjamin. The Court held that no temporary Govt. servant is entitled to opportunity in the preliminary inquiry as "there is no element of punitive proceedings in such an inquiry; the idea in holding such an inquiry is not to punish the temporary government servant but just to decide whether he deserves to be continued in service or not. " Further the Constitution Bench held that even if formal departmental inquiry is initiated against the temporary Govt. servant, it is open to the competent authority to drop further proceedings in the departmental enquiry 40 against the temporary govt. servant and to have recourse to Rules applicable to a temporary Govt. servant for terminating his services. The Court observed as under: "If therefore the authority decides, for some reason, to drop the formal departmental enquiry even though it had been initiated against the temporary govt. servant, it is still open to the authority to make an order of discharge simpliciter in terms of the contract of service or the relevant statutory rule. In such cases the order of termination of services of the temporary govt. servant which in form and in substance is no more than his discharge affected under the terms of contract or the relevant rule cannot, in law, be regarded as his dismissal, because the appointing authority was actuated by the motive that the said servant did not deserve to be continued in service for some alleged inefficiency or misconduct. " We have referred to the above decision in detail to dispel any doubt about the correct position of low. It is erroneous to hold that where a preliminary enquiry into allegations against a temporary govt. servant is held or where a disciplinary enquiry is held but dropped or abandoned before the issue of order of termination, such order is necessarily punitive in nature. Learned counsel for the respondent placed reliance on the decisions of this Court in Nepal Singh vs State of U.P. & Ors.; , and Ishwar Chand Jain vs High Court of Punjab & Haryana & Anr., ; in support of his contention that the termination order is punitive in nature. In Nepal Singh 's case a disciplinary inquiry was instituted against Nepal Singh who was a temporary sub Inspector of Police, on the charge of having contracted a second marriage during the life time of his first wife without prior permission of the Government in violating of Rule 29 of the U.P. Government Servants ' Conduct Rules, 1956. Before any finding could be rendered the inquiry was dropped for want of territorial jurisdiction of the concerned Superintendent of Police, and thereafter, his services were terminated in accordance with the rules applicable to the temporary Government servants by giving him one month 's pay in lieu of notice. nepal Singh unsuccessfully challenged the order of termination before the High Court, but his appeal was allowed by a three Judge Bench of this Court. This Court quashed the order of termination on three grounds. Firstly,it held that the order of termination was arbitrary, violative of 41 Articles 14 and 16 of the Constitution as power of termination had not been exercised honestly, in good faith for valid considerations. Secondly, the grounds mentioned in the report of the superintendent of Police on the basis of which the services of the Sub Inspector had been terminated were mere allegations and there was no definite material for terminating his services. Thirdly, the Court held that since the inquiry against Nepal Singh on the charges had been dropped for want of jurisdiction and since no attempt was made to institute a proper inquiry, instead his services were terminated on the allegation of misconduct the order of termination was violative of Article 311(2) of the Constitution. The Court further held that the termination order had been passed to circumvent the constitutional provision of article 311(2) of the Constitution. The facts and circumstances in Nepal Singh 's case were quite different than those in the instant case. However, Nepal Singh 's case is no authority for the proposition that the services of an ad hoc and temporary employee cannot be terminated even if the competent authority on an assessment of the work and the conduct of the employee finds him unsuitable for the service. The Court 's observations in Nepal Singh 's case that since the enquiry against nepal Singh on certain charges was dropped and his services were terminated under the rules applicable to the temporary govt. servant with a view to circumvent the protection of Art 311(2) of the Constitution and as such the order of termination was illegal, must be confined to the facts of that case. It appears that he decisions in the case of Champaklal (supra) and R.C. Lacy (supra) and the principles laid down therein were not brought to the notice of the Bench. Had those decisions been placed before the Court, the finding that the termination order had been passed to circumvent the provision of article 311(2) merely because departmental inquiry was dropped and the termination order had been passed, may not have been made. The decision of Nepal Singh 's case in this regard is per incurium. In Ishwar Chand Jain 's case the order of termination of Probationary Judicial Officer was set aside by this Court on the ground that no relevant material had been taken into consideration in assessing the satisfactory nature of the work and conduct of the Officer on probation. The Court held that some of the material which had been taken into account in adjudging the Judicial Officer 's work and conduct as unsatisfactory was not relevant. The decision has no relevance to the instant case. We are, therefore, of the opinion that neither of the two cases relied upon by the respondent lend any support to his case. On the other hand our view is fully supported by the decision of three Judge Bench of this Court in R.K. Misra vs U.P. State Handloom Corporation, In the instant case the repondent was a temporary Government servant and there was adverse report regarding his work which was reflected in the adverse remarks made for the year 1977 78. The competent authority held a preliminary inquiry in the allegations of improper conduct in carrying out unauthorised audit of Boys Fund of an educational institution, On result of the preliminary enquiry no charges were framed against the respondent, no officer was appointed for holding the departmental inquiry instead the competent authority chose to terminate the respondent 's services in exercise of its power under the terms of contract as well as under the relevant rules applicable to a temporary Govt. servant. It never intended to dismiss the respondent from service. Holding of preliminary inquiry does not affect the nature of the termination order. The allegations made against the respondent contained in the counter affidavit by way of a defence filed on behalf of the appellants also do not change the nature and character of the order of termination. The High Court failed to consider the question in proper perspective and it interfered with the order of termination in a casual manner. We, accordingly, allow the appeal and set aside the order of the High Court and dismiss the respondent 's Writ Petition. There will be no order as to costs. Y.Lal Appeal allowed.

The respondent was appointed on 18.2.1977 as an Assistant Auditor under the Local Funds Audit Examiner of State of U.P. on ad hoc temporary basis for the term fixed in the order of his appointment and his services were liable to be terminated at any time without assigning any reason. After his initial appointment, his services were extended from time to time till 28.2.1981. He was awarded an adverse entry in his character roll for the year 1977 78 both regarding his conduct as also his work. The respondent alongwith one Rajendra Prasad Pandey, another Sub Auditor, were deputed to audit the accounts of Raja Raghbar Dayal Inter College, Sitapur in respect of the year 1979 80. It is alleged that while auditing the account, they acted in excess of their authority in as much as they audited the 'Boys Fund Accounts ', issued audit note and also irregularly demanded and collected Rs. 2,000 as audit fee, and issued receipt under their signature. On complaint a preliminary enquiry was held and the allegations were found to be correct. After the preliminary inquiry report, the respondent was relieved from his duties from Sitapur and directed to join his duty at Allahabad. Whereupon the respondent proceeded on leave and did not join his duty at Allahabad. The respondent 's services were therefore terminated by order dated 23.9.1980 and by another order services of Pandey were also terminated. Both of them filed writ petitions in the High Court contending that their termination orders were illegal having been passed in violation of Article 311 of the Constitution. Whereas the writ petition filed by Pandey was dismissed, the one filed by the respondent was allowed. The High Court held that since juniors to the respondent were retained in service while the respondent 's services were terminated, the order of termination was discriminatory in nature. The High Court further held that the order of termination was founded on an adverse entry awarded to the respondent hence it was not in good faith; the punishment awarded to the respondent was not proportionate to the alleged offence. Against the 30 said order, the State of U.P. filed a appeal after obtaining special leave. The question involved for consideration is whether the order terminating the services of the respondent is vitiated in law? Allowing the appeal, this Court, HELD: Holding of preliminary inquiry does not affect the nature of the termination order. [42C) In the instant case the respondent was a temporary Government Servant and there was adverse regarding his work which was reflected in the adverse remarks made for the year 1977 78. The competent authority held a preliminary inquiry in regard to the allegations of improper conduct in carrying out unauthorised audit of Boys Fund of educational institution. On result of the preliminary inquiry no charges were framed against the respondent, no officer was appointed for holding the departmental inquiry instead the competent authority chose to terminate the respondent 's services in exercise of its powers under the terms of contract a well as under the relevant rules applicable to a temporary Government servant. [42A C] The principle 'last come first go ' is applicable to a case where on account of reduction of work or shrinkage of cadre, retrenchment takes place and the services of employees are terminated on account of retrenchment. But this principle is not applicable to a case where the services of a temporary employee are terminated on the assessment of his work and suitability in accordance with term and conditions of his service. On the admitted set of facts, the order of termination in the instant case, could not be rendered illegal or unjustified on the ground of juniors being retained in service. The view taken by the High Court is not sustainable in law. [33D H] Appeal allowed, High Court order set aside as it interfered with order of termination in a casual manner. [42D] Parshotam Lal Dhingra vs Union of India. [1958] S.C.R. 828; The State of Orissa & Anr. vs Ram Narayan Das, ; ; R.C. Lacy vs The State of Bihar & Ors., C.A.No 590/62 decided on 23.10.1963; Champaklal Chimanlal Shah vs The Union of India, [1964] AIR S.C.449; A.G. Benjamin vs Union of India, C.A. No. 1341/66 decided on 13.12.1966; Shamsher Singh & Anr. vs State of Punjab, [1975] 1 S.C.R. 814; State of Punjab & Anr. vs Shri Sukh Raj Bahadur, [1968] 3 S.C.R. 31 234; R.K. Misra vs U.P. State Handloom Corporation, , referred to. Nepal Singh vs State of U.P. & Ors., [1985] 1 S.C.C. 56; Ishwar Chand Jain vs High Court of Punjab & Haryana & Anr., ; distinguished.

Appeal No. 347 of 1955. Appeal by special leave from the judgment and order dated March 26, 1954, of the Income tax Appellate Tribunal, Calcutta, in Income tax Appeal No. 5263 of 1953 54. A. V. Viswanatha Sastri and Sukumar Chosh, for the appellant. G. K. Daphtary, Solicitor General of India, B. Ganapathy, R. H. Dhebar and D. Gupta, for the respondent. May 4. The Judgment of Bhagwati and Sinha, JJ., was delivered by Sinha, J. Kapur, J. delivered a separate Judgment. 848 SINHA, J. The only question for determination in this appeal by special leave, is whether the solitary transaction in respect of about three quarters of an acre of land in the suburbs of Calcutta, was an adventure in the nature of trade and, therefore, liable to income tax. The assessee is the appellant. He challenges the correctness of the order of the Income tax Appellate Tribunal, Calcutta Bench, Calcutta, dated March 26, 1954, passed in I.T.A. 5263 of 1953 54, in respect of the Assessment year 1948 49, reversing that of the Appellate Assistant Commissioner of Incometax, Range " C ", Calcutta, dated September 5, 1953. The facts of this case leading upto this appeal are as follows: The appellant is engaged in various types of business activities, being a share holder and Director or Managing Director of several limited liability concerns, and is also a partner in the firm known as " Pioneer Engineering Works ". In respect of his income during the previous two assessment years, the appellant was assessed to income tax on the sums of Rs. 53,000/ (1946 47) and Rs. 59,000/ (1947 48). The appellant holds investments in shares of the value of Rs. 2,45,000/ , out of which, according to the assessee, shares of the value of Rs. 1,95,000/ , though standing in his name, belong to other members of his family, including his father and his wife. The Hindusthan Co operative Insurance Society Limited, of Calcutta, (hereinafter referred to as " the Society "), acquired a block of about 578 bighas of land lying between Diamond Harbour Road and Tolly 's Nullah, within the Municipal limits of the Corporation of Calcutta, between the years 1940 and 1942. The Society decided to level the land thus acquired and to open out roads and after developing the same, it subdivided it into small plots and sites in different blocks suitable for residential purposes under its scheme called " The New Alipore Land Development Scheme No. XV ". The Society offered such plots for sale. One such plot, being plot No. 77 in block " E " of the said Scheme, was agreed, by an agreement dated January 10, 1946, to be sold to the assessee at the rate of Rs. 2,550/ per katha. In pursuance of the said agreement, the assessee paid to the Society, a sum of 849 Rs. 13,099/ being 10% of the estimated price of the plot with an approximate area of 51 kathas, which subsequently, on exact measurement, was found to be 45 56 kathas. Subsequently, on the acceptance of his offer, the appellant paid another SUM of Rs. 19,649 (omitting annas), being 15% of the estimated price. Thus, in all, a sum of Rs. 32,748/ being 25% of the estimated total price of the land, was paid by the assessee to the Society. All this area which the Society had undertaken to develop and sell to different purchasers in small plots, was in occupation of the Government, which had requisitioned it for purposes connected with the prosecution of the Second World War. Hence, one of the terms of the transaction between the assesee and the Society, was that the transaction of purchase would be completed within six months of the lands being released from Government occupation. It was further stipulated that the assessee would be entitled to apply, within three months of the receipt of the notice of de requisition, for extension of time not exceeding one year, for the completion of the transaction on the condition that he paid interest at the rate of 7% per annum on the outstanding amount, during the extended period. If the assessee, as purchaser, paid to the Society another sum which, together with Rs. 32,748/ , already paid, would amount to 50% of the total price of the plot in question (within six months of the notice of de requisition), he could get a conveyance of the property on his executing an English Mortgage for the remaining 50% of the price carrying interest at the rate of 7%, on the expiry of these aforesaid six months. As there was an apprehension that the Government might acquire the whole property for its own purpose, it was further stipulated that in the event of such an acquisition by Government, the agreement for sale would stand rescinded, and the assessee, in that event, would be entitled to re payment of the amounts paid by him to the Society by way of advance for the completion of the transaction. The assessee 's case is that as the terms of the payment of purchase price in several instalments, as aforesaid, were convenient to him, 107 850 he agreed to take the plot on the conditions aforesaid, with a view to building a residential house for himself and constructing a workshop in connection with his business activity. At the end of the Second World War, the assesee 's construction activities began to decline, and there was no immediate prospect of the land in question being de requisitioned by Government. In those circumstances, the assessee negotiated for the assignment of his rights under the agreement with the Society, to Rani Yuddha Rajya Devi of Nepal. The Rani appeared to have taken a fancy to the plot and to have made an attractive offer to the appellant. Hence, after exchange of letters between the parties, it was agreed between them that a sum of Rs. 1,07,000 odd would be deposited by the Rani with the assessee on suspense account until the transaction of sale between the Society as the vendor and the Rani or her nominee, as the vendee, would be executed and the transaction of purchase finalised upon her undertaking to pay the sum of Rs. 98,000 odd to the Society, which was the outstanding amount of the sale price in respect of the plot agreed by the assessee to be purchased by him from the Society. After a good deal of correspondence, on December 27, 1950, the Society executed a deed of conveyance in respect of the said plot, to the daughter of the said Rani as the vendee. The aforesaid vendee executed a deed of mortgage in favour of the Society for the outstanding amount of Rs. 50,900/ , after payment of Rs. 32,700 odd to the Society. In the result, the assessee received, on April 3, 1947, a sum of Rs. 1,07,000 odd from the Rani, in pursuance of the agreement between her and the assessee. Until the execution of the sale deed between the Society and the Rani 's nominee, as aforesaid, the assessee continued to be liable to the Society in respect of the agreement of January 10, 1946. The assessee, thus, received from the Rani a sum of Rs. 74,000 odd in excess of the amount paid by him to the Society. The property, including the plot in question, was not de requisitioned until some time in 1949. In respect of the assessment year 1948 49, the assessee filed a return of his income to the Income tax 851 Department, showing a loss of Rs. 2,000 odd for the financial year 1947 48. In pursuance of the notice under section 23(2) of the Income tax Act, the assessee appeared before the Income tax Officer, Calcutta, and produced all his books of account, including his bank accounts. The Income tax Officer, on an examination of the accounts, and after questioning the assessee, came to the conclusion that the assessee had made a profit of Rs. 74,000 odd from the transaction in question, which, according to him, was an adventure in the nature of trade. Hence, on an examination of the assessee 's accounts, the Income tax Officer included the sum of Rs. 74,485/ as profit from an " adventure in the nature of trade " taxable under section 10 of the Income tax Act as one of the items of income accrued to the assessee during the assessment year 1948 49. The assessee went up in appeal to the Appellate Assistant Commissioner of Income tax, and challenged the conclusion of the Income tax Officer that the sum of Rs. 74,000 odd was profit from an adventure in the nature of trade. It was also taken as one of the grounds of appeal by him that in any event, the receipt accrued to the assessee only in 1950, after the transaction of sale had been completed as between the Rani 's nominee and the Society. The Appellate Assistant Commissioner did not agree with the Income tax Officer that the assessee was not in a position either to complete the transaction of purchase by paying the full amount of consideration, or to erect a building thereon, or to use the land in any other way. He pointed out that under the Scheme, the Society had offered terms of purchase on instalments and on execution of a mortgage in respect of the vended property to the extent of 50% of the consideration money. He also pointed out that the assessee bad considerable investments to the extent of Rs. 2,45,000/ in shares of different limited concerns. He, therefore, came to the conclusion that the assessee was a man of means, and that it could not be said that he had not intended to purchase the plot for his own use. He further hold that the motive of making a profit at the time of the purchase, had not been established by the Department, 852 and that it was a " solitary transaction ". On these findings, he found himself unable to confirm the finding of the Income tax Officer that the profit was from an adventure in the nature of trade. He took the view that the appellant had made an investment which had appreciated considerably in value, and that it was undoubtedly a case of appreciation of capital. Treating it as a " Capital Gain ", he came to the conclusion that as the payment bad been made in 1947, the gain accrued in that year and not in the year 1950, as contended on behalf of the assessee. In the result, he made him liable to pay Capital Gains tax. The Department went up in appeal to the Incometax Appellate Tribunal, which, by its judgment dated March 26, 1954, allowed the appeal. The Tribunal pointed out that the assessee was not a man of such large means as to think of acquiring the plot for his own residential or business purposes. The admitted shares worth Rs. 2,45,000/ standing in his name, the Tribunal pointed out, were held by the assessee, in respect of the major portion, on behalf of other members of his family. The Tribunal also observed that Rs. 32,748/ paid by the assessee to the Society had been paid out of borrowed money. This conclusion does not appear to have been well founded in fact. The accounts do show credits in favour of the assessee of a larger amount. The Tribunal also pointed out that undoubtedly the " assessee is a keen businessman and has a number of varied business interests. Admittedly, he is a director of about a dozen concerns and managing director of two or three. Her is /8/ annas partner in an Engineering concern which is carrying out a number of construction and other contract works. He is an Engineer by profession and a resident of Calcutta. " The Tribunal based its conclusion that the sale was an adventure in the nature of trade, and that the profits, thus made, were assessable to income tax, on the following grounds: That the payment by the assessee to the Co. operative Society, of Rs. 32,748/ , came out of a loan taken for the purpose from a company (which conclu. sion, as already pointed out, is not borne out by the entries in the books of account of that company); 853 2. That the assessee could not have paid the balance of Rs. 98,000 odd, the outstanding amount of the purchase money, to the Insurance Company ; 3. That the assessee had no means to construct a house on the land, and lastly, 4. That the site itself fetched no income, thus, showing that it could not be an investment but only an excursion into the realm of trade. Against this decision of the Appellate Tribunal, the assessee moved this Court and obtained special leave to appeal. Before we deal with the main question in controversy in this appeal, we would like to make some general remarks on the nature of the questions involved in this case. It is not disputed on behalf of the respondent that the question now before us, is a question of law, or a mixed question of fact and law, as has been recently laid down by this Court in the case of G. Venkataswami Naidu and Co. vs The Commissioner of Income tax (1). Speaking for the Court, Gajendragadkar, J., after a detailed discussion of the decisions of this Court Meenakshi Mills, Madurai vs Commis. sioner of Income tax, Madras (2) and The Oriental Investment Co.,, Ltd. vs Commissioner of Income tax, Bombay (3), and of the House of Lords, in Edwards vs Bairstow (4), came to the conclusion that the question arising in the case, is a mixed question of law and fact, and, therefore, open to examination by this Court. In G. Venkataswami Naidu and Co. vs The Commissioner of Income tax (supra), the question raised, was exactly similar to the question now before us, though in a different setting of facts. His conclusion may be stated in his own words as follows: " In other words, in reaching the conclusion that the transaction is an adventure in the nature of trade, the tribunal has to find primary evidentiary facts and then apply the legal principles involved in the expression " adventure in the nature of trade " used by section 2, sub section It is patent that the clause 'in the nature of trade ' postulates the existence of certain elements in (1) ; (2) ; (3) ; (4) ; 854 the adventure which in law would invest it with the character of a trade or business;. and that would make the question and its decision one of mixed law and fact." "In that view of the matter, this Court further pointed out that the more proper form of the question is " whether, on the facts and circumstances proved in the case, the inference that the transaction in question is an adventure in the nature of trade is in law justified. " The recent decision of this Court has examined almost all the relevant cases decided in Indian as also English and Scotch Courts, and thus, our task in the present case, has been very much simplified. It has further been observed in that case, more than once, that judicial opinion was unanimous that no general principles or universal tests could be laid down, which could govern the decision of all cases in which the question for determination is similar to the one now before us. Each case must be determined on the total impression created on the mind of the Court by all the facts and circumstances disclosed in that particular case. Hence, no decided case can, strictly speaking, be a precedent which could govern the decision of a later case, involving a similar question. Those decisions can be used only by way of illustrations of the different view points which have a bearing on the decision of the case in hand. It has also not been disputed that in a case where a transaction under examination, is not in the line of the business of the assessee, and is ail isolated or a single instance of a transaction like that, the burden lies on the Revenue to bring the case within the words of the statute, .namely, that it was an adventure in the nature of trade. That the onus is on the Department, has been clearly laid down by Lord Garmount in the case of Commissioners of Inland Revenue vs Reinhold (1). That was a case in which the respondent, the assessee, was a director of a company carrying on the business of WarehousemeD, and had bought four houses in January, 1945, and sold them at a profit in December, 1947. He admitted that he had bought the property with a (1) , 393. 855 view to resale, and had instructed his agents to sell the same whenever a suitable purchaser was forthcoming. The assessee was made liable for tax in respect of the profit made by him on the resale. On an appeal by the assessee before the General Commis 7 sioners, it was contended on his behalf that the profit on the resale was not taxable. On behalf of the Crown, it was contended that the transaction of purchase and sale in question, constituted an adventure in the nature of trade, and that, therefore, the profits arising out of the transaction, were chargeable to income tax. The General Commissioners, being eqally divided, allowed the appeal. It was held by the Court of Session (First Division) that the fact that the property was purchased with a view to resale, did not, of itself, establish that the transaction was an adventure in the nature of trade, and that, therefore, the determination by the Commissioners was justifiable in law. The Court, in coming to that conclusion, took into account the con siderations that the respondent was not a property agent, and that his business was not, in any way, associated with the purchase and sale of estates. It was an isolated transaction, even though the assessee had purchased a hotel and sold it again ten years previously. The Court made a reference to the following observations of Lord Buckmaster in the case of Leeming vs Jones (1): ". . an accretion to capital does not become income merely because the original capital was invested in the hope and expectation that it would rise in value; if it does so rise, its realization does not make it income. " Placing that decision along side of the present case, let us see what its salient features are. Though the appellant is engaged in various types of business as a share holder or a director in limited liability concerns, as also in building contracts, dealing in landed estates is not in the line of his business. If such a transaction were in the line of his business, it would not matter much whether, in the assessment year, he had several such transactions or only one. Even a single (1) , 420. 856 transaction of dealing in landed estates, being a part of his business, would be liable to income tax, if a profit is made in that transaction. But., admittedly, the transaction in question is the only one of its kind, ,rout of which the appellant has made a considerable profit which appears to have been in the nature of a windfall. When he entered into the agreement with the Society for the purchase of the plot, in January, 1946, he had expected that at the end of the World War, the Government would release the property from its requisition, and that the Society will develop the land by laying the necessary roads and providing other amenities to the plot holders. But as the Government did not release the property, and as the appellant was a businessman, who was interested in return from his capital, and as he had already paid Rs. 32,000 odd by way of advance towards the purchase price, and as in 1947, at the end of the Second World War, his business in contracts for building con structions, began to decline, he, naturally, thought of making the best of the bargain. If he did not get out of the transaction, his financial difficulties in meeting his further liabilities under the agreement, as a result of slump in his main line of business, might lead to the forfeiture of the advance of Rs. 32,000 odd, he would naturally be on the lookout for a good purchaser. He was lucky to find a lady with a lot of money to spare, who had, as he alleged, taken a fancy to the plot in question. Thus, he could assign to her the benefit of his agreement with the Society on terms which were highly profitable to him. There is no clear evidence in support of the inference of the Appellate Tribunal that the land was purchased with the sole intention of selling it later at a profit. The Tribunal considered two alternatives in relation to this transaction one, that the land was purchased in order to build a residential house, and the second, that it was purchased in hope of selling it later for a profit. The first alterna tive, the Tribunal rejected on the ground that " be does not seem to have very much of means at his disposal. " That itself is a statement which does not bear close scrutiny. During the two years previous to the year under assessment, the appellant had 857 been assessed to income tax on Rs. 53,000/ and Rs. 59,000/ , as already indicated. That does not lend countenance to the surmise that the appellant was not a man of means. Admittedly, he held marketable shares of the value of about 2 1/2 lacs of rupees, though all those shares standing in his name, were not claimed by him as his omn. Apparently, he was carrying on a lucrative business during the immediately preceding years. It is true that in the year of assessment, on his own showing in his income tax return, he had suffered a loss, but that may have been a turning point in his fortunes, and that would not necessarily lead to the inference that he was not in a sound financial position on the date of the agreement with the Society. It may be that his hopes of flourishing in his business in the years to come, were not realized after the conclusion of the Second World War. But even assuming that the Tribunal was right in its conclusion as to the second alternative, namely, that the purchase was made in the hope of making a profit after re sale, the matter is not concluded. In this connection, a reference may be made again to the decision in Commissioners of Inland Revenue vs Reinhold (supra), at p. 392, where it was argued on behalf of the Revenue that a profit made in a transaction which was in the nature of an investment in the hope and expectation of a rise in price, may be an accretion of capital, but that if at the time of the purchase, the purchaser had resolved to sell the property in the event of a profit being made, and instructions had been issued to his agents accordingly, the transaction could not have been treated as an investment, but was truly an adventure in the nature of trade, and the profit thus made, must be treated as income. This argument was not accepted as valid. In that connection, reference was made to the following observations of Lord Dunedin, in the case of Jones vs Leeming (1) : ". . The fact that a man does not mean to hold an investment may be an item of evidence tending to show whether he is carrying on a trade or (1) , P. 423. 108 858 concern in the nature of trade in respect of his invest ments, but per se it leads to no conclusion whatever. " The decision of the House of Lords in the case afore. said, which is also reported in , is rather ins. tructive. In that case, the appellant was a member of a syndicate of four persons, formed to acquire an option over a rubber estate, with a view to selling at a profit. The option was secured, but the estate was considered to be too small for re sale. An option over another joint estate was accordingly secured, and it was decided to resell the two estates to a public company to be formed for the purpose. Another member of the syndicate undertook to arrange for promotion of the company. The syndicate 's rights were transferred to a company. This company floated another company to which the properties were sold. The syndicate 's profits were divided between the members, and the appellant, as one of the members of the syndicate, was assessed to income tax in respect of his shares of the profits. The General Commissioners, on appeal, were of the opinion that the interest in the property in question had been acquired with the sole object of making a profit, and that there was no intention of holding it as an investment. Hence, the assessment to income tax was affirmed. The King 's Bench Division, at the first hearing, remitted the case to the General Commissioners for a finding as to whether there was a concern in the nature of trade, and the Commissioners found that the transaction was not such a concern. It was held by the House of Lords that the profits were not liable to tax on the basis that they were income from an adventure in the nature of trade. Viscount Dunedin, in the course of his opinion, referred, with apparent approval, to the dictum in Ryall vs Noare (1), to the following effect: " A casual profit made on an isolated purchase and sale, unless merged with similar transactions in the carrying on of a trade or business is not liable to tax." He also approved of the following dictum of Lawrence, L. J., in the case of Leeming vs Jones (2) :_ (1) , 454. (2) , 302, 859 " It seems to me in the case of an isolated transaction of purchase and re sale of property there is really no middle course open. It is either an adventure in the nature of trade, or else it is simply a case of sale and re sale of property." Lord Warrington of Clyffe, in the course of his opinion in the case of Jones vs Leeming (1), made the following observations, which apply with full force to the facts and circumstances of the present case: ' " Here we have a case of the acquisition of an item of property and a profit made by the transfer thereof to another. In this I can find nothing but a profit arising from an accretion in value of the item of property in question and the realization of such enhanced value. There is in this nothing in the nature of revenue or income. The fact that the parties intended from the first to make a profit if they could does not in my opinion affect the question we have to determine." As already indicated, the line of demarcation between cases of isolated transactions of purchase and sale being ventures in the nature of trade, and those which are not such ventures, if any, is very thin. The cases in which single transactions have been held not to belong to the class of ventures in the nature of trade, have been noticed above, and the considerations which led those courts to hold that such ventures were not liable to income tax, apply to the case in hand. On the other side of the line, there is a series of cases in which single transactions have been held to have been ventures in the nature of trade, for reasons which do not apply to the present case. We may notice some of the typical cases which illustrate the reasons for which a single transaction was brought within the ambit of a venture in the nature of trade. The case of Californian Copper Syndicate (Limited and Reduced) vs Harris (Surveyor of Taxes) (2), related to the purchase and sale of a mining property. In that case, a company had been formed for the purpose, inter alia, of acquiring and re selling a mining property. That company acquired some mining property (1) , 425. (2) 860 and sold the same to a second company, consideration for the sale being paid up shares of the latter company. It was held by the Court of Exbhequer (Scotland) Second Division, that the difference between the purchase price and the value of shares for which the property was exchanged was a profit assessable to incometax. It was pointed out by the Court that the case involved a deal which was a "proper trading transaction, one within the Company 's power under their Articles, and contemplated as well as authorised by their Articles ". The ratio of the decision in that case appears to have been that though it was a single transaction in which profit was made, it was an adventure in the nature of trade, being in the line of the business adopted by the company. The next case of Martin vs Lowry (1) is another instance of a single transaction of purchase of property being treated as a venture in the nature of trade, on account of the very nature and magnitude of the commodity dealt in by a person whose usual line of business was wholly outside the scope of the new venture. That was a case in which a wholesale agricultural machinery merchant, who never had any dealings in linen trade, purchased from the Government its surplus stock of aeroplane linen (some 44 million yards). In order to dispose of this huge stock of linen purchased by him, the assessee embarked upon an extensive advertising campaign, rented offices and engaged expert staff to organize the sales. The number of transactions of sale of that huge stock of linen, ran into thousands. The House of Lords affirmed the determination of the courts below, holding that the transaction amounted to the carrying on of a trade of which the profits were chargeable to income tax and Excess Profits Duty. Another case in the same volume, is The Commissioners of Inland Revenue vs Livingston and others (2). In that case, the persons sought to be taxed were, a ship repairer, a blacksmith and a fish salesman 's employee, who joined in the venture of purchasing a cargo vessel with a view to converting it into a steam drifter, and selling it. That was a new line of business for them. (1) (2) 861 Extensive repairs and alterations to the ship were carried out, and the result was a sale of the converted vessel at a profit. It was held that the transaction, though an isolated one, was a venture in the nature of trade, and thus, liable to income tax. The ratio of the decision was stated in the following words of the Lord President: " If the venture was one consisting simply in an isolated purchase of some article against an expected rise in price and a subsequent sale it might be impossible to say that the venture was 'in the nature of trade ' ; because the only trade in the nature of which it could participate would be the trade of a dealer in such articles, and a single transaction falls as far short of constituting a dealer 's trade, as the appearance of a single swallow does. of making a summer. The trade of a dealer necessarily consists of a course of dealing, either actually engaged in or at any rate contemplated and intended to continue. " The case of Rutledge vs The Commissioners of Inland Revenue (1), is another illustration of a case in which a single transaction of purchase and sale, was held to be an adventure in the nature of trade for the reason that the commodity purchased was of such a nature and of such a vast magnitude that it could not have possibly been intended for the consumption of the purchaser himself or his family. In that case, the assessee was a money lender who was also interested in a cinema company. In the interest of his cinema business, he happened to be in Berlin, and there took the opportunity of purchasing, for a very cheap price, a very large quantity (one million rolls) of toilet paperfor pound 1,000 and realised pound ,12,000 by sale of that com modity. He was taxed on the nett profit of pound 10,895. It was held by the Court of Session, Scotland (First Division), that it was certainly an adventure, because the assessee made himself liable for the purchase of that vast quantity of toilet paper, obviously for no other conceivable purpose than that of re selling it for a large profit. As regards the question whether the adventure was in the nature of trade, it was contended (1) 862 on behalf of the assessee that it was essential to the idea of trade that there should be a continuous series of trading operations. The Court rightly pointed out that the question was not whether it was a trade but ` Whether it was a venture in the nature of trade. Hence, though the single transaction of purchase and sale, may not have amounted to what is ordinarily understood by trade in the sense of a series of transactions, it was certainly a venture in the nature of trade, because from the very beginning, the intention was manifest that the purchase was made not with a view to utilizing the commodity for the personal use of the purchaser, but with a view to making profit by a resale, which was apparent from the very nature and magnitude of the commodity purchased. Another illustration of the same rule is to be found in the case of The Balgownie Land Trust, Ltd. vs The Commissioners of Inland Revenue (1). That was the case of a landed estate which was left by the owner to. trustees with a direction to sell it. The trustees, being unsuccessful in their efforts to sell the estate, formed a company with general powers to deal in real property, and transferred the estate to this company. The company made certain other purchases of property by way of accretions to the original estate. The property was sold in parts during the years 1921, 1924, 1926 and 1927. The company was assessed to income tax for the profits from the sales of those lands. The Court, confirming the assessment of the company to income tax on the profits made on those sales, held that the company was doing precisely what it meant to do, namely, carrying on business of a company dealing in a real estate. The case of Commissioners of Inland Revenue vs Fraser (2), is another illustration of the rule that if a person enters into a single transaction outside his ordinary avocation of life, with the sole object of making a profit by re sale, it may amount to an adventure in the nature of trade. In that case, a wood cutter bought, for re sale, whisky in large quantities, and without taking delivery of the whisky, sold it at a profit. It was the assessee 's sole (1) (2) 863 dealing in whisky, but all the same, it was held to be liable to income tax on the ground that the nature of the transaction, with reference to the commodity dealt in in large quantities, which would not ordinarily be meant for personal or family consumption, may indicate that it was an adventure in the nature of trade. We have set out the illustrative cases on the two sides of the thin line of demarcation that may possibly be said to distinguish one class of case from the other. The question still remains, on which side of the line, the present case should be placed ? The learned Solicitor General placed strong reliance on the recent decision of this Court in G. Venkataswami Naidu & Co. vs The Commissioner of Income tax (supra). The question, therefore, is whether the present case falls on the same side of the line as the recent decision of this Court, which had to deal with a similar question, as already indicated. In that case, the assessee had purchased four plots under four different deeds. During the time that the assessee was in possession of those plots, he made no efforts to put up any structures, or to utilize them in other ways. The assessee was in a fiduciary position with the Mills contiguous to which the plots purchased, were; and it was also found that the assessee was in a position to influence the Mills to purchase those plots at a price favourable to him. It was in that setting of the facts, that this Court made the following obser vations "When section 2, sub section (4) refers to an adventure in the nature of trade it clearly suggests that the transaction cannot properly be regarded as trade or busi. It is allied to transactions that constitute trade or business but may not be trade or business itself It is characterized by some pB`= of the essential features that makeup trade or business but not by all of them; and so, even an isolated transaction can satisfy the description of an adventure in the nature of trade. " Can it be said, in the setting of the facts and circumstances of the present case, set out above, that the transaction in question has such characteristics as 864 to point to the conclusion that itwas a venture in the nature of trade ? It was suggested that the area of the land in question, namely, three quarters of an acre in the suburbs of Calcutta, was large enough to indicate that the assessee would not have intended to take it for his own use and occupation. In the first place, the area is not so large as to lead necessarily to the inference that it could not have been meant to be used by him in the way of his business or for his own residence. Certainly, the Society, having acquired more than 500 bighas of land in a lot, could not claim that the land was meant for its own use. On the other side, it was meant to be developed into small building sites, as they actually did. But the Society had, without developing the area, sub divided it into building sites, one of which was sought to be acquired by the appellant. He was carrying on an engineering concern, and it is not, therefore, unlikely that he may have intended, as he alleged, to put up a small workshop on a portion of the land to be acquired, and to build his own residential house on the other portion. It was not suggested that the appellant had his own house in Calcutta, and was, therefore, not in need of a building site. At the time he entered into the agreement of purchase with the Society, he was doing good business, as is shown by the large amounts on which he was assessed to income tax. It was not unnatural for him to look forward to continue his business in as prosperous a way as he had been doing in the recent past, and thus, to raise sufficient funds to build his own residential house, or to construct a workshop for his own engineering business. Hence, the possibility or the probability that the site may appreciate in value, would not necessarily lend itself to the inference that the transaction was a venture in the nature of trade, as distinguished from a capital investment. In all the circumstances of this case, the total impression created on our mind, is that it has not been made out by the Department that the dominant intention of the appellant was to embark on a venture in the nature of trade, when he entered into the agreement which resulted in the profits sought to be taxed. 865 For the aforesaid reasons, we would allow this appeal, and set aside the orders of the Tribunal below with costs. KAPUR, J. I regret I am unable to agree. that the appeal in the present case should be allowed and my reasons are these: On the facts which were proved the Income tax Appellate Tribunal came to the conclusion that the purchase of land by the appellant was an adventure in the nature of trade and profit arising therefrom was assessable to income tax. In coming to this conclusion the Appellate Tribunal took into consideration certain facts; (1) that the only payment the appellant made for the purchase of the land was of a sum of Rs. 32,748 which he borrowed from his company and he was not in a position to pay the balance of Rs. 98,246; (2) the appellant had no money available at all, to pay the part of the purchase price of Rs. 1,30,994 and be had no means to construct the house ; (3) that his financial resources were such as not to justify the purchase of the plot of land for the construction of a house; (4) the site itself fetched no income but it was a kind of investment with the hope of making a profit out of it and the land was purchased only for the purpose of sale; (5) that the appellant being a keen businessman had intimate knowledge of the trend of the rise in prices of land and therefore the purpose for which he made the purchase was in order to make profit and not merely an investment. As against these circumstances various facts were brought to our notice which it has argued militate against the findings of the Tribunal : (1) that the appellant was carrying on an engineering concern and therefore it was not unlikely that he intended, as he alleged, to put up a small workshop on that portion of land; (2) that the appellant did not have his own house in Calcutta and therefore he could have been in need of a piece of land on which he could build a house and (3) that at the time he entered into an agreement of purchase he had a prosperous business which is ,shown by the amount of income tax which he paid for 109 866 two years and he could legitimately expect that his business would continue to remain prosperous; (4) that these facts could not lead to the necessary consequence that the transaction was a venture in the nature of trade and that it was not the dominant intention of the appellant at the time when he entered into the transaction to embark upon a venture in the nature of trade. Under the Income tax law it is the exclusive function of the Appellate Tribunal to find facts. Even though the powers of this Court under article 136 are very wide yet they have to be exercised within the limits imposed by the decisions of this Court and one such limitation is that this Court will not ordinarily interfere with findings of fact. It has been held by this Court that the question whether an adventure is in the nature of a trade or not is a mixed question of law and fact. The facts have to be found by the fact finding authority and to those facts the law has to be applied and whenever it is necessary to get a correct finding on a question of fact it is the fact finding authority which is called upon to consider the evidence and give its finding. (See G. Venkataswami Naidu & Co. vs The Commissioner of Income tax (1)). Therefore if there arose a question of law out of the order of the Appellate Tribunal then the appellant could have had the case stated to the High Court under section 66(1) and if the Appellate Tribunal refused to state the case it was open to the appellant to have the case stated under section 66(2) of the Indian Income tax Act. No doubt he did make an application to the Appellate Tribunal to state the case under section 66(1) but he did not make any application to the High Court till 1957, after he had obtained special leave in this Court and the High Court dismissed the petition on the ground that it was barred by time. The position comes to this that the tribunal refused to state the case under section 66(1) of the Income tax Act and the appellant did not apply to the High Court under section 66(2) till long after the period of limitation had expired. In the circumstances the courses open to this (1) ; 867 Court would be (1) to set aside the order of the Appellate Tribunal and remit the case to the Tribunal for decision in accordance with the observations made by this Court as was done in the case of Omar Saly Mohammed Sait vs The Commissioner of Income tax (1) or it may be open to this Court to direct a reference as was done in Jagta Coal Company vs The Commissioner of Income tax (2). Then in Dhakeswari Cotton Mills vs The Commissioner of Income tax (3) this Court only remitted the case to the Appellate Tribunal to proceed in accordance with law on the ground that certain principles of natural justice had been violated and the assessee was not given an opportunity to rebut the evidence against him. The Income tax law has prescribed a procedure to have questions of law determined and an assessee cannot byepass the various steps prescribed under that law. The position therefore comes to this that if there is no evidence to support the finding the question is one of law which would fall under sections 66(1) and 66(2) of the Income tax Act; (2) if in giving its finding the Appellate Tribunal disregards certain pieces of evidence or proceeds in a manner which is violative of natural justice the finding will be vitiated but if there is evidence to support the finding of fact and these findings are properly arrived at then it will be a pure question of fact which this Court will not ordinarily interfere with ; (3) if there is an error of law arising as above or because of misinterpretation of the Income tax law then the case has to be stated to the High Court in the manner provided in the Income tax Act and if the assessee does not choose to follow the procedure prescribed then he cannot come to this Court disregarding the remedy provided by the Income tax law and (4) the legal effect of facts found where the point for determination is a mixed question of law and fact would fall under section 66(1) & (2) of the Income tax Act. (See G. Venkataswami Naidu & Co. vs The Commissioner of Income tax (4) ). This is a case in which certain essential facts have (1) C.A. No. 15 Of 1958 (2) C. A. NO. 337 Of 1956. (3) ; (4) ; 868 not been considered by the Appellate Tribunal and therefore it is a case which should be remitted to the Income tax Appellate Tribunal to determine the facts in accordance with the observations made by this ,,Court and in the light of those findings to determine whether the transaction was an adventure in the nature of a trade or not. I would order accordingly. ORDER OF THE COURT In view of the opinion of the majority, the appeal is allowed with costs.

The question for decision in this appeal was whether a single transaction of sale of land measuring about three quarters of an acre was an adventure in the nature of trade so as to make it liable to income tax. The assessee appellant, an Engineer by profession, was engaged in various business activities including that of an engineering firm but, admittedly, had no dealing, except the one in question, in respect of land. In 1946 be entered into an agreement with the Hindusthan Co operative Insurance Society Ltd. for the purchase of the land in question and paid a sum of Rs. 32,748 in two instalments, being 25% of the estimated total price of the land. As his construction activities declined and the Government, who had requisitioned the land, were not immediately releasing it, the appellant sold his rights under the agreement to a third party in 1947 and thereby received a sum of Rs. 74,000 odd in excess of the amount paid by him to the Society. The land, however, was not released by the Government until 1949. The Income tax Officer held that the transaction was an adventure in the nature of trade and the said sum was a profit therefrom, taxable under section 10 of the Incometax Act, and included it in the assessable income. The Appellate Assistant Commissioner, in appeal, held that the assessee, a man of means, had intended to purchase the land for his own use, and that the motive of profit was entirely absent when the purchase was made and that as it was a case of appreciation of capital, he was liable to pay Capital Gains tax. The Appellate Tribunal on appeal by the Department, reversed the findings and the decision of the Appellate Assistant Commissioner and affirmed that of the Income tax Officer. After the assessee had obtained from this Court special leave to appeal, he made an application to the High Court under section 66(2) of the Income tax Act, which that Court dismissed as being barred by limitation. Held, (per Bhagwati and Sinha, JJ., Kapur, J., dissenting) that admittedly the transaction in question being a single instance of its kind, and not in the line of the business of the assessee, it was for the Department to prove that the dominant intention of the appellant, when he entered into the agreement with the Society, was to embark on a venture in the nature of 847 trade as distinguished from a capital investment, and they having failed to do so, the appeal must succeed. Commissioners of Inland Revenue vs Reinhold, , applied. There could be no doubt, as held by the Court, that the question for decision involved in such cases was one of law or a mixed question of fact and law. G. Venkataswami Naidu and Co. vs The Commissioner of I come tax; , , referred to and distinguished. The line of demarcation, however, between an isolated trans action and a venture in the nature of trade was very thin and each case had to be decided on the total impression all its facts and circumstances made on the mind of the judge. Case law reviewed. KAPUR, J. Even though the powers of this Court under article I36 of the Constitution were very wide, they had to be exercised within the limits imposed by its own decisions and one such limitation was that this Court would not ordinarily interfere on questions of fact. Since the question involved in the instant case was a mixed question of law and fact, the facts should properly be found by the body whose exclusive function under the Income tax Act was to do so. G. Venkataswami Naidu & Co. vs The Commissioner of Income tax; , and Dhakeswari Cotton Mills vs The Commissioner of Income tax, [1955] i S.C.R. 94I, referred to. Nor could an assessee be allowed to by pass the procedure prescribed by sections 66(1), 66(2) of the Income tax Act to have question of law determined. Since, however, the Appellate Tribunal had, in the instant case, failed to consider certain essential facts, the case should be remitted to it for a proper decision in the light of the observations made by this Court.

Appeal No.3985 of 1988. From the Judgment and Order dated 31.12.1987 of the Andhra Pradesh Administrative Tribunal, Hyderabad in R.P.No. 967 of 1987. WITH S.L.P. (C) No. 9290 of 1988 with S.L.P (C) No. 2150/87 CMP No. 25521/88 and C.A.1342/86 K.Madhava Reddy, C. Sitaramiah, P.P.Rao, G. Prabhakar, K.R. 31 Nagaraja, P.K. Rao, Ms. C.K. Sucharita, B. Kanta Rao, K. Ram Kumar, B. Krishna Prasad and T.V.S.N. chari (N.P.) for the appearing parties. The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J. The questions that arise for consideration in all these connected cases are confined only to some of the posts of civil services of Andhra Pradesh in view of certain special provisions applicable to these services. Article 371D of the Constitution of India is peculiar to the State of Andhra Pradesh due to historical background. It was enacted by the Constitution (Thirty Second) Amendment Act which applied only to the State of Andhra Pradesh, with a view to give effect to certain safe guards in the matter of employment opportunities for resi dents of Telangana region. This Article empowers President to provide by order for equitable opportunities and facili ties for the people belonging to different parts of the State of Andhra Pradesh in the matter of public employment and in the matter of education. This Article also provides for constitution of an Administrative Tribunal to receive representations for the redressal of the grievances and for passing necessary orders. Accordingly the President of India made Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Order, 1975 ( 'Presidential Order ' for short) by virtue of which the State of Andhra Pradesh has been divided into six zones and local cadres of posts in respect of the local areas were created. In respect of Andhra Pradesh Panchayati Raj Engi neering Service the two such zonal posts are junior Engineer and Assistant Engineer. The main question that arises for consideration in these cases is whether the promotion from Junior Engineer to Assistant Engineer should be on the basis of Statewide list or the zonal list. Some of the promotions made were questioned by the affected persons before the Administrative Tribunal which disposed them of indicating that such promotions should be made on the basis of the Statewide list. The State of Andhra Pradesh has questioned the same in C.A.No. 1342/86, C.A.No. 3985/88 and S.L.P. (Civil) No. 9290/88 mainly on the ground that promotions should be confined to only within local cadres and zonal posts. S.L.P. (Civil) No. 2150/87 is filed by two such Engineers whose representation was disposed of by the Tribu nal directing the Government to redetermine their positions in the Seniority list instead of giving a definite declara tion as prayed for by them. Shri K.Madhava Reddy, learned counsel appearing for the State of Andhra Pradesh, submitted that both the posts of Junior Engineer and Assistant Engineer are zonal posts under the Presidential Order and the zonal seniority list has to be followed in the matter of promotions from 32 Junior Engineer to Assistant Engineer and not the Statewide seniority list of Junior Engineers. He also submitted that all promotions made so far pursuant to certain orders should be treated as provisional and that the State Government should be permitted to review these promotions on the basis of the zonal seniority list and that all further promotions shall be made on the basis of the zonal seniority list. According to the learned counsel, for the purpose of promo tion to the higher post of Executive Engineer which is not a zonal post, a Statewide seniority list of Assistant Engi neers of all zones should be prepared on the basis of which promotion to the post of Executive Engineer will be made. Shri Sitaramiah, learned counsel appearing for respondents, submitted that Article 371D(2) refers only to direct re cruitment and the Presidential Order made under the said Article cannot make a departure and cannot be made applica ble for promotions also. On the other hand, it is the State wide list that should be the basis for promotions. In sup port of his submissions he invited our attention to the provisions of Article 371D and the Presidential Order and emphasised the word 'employment ' as occurring in the Article should be confined only to direct recruitment. Shri P.P. Rao, learned counsel appearing for other set of respondents in the appeals filed by the State of Andhra Pradesh, submit ted that even if either of the lists is to form the basis for promotions his clients are not affected and their promo tions are being unnecessarily delayed. Some of the Engineers of the Andhra Pradesh Panchayati Raj Engineering Service got themselves impleaded in the appeal filed by the State of Andhra Pradesh and Shri B. Kanta Rao appearing on their behalf supported the stand taken by the Government of Andhra Pradesh. To appreciate these rival contentions it becomes neces sary to refer to some of the relevant provisions of Article 371D as well as the Presidential Order and some of the notifications made thereunder and the relevant provisions of the A.P. Panchayati Raj Engineering Service Rules. On Novem ber 1, 1956 as a result of reorganisation of the States the erstwhile State of Hyderabad was trifurcated and Telangana region became a part of the newly formed State of Andhra Pradesh. Certain safeguards were envisaged for the Telangana area in the matter of development and also in the matter of employment opportunities and education facilities for the residents of that area. In the year 1957 the Public Employ ment (Requirement as to Residence) Act was enacted inter alia to provide for employment opportunities for residents of Telangana area. Some of the relevant provisions were held to be unconstitutional by the Supreme Court due to a variety of causes. The working of the safeguards gave rise to dis satisfaction sometimes in the Telangana area and sometimes in the other areas of the State and even led to violent agitations. A consensus was arrived 33 among several leaders of Andhra Pradesh to make a concerted effort to analyse the factors which have been giving rise to the dissatisfaction and they suggested certain measures known as "Six Point Formula" and the same has been endorsed by the State Government. A bill was brought forward to provide for necessary constitutional authority for giving effect to this formula and the same became the Constitution (Thirty Second) amendment Act under which Article 371D was introduced. The relevant provisions of this Article for our purpose are as under: "371 D. Special provisions with respect to the State of Andhra Pradesh (1) The President may by order made with respect to the State of Andhra Pradesh provide, having regard to the requirements of the State as a whole, for equitable opportunities and facilities for the people belonging to different parts of the State, in the matter of public employment and in the matter of education and different provisions may be made for various parts of the State. (2) An order made under clause (1) may, in particular: (a) require the State Government to organise any class or classes of posts in a civil service of, or any class or classes of civil posts under, the State into different local cadres for different parts of the State and allot in accordance with such principles and procedure as may be specified in the order the persons holding such posts to the local cadres so organised; (b) specify any part or parts of the State which shall be regarded as the local area (i) for direct recruitment to posts in any local cadre (whether organised in pursuance of an order under this article or constituted otherwise) under the State Government; (ii) for direct recruitment to posts in any cadre under any local authority within the State; and (iii) for the purpose of admission to any University within the State or to any other educational institution which is subject to the control of the State Government; XX XX XX (10) The provisions of this article and of any order made by the President thereunder shall have effect notwithstanding anything in any other provision of this Constitution or in any other law for the time being in force. " 34 It may be noted that clause (3) provides for constitu tion of an Administrative Tribunal. Now we may note some of the relevant provision in the Presidential Order. In para 2 definitions of the various expression used in the Order are given. They read thus: "Para 2. Interpretations: (1) In this Order, unless the co text otherwise requires: (a) xx xx xx (b) 'direct recruitment ' includes recruitment made on a temporary basis but does not include recruitment made in pursuance of any scheme approved by the State Government providing for the regularisation of the services of persons holding posts on a temporary basis before the commencement this order; (c) 'local area ' in relation to any local cadre, means the local area specified in paragraph 6 for direct recruitment to posts such local cadre, and includes, in respect of posts belonging the category of Civil Assist ant Surgeons, the local area specified in sub paragraph (5) of paragraph 8 of this Order; (d) 'local authority ' does not include any local authority which is not subject to the control of the State Government; (e) 'local cadre ' means any local cadre of post under the State Government organised in pursuance of paragraph 3, or constituted otherwise for any part of the State; (f) 'local candidate ' in relation to any local area, means a candidate who qualifies under paragraph 7 as a local candidate relation to such local area; (g) xx xx xx (h) 'Schedule ' means a Schedule appended to this Order; (i) xx xx xx (j) 'specified gazetted category ' means any gazetted category specified in the Third Schedule and includes any other gazetted category notifies as such by the Central Government; (k) xx xx xx (l) xx xx xx 35 (m) 'Zone ' means a zone specified in the Second Schedule comprising the territories mentioned therein. xx xx xx Para 3. Organisations of Local Cadres: (1) The State Government shall, within a period of eighteen months from the commencement of this order, organise classes of posts in the civil services of, and classes of civil posts under the state into different local cadres for different parts of the State to the extent, and in the manner, hereinafter provided. (G.O. Ms. No. 794, G.A.(A) dated 12.11.1976) "Provided that, notwithstanding the expira tions of the said period, the president may by order, require the State Government, whenever he considers it expedient so to do, to orga nise any classes of posts in the civil serv ices of, and classes of civil posts, under the State into different local cadres for differ ent parts of the State." (Proviso is added as per G.O. Ms. No. 34, G.A.D. (SPFA), dated 24th January, 1981). (2) The posts belonging to the category of Junior Assistant, and to each of the other categories equivalent to, or lower than that of a Junior Assistant in each department in each district shall be organised into a sepa rate cadre. Explanation: For the purposes of this sub paragraph, subparagraph (1) of paragraph 6, and sub paragraph (1) of paragraph 8, a cate gory shall be deemed to be equivalent to or lower than that of a Junior Assistant if the minimum of the scale of pay, of a post belong ing to a category or where the post carries a fixed pay, such fixed pay equal to or lower than the minimum of the scale of pay of a Junior Assistant. (3) The posts belonging to each non gazetted category, other than those referred to in sub paragraph (2), in each department in each zone shall be organised into a separate cadre. (4) The posts belonging to each specified gazetted category in each department in each zone shall be organised into a separate cadre. (5) Notwithstanding anything contained in sub paragraphs (3) and (4), the State Govern ment may, where it considers it expedient to do so and with the approval of the Central Government, organise the posts belonging to any of the categories 36 referred to therein, in any department, or any establishment thereof, in two or more continu ous zones into a single cadre. xx xx xx Para 4. Allotment of persons: (1) Persons holding posts required to be organised into local cadres shall be allotted to such cadres by the State Government or any officer or authority authorised by it in this behalf in accordance with the principles and procedure hereinafter specified. (2) In allotting persons to local cadres due regards shall be had to all or any of the following, namely: (a) the administrative needs of the posts in the local cadres; (b) the need for the composition of balanced local cadres with reference to age and senior ity, groups; (c) the length of service of the persons concerned in the part of the State for which the local cadre is organised; (d) knowledge of the persons concerned of the languages spoken and the law in force in the part of the State lot which the local cadre is organised; (e) preference of the persons concerned for allotment to any local cadre, where feasible. xx xx xx Para 5. Local cadres and transfer of persons: (1) Each part of the State for which a local cadre has been organised in respect of any category of posts, shall be a separate unit for purposes of recruitment, appointment, discharge, seniority, promotion and transfer, and such other matters, as may be specified by the State Government, in respect of that category of posts. xx xx xx Para 13. Certain appointments and promotions to be provisional: Any certain appointments and promotions made after the commencement of this order or any order made in pursuance of the proviso to paragraph 3, as the case may be, and before any local cadre has been orga nised under the provisions of this Order made in pursuance of the Proviso to 37 paragraph 3, to any post which is required to be included in such cadre shall be provisional and shall, within a period of twelve months after such organisation, be reviewed and readjusted in accordance with the provisions of this order. Explanation: For the purposes of this para graph, any local cadre shall be deemed to be organised, with the allotment of persons to it under paragraph 4. (Substituted as per G.O. Ms. No. 234, GAD (SPF A) Dept., dated 24th Jan., 1981). xx xx xx THE SECOND SCHEDULE (See paragraphs 2 (1) (m) and 8 (4) Zones Zone I Shrikakulam and Visakhapatnam districts. Zone II East Godavari, West Godavari and Krishna districts. Zone III Gunrur, Prakasam and Nellore districts. Zone VI Chittoor, Cuddapah, Anantapur and Kurnool districts. Zone V Adilabad, Karimnagar, Warangal and Khammam districts. Zone VI Hyderabad, Nizamabad, Mahabubnagar, Medak and Nalgonda districts. THE THIRD SCHEDULE [See paragraphs 2(1) (j) and (4) Specified Gazetted Categories Sr. No. Category Name of the Department (1) (2) (3) xx xx xx 30. Assistant Engineers Panchyati Raj Enginee ring Department 30 A. Junior Engineers do xx xx xx 40. Junior Engineers Public Works Department (Irrigation) 41. Assistant Engineers Public Works Department (Irrigation) 42. Junior Engineers Public Works Department (R&B) 43. Assistant Engineers do " (emphasis supplied ) 38 It is clear from these provisos that the primary purpose of Article 371D was to promote speedy development of the backward areas of the State of Andhra Pradesh with a view to secure balance in the development of the State as a whole and to provide equitable opportunities to different areas of the State in the matter of education, employment and career prospects in public service. Accordingly the Presidential Order was made. From the above extracted provisions of the Order it can be seen that State of Andhra Pradesh was divided into six zones and the 4th zone, with which we are concerned, com prises of Chittoor, Cuddapah, Anantpur and Kurnool Dis tricts. As noted above Schedule III enumerates various specified gazetted categories and Junior Engineers and Assistant Engineers in the Panchayati Raj Engineering De partment as well as in the Public Works Department (Irriga tion) and (Roads and Buildings) are among those various categories mentioned therein. Paragraph 3 provided for organisation of local cadres in respect of classes of posts in the civil services in the State of Andhra Pradesh. Under para 3(4) the posts belonging to each specified category in each department in each zone shall be organised into a separate cadre. Para 4 provides for the allotment of persons holding posts into such local cadres to be organised. Para 5 which is important, lays down that each part of the State for which a local cadre has been organised in respect of any category of posts, shall be a separate unit for purposes of not only recruitment etc. but also in respect of promotion. Para 13 lays down that in certain appointments or promotions after the commencement of the Presidential Order or any order made in pursuance of the proviso to paragraph 3 and before any local cadre has been organised, shall be provi sional and shall within a period of twelve months after such organisation of local cadre, be reviewed and readjusted in accordance with the provisions of the Presidential Order. A.P. Panchayati Raj Engineering Service Rules were framed in the year 1963. These Rules provide for the ap pointments of different categories of engineers. After the Presidential Order was issued a new Rule 2 A was introduced on 26.11.79 to bring the State Rules in conformity with the provisions of the Presidential Order. Rule 2 A reads thus: "Rule 2 A Unit of Appointment: For purposes of recruitment,appointment, discharge for want of vacancy, re appointment, seniori ty, transfer, promotion and appointment as full member in respect of category 4, Deputy Executive Engineers, each 39 zone comprising the districts specified against each shall be a separate unit: xx xx xx Zone IV: Chittoor, Cuddapah, Anantpur and Kurnool districts. xx xx xx Provided that the post of Deputy Executive Engineers in the office of the Chief Engineer (Panchayati Raj) shall be filled on a tenure basis by drafting persons equitably from different units and the period of tenure shall not ordinarily exceed three years; Provided further that the posts of Deputy Executive Engineers in the Rigs Divisions notified as Special Officers under the Andhra Pradesh Public Employment (Organisations of Local Cadres and Regulation of Direct Recruit ment) Order, 1975 shall be filled by drafting persons from the units over which the respec tive Rigs Division is having jurisdiction. (G.O. Ms. No. 1024 PR, dated 26.11.1979). " Regarding the scope of this rule it is the submission of the learned counsel for the State of Andhra Pradesh that a combined reading of Rule 2 A read with para 13 of the Presi dential Order would show that the said Rule has retrospec tive effect, therefore the Government is at liberty to revise the promotions made otherwise then on the basis of the zonal seniority list. But Shri Sitaramiah, learned counsel, submitted that the said Rule cannot be given retro spective effect and the same applies to vacancies arising thereafter and therefore the promotions already made should not be disturbed. It is an admitted fact that there was a Statewide list of Junior Engineers before 28.10.75 namely before the Presi dential Order was made. Questioning some of the promotions made by the Government, representation petitions were filed before the A.P. Administrative Tribunal. In such matters the Tribunal observed that as a precautionary measure the jun iors to the petitioners therein in the Statewide list cannot be promoted before the petitioners ' cases are considered for the appointment to the post of Executive Engineer which is a higher post. In all the orders passed by the Tribunal there is an indication that the Statewide list should be the basis for promotion. Though they appear to be in the nature of interim 40 directions but the ratio relied upon is that the promotion should be on the basis of the Statewide list. Therefore the question that has been canvassed by the State Government in all these matters is that the observation and the directions given by the Administrative Tribunal are opposed to the very object underlying the Presidential Order and is contrary to various provisions therein. At this juncture it is essential to note the principle and object underlying the zonal system as provided for in the Presidential Order. We have already noted that the object underlying Article 371D is to promote speedy develop ment of the backward areas and to provide equal opportuni ties to different areas of the State in the matter of em ployment etc. This Article is a special provision which makes departure from the general scheme of the Constitution. In High Court of Andhra Pradesh and Ors. vs V.V.S. Krishnamurthy and Ors., after referring to the Statement of Objects and ' Reasons of the Constitution (Thirty Second) Amendment Act, it was observed as under: "It will be seen from the above extract, that the primary purpose of enacting Article 371D was two fold; (i) To promote "accelerated development of the backward areas of the State of Andhra Pradesh so as to secure the balanced development of the State as a whole". and (ii) to provide "equitable opportunities" to dif ferent areas of the State in the matter of education, employment and career prospects in public service. (1) To achieve this primary object, Clause (1) of Article 371D empowers the President to provide by order, "for equitable opportunities and facilities for the people belonging to different parts of the State in the matter of public employment and in the matter of educa tion. " Clause (2) of the Article is complemen tary to Clause (1). It particularises the matters which an order made under Clause (1) may provide. For instance, its sub clause (c) (i) enables the President to specify in his Order, "the extent to which, the manner in which and the conditions subject to which, preference or reservations shall be given or made in the matter of direct recruitment to posts in any local cadre under the State Government or under any local authority. Sub clause (c) further makes it clear that resi dence for a specified period in the local area, can be made a condition for recruitment to any such local cadre. Thus, Clause (4) also, directly is designed to achieve the primary object of the legislation. " 41 The Presidential Order was made keeping in view this Object and suitable provisions are inserted. With a view to achieve this Object and in conformity with the provisions of the Order, the State is divided into six zones and certain specified gazetted services are included in the local cadres. The A.P. Panchayati Raj Engineering Services is one such and two categories of posts namely Junior Engineers and Assistant Engineers are such zonal posts. It may be men tioned here that the validity of the Presidential Order is not being questioned. Therefore we have to proceed on the basis that all the provisions of the Presidential Order are valid. The further and rather the main submission of the re spondents is that the Presidential Order only lays down the criteria for claiming eligibility as a local candidate on the basis of the period of residence or of stay in that local area and reservations are meant to be made to the local cadre only in respect of direct recruitment to the said posts mentioned therein and therefore the power con ferred under the Article should be confined only to direct recruitment. In this context the learned counsel also relied very much on the expressions used in Article 371D (1) and (2). The learned counsel also submitted that initially the Junior Engineers are selected by the Public Service Commis sion and are given a ranking and they are allotted to the local cadre and to that extent that may become a zonal post. But when it is a question of promotion to the higher post of Assistant Engineer though shown as a zonal post by virtue of being included in the local cadre, it should be only on the basis of the seniority in the Statewide list originally prepared by the public Service Commission. The learned counsel very much relied on the expression 'in the matter of public employment ' and the other expressions used in Article 371D (1) and (2). First we shall consider the submission that the purport of Article 371D and the Presidential Order in respect of direct recruitment does not apply to promotion. The expres sion 'in the matter of public employment ' in clause (1), in our view, is of wider import. The public employment can be by way of direct recruitment or by promotion. In The General Manager; Southern Railway vs Rangachari, ; this Court considered the scope of Articles 16 (1), (2) and (4) and it was observed that Articles 16 (1) and (2) of the Constitution are intended to give effect to Articles 14 and 15(1) of the Constitution and they arc supplemented to each other. Regarding the meaning of the word "employment" it is noted that: "Article 16 (1) should, therefore, be con strued in a broad and general, and not pedan tic and technical way, so construed, "matters relating to employment" cannot mean merely matters prior to the act of appointment nor can 'appointment ' to any 42 office mean merely the initial appointment but must include all matters relating to employ ment, whether prior or subsequent to the employment, that are either incidental to such employment or form part of its terms and conditions and also include promotion a selec tion post. "Although Article 16(4) which in substance is an exception to articles 16 (1) and 16(2) and should, therefore, be strictly construed, the court cannot in construing it overlook the extreme solicitude shown by the Constitution for the advancement of socially and education ally backward classes of citizens. " It is thus concluded that Article 16(4) authorises the State to provide for reservation of appointments as well as selection posts. At this juncture it may be noted that Article 371D (10) declares that any order made by the Presi dent shall have effect notwithstanding anything in any other provision of the Constitution or in any other law for the time being in force. Therefore notwithstanding anything contained in the A.P. Panchayati Raj Engineering Service Rules, the promotions have to be based on zonal list other wise the very object sought to be achieved as per Article 371D and the Presidential Order would be defeated. Shri Sitaramiah, however, laid considerable stress on Article 371D (2) which empowers the President to make an order "in particular" to specify any part or parts of the State which shall be regarded as the local area for direct recruitment in any local cadre. It is submitted that if clauses (1) and (2) of Article 371D are read together the Presidential Order can make provision only in respect of appointments by way of direct recruitment and cannot be applied for promotion also. But as laid down in Rangachari 's case the word "employment" should be interpreted in a broad and general manner. The ratio therein should be applied in interpreting the words "in the matter of public employment" occurring in Article 371D also. Consequently it must be held that Article 371D and the Presidential Order apply both for direct recruitment and for promotion in respect of categories specified in the Third Schedule. Article 371D (2) does not make any departure from this principle. The words "in particular" therein only lay emphasis on the aspect of creating local cadres for different parts of the State for the purpose of direct recruitment and treat such parts as local areas. This does not in any manner restrict the scope of Article 371D wherein it is clearly declared that in the matter of public employ ment, the President is empowered to make an order in the manner stated therein and the public employment cannot but be interpreted to include promotion also. It therefore emerges that Article 371D is in general terms and applies to the public employment as a whole and Article 371D(2) in particular applies to direct recruitment. It is only comple mentary to clause (1) and particularises 43 the matters which an order made under clause (1) provides for. Any other interpretation would defeat the object under lying these two provisions. The other submission of Shri Sitaramiah, as already noted, is that even assuming that Rule 2 (a) which came into existence in 1979 is valid and applies to promotion also then it can have only prospective effect and all the promo tions prior to this Rule should be only on the basis of the Statewide list. In considering this argument we have to bear in mind para 13 of the Presidential Order which specifically lays down that certain appointments and promotions after the commencement of the Order should be treated as provisional and the same should be reviewed an readjusted in accordance with the Presidential Order for the purpos of preparing the local cadres and allotting to the zones. The learned coun sel, however, relied on two judgments of this Court in Y. V. Rangiah and Others etc. vs J. Sreenivasa Rao and Others etc., , and N.T. Devin Katti and Others vs Karnataka Public Service Commission and Others, ; , in support of his submission that the said Rule cannot be given retrospective effect and that the promotions should be made only in accordance with the unamended A.P. Pan chayati Raj Engineering Service Rules, 1963. But having regard to the historical background and the object underly ing Article 371D and the Presidential Order and in particu lar para 13 of the Order the promotions, if any, made, should be treated only as provisional. If Rule 2(a) is viewed from this angle particularly in the light of paras 5 and 13 of the Presidential Order it becomes clear that the said Rule has to be given retrospective effect so that the promotions to the junior posts can be brought in conformity with Article 371D and the Presidential Order. Accordingly any promotions made should be treated only as provisional and they should be reviewed and readjusted. This leads us to the question whether the promotions from the post of Junior Engineer to Assistant Engineer should be based on zonal seniority list or on the Statewide seniority list. Rule 2(a) makes it abundantly clear that for the purpose of recruitment, appointment, promotion, transfer etc. each zone shall be a separate unit. Para 5 of the Presidential Order is also to the same effect. When once each zone is treated as a separate unit for the purpose of promotion also in respect of zonal posts then by virtue of Article 371D and the Presidential Order, as observed above, the promotion from the post of Junior Engineer to the post ' of Assistant Engineer which are both zonal posts, should be on the basis of the zonal seniority list inasmuch as the post of Junior Engineer and the next promotion post namely" Assistant Engineer are included in the local cadre and the zonal list as we find in the Third Schedule. With regards the higher posts which are not included in the local cadre and which are Statewide posts, it 44 becomes obvious that the Statewide seniority list of the Assistant Engineers of all zones should be prepared and that should be the basis of promotion to the post of Executive Engineer which is not a zonal post. Therefore it emerges that the directions given by the Tribunal to ensure that no Junior Engineer is promoted earlier than their seniors in the Statewide seniority list to the post of Executive Engi neer, should be quashed. Shri Sitaramiah, however, pointed out certain anamolies if such a principle is to be followed. According to the learned counsel, if the promotions are to be made only on the basis of the zonal list than there is every possibility of some of the seniors in the Statewide list not getting promotions and the same would result in some of the juniors becoming seniors which would ultimately affect the promo tional avenues for the Statewide higher post like Executive Engineer. But it must be noted that Article 371D is of exceptional nature and the object is to provide equal oppor tunities in the backward areas in respect of the specified posts mentioned in the Third Schedule which are included in the local cadre which thus became zonal posts. As mentioned in para 5 of the Presidential Order and Rule 2 (a) of the Engineering Service Rules such zones should be treated as separate units for the purpose of promotions also. Therefore there is valid nexus to the object that is sought to be achieved and even if there is some anamoly it cannot on that basis be said that such promotions for zonal posts on the basis of the zonal seniority list amounts to discrimination. In S.Prakasha Rao and another vs Commissioner of Commercial Taxes and Others, , a Bench of three Judges of this Court affirmed the view taken by the Administrative Tribunal, Andhra Pradesh that the zonal seniority list prepared pursuant to the initial organisation and creation of local cadres is to be maintained and such zonal seniority list is the criteria for promotion. In the result we hold that all promotions of Junior Engineers (redesignated as Assistant Executive Engineers) to the next higher post of Assistant Engineers (re designated as Deputy Executive Engineers) have to be made on the basis of the zonal seniority lists as indicated above and not on the basis of the Statewide seniority list of Junior Engi neers. The promotions made after the Presidential Order dated 18.11.75 should be treated as provisional and the Government is permitted to review these promotions on the basis of zonal seniority lists and re adjust the same. All the future promotions from the post of Junior Engineer to the post of Assistant Engineer should necessarily be made on the basis of the zonal seniority lists. For the purpose of promotion to the post of Executive Engineer, which is not a zonal post, a Statewide seniority list of the Assistant Engineers of all zones should be prepared and such Statewide seniority 45 list should form the basis of promotion to the post of Executive Engineer. The State Government is accordingly directed to prepare such lists i.e. zonal seniority lists of various zones for the purpose of promotions from Junior Engineers to Assistant Engineers within the zones and also Statewide seniority list of the Assistant Engineers of all zones for the purpose of promotion to the post of Executive Engineer. Such of the Directions given by the Tribunal in the matters before us which are contrary to or different from the above conclusions, remain quashed. The inter se seniority and the consequent promotions of respondent Nos. 1 to 5 in Civil Appeal No. 3935/88 as well as the petitioners in Special Leave Petition (Civil) No. 2150/87 shall be determined subject to the above directions. All these mat ters are disposed of accordingly with the above directions. In the circumstances of the cases, there will be no order as to costs. G.N. Appeals disposed of.

Article 371D of the Constitution of India, which is peculiar to the State of Andhra Pradesh only, empowers the President to provide by order for equitable opportunities and facilities for the people belonging to different parts of the State in the matters of public employment and educa tion. As provided therein the President of India made the Andhra Pradesh Public Employment (Organisation of Local Cadres and Regulation of Direct Recruitment) Orders, 1975, by virtue of which the State was divided into six zones, and local cadres of posts in respect of the local areas were created. In respect of Andhra Pradesh Panchayati Raj Engi neering Service the two such zonal posts were Junior Engi neer and Assistant Engineer. Before the Administrative Tribunal, some promotions made from Junior Engineer to Assistant Engineer were questioned, and the Tribunal held that promotions should be made on the basis of the Statewide list and directed the State Government to redetermine the position of the petitioners before it, in the seniority list. Aggrieved by the Tribunal 's order, the State Government and the affected officials have approached this Court by way of the present appeals and special leave petitions. On behalf of the State Government, it was contended that both the posts of Junior Engineer and Assistant Engineer were zonal posts under the Presidential Order and the zonal seniority list had to be followed in the 28 matter of promotions from Junior Engineer to Assistant Engineer and not the Statewide seniority list of Junior Engineers. On behalf of the Respondents it was contended that Article 371D (2) of the Constitution refers only to direct recruitment and the Presidential Order made under the said Article cannot make a departure and cannot be made applica ble for promotions also. It was further contended that it is the Statewide list that should be the basis for promotion. Disposing of these matters, this Court, HELD: 1. Notwithstanding anything contained in the A.P. Panchayati Raj Engineering Service Rules, 1963 the promo tions have to be based on zonal list; otherwise the very object sought to be achieved as per Article 371D of the Constitution of India and the Presidential Order issued thereunder would be defeated. The word 'employment ' should be interpreted in a broad and general manner. The expression 'in the matter of public employment ' in clause (1) of Arti cle 371D is of wider import. The public employment can be by way of direct recruitment or by promotion. The Presidential Order would apply both for direct recruitment and for promo tion in respect of categories specified in the Third Sched ule. Article 371D (2) does not make any departure from this principle. The words 'in particular, therein only lay empha sis on the aspect of creating local cadres for different parts of the State for the purpose/of direct recruitment and treat such parts as local areas. This does not in any manner restrict the scope of Article 371D wherein it is clearly declared that in the matter of public employment, the Presi dent is empowered to make an order in the manner stated therein and the public employment cannot but be interpreted to include promotion also. It, therefore, emerges that Article 371D is in general terms and applies to the public employment as whole and Article 371D(2) in particular ap plies to direct recruitment. It is only complementary to clause (1) and particularises the matters which an order made under clause (1) provides for. Any other interpretation would defeat the object underlying these two provisions. [42 D H, 43 A] The General Manager, Southern Railway vs Rangachari, ; , relied on. Article 371D is of exceptional nature and the objective is to provide equal opportunities in the backward areas in respect of the specified posts mentioned in the Third Schedule which are included in the local cadres which thus became zonal posts. As mentioned in para 5 of the 29 Presidential Order and Rule 2 A of the A.P. Panchayati Raj Engineering Service Rules, such zones should be treated as separate units for the purpose of promotions also. There fore, there is valid nexus to the object that is sought to be achieved and even if there is some anamoly it cannot on that basis be said that such promotions for zonal posts on the basis of the zonal seniority list amounts to discrimina tion. [44 D E] 2.2. Rule 2 A makes it abundantly clear that for the purpose of recruitment, appointment, promotion, transfer etc. each zone shall be a separate unit. Para 5 of the Presidential Order is also to the same effect. When once each zone is treated as separate unit for the purpose of promotion also in respect of zonal posts then by virtue of Article 371D and the Presidential Order, the promotion from the post of junior Engineer to the post of Assistant Engi neer which are both zonal posts, should be on the basis of the zonal seniority list inasmuch as the post of Junior Engineer and the next promotion post namely Assistant/Engi neer are included in the local cadres and the zonal list in the Third Schedule. With regard to the higher post which included in the local cadre and which are Statewide posts, it becomes obvious that the Statewide seniority list of the Assistant Engineer of all zones should be prepared and that should be the basis of promotion to the post of Executive Engineer which is not a zonal post. Therefore, the direc tions given by the Tribunal to ensure that no Junior Engi neer is promoted earlier than their seniors in the Statewide seniority list to the post of Executive Engineer, should be quashed. [43 F H, 44 A B] section Prakasha Rao and Anr. vs Commissioner of Commercial Taxes and Ors., , relied on. High Court of Andhra Pradesh and Ors. vs V.V.S. Krishna murthy and Ors., , referred to. All promotions of Junior Engineers (redesignated as Assistant Executive Engineers) to the next higher post of Assistant Engineers (redesignated as Deputy Executive Engi neers) have to be made on the basis of the zonal seniority list and not on the basis of the Statewide seniority list of Junior Engineers. Having regard to the historical background and the object underlying Article 371D and the Presidential Order and in particular para 13 of the Presidential Order, the promotions, if any made should be 30 treated only as provisional. If Rule 2 A is viewed from this angle particularly in the light of paras 5 and 13 of the Presidential Order it becomes clear that the said Rule has to be given retrospective effect so that the promotions to the junior posts can be brought in conformity with Articles 371D and the Presidential Order. The promotions made after the Presidential Order dated 18.11.1975 should be treated as provisional and the Government is permitted to review these promotions on the basis of zonal seniority lists and re adjust the same all the future promotions. from the post of Junior Engineer to the post of Assistant Engineer should necessarily be made on the basis of the zonal seniority lists. For the purpose of promotion to the post of Executive Engineer, which is not a zonal post, a Statewide seniority list of the Assistant Engineers of all zones should be prepared and such statewide seniority list should form the basis of promotion to the post of Executive Engineer. The State Government is accordingly directed to prepare such lists i.e. zonal seniority lists of various zones for the purpose of promotions from Junior Engineers to Assistant Engineers within the zones and also the statewide seniority list of the Assistant Engineers of all zones for the purpose of promotions to the post of Executive Engineer. Such of the directions given by the Tribunal in the matters, which are contrary to and different from the conclusions now reached, shall remain quashed. [44 D E; 44 D H; 45 A B] 3.3. The inter se seniority and the consequent promo tions of Respondent Nos. 1 to 5 in Civil Appeal No. 3935/88 as well as the petitioners in Special Leave Petition (Civil) No. 2150/87 shall be determined subject to the directions, now given. [45 B C] Y. N. Rangiah and Ors. J. Sreenivasa Rao and Ors. , [1983]3 SCC 284; N.T. Devin Katti and Ors. vs Karnata ka Public Sen,ice Commission and Ors., ; , referred to.

vil Appeal No. 1248 of 1967. Appeal by certificate from the judgment and order dated April 7, 1966 of the Punjab High Court at Chandigarh in Letters Patent No. 296 of. section K. Mehta, K. R. Jagaraia and M. Qamaruddin, for the appellants. H. K. Puri, R. L. Roshan and section K. Dhingra, for respondents Nos. 3 5, 9 & 10. 199 The Judgment of the Court was delivered by ALAGIRISWAMI, J. This is an appeal by certificate against the judgment of a Division Bench of the Punjab High Court 'in a Letters Patent Appeal. The question for decision in this appeal depends upon the interpretation of clause (ccc) added to the proviso to sub section (1) of section 60 of the Code of Civil Procedure by Punjab Relief of Indebtedness Act 7 of 1934 as amended by Punjab Acts 12 of 1940 and 6 of 1942 exempting from attachment "One main residential house and other buildings attached to it (with the material and the sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment) belonging to a judgment debtor other than an agriculturist and occupied by him : Provided that the protection afforded by this clause shall not extend to any proper ty specifically charged with the debt sought to be ' recovered. " The facts giving rise to this appeal are as follows. The appellants are two brothers and their sons. They constituted a firm called Jahangiri Mal Kalu Ram. On 19 11 1956 they were declared insolvents and the Official Receiver took possession of all their properties including the building in dispute. On 21 11 1956 the appellants filed an objection petition under section 60 of the Code of Civil Procedure read with section 4 of the Provincial Insolvency Act in respect of taking the possession of the building in dispute basing this upon clause (ccc) above referred to. The Official Receiver contended that the property in dispute is not a residential house but a shop and that the back portion of the building which consists of a kitchen and raised platform etc., for placing water was given in trust to the petitioners for residential purposes at the time of taking the possession of the shop. The creditors also contended that the property in dispute is a shop and not a residential house, even though the appellants were admitted to be using the back portion of the shop as their residence. The Trial Court held that ". .the entire building consists; of two distinct units, the one opening in the chowk of themandi being distinct business premises as a shop while theother structure on the back thereof is exclusively a residence hours . The unit which is a shop has the, main hallwhich has two. apartments on account of the arched columns 'inthe middle, and the kotha immediately behind the said half. I consider this kotha to be an integral part of the shop because there is no indication at the spot that it was an essential part of the residen tial house. To the contrary, the staircase leading from the hall on to the roof of that kotha and the steps from the roof of that kotha leading to the roof of the hall and to the room on a portion thereof, show that the said kotha is an integral part of the shop itself. The two units being the 200 property of the same persons naturally we would expect connecting doors between these two units. He, therefore, upheld the objection petition of the appellants in respect of the portion BCDE in the plan and the upper storey thereon, and dismissed it in respect of the rest of the building. On appeal by the insolvents the learned District Judge of Hissar held that there was no manner of doubt that the building in question is the main residential house of the insolvents and allowed the appeal. On appeal by the creditors a learned Single Judge observed "Accepting the. finding of the Insolvency Judge that the shop has a separate access of its own it cannot be denied that the residential portion is connected with it. The shop is in the ground floor and there is an opening in the Mandi but it is connected with the residential portion on the same floor. The other portion of the building is entirely devoted to residential purposes. " In the result he held "It is only a portion of the ground floor which has been used for shops. In my opinion, the view adopted by the lower appellatecourt is in conformity with the intent and language of theLegislature and is also in accord with the authorities of this Court. " On a further appeal under the Letters Patent the Division Bench purporting to follow the Full Bench decision of that Court in Ude Bhan & Ors. vs Kapoor Chand & Ors. (1), where it was held that if out of the main residential house belonging to a non agriculturist judgment debtor a portion is let out by him to a tenant, the whole house could not be said to be in his occupation, allowed the appeal and set aside the judgments. of the I earned Single Judge as well as the District Judge and restored the order of the Insolvency Judge. We have carefully considered the facts of this case and are in agreement with the view of the learned District Judge as well as the learned Single Judge of the High Court that the building is a single one with a portion of it in the down stairs being used as a shop. That portion opens on the chowk Mandi Dabwali and there is another opening for regular entrance from a public street. There is no evidence that any portion of the upstairs is being used for the purpose of the shop. Therefore, there is no warrant for the finding of the Insolvency Judge that the building is in two distinct portions. Indeed the learned Judges of the Division Bench did not differ from the finding of the first appellate court and the second appellate court on this point. They seem to accent this finding and proceed on that basis. Their reasoning was that if a portion of the main residential house of a judgment debtor ceases to enjoy immunity from attachment, in case that portion is let out by the, judgment debtor to a tenant, it (1) I.L.R. 1966 (2) Punjab 400. 201 would necessarily follow that the. shop portion of a building, the other part of which is being used for residential purpose would not be exempt from attachment. It appears to us that this conclusion does not follow from the judgment of the Full Bench or from the language of the statute. It is obvious that what clause (ccc) exempts is the main residential house. There is no doubt that the building is the main residential house of the insolvents. The judgment of the Full Bench proceeds on the basis that when a portion of even a main residential house is let out to a tenant by the judgment debtor that portion is not occupied by him and as occupation of the residential house by the judgment debtor is one of the requirements of the statute is order to qualify for exemption from attachment the portion let out cannot be said to be occupied by the judgment debtor and therefore does not qualify for exemption. Therefore, the decision of the Full Bench gives no guidance in interpreting the question that has to be considered in this case. The question for decision in this case is whether if a portion of the residential house is occupied by the judgment debtor himself for the purposes of a shop that portion ceases to be part of the residential house. It appears to us clear that 'it does not. In the circumstances and social conditions of this country it would be difficult to justify the conclusion that where a part of a residential house is used in connection with the business or profession of the owner of that house that portion ceases to be part of the residential house. As is well known, very often a lawyer might have his office room in his house, a doctor might have a consulting room in his house, an advocate 's library might occupy one of the rooms of his house. The room where the lawyer works or his library is located cannot be said to cease to be part of his residential house. The Punjab Court has taken the same view at least from the year 1951. In Agha Jafar Ali Khan V. Radha Kishan(1) it was held that "where the whole building is being used for the purposes of residence, the mere fact that there is a shop on the ground floor will not convert the building into something different from a residential house". The judgment of the Full Bench mentions that it is not clear in that case whether the shop portion of the building was in the possession of the judgment debtor or was rented out by him. A careful reading of the judgment shows that there was no question in that case of the shop portion of the building being in the possession of anybody except the owner. In Firm Ganga Ram vs Firm Jai Ram(2) where the ground floor of a building with three floors was being used for commercial purposes and the first and the second floors for residential purposes it was held that the judgment debtor can claim immunity from attachment or sale, with respect to the entire house under the provisions of section 60(1) clause (ccc), where it is the (1) A.I.R. 1951 Punjab 433. (2) A.I.R. 1957 Punjab 293. 202 only residential house belonging to them and occupied by them It is instructive to refer to a portion of the discussion "The conditions in our country are such which admit of a composite user of the same building. A part of the same house is used for dwelling, and the other part is meant for commercial or business purpose and sometimes even the later portion, particularly after the business hours, is used for dwelling. ". Having regard to the mode of living of the people in this country, their habits and customs, it is not possible generally to designate a particular building as one, which is used exclusively for a residential purpose in contradiction to a commercial purpose. On this basis, residential building of a medical practitioner, will not be exempt from liability to attachment or sale, if in a portion he receives or treats his patient. _ "Similarly, where in his house, an iron smith works on his forge, a shoes maker maker shoes on his last, a potter turns his wheel, or any other artisan spreads his tools, to make a living, or a petty trader keeps his wares for sale, according to the interpretation, which the learned counsel for the respondent, asks me to put on the words occurring in the Code, the provisions will be powerless in extending any effective protection. This construction will result in defeating the very purpose of the law. " We completely agree with the learned Judge 's observations. It is interesting to note that in Punjab Mercantile Bank Limited (in liquidation) Jullundur City vs Messrs General Typewriter Co., Jullundur City() Tak Chand, J. who gave the above judgment held that where the judgment debtor was residing in the greater part of the house two chabaras on the first floor let out to tenants were not exempt from attachment and sale. To the same effect is the judgment of the Full Bench relied on by the Division Bench in this case. Tek Chand, J. has kept clear in his mind the distinction between a case where a portion of the residential house is let out and a portion used by the owner himself, though for a purpose other than residential. Such use does not make the residential house cease to be a residential house or the portion so used as not part of the residential house. (1) 8 1. 203 There is no doubt that this was the main residential house of the insolvents and it was occupied by them. The facts of the case bring it squarely within the scope of the section and the whole building is, therefore, exempt from attachment. The appeal is, therefore, allowed, the judgment of the Division Bench set aside and the judgments of the learned Single Judge and the learned District Judge are restored. The respondents will pay the appellants ' costs. S.B.W. Appeal allowed.

The appellants. two brothers and their sons, constituted a firm. They were declared insolvent and the Official Receiver took possession of all their properties including the building in dispute. The appellants filed an objection petition under Sec. 60 of the Code of Civil Procedure read with Sec. 4 of the Provincial Insolvency Act in respect of taking possession of the building in dispute basing this upon cause (ccc) of the, Proviso, subsection (1). The Trial Court held that the entire building consists of two distinct units, the one being distinct business premises as a shop, while the other structure, on the back thereof, exclusively used a residential premises, and, therefore, upheld the objection petition of the appellants in respect of the residential portion and the upper storey thereon and dismissed it in respect of the rest of the building on appeal the Dist. Judge and the Single Judge of the High Court held in favour of the appellants. On a further appeal under the Letters Patent. the Division Bench purporting to follow the Full Bench Decision of that Court in Ude Bhan and Ors. vs Kapoor Chand and Ors. allowed the appeal and set aside the judgments of the learned single Judge and restored the order of the Insolvency Judge. On appeal by certificate, allowing the appeal, HELD : (1) If a portion of the residential house is occupied by the Judgment debtor himself for the. purpose of a shop that portion does not cease to be part of the residential house. In the circumstances and social conditions in this country it would be difficult to justify the conclusion that where a part of a residential house is used in connection with the business or profession of the owner of that house that portion ceases to be part of the residential house. The Punjab High Court has taken the same view at least from the year 1951. The contrary view taken by the impugned judgment does not flow form the full bench judgment or the language of the Section [201D] Ude Bhan & Ors. vs Kapoor Chand & Ors., I.L.R. 1966 (2) Punjab 400, Agha Jafar Ali Khan vs Radha Kishore, A.I.R. 1951 Punjab 433, distinguished. Firm Ganga Ram vs Firm Jia Ram, A.I.R. 1957 Punjab 293 followed. Punjab Mercantile Bank Limited (in liquidation) Jullundur City vs Messers General Typewriter Co. Jullundur City, , referred to. (2) There is no doubt that the building in question was the main residential house of the appellants and it was occupied by them. The facts of the ' case bring it squarely within the scope of the section and the whole building is, therefore, exempt from attachment. [2O3A]

minal Appeal No. 132 of 1954. Appeal by Special Leave granted by the Supreme Court by its Order dated the 3rd September, 1954 from the Judgment and Order dated the 15th June ' 1954 of the High Court of Judicature for the State of Punjab at Simla in Criminal in Appeal No. 287 of 1954 arising out of the Judgment and Order dated the 14th April 1954 of the Court of Additional Sessions Judge in Session Case No. 4 of 1954. J.G. Sethi, (Naunit Lal, with him), for the appellant. 1204 Gopal Singh and P. G. Gokhale, for the respondent. January 25. The Judgment of the Court was delivered by IMAM J. This appeal by Nanak Chand comes by special leave against the judgment of the Punjab (1) High Court. The appellant was convicted by the High Court under section 302 of the Indian Penal Code and the sentence of death passed on him by the Additional Sessions Judge of Jullundur was con firmed. On the facts alleged by the prosecution there can be no doubt that Sadhu Ram was killed on the 5th of November, 1953, at about 6 45 P.m. at the shop of Vas Dev P. W. 2. It is alleged that the appellant along with others assaulted Sadhu Ram. The appellant was armed with a takwa. Numerous injuries were found on the person of Sadhu Ram. According to the doctor, who held the postmortem examination, injuries 1, 3 and 4 were due to a heavy sharp edged weapon and could be caused by a takwa. It was denied by the prosecution that the deceased was assaulted by any other person with a takwa. According to the Medical evidence, injuries 1, 3 and 4 individually, as well as collectively, were enough to cause: death in the ordinary course of nature. In the Court of Sessions the appellant along with others was charged under section 148 and section 302, read with section 149 of the Indian Penal Code. The Additional Sessions Judge, however, held, that the charge of rioting was not proved. He, accordingly found the appellant and three others guilty under section 302 read with section 34 of the Indian Penal Code. He acquitted the other three accussed There was an appeal by three convicted persons to the High Court and the high court convicted the appellant alone under section 302 of the Indian Penal Code, confirming the sentence of death but altered the conviction of the other accused 'from section 302/34 to section 323, Indian Penal Code. it held that the provisions of section 34 of the Indian Penal Code did not apply. 1205 On behalf of the appellant questions of law and questions of fact were urged. It will be unnecessary to deal with the questions of fact if the argument on points of law is accepted. The principal question of law to be considered is as to whether the appellant could legally be convicted for murder and sentenced under section 302, Indian Penal Code when he was not charged with that offence. It was urged that as the appellant had been acquitted of the charge of rioting and the offence under section 302/149 of the Indian Penal Code, he could not be convicted for the substantive offence of murder under section 302, Indian Penal Code, without a charge having been framed against him under that section. Reliance has been placed on the provisions of the Code of Criminal Procedure relating to the framing of charges, the observations of the Privy Council in Barendra Kumar Ghosh vs Emperor(1) and certain decisions of the Calcutta High Court to which reference will be made later on. It was urged that for every distinct offence of which a person is accused, there shall be a separate charge and every such charge shall be tried separately except in cases mentioned under sections 234, 235, 236) 237 and 239 of the Code of Criminal Procedure. Section 149 of the Indian Penal Code creates a specific offence and it is a separate offence from the offence of murder punishable under section 302 of the Indian Penal Code. The provisions of sections 236, 237 and 238 of the Code of Criminal Procedure did not apply to the facts and circumstances of the present case. Off behalf of the Prosecution, however, it was urged that section 149 did not create any offence at all and therefore no separate charge was obligatory under section 233 of the Code of Criminal Procedure and that in any event the provisions of sections 236 and 237 of the Code of Criminal Procedure did apply and the appellant could have been convicted and sentenced, under section 302 of the Indian Penal Code, although no charge for the substantive offence of murder had been framed against him. (1) Cal, 197, 1206 It is necessary, therefore, to examine the provisions of section 149 of the Indian Penal Code and consider as to whether this section creates a specific offence. Section 149 of the Indian Penal Code is to be found in Chapter VIII of that Code which deals with offences against the public tranquillity. Section 149 of the Indian Penal Code reads: "If an offence is committed by any member of an unlawful assembly in prosecution of the common object of that assembly, or such as the members of that assembly knew to be likely to be committed in prosecution of that object, every person who, at the time of the committing of that offence, is a member of the same assembly, is guilty of that offence". This section postulates that an offence is committed by a member of an unlawful assembly in prosecution of the common object of that assembly or such as a member of the assembly knew to be likely to be committed in prosecution of that object and declares that in such circumstances every person, who was a member of the same assembly at the time of the commission of the offence, was guilty of that offence. Under this section a person, who is a member of an unlawful assembly is made guilty of the offence committed by another member of the same assembly, in the circumstances mentioned in the section, although he had no intention to commit that offence and had done no overt act except his presence in the assembly and sharing the common object of that assembly. Without the provisions of this section a member of an unlawful assembly could not have been made liable for the offence committed not by him but by another member of that assembly. Therefore when the accused are acquitted of riot and the charge for being members of an unlawful assembly fails, there can be no conviction of any one of them for an offence which he had not himself committed. Similarly under section 150 of the Indian Penal Code, a specific offence is created. Under this section a person need not be a member of an unlawful assembly and yet he would be guilty of being a member of an unlawful assembly and guilty of an offence which may be committed by 1207 a member of the unlawful assembly in the circumstances mentioned in the section. Sections 149 and 150 of the Indian Penal Code are not the only sections in that Code which create a specific offence. Section 471 of the Indian Penal Code makes it an offence to fraudulently or dishonestly use as genuine any document which a person knows or has reason to believe to be a forged document and it provides that such a person shall be punished in the same manner as if he had forged such document. Abetment is an offence under the Indian Penal Code and is a separate crime to the principal offence. The sentence to be inflicted may be the same as for the principal offence. In Chapter XI of the Indian Penal Code offences of false evidence and against public justice are mentioned. Section 193 prescribes the punishment for giving false evidence in any stage of a judicial proceeding or fabricating false evidence for the purpose of being used in any stage of a judicial proceeding. Section 195 creates an offence and the person convicted of this offence is liable in certain circumstances to be punished in the same manner as a person convicted of the principal offence. Sections 196 and 197 to 200 of the Indian Penal Code also create offences and a person convicted under any one of them would be liable to be punished in the same manner as if he had given false evidence. It was, however, urged on behalf of the Prosecution that section 149 merely provides for constructive guilt similar to section 34 of the Indian Penal Code. Section 34 reads: "When a criminal act is done by several persons, in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone". This section is merely explanatory. Several persons must be actuated by a common intention and when in furtherance of that common intention a criminal act is done by them, each of them is liable for that act as if the act bad been done by him alone. This section does not create any specific offence. As was pointed out by Lord Sumner in Barendra Kumar Ghosh vs Emperor(1) " 'a criminal act ' means that (1) Cal. 197, 1208 unity of criminal behaviour which results in something, for which an individual would be punishable, if it were all done by himself alone, that is, in a criminal offence". There is a clear distinction between the provisions of sections 34 and 149 of the Indian Penal Code and the two sections are not to be confused. The principal element in section 34 of the Indian Penal Code is the common intention to commit a crime. In furtherance of the common intention several acts may be done by several persons resulting in the commission of that crime. In such a situation section 34 provides that each one of them would be liable for that crime in the same manner as if all the acts resulting in that crime had been done by him alone. ' There is no question of common intention in section 149 of the Indian Penal Code. An offence may be committed by a member of an unlawful assembly and the other members will be liable for that offence although there was no common intention between that person and other members of the unlawful assembly to commit that offence provided the conditions laid down in the section are fulfilled. Thus if the offence committed by that person is in prosecution of the common object of the unlawful assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object, every member of the unlawful assembly would be guilty of that offence, although there may have been no common intention and no participation by the other members in the actual commission of that offence. In Barendra Kumar Ghosh vs Emperor(1) Lord Sumner dealt with the argument that if section 34 of the Indian Penal Code bore the meaning adopted by the Calcutta High Court, then sections 114 and 149 of that Code would be otiose. In the opinion of Lord Sumner, however, section 149 is certainly not otiose,, for in any case it created a specific offence. It postulated an assembly of five or more persons having a common object, as named in section 141 of the Indian Penal Code and then the commission of an offence by one member of it in prosecution of that object and he referred to Queen vs Sabid Ali and (1) Cal, 197, 1209 Others(1). He pointed out that there was a difference between object and intention, for although the object may be common, the intentions of the several members of the unlawful assembly may differ and indeed may be similar only in respect that they are all unlawful, while the element of participation in action, which is the leading feature of section 34, was replaced in section 149 by membership of the assembly at the time of the committing of the offence. It was argued, however, that these observations of Lord Sumner were obiter dicta. Assuming though not conceding that may be so, the observations of a Judge of such eminence must carry weight particularly if the observations are in keeping with the provisions of the Indian Penal Code. It is, however, to be remembered that the observations of Lord Sumner did directly arise on the argument made before the Privy Council, the Privy Council reviewing as a whole the provisions of sections 34, 114 and 149 of the Indian Penal Code. On behalf of the appellant certain decisions of the Calcutta High Court were relied upon in support of the submission made, viz. Panchu Das vs Emperor(2), Reazuddi and Others vs King Emperor(3) and Emperor vs Madan Mandal and Others( ' ). These decisions support the contention that it will be illegal to convict an accused of the substantive offence under a section without a charge being framed if he was acquitted of the offence under that section read with section 149 of the Indian Penal Code. , On the other hand, the prosecution relied upon a decision of the. Full Bench of the Madras High Court in Theetkumalai Gounder and Others vs King Emperor(5) and the case Queen Empress vs Bisheshar and Others(6). The decision of the Madras High Court was given in April, 1924, and reliance was placed upon the decision of the Allahabad High Court. The decision of the Privy Council in Barendra Kumar Ghosh 's case was in October, 1924. The Madras High Court, therefore, did not have before it the decision of the Privy Council. It is impossible to, say what view might have been expressed (1) [1873] 20 W.R. (Cr.) 5.(2) Cal. (3) [1961] 6 O.W.N 98.(4) ,Cal. (5) Mad. 746.(6) All. 1210 by that court if the Privy Council 's judgment in the aforesaid case had been available to the court. The view of the Calcutta High Court had been noticed and it appears that a decision of the Madras High Court in Taikkottathil Kunheen(1) was to the effect that section 149 of the Indian Penal Code is a distinct offence from section 325 of the Indian Penal Code. Because of this it was thought advisable to refer the matter. to a Full Bench. Two questions were referred to the Full Bench: (1) When a charge omits section 149, Indian Penal Code, and the conviction is based on the provisions of that section, is that conviction necessarily bad, or does it depend on whether the accused has or has not been materially rejudiced by the omission? (2) When a charge has been framed under sections 326 and 149, Indian Penal Code, is a conviction under section 326, Indian Penal Code, necessarily bad, or does this also depend on whether the accused has or has not been materially prejudiced by the form of the charge? The Full Bench agreed with the view expressed by Sir John Edge in the Allahabad case that section 149 created no offence, but was, like section 34, merely declaratory of a principle of the common law, and its object was to make it clear that an accused who comes within that section cannot put forward as a defence that it was not his hand which inflicted the grievous hurt. It was observed by Spencer, J. that a person could not be tried and sentenced under section 149 alone, as no punishment is provided by the section. Therefore the omission of section 149 from a charge does not create an illegality by reason of section 233 of the Code of Criminal Procedure which provides that for every distinct offence of which any person is accused there shall be a separate charge. They did not agree, with the general statement in Reazuddi 's case(2) that it is, settled law that when a person is charged by implication under section 149, he cannot be convicted of the substantive offence. A charge for a substantive offence under section 302, or section 325 of the Indian Penal Code, etc. is for a distinct and separate offence from that under section (1) [1928] 18 L.W. 946. (2) (1901] 1211 302, read with section 149 or section 325, read with section 149, etc. and to that extent the Madras view is incorrect. It was urged by reference to section 40 of the Indian Penal Code that section 149 cannot be regarded as creating an 'offence ' because it does not itself provide for a punishment. Section 149 creates an offence but the punishment must depend on the offence of which the offender is by that section made guilty. Therefore the appropriate punishment section must be read with it. It was neither desirable nor possible to prescribe one uniform punishment for all cases which may fall within it. The finding that all the members of an unlawful assembly are guilty of the offence committed by one of them in the prosecution of the common object at once subjects all the members to the punishment prescribed for that offence and the relative sentence. Reliance was also placed upon the decision of the Patna High Court in Ramasray Ahir vs King Emperor(1) as well as the decision of the Allahabad High Court in Sheo Ram and Others vs Emperor(1). In the former case the decision of the Privy Council in Barendra Kumar Ghosh 's case was not considered and the decision followed the Full Bench of the Madras High Court and the opinion of Sir John Edge. In the latter case the Allahabad High Court definitely declined to answer the question as to whether the accused charged with an offence read with section 149, Indian Penal Code, or with an offence read with section 34, Indian Penal Code, could be convicted of the substantive offence only. After an examination of the cases referred to on behalf of the appellant and the prosecution we are of the opinion that the view taken by the Calcutta High Court is the correct view namely, that a person charged with an offence read with section 149 cannot be convicted of the substantive offence without a specific charge being framed 'as required by section 233 of the Code of Criminal Procedure. It was urged that in view of the decision of this Court in Karnail Singh and another vs State of Punjab(1) a conviction under section 302, read with see (1) Patna 484. (2) A.I.R. 1948 All. 162, (3) , 155 1212 tion 149, could be converted into a conviction under section 302/34 which the trial Court did. There could be no valid objection, therefore, to converting a conviction under section 302/34 into one under section 302 which the High Court did. ' This argument is unacceptable. The High Court clearly found that section 34 was not applicable to the facts of the case and acquitted the other accused under section 302/34, that is to say the other accused were wrongly convicted by the trial court in that way but the appellant should have been convicted under section 302. The High Court could not do what the trial court itself could not do, namely, convict under section 302, as no separate charge had been framed under that section. It was urged by the Prosecution that under the provisions of section 236 and section 237 of the Code of Criminal Procedure a person could be convicted of an offence which he is shown to have committed although he was not charged with it. Section 237 of the Code of Criminal Procedure is entirely dependent on the provisions of section 236 of that Code. The provisions of section 236 can apply only in cases where there is no doubt about the facts which can be proved but a doubt arises as to which of several offences have been committed on the proved facts in which case any number of charges can be framed and tried or alternative charges can be framed. In these circumstances if there had been an omission to frame a charge, then under section 237, a conviction could be arrived at on the evidence although no charge had been framed. In the present case there is no doubt about the facts and if the allegations against the ap pellant that he bad caused the injuries to the deceased with takwa was established by evidence, then there could be no doubt that the offence of murder bad been committed. There was no room for the application of section 236 of the Code of Criminal Procedure. It had been argued on behalf of the prosecution that no finding or sentence pronounced shall be deemed invalid merely on the ground that no charge was framed. Reliance was placed on the provisions of section 535 of the code of criminal procedure 1213 Reference was also made to the provisions of section 537 of that Code. Section 535 does permit. a court of appeal or revision to set aside the finding or sentence if in its opinion the non framing of a charge has resulted in a failure of justice. Section 537 also permits a court of appeal or revision to set aside a finding or sentence if any error, omission or irregularity in the charge has, in fact, occasioned a failure of justice. The explanation to the section no doubt directs that the court shall have regard to the fact that the objection could and should have been raised at an earlier stage in the proceedings. In the present case, however, there is no question of any error, omission or irregularity in the charge because no charge under section 302 of the Indian Penal Code was in fact framed. Section 232 of the Code of Criminal Proce. dure permits an appellate court or a court of revision, if satisfied that any person convicted of an offence was misled in his defence in the absence of a charge or by an error in the charge, to direct a new trial to be had upon a charge framed in whatever manner it thinks fit. In the present case we are of the opinion that there was an illegality and not an irregularity curable by the provisions of sections 535 and 537 of the Code of Criminal Procedure. Assuming, however, for a moment that there was merely an irregularity which was curable we are satisfied that, in the circum stances of the present case, the irregularity is not curable because the appellant was misled in his defence by the absence of a charge under section 302 of the Indian Penal Code. By framing a charge under section 302, read with section 149 of the Indian Penal Code against the appellant, the Court indicated that it was not charging the appellant with the offence of murder and to convict him for murder and sentence him under section 302 of the Indian Penal Code was to convict him of an offence with which he had not been charged. In defending himself the appellant was not called upon to meet such a charge and in his defence he may well have considered it unnecessary to concentrate on that part of the prosecution ease, Attention has been 1214 drawn to the Medical evidence. With reference to injury No. I the doctor stated that the wounds were not very clean cut. It is further pointed out that the other incised injuries on the head were bone deep. The bone, however, had not been out. Injuries on the head although inflicted by a blunt weapon may sometimes assume the characteristics of an incised wound. Reference was made to Glasgow on Medical Jurisprudence, 9th Ed., at page 241, where it is stated that under certain circumstances, and in certain situations on the body, wounds produced by a blunt instrument may stimulate the appearance of an incised wound. These wounds are usually found over the bone which is thinly covered with tissue, in the regions of the head, forehead, eyebrow, cheek, and lower jaw, among others. It is also pointed that Vas Dev P.W. 2 bad admitted that Mitu took away the takwa from the appellant after Sadhu Ram had been dragged out of the shop but no takwa blow was given outside the shop. Prakash Chand P.W. 4, another eye witness, also admitted that Mitu had taken the takwa from the appellant when they had come out of the shop. It was urged that if a specific charge for murder had been framed against the appellant, he would have questioned the doctor more closely about the incised injuries on the head of the deceased, as well as the prosecution witnesses. It is difficult to hold in the circumstances of the present case that the appellant was not prejudiced by the non framing of a charge under section 302, Indian Penal Code. Having regard to the view expressed on the question of law, it is unnecessary to refer to the arguments on the facts. The appeal is accordingly allowed and the conviction and the sentence of the appellant is set aside and the case of the appellant is remanded to the court of Sessions at Jullundur for retrial after framing a charge under section 302 of the Indian Penal Code and in accordance with law. Appeal allowed.

Section 34 of the Indian Penal Code is merely explanatory. It does not create any specific offence. Under this section several persons must be actuated by a common intention and when in further (1) A.I.R. 1936 Lah. 1202 ance of that common intention a criminal act is done by them, each of them is liable for that act as if the act had been done by him alone. There is a clear distinction between the provisions of section 34 and section 149 of the Indian Penal Code and the two sections are not to be confused. The principal element in section 34 of the Indian Penal Code is the common intention to commit a crime. In furtherance of the common intention several acts may be done by several persons resulting in the commission of that crime. In such a situation section 34 provides that each one of them would be liable for that crime in the same manner as if all the acts resulting in that crime had been done by him alone. There is no question of common intention in section 149 of the Indian Penal Code. An offence may be committed by a member of an unlawful assembly and the other members will be liable for that offence although there was no common intention between that person and the other members of the unlawful assembly to commit that offence provided the conditions laid down in the section are fulfilled. Thus if the offence committed by that person is in prosecution of the common object of the unlawful assembly or such as the members of that assembly knew to be likely to be committed in prosecution of the common object, every member of the unlawful assembly would be guilty of that offence, although there may have been no common intention and no participation by the other members in the actual commission of that offence. There is a difference between object and intention, for although the object may be common, the intentions of the several members of the unlawful assembly may differ and indeed may be similar only in one respect namely that they are all unlawful, while the element of participation in action, which is the leading feature of section 34, is replaced in section 149 by membership of the assembly at the time of the committing of the offence. A charge for a substantive offence under section 302, or section 325 of the Indian Penal Code, etc. is for a distinct and separate offence from that under section 302, read with section 149 or section 325, read with section 149, etc. A person charged with an offence read with section 149 cannot be convicted of the substantive offence without a specific charge being framed as required by section 233 of the Code of Criminal Procedure. There was no room for the application of section 236 of the Code of Criminal Procedure to the facts of the present case. The provisions of section 236 of the Code of Criminal Procedure can apply only in cases where there is no doubt about the facts which can be proved but a doubt arises as to which of several offences have been committed on the proved facts in which case any number of charges can be framed and tried or alternative charges can be framed. In the present case there was no doubt about the facts and if the allegation against the appellant that he had caused the injuries to the deceeased with takwa was established by evidence, then there could be no doubt that the offence of murder had been committed, 1203 In the present case there was no question of any error, omission or irregularity, in the charge within the meaning of section 537 of the Code of Criminal Procedure because no charge under section 302 of the Indian Penal Code was in fact framed. There was an illegality in the present case and not an irregularity which was curable by the provisions of sections 535 and 537 of the Code of Criminal Procedure. Assuming however that there was merely an irregularity which was curable, the irregularity in the circumstances of the case was not curable because the appellant was misled in his defence by the absence of a charge under section 302 of the Indian Penal Code. By framing a charge under section 302, read with section 149, Indian Penal Code against the appellant, the Court indicated that it was not charging the appellant with the offence of murder and to convict him for murder and sentence him under section 302 of the Indian Penal Code was to convict him of an offence with which he had not been charged. In defending himself the appellant was not called upon to meet such a charge and in his defence he may well have considered it unnecessary to concentrate on that part of the prosecution ease. Barendra Kumar Ghosh vs Emperor ( (1925] I.L.R. 52 Cal. 197), Queen vs Sabid Ali and others ( [1873] 20 W.R. (Cr.) 5), Panchu Das vs Emperor ( Cal. 698), Beazuddi and Others vs King Emperor ([1901] , Emperor vs Madan Mandal and Others ( Cal. 662), Theethumalai Gounder and Others vs King Emperor ([1924] I.L.R. , Queen Empress vs Bisheshar and Others ( All. 645), Taikkottathil Kunheen ( [1923] 18 L.W. 946), Bamasray Ahir vs King Emperor ( Patna 484), Sheo Ram and Others vs Emperor (A.I.R. 1948 All. 162), and Karnail Singh and another vs State of Punjab ( , referred to.

Civil Appeal No. 5858 of 1983. From the Judgment and Order dated 5.5.83 of the Allahabad High Court of in S.A. No. 1281 of 74. S.K. Bisaria, A.P. Malhotra, J.K. Nayyar and R.S. Sharma for the Appellant. Shakil Ahmed Syed for the Respondent. The Judgment of the Court was delivered by 822 OJHA, J. This is a tenant 's appeal by special leave against the judgment of the Allahabad High Court dismissing, his second appeal arising out of a suit for ejectment of the appellant filed by the landlord respondent in respect of a shop. One of the questions which came up for consideration in the suit was as to whether the U.P. (Temporary Control of Rent and Eviction) Act, 1947 (U.P. Act III of 1947) was or was not applicable to the shop in question. The trial court held that the said Act was not applicable. Other pleas raised in defence by the appellant having failed, a decree for eviction and for recovery of damages for use and occupation was passed against him on 19th August, 1971. The trial court, however, directed the parties to bear their own costs. Against that decree an appeal was preferred by the appellant. During the pendency of the appeal, the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (U.P. Act 13 of 1972), hereinafter referred to as the Act, was enforced with effect from 15th July, 1972. The appellant made deposit contemplated by Section 39 read with Section 40 of the Act on 19th July, 1972, that is, within one month from 15th July, 1972, which was the date of the commencement of the Act, in the lower appellate court and asserted that in view of the deposit so made he was entitled to be absolved from his liability for eviction from the disputed shop. The amount so deposited, however, did not include the costs of the suit. Subsequently, the appellant was permitted to deposit even the costs of the suit by the lower appellate court but at his own risk. In regard to the claim of the appellant that he was entitled to be absolved from his liability for eviction on account of the deposit made by him on 19th July, 1972, it was urged on behalf of the landlord respondent that since the costs of the suit had not been deposited and the subsequent deposit thereof was beyond one month contemplated by Section 39 of the Act, the appellant was not entitled to the benefit of the said Section read with Section 40. For the appellant, on the other hand, it was urged that since the trial court had directed the parties to bear their own costs the benefit of the aforesaid Sections could not be denied to him for non deposit of the costs of the suit. In the alternative, it was asserted by him that since the costs even of the suit were deposited subsequently the delay in the deposit was liable to be condoned. However, neither the main plea nor the alternative plea found favour with the lower appellate court and it dismissed the appeal with costs. It further passed a decree for the costs of the suit also in favour of the landlord respondent by allowing the cross objection filed by her in this behalf. 823 Aggrieved by the decree passed by the lower appellate court the appellant preferred a second appeal which was dismissed by the High Court by the judgment appealed against. The pleas which were raised by the appellant before the lower appellate court and the High Court in regard to the scope of Section 39 read with Section 40 of the Act have been reiterated before us by his learned counsel. In support of his alternative submission that the delay in depositing the costs of the suit deserved to be condoned, the learned counsel for the appellant placed reliance on a decision of this Court in Krishna Kumar Gupta vs Addl. District Judge IV and others, On the facts of the instant case, however, we do not find it necessary to go into the question as to whether the delay in making deposit contemplated by Section 39 can be condoned or not because in our opinion the appeal deserves to be allowed on the main submission made by learned counsel for the appellant, namely, that since the trial court had directed the parties to bear their own costs as a result of which the costs of the suit were not payable by the appellant on the date of the deposit, the non deposit of the said costs within one month from 15th July, 1972 as contemplated by Section 39 of the Act could not deprive him of the benefit of the said Section. What was the true import of the expression 'full costs ' used in Section 39 of the Act, came up for consideration before a Division Bench of the Allahabad High Court in R.D.Ram Nath & Co. and another vs Girdhari Lal and another, [1975] A.L.J. Page 1. In so far as is relevant for the present case it was held: "The expression 'full costs of the suit ' in respect of a pending suit will represent the amount of court fee paid on the plaint and on other documents and other taxable expenses incurred by the landlord by the date of deposit together with such amount of the Advocate 's fee and the fee of his clerk as is taxable on the contested scale whether any certificate of fee has or has not been filed by the date of deposit. In case of a first appeal or revision filed against a decree or order of the trial court it will represent the costs awarded to the landlord in the decree or order together with the amount paid as court fee on the memorandum of appeal or revision and other documents and other taxable expenses incurred in the first appellate or revisional court including the Advocate 's fee and the fee of his clerk which are to be computed in the manner stated above." 824 This decision was cited before the learned Judge who decided the appellant 's second appeal with particular emphasis on the words 'the costs awarded to the landlord in the decree or order ' with regard to the deposit to be made in case of a first appeal or revision filed against a decree or order of the trial court. The learned Judge, however, took the view that since an appeal was a continuation of the suit the aforesaid words appear to have been mentioned by the Bench rather loosely. He also pointed out that in case the cross objection filed by the landlord was ultimately allowed the costs of the trial court would become payable and in this view of the matter also the costs of the suit had to be deposited notwithstanding the fact that the trial court had directed the parties to bear their own costs. According to the learned Judge the words 'landlord 's full costs of the suit ' were not the same thing as the costs awarded to the plaintiff in a suit and that the word 'landlord ' had been used in Section 39 purposely in order to distinguish it from the plaintiff of the suit. He further took the view that 'landlord 's full costs of the suit ' in Section 39 really meant all those taxable costs which were capable of being ascertained on the date of the deposit. Having heard learned counsel for the parties we find it difficult to agree with the view that the words 'the costs awarded to the landlord in the decree or order ' were used loosely. Irrespective of the actual amount of costs that may have been incurred by the landlord in prosecuting a suit he is entitled to recover from the tenant only such costs which in law are known as taxable costs and are made payable by the tenant to the landlord. The matter may be clarified by an illustration. Take a case where court fee in excess of what is prescribed has been actually paid by the landlord. Notwithstanding such payment the tenant, even on the suit being decreed with costs, will not be liable to pay the excess amount of court fee, inasmuch as law does not permit it to be taxed. The same would be the position in regard to the fee paid by the landlord to his counsel in excess of such fee as is taxable. For this reason even though the word 'taxable ' has not been prefixed to the words 'costs of the suit ' in Section 39 of the Act, the concept of taxable costs has been introduced therein in the process of interpretation of the said Section. On principle, we do not find much difference in a case where the costs incurred by the landlord have been made specifically not payable by the tenant to the landlord by a decree or order of the court. In our opinion non deposit of such costs which, either on account of the relevant rules or some specific order of the court are not payable by the tenant to the landlord on the date of deposit contemplated by Section 39 or 40, as the case may be, cannot deprive the 825 tenant of the benefit of these two sections. The fact that in appeal there was a possibility of costs of the suit also being awarded to the landlord by reversing the decree of the trial court in this behalf will, in our opinion, not be material. As regards the use of the word 'landlord ' in place of the word 'plaintiff ' in Section 39 of the Act suffice it to point out that since the Act deals with landlords and tenants the word 'landlord ' was used in Section 39 also as it was used in various other sections. This circumstances, in our opinion, could not be used for holding that even if costs are not payable to the landlord on the date of deposit because of some specific order of the court it would still be payable. We would, however, like to emphasise that since Section 39 contemplates deposit of full costs of suit also, in cases falling under this category, namely, where because of a decree or an order passed by the court below depriving the landlord of his costs, the tenant is not liable to pay the amount of costs on the date when the deposit contemplated by Section 39 read with Section 40 of the Act is made in an appellate or revisional court, such court in order to safeguard the interests of the landlord and to give effect to the intention of the legislature expressed in Section 39 read with Section 40 of the Act will require the tenant to deposit such costs also in supersession of the decree or order of the subordinate court in this behalf, if other conditions of these two sections have been complied with, before passing an order giving him the benefit of these sections, namely, of absolving him from his liability for eviction from the premises in question. Such a course would meet the ends of justice and safeguard the interests of both the parties. In doing so, in cases falling under the aforesaid category, the court will neither be condoning any default nor extending the time for depositing costs of the suit beyond the date contemplated by Section 39, in as much as on that date such costs were not payable by the tenant because of an order of court passed in this behalf. In the instant case the costs of the suit had already been deposited by the tenant and only an order permitting the landlord to withdraw the same was needed. The learned counsel for the landlord respondent while supporting the judgment appealed against placed reliance on a subsequent decision by Division Bench of the Allahabad High Court in Smt. Phoolwati vs Gyan Chand Verma and another, [1985] ALL. L.J. Page 826 1. It was pointed out by him that the judgment under appeal in the instant case on the point in question, has been approved in the case of Smt. Phoolwati (supra). In our opinion, the decision in the case of Smt. Phoolwati (supra) is distinguishable on facts. That was a case where during the pendency of the suit the landlord had sought permission to file some papers but her application, made in this behalf, was rejected by the trial court. Against that order the landlord preferred a revision which was allowed with costs which amount, as quantified in the formal order, came to Rs.132.10. The amount which was deposited by the tenant in order to claim the benefit of Section 39 of the Act, however, did not include this sum. It was urged on behalf of the tenant that since the sum of Rs.132.10 represented costs awarded in a revision arising not out of the main decree but out of an interlocutory order it was not necessary to be deposited. This plea was repelled and in doing so reliance was indeed placed on the decision in the case of R.D. Ram Nath & Co. (supra). Emphasis was placed on the words 'other taxable expenses incurred ' occurring in that part of the judgment in the case of R.D. Ram Nath & Co. (supra) which has been extracted above. Another circumstance which was relied on by the tenant in that case was that even though the revision against the interlocutory order had been dismissed with costs, the amount of Rs.132.10 even though mentioned in the formal order was not included in the ultimate decree which was passed in the suit. It is in this background that it was held that the said amount of Rs.132.10 fell within the expression of 'landlord 's full costs of the suit ' notwithstanding the fact that it was not shown in the decree. It was thus a case where the sum of Rs.132.10 had specifically been made payable by the tenant to the landlord in the revision against the interlocutory order but for some reason was omitted to be included in the ultimate decree. It was not a case where the costs of the revision had been directed to be borne by the parties so that it was rendered not payable by the tenant. Since the question in regard to the effect of costs not being allowed by a decree or order did not arise in the case of Smt. Phoolwati (supra) there was really no occasion to approve in that case the judgment appealed against in the instant case. In view of the foregoing discussion we are of the opinion that on the facts of the instant case the appellant was entitled to the benefit of Section 39 read with Section 40 of the Act and to be absolved from his liability to be evicted from the shop in question on account of the deposit made by him on 19th July, 1972 referred to above. In the result, this appeal succeeds and is allowed and the suit of the plaintiff 827 respondent in so far as the eviction of the appellant from the shop in question is concerned, is dismissed. The landlord respondent shall be entitled to withdraw the various amounts including costs of suit deposited by the tenant appellant in the courts below. In the circumstances of the case, however, the parties shall bear their own costs of this appeal. R.S.S. Appeal allowed.

In a suit for ejectment filed by the landlord respondent a decree for eviction from a shop was passed against the tenant appellant on 19th August, 1971. The Trial Court however directed the parties to bear their own costs. During the pendency of the tenant 's appeal, the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 was enforced with effect from 15th July, 1972. The appellant made the deposit contemplated by section 39 read with section 40 of the Act within one month in the lower appellate court and asserted that in view of the deposit so made he was entitled to be absolved from his liability for eviction. The deposit, however, did not include the costs of the suit. The landlord contested the tenant 's claim on the ground that since the costs of the suit had not been deposited within time, the tenant was not entitled to the benefit of section 39 read with section 40. In defence, the tenant urged that since the trial Court had directed the parties to bear their own costs the benefit of the aforesaid sections could not be denied to him. In the alternative, it was asserted that the delay in the deposit of costs was liable to be condoned. These contentions did not find favour with the lower appellate court and it dismissed the appeal with costs. The tenant 's second appeal was also dismissed by the High Court. The High Court held that the costs of the suit had to be deposited notwithstanding the fact that the trial court had directed the parties to bear their own costs. According to the High Court, the words 'landlord 's full costs of the suit ' were not the same thing as the costs awarded to the plaintiff in a suit but really meant all those taxable costs which were capable of being ascertained on the date of the deposit. In this Court the appellant reiterated the pleas raised in the courts below. Allowing the appeal, it was, 821 ^ HELD: (1) Irrespective of the actual amount of costs that may have been incurred by the landlord in prosecuting a suit, he is entitled to recover from the tenant only such costs which in law are known as taxable costs and are made payable to the landlord. [824E] (2) Non deposit of such costs which, either on account of the relevant rules or some specific order of the court are not payable by the tenant to the landlord on the date of deposit contemplated by section 39 or 40, cannot deprive the tenant of the benefit of these two sections. The fact that in appeal there was a possibility of costs of the suit also being awarded to the landlord by reversing the decree of the trial court in this behalf will not be material. [824H;825A] (3) In cases falling under this category, the appellate or revisional court in order to safeguard the interests of the landlord and to give effect to the intention of the legislature expressed in section 39 read with section 40 of the Act, will require the tenant to deposit such costs also in supersession of the decree or order of the subordinate court in this behalf before passing an order giving him the benefit of these sections. [825E] (4) The appellant was entitled to the benefit of section 39 read with Section 40 of the Act and to be absolved from his liability to be evicted from the shop in question. [826G H] Krishna Kumar Gupta vs Additional District Judge IV, ;R.D. Ram Nath & Co. vs Girdhari Lal, and Smt. Phoolwati vs Gyan Chand Verma, [1985] All L.J. 1, referred to.

ivil Appeals Nos. 817 to 819 of 1968 and 1456 to 1458 of 1969 From the Judgment and order dated the 19th May, 1966 and appeals by Special Leave from the Judgment and order dated the 7th November 1968 of the Punjab & Haryana High Court in C.W. No. 2205, 2206 and 2215 of 1965 and in C. Revsn. 771 to 773 of 1967 respectively. Rameshwar Dial and A, D. Mathur for the appellants (In all the appeals) . K. L. Gosain and E. C. Aggarwala for respdt. Nos. 1 (In C.A. Nos. 817/68, 1456 1457/69) respdt. Nos. 1 and 3 (in Cas. Nos. 818/68 and 1458/69) and respdt. No. 1 (In CA No. 819/68). The Judgment of the Court was delivered by KRISHNA IYER,J. These two batches of appeals stem from the same judgment but raise two different questions of law under the Punjab Security of Land Tenures Act, 1953 (Punjab Act X of 1953) (for short, the Act), the forensic focus being turned on two different facets of section 18 of the Act. The first set of appeals relates to the right of the tenants to purchase the ownership of the common landlord, Teja, while the second set of appeals turns on the principles of compensation awardable to the landlord pursuant to the vesting of ownership in the tenant. Taja, the landlord, was admittedly a large land owner under whom there were three tenants. Each of them applied for purchase of ownership under section 18(1) of the Act. The Assistant Collector, who is the primary authority, found them eligible, fixed the price and the instalments of payment, and they duly deposited the first instalment. The statutory consequence of such deposit was that title to the property vested in the tenants on that date. All these events took place in the early '60s. Had the scheme of agrarian reform in the Punjab been simple and had the virtue of early finality so necessary in such a measure been present, the law would have operated with speed and changed the rural landscape radically, instead of provoking a heavy run of never ending litigation. Section 24 of the Act has had this unwitting effect. Too many tiers of quasi judicial review, too long at each deck and in a system which is slow moving, tempt disappointed parties to litigate to the disastrous end. Such a statutory creation, calculated to give ultimate justice, is like a Frankenstein 's monster, the very prolonged over judicialised litigative engine, bleeding justice to death. A legislature, with care and concern for the agrarian community should be vigilant enough to design a quick and competent legal engineering project absent by contrast in most land reform laws blessing the rural poor. And it is noteworthy that legal battles are fought largely before Collectors, Commissioners and Financial Commissioners and then the writ chapter begins. This litigation, it is worthy of note, began before the Collector in 1961/62. A fundamental assessment of the comparative economic and social costs of multi decked determination procedure would have induced the legislature to reduce institutional levels of adjudication. This is by the way, although we strongly recommend that the legislatures do pay serious attention to producing an early termination to land reform reordering by a mammoth and immediate decision making instrumentality. 849 C.As 817 819/68 Shortly put, and shorn of details, the simple contention of the appellants in these appeals is that although their prepositus Teja was a large landowner, on his death his heirs, the present appellants, became entitled to shares and, in this process of fragmentation, they became 'small landowners ' within the meaning of section 2(2) of the Act. This event occurred after the tenants had been found entitled to purchase from the landowner the lands held by them and after they had deposited the first instalment as set down in section 18(4). The plea is that an appeal is a continuation of the original proceeding and, therefore, if there is a change of circumstances in the landlord 's ownership during the pendency of the appeal, resulting in his legal representatives becoming 'small landowners ', the tenants will be disentitled to purchase the land. Of course, a tenant of a 'small landowner ' has no right to purchase the land. But, in the present case, the landowner admittedly was a large landowner at the time the tenants applied for purchase. Section 18(1) reads, dropping the irrelevant portions, thus: "18. Right of certain tenants to purchase land: (1) Notwithstanding anything to the contrary contained in any law, usage or contract, a tenant of a land owner other them a small landowner (i) (ii) (iii) shall be entitled to purchase from the land owner the land so held by him . in the case of a tenant falling within cl.(i) or cl.(ii) at any time, and in the case of a tenant falling within cl (ii) within a period of one year from the date of commencement of this Act." It is common case that the application has been made in time and that at the time such application was made, the tenants were competent to buy the land. Section 18(4) (a) and (b) may, at this stage, be read: "18(4) (a) The tenant shall be competent to pay the purchase price either in a lump sum or in six monthly instalments not exceeding ten in the manner prescribed. (b) on the purchase price or the first instalment there of, as the case may be, being deposited, the tenant shall be deemed to have become the owner of the land, and the Assistant Collector shall, where the tenant is not already in possession and subject to the provisions of the Punjab Tenancy Act , (XVI of 1887), put him in possession thereof. " It is absolutely plain that on the deposit of the first instalment of the purchase price, the tenant shall be deemed to have become the owner of the land. In the present case, all these happenings had resulted in the respondents becoming the owners. 850 The death of the large landowner occurred pending the appeal. the argument of counsel for the appellant, which found favour with the Financial commissioner, but failed before the High Court, is that an appeal being a re hearing of the suit, relief must be given to the legal representatives of the original landowner who, by devolution, became small landholders. If this contention be sound, the tenants would have to be denied relief since they would be holding under small landowners. The solitary point which thus falls for determination is as to whether the subsequent event of the landowner 's death at the appellate stage unsettles the right acquired by the tenants or whether the tribunal must uphold rights which have crystallized as on the date the applications were made and, in any event, the deposits of the first instalment were made by each of the tenants. We see no difficulty in answering this question against the appellant, but, in view of the persistent submission based upon a few rulings of this Court, the Federal Court and the High Courts, made by counsel for the appellant, we may as well consider the question of law , adopting an interpretative attitude which will further and not frustrate the legislative will in case there are alternative choices for the Court. Of course, a construction which will promote predictability of results, maintenance of reasonable orderliness, simplification of the judicial task advancement by the Court of the purpose of the legislation and the judicial preference for what it regards as the sounder rule of law as between competing ones, must find favour with us. A plain reading of section 18, without reference to consideration of subsequent events at the appellate level, yields the easy and only conclusion that the rights of parties are determined on the date they come to Court and what is an insurmountable obstacle to any other construction is that once the deposit is made the title to the land vests in the tenant. Agrarian reform law affects a considerable number of people and to keep rights uncertain over a long stretch of time till appeals and reviews and revisions and other processes are exhausted, is to inject unpredictability of results, for it is quite on the cards that a landlord may die in the long course of litigation, or other events may happen at later stages beyond the trial Court. Can rights of parties fluctuate with such uncertain contingencies ? If so, stabilization of land ownerships, so vital to the new pattern of agrarian relations, will be postponed for a long time. Is not the judicial task simplified by adopting the golden rule that the rights of parties must be determined when they seek justice and not when the last Court has had its last say, long years after the litigation was initiated ? A system of orderliness about rights in land will result from this approach. More than all, the sounder rule of law as between rival claims to consideration of, or indifference to, subsequent events is surely that which excludes the later event factually or legally. Such a reading of the statutory scheme rhymes well with rapid agrarian reform contemplated by the framers. The philosophy of the approach which commends itself to us is that a litigant who seeks justice in a perfect legal system gets it when he asks for it. Rut because human institutions of legal justice function slowly, and in quest of perfection, appeals and reviews at higher levels are provided for, the end product comes considerably late. But these higher Courts pronounce upon the rights of parties as the facts stood when the 851 first Court was first approached. The delay of years flows from the infirmity of the judicial institution and this protraction of the Court machinery shall prejudice no one. Actus curiae neminem gravabit(1). Precedential support invoked by the appellant 's counsel also lets him down provided we scan the fact situation in each of those cases and the legal propositions therein laid down. The realism of our processual justice bends our jurisprudence to mould, negate or regulate reliefs in the light of exceptional developments having a material and equitable import, occurring during the pendency of the litigation so that the Court may not stultify itself by granting what has become meaningless or does not, by a myopic view, miss decisive alterations in fact situations or legal positions and drive parties to fresh litigation whereas relief can be given right here. The broad principle, so stated, strikes a chord of sympathy in a court of good conscience. But a seeming virtue may prove a treacherous vice unless judicial perspicacity, founded on well grounded rules, studies the plan of the statute, its provisions regarding subsequent changes and the possible damage to the social programme of the measure if later events are allowed to unsettle speedy accomplishment of a re structuring of the land system which is the soul of this which enactment. No processual equity can be permitted to sabotage a cherished reform, nor individual hardship thwart social justice. this wider perspective explains the rulings cited on both sides and the law of subsequent events on pending actions. In P. Venkateswarlu vs Motor & General Traders(2) this Court dealt with the adjectival activism relating to post institution circumstances Two propositions were laid down. Firstly, it was held that 'it is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suitor institutes the legal proceeding '. This is an emphatic statement that the right of a party is determined by the facts as they exist on the date the action is instituted. Granting the presence of such facts, then he Is entitled to its enforcement. Later developments cannot defeat his right because, as explained earlier, had the court found his facts to be true the day he sued he would have got his decree. The Court 's procedural delays cannot deprive him of legal justice or rights crystallised in the initial cause of action. This position finds support in Bhajan Lal vs State of Puniab(3) . The impact of subsequent happenings may now be spelt out. First, its bearing on the right of action, second, on the nature of the relief and third, on its impotence to create or destroy substantive rights. Where the nature of the relief as originally sought, has become obsolete or unserviceable or a new form of relief will be more efficacious on account of developments subsequent to the suit or even during the appellate stage, it is but fair that the relief is moulded, varied or re shaped in the light of dated facts. Patterson(4) illustrates this position. It is important (1) "An act of the court shall prejudice no one" Lalin for lawyers Sweet & Maxwell. (2) A. I. R. , 1410. (3) (4) Patterson vs State of Alabama ; , 607; 852 that the party claiming the relief or change of relief must have the same right from which either the first or the modified remedy may flow. Subsequent events in the course of the case cannot be constitutive of substantive rights enforceable in that very litigation except in a narrow category (later spelt out) but may influence the equitable jurisdiction to mould reliefs. Conversely, where rights have already vested in a party, they cannot be nullified or negated by subsequent events save where there is a change in the law and it is made applicable at any stage. Lachmeshwar Prasad Shuku vs Keswar Lal Chaudhuri(1) falls in this category. Courts of justice may, when the compelling equities of a case oblige them, shape reliefs cannot rights to make them justly relevant in the updated circumstances. Where the relief is discretionary, courts may exercise this jurisdiction to avoid injustice. Likewise, where the right to the remedy depends, under the statute itself, on the presence or absence of certain basic facts at the time the relief is to in ultimately granted, the Court, even in appeal, can take note of such supervening facts with fundamental impact. Venkateswarlu (supra), read in its statutory setting, falls in this category. Where a cause o action is deficient but later events have made up the deficiency, the Court may, in order to avoid multiplicity of litigation, permit amendment and continue the proceeding, provided no prejudice is caused to the other side. All these are done only in exceptional situations and just cannot be done if the statute, on which the legal proceeding is based, inhibits, by its scheme or otherwise, such change in cause of action or relief. The primary concern of the court is to implement the justice of the legislation. Rights vested by virtue of a statute cannot be divested by this equitable doctrine (See Chokalingam Chetty: P.C.). The law stated in Ramji Lal vs the State of Punjab(2) is sound: "Courts do very often take notice of events that happen. subsequent to the filing of suits and at times even those that have occurred during the appellate stage and permit pleadings to be amended for including a prayer for relief on the basis of such events but this is ordinarily done to avoid multiplicity of proceedings or when the original relief claimed has, by reason of change in the circumstances, become inappropriate and not when the plaintiff 's suit would be wholly displaced by the proposed amendment (see Steward vs The North Metropolitan Tramways Company and a fresh suit by him would be so barred by limitation. " One may as well add that while taking cautious judicial cognizance of 'post natal ' events, even for the limited and exceptional purposes explained earlier, no court will countenance a party altering, by his own manipulation. a change in situation and plead for relief on the altered basis. The apparently divergent strains of the several decisions has persuaded us to dilate on this branch of processual jurisprudence. Let us now apply the law to the circumstances here. The legislation we are interpreting relates to agrarian reform, regarded as the vitaI base to build a (1) (2) I. L. R. [1966] Punj. 125. 853 new social order. The Constitution has stressed not merely the supreme significance of this rural transformation but the fleet footed implementation thereof, even going to the extreme extent of walling off litigative assaults on constitutionality by creation of the Ninth Schedule and the like. Moreover, the Act itself takes care to prevent future accumulation of lands or motivated slimming process by transfers, interfering with the scheme of surplus pool and settlement of ejected tenants and the like. Peasant proprietorship is a cherished goal of the statute and so it provides that even on the payment of the first instalment of the price the tenant gets the title of the landlord. To hold that, if the landlord dies at some distant date after the title has vested in the tenant, the statutory process would be reversed if by such death, his many children, on division, will be converted into small landholders, is to upset the day of reckoning visualized by the Act and to make the vesting provision 'a teasing illusion ', a formal festschrift to agrarian reform, not a flaming programme of 'now and here '. These surrounding facts drive home the need not to allow futurism,, in a dawdling litigative scene, to foul the quick legislative goals. Moreover, the right of the respondents is fixed under section 18(1 ) and (41 and that cannot be uprooted by supervening circumstances. We are not called upon to mould the relief but to reject the right. We are not asked to avoid multiplicity of suits but to non suit and thus stultify the agrarian law. We are not required to permit the appellate authority to re assess the facts as they stood when the action was brought (that is part of appellate power) but to project the landholder 's subsequent death backwards to refuse a right already acquired. A flash back camera, in this context, frustrates forensic objectives. Individual misfortune may be real but larger social changes will claim martyrs in law and in fact. How can we miss the sublime impact of the Passion of Christ for the Redemption of Mankind ? The great fact is that, if uniformly relentlessly and swiftly enforced, neither landlord nor tenant can keep more than the 'permissible area '. That is the equity and equality of this agrarian law. We see no merit in the appeals and dismiss them, leaving parties to bear their respective costs throughout. 1456 1458/69 These appeals raise an interesting question of law bearing on compensation payable to landholders whose lands are vested in tenants and this turns on the connotation of 'similar land ' in section 18(2) of the Act in the context of averaging the price for ten years before the filing of the application for purchase. The primary fact which projects this point 854 Of law is as to whether the purchased land is irrigated or non irrigated for purposes of valuation. We are relieved from the need to investigate the implications of the issue because the factual foundation about the nature of the land in question was never put in issue nor considered in the High Court. Thus the appellants have missed the bus and we cannot hear them on a question raised de novo and demanding enquiry into facts not raised at the next below level. We dismiss these appeals, without costs. V.M.K, Appeals dismissed.

Section 18(1) of the Punjab Security of Land Tenures Act, 1953. lays down that, notwithstanding to the contrary contained in any law, usage or contract, a tenant of a land owner other then a small land owner shall be entitled to purchase from the land owner the land so held by him in the Case of a tenant falling within Cl. (i) or cl. (ii) at any time. and in the case of a tenant falling within Cl. (iii) within a period of one year from the date of commencement of this Act. Section 18(4)(a) provided that the 'tenant shall be competent to pay the purchase price either in a lump sum or in six monthly instalments not exceeding ten in the manner prescribed. Clause (b) provided that, on the purchase price or the first instalment thereof, as the case may be, being deposited, the tenant shall be deemed to have become the owner of the land. Teja, the landlord was a large land owner under whom there were three tenants. Each o them applied for purchase of ownership under section 18(1) of the Act. The Assistant Collector found them eligible, fixed the price and the instalments of payment, and they duly deposited the first instalment. After this Teja died. Before the Financial Commissioner, the appellants contended that on the death of Teja, they as the heirs of 'Teja, became entitled to shares and, in this process of fragmentation, they became small landowners within the meaning of section 2(2) of the Act and therefore the tenants will be disentitled to purchase the land. Their plea was that an appeal is a continuation of the original proceeding and, therefore is there is a change of circumstances in the landlord 's ownership during the pendency of the appeal, resulting in his legal representatives becoming small landowners ' the tenants will be disentitled to purchase the land. The appellants succeeded before the Financial Commissioner, but failed before the High Court. This appeal has been preferred on the basis of the special leave granted by this Court. Dismissing the appeals, ^ HELD: (i) It is absolutely plain that on the deposit of the first instalment of the purchase price, the tenant shall be deemed to have become the owner of the land. In the present case, all these happenings had resulted in the respondents becoming the owners. [849 H] (ii) Where rights have already vested in a party, they cannot be nullified or negated by subsequent events save where there is a change in law and it is made applicable at any stage. [852 B] P. Venkataswarlu vs Motor & General Traders ; , 1410, Bhajan Lal vs State of Panjab , Patterson vs State of Alabama ( 1934) 294 U.S. 600, 607 Lachmeshwar Prasad Shukul v, Keshwar Lal Chau ; , 607 Lachmeshwar Prasad Shukul vs Keshwar Lal Chaudhuri and Ramji Lal vs The State of Panjab, I.L.R. [1966] Punj. 125 referred to. The death of the large landowner occurred pending the appeal. The right of the respondents is fixed under sub sections (1) and (4) of S 18 of the Act and that cannot be uprooted by supervening circumstances. A plain reading of section 18 Yields the only conclusion that the rights of parties are determined on the date they come to court. [853 D] 6 1127SCI/75 848

No. 120 of 1959. Writ Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. Bhagirath Das and, B. P. Maheshwari, for the petitioner. N. section Bindra and D. Gupta, for the respondent. April 7. The Judgment of the Court was delivered by 824 SARKAR, J. The petitioner is a dealer registered under the Punjab General Sales Tax Act. He filed returns of his sale turnovers for the four quarters of the financial year ending on March 31, 1955, and likewise, for the four quarters of the financial year ending on March 31, 1956. In respect of each year the Sales Tax Assessing Officer served three successive notices on him on March 7, 1958, April 4, 1958, and August 18, 1959, requiring him to attend with the documents and other evidence in support of his returns. In the last of the notices mentioned above it was stated that on failure to produce the documents and other evidence mentioned, the case would be decided "on best judgment assessment basis". The petitioner did not comply with any of the notices, but after the receipt of the last notice he presented this petition under article 32 of the Constitution challenging the right of the authorities to make a best judgment assessment. The question raised by the petitioner turns on section 11 of the Punjab General Sales Tax Act, relevant provisions of which are set out below. section 11. (1) If the Assessing Authority is satisfied without requiring the presence of registered dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns. (2)If the Assessing Authority is not satisfied without requiring the presence of a registered dealer who furnished the returns or production of evidence that the returns furnished in respect of any period are correct and complete, he shall serve on such dealer a notice in the prescribed manner requiring him, on a date and at a place specified therein, either to attend in person or to produce or to cause to be produced any evidence on which such dealer may rely in support of such returns. . . . . . . . . . . . . . . . (4) If a registered dealer, having furnished returns in respect of a period, fails to comply with the terms of a notice issued under sub section (2), the 825 Assessing Authority shall within three years after the expiry of such period, proceed to assess to the best of his judgment the amount of the tax due from the dealer. The contention of the petitioner is that at the date of the notice last mentioned the Sales Tax authorities had no right to proceed to make any beat judgment assessment as the three years within which only such assessment could be made had expired before then. It seems to us that the contention of the petitioner is well founded. The learned counsel for the respondent, the assessing authority, also frankly conceded that he 'found it difficult to contend to the contrary. Sub section (4) of section 11 deals with the case of a dealer who has furnished returns in respect of a period and has thereafter been asked to produce evidence to support the returns but has failed to do so. The subsection provides that in such a case the assessing authority may proceed to make an assessment which to the best of his. judgment should be made irrespective of the returns. The reason for this provision is that the correctness of the returns having been doubted by the assessing authority, the dealer has not availed himself of the opportunity afforded to him to remove these doubts. The sub section however provides that the power can be exercised within the three years mentioned in it. Quite plainly, the power cannot be exercised after these three years have gone by. The question is, how to compute the three years? The sub section 'says "within three years after the expiry of such period". So the three years have to be counted from the expiry of the period mentioned. What then is that period? The words are "such period". The period referred therefore is the period mentioned earlier. in the sub section, and that is the period in respect of which returns had been furnished by the dealer. This is also made clear by sub section (1) of section 11. That deals with a case where the returns are accepted. Both sub sections (1) and (4) deal with returns for the same period. Now section 10(3) provides that 104 826 every registered dealer shall furnish such returns by such dates and to such authority as may be prescribed" "Prescribed" means prescribed by rules framed under the Act. Under r. 20 of these rules, a registered dealer like the petitioner, had to furnish returns quarrerly. The rules define "return period" as "the period for which returns are prescribed to be furnished by a dealer". It would therefore appear that when sub sec. (4) of section 11 talks of "returns in respect of a period", that refers in the case of the petitioner to the quarters in respect of which he submitted the returns. We when come to this that the three years within which the authority could proceed to make the best judgment assessment had to be counted from the end of each quarter in respect of which returns had been filed. Now the last of the quarters in respect of which the petitioner filed his returns ended on March 31, 1956. So the assessing authority could not proceed to make a best judgment assessment in respect of this quarter after March 31, 1959. In the case of the earlier quarters, of course, the three years had expired even prior to this date. It is not in dispute that the assessing officer had not proceeded to make any assessment on the petitioner at the date of any of the notices. In the present case therefore the notices given on August 18, 1959, that best judgment assessments would be made in respect of the quarters constituting the financial years 1955 and 1956, the last of which expired on March 31, 1956, were futile. No such assessments could be made in respect of any of these quarters after March 31, 1959. The petition must, therefore, be allowed. A writ will issue restraining the respondent from making any best judgment assessment on the petitioner for sales tax for any quarter of the financial years 1955 and 1956. The petitioner will get the costs of this petition. Petition allowed.

Under the Punjab General Sales Tax Act, 1948, a dealer had to furnish his return every quarter according to the Rules and was also required to furnish evidence in support of the return if called for, and if he failed to do so the assessing authority could proceed to make an assessment to the best of his judgment, but this power could he exercised "within three years after the expiry of the period". Held, that three years within which the authority could proceed to make the best judgment assessment had to be com puted from the end of such quarter in respect of which return had been filed.

Civil Appeal Nos. 153839 Of 1985. From the Judgment and Order dated 25.4.1984 of the Bombay High Court in First Civil Appeal Nos. 37/8 and 38/8 of 1980. S.K. Mehta for the Appellants. Jitendra Sharma for the Respondents. The Judgment of the Court was delivered by DESAI, J. A monopoly successfully avoided its legally incurred liability on the wholly untenable ground. That is the scenario in these appeals. Oriental Fire and General Insurance Company Ltd., a nationalised company having the monopoly of general insurance is the Fifth Respondent in the first appeal and the second respondent in the second appeal. It would be referred to and 'insurance company ' hereinafter. An accident occurred on Praca de Jorge Barrete Road, Margao on May 17, 1976 around 10.30 A.M. in which one Sita Gomes and her sister in law Ida Menezes were injured. Ida succumbed to her injuries and Sita Gomes recovered. The offending vehicle was a pick up van belonging to M/s. Narcinva V. Kamat, a firm carrying on business at Margao, Goa. The vehicle was insured with the insurance company. Two petitions claiming compensation came to be filed; one by the heirs of Ida and the other by Sita. The Motor Accident Claims Tribunal (Tribunal for short) held that the driver of the van was responsible for the accident as the van was being driven at the relevant time, rashly and negligently. The Tribunal awarded Rs. 75,000 as compensation to the heirs of Ida and Rs. 3,000 to Sita. In the proceedings before the Tribunal, the Insurance Company, appeared and contended that according to the terms of the contract of insurance as evidenced by the policy of insurance, the vehicle can be driven either by a driver in the employment of the insured or with the permission of the insured by one who holds a valid driving licence. In respect of this contention the Tribunal framed issue Nos. 7 and 8 in both the petitions in the following terms; 954 "7. Whether the respondent No. 6 (insurance company) proves that there is no liability on them as the respondent No. 2 Narcinva Kamat who was driving the vehicle involved in the accident was not holding any effective driving licence ? 8. Whether the respondent No. 6 proves that under the provisions of Sec. 95 of the Motor Vehicles Act and the policy in force their liability in any event is limited to the extent of Rs. 50,000 in all both in respect of this Claim Petition as well as other Claim Petition filed in the same Tribunal on account of the same accident being Claim Petition Nos. 22 23/76 filed in the Tribunal on account of the same accident. " The Tribunal answered both the issues in favour of the insurance company observing that at the time of the accident the vehicle was being driven by appellant No. 2, the partner of the firm, which was the owner of the vehicle and as the driver did not produce his driving licence, it must be held that the driver did not have a valid driving licence. The Tribunal therefore, concluded that in the absence of a valid driving licence, there was a breach of the contract of insurance and the insurance company was absolved from the liability under the policy of insurance. The firm and its partner preferred two appeals before the Panaji Bench (Goa) of the High Court of Bombay. A Division Bench of the High Court agreed with the findings of the Tribunal and dismissed the appeals. Hence these appeals by special leave. The scope of the appeals is very limited. The appeals are by the firm, owner of the vehicle which was involved in the accident and one of its partner who it was alleged was shown to be driving the vehicle at the time of the accident and while granting leave it was limited to the question: whether both the Tribunal and the High Court were justified in holding that the insurance company was not liable to satisfy the award under the contracts of insurance. The undisputed facts are that the pick up van motor vehicle bearing No. GDT 9510 belongs to the first appellant firm, and 955 the second appellant is the partner of the firm. This vehicle was involved in an accident that occurred on May 17, 1976 at around 10.30 a.m. There is a concurrent finding that the vehicle was driven rashly and negligently by the partner who was then driving the vehicle and that in this accident, Sita and Ida suffered injuries. Ida 's injuries proved fatal. The amount of the compensation awarded in both the petitions is no more open to dispute. The question is whether the insurance company under the contract of insurance is liable to satisfy the award ? Before the Tribunal and the High Court, it was contended on behalf of the appellants that at the relevant time, it was not appellant No. 2 but one Pandu Lotlikar, who was respondent No. 4 before the Tribunal was driving the vehicle. It has been concurrently found that it was appellant No. 2 who was driving the vehicle. The concurrent finding must be accepted as correct. Appellant No. 2 is none other than the partner of the first appellant firm which is the owner of the vehicle. The High Court has extracted a term in the schedule of the policy of insurance pertaining to the pick up van which may be reproduced from the judgment of the High Court. "Driver: Any of the following; (a) (deleted in type) (b) any other person provided he is in the Insured 's employ and is driving on his order or with his permission. Provided that the person driving holds a licence to drive the Motor Vehicle or has held and is not disqualified for holding or obtaining such a licence. " We have reproduced this term from the judgment of the High Court because the learned counsel for the insurance company did not have a copy of the policy of the insurance nor the one was shown from the record. Of course, the Tribunal records that the vehicle was insured as a private carrier and this was culled out from the claim form submitted on October 14,1976. It is produced at Ext. One Jaimo Albert was examined on 956 behalf of the insurance company. He was shown Ext. 29 which was identified as a copy of the policy of insurance issued by the insurance company in favour of the first appellant. He admitted that it was a comprehensive policy meaning thereby that the insurance company would be liable to satisfy the claim of damage arising out of the use of the vehicle. He does not speak of any other term of the contract of insurance. Now would the insurance company be discharged from the liability under the contract of insurance if as contended by it, at the relevant time, appellant No. 2 was driving the vehicle. Appellant No. 2 is the partners of the firm. All the partners of the firm if they have a valid driving licence would be entitled to drive the vehicle. Each partner of the firm is an agent of the firm as well as the other partner as provided by Sec. 18 of the Partnership Act. Every partner is entitled to attend diligently to his duties in the conduct of the business as provided in Sec. 12 of the Partnership Act. 26 provides that where by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the, firm is liable therefor to the same extent as the partner. A conspectus of these provisions shall show that where the pick up van belonging to the firm is being driven by a partner, it can be said that it is done with the permission of the owner namely, the firm or with its implied authority. The next question is whether the partner had a valid driving licence at the relevant time. Unfortunately, while dealing with this aspect of the case, both the Tribunal and the High Court fell into an error which resulted in giving a clean chit to the insurance company. It is admitted that this pick up van could be used as a private carrier. It is also admitted that the insurance company had issued a comprehensive insurance policy in respect of this van and at the relevant time it was in force. ' It is contended on behalf of the insurance company that the second appellant did not have a valid driving licence. It is the insurance company which complains that there has been a breach of one of the important terms of the contract of insurance as evidenced by the policy of insurance (the whole of which was 957 not shown to us) and that the second appellant who was shown to be driving the vehicle at the relevant time, did not have a valid driving licence to drive the pick up van. The insurance company complains of breach of a term of contract which would permit it to disown its liability under the contract of insurance. If a breach of a term of contract permits a party to the contract to not to perform the contract, the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract. The test in such a situation would be who would fail if no evidence is led. The language and the format in which issues Nos. 7 and 8 have been cast by the Tribunal clearly casts the burden of proof on the insurance company. Not an iota of evidence has been led by the insurance company to show that the second appellant did not have a valid driving licence to drive the vehicle. Mr. J. Sharma, learned counsel who appeared for the appellant urged that a question was asked in the cross examination of the second appellant whether he would produce his driving licence, and that as he failed to produce the same an adverse inference must be drawn against him that he did not have a valid driving licence. The High Court has recorded a finding in this behalf which may first be extracted in its own words: "Mr. Cardoso 's contention proceeds on a misreading of clause (b) indented above, which brings to the forefront that the person driving the vehicle must be 'in the insurer 's employ ' and further, being in such employment was driving the vehicle on the order of the insurer or with his permission. In this case, the very first premise is missing for the simple reason it is not even the second P appellant 's case that he was every in the employment of the first appellant firm but was at all material times a partner thereof. Even if the first appellant held a valid driving licence, clause (b) would not absolve him from liability for payment, if the van had been driven by him at the relevant time. " The High Court took no notice of the fact that the van belonged to the firm and every partner for that reason would be the owner of the property of the firm because the firm is not a legal entity in the sense in which the company under the Com 958 panies Act has a juristic personality. Firm is a compendious name for the partners. And the High Court limited its enquiry to ascertain whether the first part of the condition is satisfied viz. whether the driver was in the employ of the insurer. It completely overlooked the second clause that the driver appellant No. 2 was driving with the permission of the insured, the firm in this case. Two clauses are disjointed by a disjunctives 'or '. On a proper analysis and interpretation of the term of contract of insurance, the insurance company cannot escape the liability if (a) the insured himself was driving the vehicle or (b) the driver is in the employment of the insurer and is driving on the order of the insurer or (c) he is driving with his permission. The words with his permission does not qualify the expression 'is in the insurer 's employ '. The clause can be properly read thus: 'any other person with insurer 's permission. ' This ought to be so because a friend can always be permitted if he has a valid driving licence to drive a friend 's car. If in every such situation where the person driving the vehicle is not shown to be the insurer himself or someone in his employment, the contract of insurance would afford no protection and the insurance company having collected the premium would wriggle out of a loophole. Therefore the proper construction of this condition must be to read it as stated hereinbefore. Approaching the matter from this angle, if appellant No. 2 was driving the vehicle belonging to the firm, it can be said to be by the insurer itself or with its permission. The last question is whether he had a valid driving licence. The High Court has not recorded a clear cut finding on this point. The finding of the Tribunal is more evasive then the one by the High Court. Mr. Sharma did not dispute that the second appellant had driving licence. His grievance is that he having failed to produce the same when called upon to do so in the cross examination, an adverse inference be drawn against him that he did not have a valid licence to drive a pick up van. The submission fails to carry conviction with us. The burden to prove that there was breach of the contract of insurance was squarely placed on the shoulders of the insurance company. It could not be said to have been discharged by it by a mere question in cross examination. The second appellant was under no obligation to furnish evidence so as to enable the insurance company to wriggle out its 959 liability under the contract of insurance. Further the R.T. which issues the driving licence keeps a record of the licences issued and renewed by it. The insurance company could have got the evidence produced to substantiate his allegation. Applying the test who would fail if no evidence is led, the obvious answer the insurance company. To some up of insurance company failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the insurance company failed to prove that aspect, its liability under the contract of insurance remains intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance. Accordingly, both these appeals must succeed and are partly allowed. The award of the Tribunal as well as the judgment of the High Court are modified directing the Oriental Fire and General Insurance Co. Ltd. to satisfy the award with interest at 12 percent from the date of the accident till payment, and full costs in favour of the original claimants. The full payment to satisfy the award shall be made within a period of two moths from today. A.P.J. Appeals allowed.

In a road accident that took place two ladies were injured. One succumbed to her injuries. The offending vehicle was a pick up van belonging to a firm and was being driven by one of the partners. Two claim petitions were filed one by the heirs of the deceased and the other by the injured. The Motor Accident Claims Tribunal held that the van was being driven at the relevant time rashly and negligently. The Tribunal awarded Rs. 75,000 as compensation to the heirs of the deceased and Rs. 3,000 to injured. Before the Tribunal, the Insurance company contended that according to the terms of the contract of insurance as evidenced by the policy of insurance, the vehicle can be driven either by a driver in the employment of the insured or with the permission of the insured by one who holds a valid driving licence. The Tribunal found that at the time of the accident, the vehicle was being driven by appellant No. 2, the partner of the firm, which was the owner of the vehicle and as the driver did not produce his driving licence, held that the driver did not have a valid driving licence and, in the absence of a valid driving licence, there was a breach of the contract of insurance and the insurance company was absolved from the liability under the policy of insurance. A Division Bench of the High Court confirmed the findings of the Tribunal and dismissed the appeals by the firm and its partners. On the question whether the insurance company under the contract of insurance is liable to satisfy the award, partly allowing the appeals, ^ HELD: 1. The insurance company has failed to prove that there was a breach of the term of the contract of insurance as evidenced by the policy of insurance on the ground that the driver who was driving the vehicle at the relevant time did not have a valid driving licence. Once the insurance company failed to prove that aspect, its liability under the contract of insurance remains 952 intact and unhampered and it was bound to satisfy the award under the comprehensive policy of insurance. [959B D] 2. The award of the Tribunal as well as the judgment of the High Court are modified. The Insurance Company is to satisfy the award with interest at 12 per cent from the date of the accident till payment. [959D E] 3. Where the pick up van belonging to the firm is being driven by a partner, it can be said that it is done with the permission of the owner of the firm or with its implied authority. [956E] While dealing with the question whether the partner had a valid driving licence at the relevant time, both the Tribunal and the High Court fell into an error which resulted in giving a clean chit to the insurance company, Admittedly this pick up van could be used as a private carrier and the insurance company had issued a comprehensive insurance policy in respect of this van and at the relevant time it was in force. [946E G] 5. If a breach of a term of contract permits a party to the contract to not to perform the contract. the burden is squarely on that party which complains of breach to prove that the breach has been committed by the other party to the contract. The test in such a situation would be who would fail if no evidence is led. [957B C] In the instant case, not an iota of evidence has been led by the insurance company to show that the second appellant did not have a valid driving licence to drive the vehicle. The High Court took no notice of the fact that the van be. longed to the firm and every partner for that reason would be the owner of the property of the firm. It limited its enquiry to ascertain whether the driver was in the employ of the insurer. It completely overlooked the fact that the driver appellant No. 2 was driving with the permission of the insured, the firm in this case. [957C H; 951A B] 6. On a proper analysis and interpretation of the term of contract of insurance, the insurance company cannot escape the liability if (a) the insured himself was driving the vehicle or (b) the driver was in the employment of the insurer and was driving on the order of the insurer or not being in such employment was driving under order of the insurer or (c) with his permission. [958B C] 7. The burden to prove that there was breach of the contract of insurance was squarely placed on the shoulders of the insurance company. It could not be said to have been discharged by it by a more question in cross examination. The second appellant was under no obligation to furnish evidence so as to enable the insurance company to riggle out its liability under the contract of insurance. Further the R.T.A. which issued the driving licence keeps a record of the licences issued and renewed by it. The insurance company could have got the evidence produced to substantiate his allegation. Applying the test who would fail if no evidence is led, the obvious answer is the insurance company. [958G H; 959A] 953

Civil Appeal No. 561 of 1975. Appeal by special leave from the judgment and order dated 6 2 1975 of the Karnataka High Court in Writ Petition No. 48 of 1975. G L. N. Sinha, Solicitor General of India and M. Veerappa, for the appellants. V. M. Tarkunde,, section section Javali, A. K. Srivastava and B. P. Singh, for respondent Nos. 1 9, 16, 17, 19 21 & 26 30. H H. B. Datar and R. B. Datar, for respondent Nos. 18 & 25. 59 The judgment of the Court. was delivered by BHAGWATI, J. There is a town called Gangawati in The State of Karnataka. It had a Town Municipal Council constituted under the Karnataka Municipalities Act, 1964. The term of office of the Municipal Councillors elected at the last General Elections expired by efflux of time in 1962, but instead of holding a General Election to constitute a new Town Municipal Council, the State Government appointed an Administrator to exercise the powers and perform and discharge the functions and duties of the Town Municipal Council and also constituted an Advisory Council to advise and assist the Administrator. The appointment of the Administrator and the constitution of the Advisory Council were challenged by one of the residents of Gangawati in the High Court of Karnataka by Writ Petition No. 2405 of 1972. The writ petition was, however, settled as the State Government gave an undertaking that it would take the necessary steps for holding a General Election within a reasonable time. This happened on 6th February, 1974. The State Government thereafter, in accordance with the undertaking given by it, appointed the Returning Officer on 25th February, 1974 and it looked as if the General Elections was at last going to be held. But this hope was belied. Before the Re turning officer could issue a notice fixing the calendar of events forth election, the State Government rescinded the Notification which had been issued by it earlier under s.13 of the Act determining inter alia the territorial divisions into which the Municipality shall be divided. The result was that no further steps could be taken by the Returning Officer in the matter of holding the election. Angered and frustrated by this second attempt on the part of the State Government to bulk the holding of the election, the same individual, who had filed the earlier writ petition, preferred another writ petition, namely, Writ Petition No. 2715 of 1974. for a mandamus to the State Government to hold the election. The High Court made an order on this writ petition on 7th August, 1974 directing the State Government to hold the election within four months. This time was later extended to 8th March, 1975. Pursuant to the direction of the High Court, the State Government issued a Notification dated 3rd December, 1974 under section 13 of the Act determining the territorial divisions into which the Gangawati Municipality shall be divided for the purpose of holding the election and allotting number of seats to each territorial division. The Gangawati Municipality was divided into six territorial divisions and each territorial division was defined and demarcated by reference to census block numbers, wards and also boundaries. The Returning officer there after on 7th December, 1974 issued a notice fixing the calendar of events for holding the election. The Tehsildar, who was the designated officer under section 14, sub section (2), in the meanwhile, prepared the list of voters for each division from the Mysore Legislative Assembly Electoral Roll (hereinafter referred to as the Electoral Roll) by including in the list parts of the Electoral Roll referable to the census block numbers comprised within the division. The list of voters for each division so prepared was authenticated by the designated officer and kept open for inspection in the office of the Municipal Council. A 60 large number of nominations were filed on or before the last date fixed for it in the calendar of events and after scrutiny and withdrawal, a list of the contesting candidates was published by the Returning officer on 21st December, 1974. The only step which remained to be taken to complete the process of election was the poll which was fixed on 10th January 1975. However, on 21st December, 1974, when the question of finalisation of polling stations was taken up by the Returning officer, the Secretary of the Congress Party raised an objection that the division wise lists of voters prepared and authenticated by the designated officer were defective "inasmuch as voters who reside in one division are being made to vote in a different division" and that these lists of voters should, therefore, be rectified before fixing up the polling stations. The Returning officer considered his objection and by an order made on the same date rejected it. This order is very material and we will, therefore. reproduce it in full. It reads inter alia as follows: "It is seen from the list maintained that the population in the parts of voters list tallies with the proposal made to Government for the delimitation of the constituencies. Further it is seen that the various parts included in the division wise voters list conform to the census block numbers which are mentioned in the notification published in regard to the declaration of delimitation of territorial divisions. It also fits into the ward wise description of constituencies as declared by Government. However, it is too late in the day to prefer objections about voters list. The voters list was open for inspection all along. Many interested parties have obtained copies of the same. Nominations have been filed by respective parties on the basis of the same voters list and the scrutiny has been completed and valid nominations have been declared and today at 3.00 p.m. Last date for withdrawal is also over and the list of polling stations is finalised. At this juncture, it is regretted to declare that parties cannot be allowed to go back to the period prior to scrutiny of the nomination papers, especially so when there was not one word of objection or protest over the voters list at the appropriate time. As per section 23(3) of the Representation of the People Act, 1950 no amendment or deletion of any entry in the electoral roll should be made or given effect after the last date for making nominations in that constituency or division. Any change in the parts of the Division of Voters will amount to an amendment of electoral roll of that division. " It appears that three of the contesting candidates and a member of the Legislative Assembly belonging to the Congress Party were dissatisfied with this order and they, therefore, made an application to the Deputy Commissioner pointing out what they thought were defects in the division wise lists of voters. The Deputy Commissioner instructed the 61 Returning officer to make physical verification of these defects and the Returning officer accordingly went to the respective places where the mistakes were alleged to have occurred and after verification, made a report dated 27th December, 1974. In this report, the Returning officer stated that: "It was found during my random inspection of the various houses on the borders of the different divisions that some voters residing adjacent to one division have been included in another ad joining division and the voters list in respect of each division has been formed accordingly." The Returning officer observed that as a result of this physical verification it was found that 'the number of; voters ill the respective division would undergo considerable change" and gave figures showing that the change in the number of voters in each division would be in the neighborhood of twenty five per cent. Basing itself on this report, the State Government, by an order dated 30th December, 1974, canceled the calendar of events published by the Returning officer and directed him to issue fresh calendar of event. "after getting the voters lists completed strictly as per the division notified. " Though this order did not refer to the provision of law under which it was purported to be made, the State Government claimed that the source of its power to make this order lay in rule 75 of the Mysore Municipalities (Election of Councillors) Rules, 1965 (hereinafter referred to as the Rules) made under s.38 of the Act. The petitioners. who are residents of Gangawati, finding that the State Government had again tried to fish out some excuse for putting off the general election, preferred the present writ petition questioning the validity of this order made by the State Government. The High Court, by a judgment and order dated 6th February, 1975 held that the State Government had no power under rule 75 to cancel the calendar of events validly fixed by the Returning officer and set at naught the election process which had already commenced and in this view, quashed and set aside the order of the State Government and directed the Returning officer to hold the elections "from the Stage at which it was interrupted by the impugned Government order after fixing convenient dates for the remaining events so that the election may be completed before 8th ' March, 1975. " The State Government challenges the correctness or this view in the present appeal brought with special leave obtained from this Court. The hearing or this appeal concluded on 2nd May 1975 which was the last working day for the Court before the commencement of the summer vacation. Since the appeal involves the question as to the holding of the election and delay in the pronouncement of the order might defeat the object of filing the appeal, we pronounced our order immediately after the conclusion of the hearing, dismissing the appeal with costs and directing the Returning officer to complete the election before 10 June, 1975. We now proceed to give our reasons. The question which arises for determination in the appeal is as to whether the State Government had power under rule 75 to make the impugned order cancelling the calendar of events and thereby in effect setting at naught the entire election process which had proceeded upto the stage of poll. Rule 75, which is the last amongst the Rules, in the following terms: 62 "Notwithstanding anything contained in these rules, the State Government and subject to the general or special orders of the Government, the Commissioner shall have the power of superintendence, direction and control of the con duct of elections under these rules, and may make such orders as it or he deems fit for ensuring that the elections are held in accordance with the provisions of the Act. " lt is not necessary for the purpose of the present appeal to embark on a discussion on the wider question as to what are the different circumstances in which the power conferred under rule 75 can be exercised by the State Government and what kind of order can be made by the State Government in exercise of such power. It would indeed be inexpedient and unwise to draw the precise lines within which the power under rule 75 should be exercisable, for there may be infinite valid circumstances which may call for exercise of such power What we need consider here is only the limited question whether on the facts and circumstances of the present case, the State Government had power under rule 75 should be exercisable, for there may be infinite calendar of events fixed by the Returning officer. If such power could not be found in rule 75, it was common ground that there was no other provision in the Act or the Rules which would justify the making of the impugned order and it would plainly be invalid. Now, the only justification pleaded by the State Government in support of the exercise of the power under rule 75 was that the division wise lists of voters prepared and authenticated by the designated officer were defective and if the election were held on the basis of such defective lists of voters, it would not be in accordance with the provisions 1. ` of the Act and hence the impugned order had to be made by the State Government for ensuring that the election was held in accordance with the provisions of the Act as contemplated under rule 75. This justification, plausible though it may seem, is, in, our opinion, without merit. To test its validity it is necessary to understand the nature of the defect from which according to the finding of the Returning officer, the divisional lists of voters suffered and see whether that defect brings the case within the scope and ambit of rule 75. We may first refer to a few relevant sections of the Act. Sec. 13 provides that for the purposes of election of councillors at a general election, the State Government shall, after previous publication, by notification, determine (a) the number of territorial divisions into which the municipality shall be divided, (b) the extent of each territorial division, (c) the number of seats allotted to each territorial division which shall be not less than three and not more than five, and (d) the number of seats, if any, reserved for the Scheduled Castes and for women in each territorial division. It was in obedience to the requirement of this section that the State Government issued the notification dated 23rd December, 1974 determining inter alia the divisions in which the Gangawati Municipality shall be divided for the purpose of holding the election. The extent of each division was defined and demarcated in the Notification with great precision by reference to the 63 census block numbers which had been given to the different areas at the time of the census. These areas were clearly and definitely identifiable by their census block numbers, particularly as the extent of each census block number was well defined and it was known with definiteness and certitude as to which houses were comprised in it. There was, therefore, plainly and manifestly no doubt or uncertainty about the extent of each of the division into which the Gangawati Municipality was divided by the Notification. Section 14 is the next important section which deals with the subject of list of voters. It has four sub sections of which the first three are material. They are as follows: "(1) The electoral roll of the Mysore Legislative Assembly for the time being in force for such part of the constituency of the Assembly as is included in a division of a municipality shall, for the purpose of this Act, be deemed to be the list of voters for such division. (2) The officer designated by the Deputy Commissioner in this behalf in respect of a municipality shall maintain a list of voters for each division of such municipality (3) Every person whose name is in the list of voters referred to in sub section (1) shall unless disqualified under any law for the time being in force, be qualified to vote, at the election of a member for the division to which such list pertains. " What shall be the qualification of a person to stand as a candidate at an election is laid down in section 15, sub section That sub section provides that every person whose name is in the list of voters for any of the divisions of the municipality shall, unless disqualified under this Act or any other law for the time being in force, be qualified to be elected to the election for that division or any other division of the municipality and every person whose name is not in such list shall not be qualified to be elected, at the election for any division of the municipality. Then follows sub section (2) which is of some importance. We quote it: "Subject to any disqualification incurred by a person the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or is not qualified to vote or is qualified or is not qualified to be elected as the case may be, at an election." Section 38 confers power on the State Government to make rules to provide for or regulate all or any of the matters set out in the section for the purpose of holding election of councillors under the Act. It was in pursuance of this section that the Rules were made by the State Government. It will be seen on a plain reading of sub s (1) of section 14 that the electoral roll for the territorial area comprised in a division is to be deemed to be the list of voters for such division. The designated officer is merely to perform the operation of scissors and paste cut 64 out those portions of the electoral roll which relate to the territorial area included in the division and paste them together so as to form the list of voters for the division. There is no separate qualification laid down in the Act for being placed in the list of votes for a division laid down in the Act for being placed in the list of votes for a division as was the case in Chief Commissioner, Ajmer vs Radhey Shyam Dani. In that case, section 30, sub section (2) of Ajmer Merware Municipalities Regulation, 1925 laid down tow conditions which must be fulfilled in order to entitle a person to be enrolled as an electoral of the Ajmer Municipalities Regulation, 1925 laid down two conditions which must be fulfilled in order to entitle a person to be enrolled as an electoral of the Ajmer Municipalities, namely, (1) that he should be entitled under the Representation of the People Act, 1950 to be registered in the electoral roll for a Parliamentary Constitution, if the constituency had been co extensive with the Municipality, and (2) that his name should be registered in the electoral roll for a Parliamentary Constituency comprised in the Municipality. It was for this that the name of a person should be registered in the electoral roll of a Parliamentary Constituency. That did not entitle him straightaway to be included in the electoral roll of the Municipality. It was further required to be seen whether he was entitled to be registered in the electoral roll of the Parliamentary Constituency. That enquiry was necessary to be made before the electoral roll of the Municipality could be prepared. But, here no other qualification is required : the mere fact of a person being in the Electoral Roll for the territorial area comprised in a division is sufficient to include him in the list of voters for such division. Vide sub section (1) of section 14. What is required by this sub section is that the list of voters of a division should correspond ipsissima verba with the Electoral Roll for the territorial area included in the division. If there is any mistake in the Electoral Roll, in that some voters residing in one area or house number are shown as residing in another, it cannot be corrected by the Returning Officer while preparing the list of voters for each division. The Returning Officer has to take the Electoral Roll for the territorial area of the division as it is, with whatever mistakes there may be in it and that would be the list of voters for the division. The only way in which the mistakes, if any, either in the names of the voters or in their addresses, including house numbers in which they reside, can be corrected is by applying for rectification of the Electoral Roll under section 22 of the Representation of the People Act, 1950. So long as such rectification is not made, the entries in the Electoral Roll would stand and they would necessarily be reflected in the list of voters for the division. But they would not constitute mistakes, so far as the preparation of the list of voters for the division is concerned. It is only if the list of voters for the division does not correspond with the Electoral Roll for the territorial area comprised in the division, in the sense that voters shown in the Electoral Roll as residing in the territorial area of the division are omitted to be included in the list of voters, or voters shown in the Electoral Roll as residing in the territorial area of another division are included in the list of voters, that it can be said that the list of voters is defective and not in accordance with the provisions of the Act. 65 Now in the present case, it is clear from the order of the Returning officer dated 21st December, 1974 that the list of voters for each division corresponded fully and completely with the Electoral Roll for the territorial area comprise in such division. The finding of the Returning officer was that the various parts of the Electoral Roll included in the list of voters for each division conformed to the Census Block numbers of the respective division mentioned in the Notification dated 3rd December, 1974. Each division was defined and demarcated by reference to Census Block numbers and the parts of the Electoral Roll were also made out on the basis of Census Book numbers. There could, therefore, be no doubt or confusion as to which parts of the Electoral Roll related to the territorial area comprised in a particular division. The correspond parts of the Electoral Roll could be easily ascertained and identified by reference to Census Block numbers for preparing the list of voters for each division. that was admittedly done in the present case and there was no complaint about it. No defect was also alleged or found in this respect. The only defect if at all it can be cared a defect which the Returning officer noticed on physical verification was that the voters shown ill the Electoral Roll as residing in the territorial area or one division were in fact residing in another. But, as already pointed out above that cannot be regarded as a defect in the division wise list of voters and it would not stamp them with the vice of not being in conformity with the requirements of the Act. The State Government was, there fore, in any view of the matter, not entitled to make the impugned order under rule 75 on the ground that the divisional lists of voters were defective and the election held on the basis of such lists of voters would not be in accordance with the provisions of the Act. What the State Government did by making the impugner order was to interfere with the election process which was going on in accordance with law and that was clearly not permissible on any interpretation of rule 75. That takes us to the alternative argument advanced by the learned Solicitor General on behalf of the State Government. He contended that in any event even if the impugned order was bad and the election process was liable to be continued from the stage at which it was interrupted, the poll could be taken only on the basis of the revised Electoral Roll which had come into being, in the meanwhile, in February 1975 and, therefore it was necessary for the designated officer to correct the divisional lists of voters so as to bring them in accord with the revised Electoral Roll. This contention is also without force. lt is true that there is no provision in the Act similar to section 23 sub section (3) of the Representation of the People Act, 1950 providing that no amendment, transposition or deletion of any entry in the list of voters for a division shall be made and no direction for the inclusion of any name in such list of voters shall be given after the last date for making nomination for an election in the division. But the scheme of the Act and particularly sections 14 and 15 make it clear that it is one list of voters for each division that is contemplated to be in force during the entire process of election. The list of voters is to be prepared for the election and 'election ' means the entire process consisting of several stages and embracing several steps by which an elected member is re 66 turned, whether or not it is found necessary to take a poll. Vide: N. P. Ponnuswami vs Returning officer, Namakkal Constituency & ors.(1) The list of voters must, therefore, a fortiori remain the same throughout the process of election. There cannot be one list of voters for determining the eligibility to stand as a candidate and another for determining the eligibility to vote, at the sane election. That would not only be irrational, but would also introduce confusion and uncertainty in the election process. Candidates would not know at the time when they file their nominations as to what is the strength and composition of the electorate in the division m which they are contesting the election. They would also be handicapped in canvassing for votes. It would indeed be a strange and anomalous position if there were two or more different lists of voters at different stages of the same election Sub section (1) of s.14 does not contemplate a this of voters which keeps on changing from times to time during the election t process. It deems the Electoral Roll for the territorial area of the division, in force at the relevant time to be the List of voters for the division "for the purpose of the Act", that is for the purpose of election which is the whole process culminating in a candidate being declared elected and not merely polling. The same list of voters is, therefore, to prevail for all stages in the election. This we find emphasised also in sub section (3) of s.14 which enacts that every person whose name is in the list of voters referred lo in sub section (1) shall be qualified to vote at the election of a member for the division to which such list pertains. Sub section (2) of s.15 also points in the same direction. It says that "the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or is not qualified to vote or is qualified or is not qualified to be elected as the case f may be, at an election. " The reference here, as matter of plain grammar, is indisputably to the same list of voters which is to be conclusive evidence for both purposes. lt is, therefore, clear, on a proper interpretation of the provision of the Act that the Legislature did not intend that the list of voters should change from time to time during the process of election and the relevant Ellctoral Roll for the purpose of preparation of the list of voters must consequently be taken to be the Electoral Roll in force at the date when the election process commenced, that is, the date when the calendar of events was published. The same view was taken by a revision Bench of the Mysore High Court in Shivappa Chanamollappa Jogendra vs Basavannappa Gadlappa Banker. (") We are in agreement with that view. The poll in the present case must, therefore, be taken on the basis of the list of voters for each division prepared with reference to the Electoral Roll in force on 7th December, 1974, that being the date on which the calendar of events was published by the Returning officer. One other question was also raised before us, namely, whether the designated officer can be required to rectify the list of voters for a division, if it can be shown that the list of voters does not correspond exactly with the Electoral Roll for the territorial area of the division, as for example, some voters in a particular house in a Census Block number falling in the division, though shown in the Electoral Roll as 67 such, are, through inadvertence, omitted to be included in the list of voters for the division. It is not necessary for the purpose of the present appeal to decide this question, but we may point out that tall the election process has commenced by the issue of notice fixing the calendar of events, there is no reason why the designated officer should not be entitled to rectify such defect in the list of voters and bring the list of voters in conformity with the Electoral Roll. But once the calendar of events is published and the election process has begun, it is extremely doubtful whether any changes can be made in the list of voters for the purpose of setting right any such defect. We, however, do not wish to express any final opinion on this point. These were the reasons which weighed with us in making the order dated 2nd May, 1975 dismissing the appeal with costs and directing the Returning officer to complete the election before 10th June 1975 on the basis of the Electoral Roll in force on 7th December 1914.

Section 13 of the Karnataka Municipalities Act, 1964, provides that for the purpose of election of councillors of a town municipality at a general election the State Government shall, after previous publication by notification, determine, (a) the number of territorial divisions into which the municipality shall be divided. (b) the extent of each territorial division; (c) the number of seats allotted to each territorial division. and (d) the number of seats reserved for the Scheduled Castes and women. Section 14 provides that the electoral roll of the State Legislative Assembly for the territorial area comprised in the division, shall be deemed to be the list of voters of such division Rule 75 of the Mysore Municipalities (Election of Councillors) Rules, 196 empowers the State Government to make such orders as it deems fit for ensuring that the elections are held in accordance with the provisions of the Act. For holding a general election with respect to a town municipal council, the State Government issued the notification under section 13. Thereafter the Returning officer issued a notice fixing the calendar of events for holding the election. The list of voters for each division was prepared exactly according to the Electoral Roll, and kept open for inspection In the office of the municipal council. A list of the contesting candidates was also published and the poll date was also fixed as January 10, 1975. At that state it was found that some voters residing in the border of one division had been included in the voters ' list of an adjoining division and the State Government, in purported exercise of the power under r. 75, cancelled the calendar of events published by the Returning officer and directed a fresh preparation of the voters ' list as per the divisions notified. In a writ petition filed by the respondents, who were residents of the town, the High Court held that the State Government had no power to cancel the calendar of events and quashed the direction of the State Government. Dismissing the appeal to this Court, ^ HELD: (1) What is required by section 14(1) is that the list of voters of a division should correspond ipsissima verba with the Electoral Roll for the territorial area included in the division. of there is any mistake in the Electoral Roll in the some voters residing in one area or house number are shown as residing in another, it cannot be corrected by the Returning officer while preparing the list of voters for that division. The only way in which such mistake can be corrected is by applying for rectification of the Electoral Roll under section 22 of the Representation of the People Act, 1950, but of such rectification is not made the entries in the Electoral Roll would stand and they would necessarily be reflected in the list of voters for the division. But that would not constitute a mistake so far as the preparation of the list of voters for the division is concerned. It is only if the list of voters for the division does not correspond" with the concerned Electoral Roll in the sense that the voters shown in the Electoral Roll as residing in the territorial are omitted to be included in the list of voters of that division or voters shown In the Electoral Roll as residing in the territorial area of one division are included in the list of voters of another. that it can be said that the List is defective and not in accordance with the provisions of the Act [64D H] 58 (2) The scheme of the Act and particularly sections 14 and 15 show that it is only one list of voters that is contemplated to be in force during the entire process of election, and there is no question of correcting the list of voters according to the revised Electoral Roll which had come into being in February, 1975. [65G H] The list of voters is to be prepared for the election tnd 'election ' means the entire process consisting of the several stages and embracing the several steps by which an elected member is returned. [65H] Section 14(1) does not contemplate a list of voters which keeps on changing from time to time during the election process. It deems the Electoral Roll for the territorial area of the division in force at the relevant time to be the list of voters for the division for the purposes of the Act that is, for the purposes of the 'election '. Section 14(3) enacts that every person whose name is in the list of voters referred to in sub section (1) shall be qualified to vote at the election of a member for the division to which such list pertains. Section 15 (2) also says that the list of voters shall be conclusive evidence for the purpose of determining under this section whether the person is qualified or not qualified to vote or to be elected. The sub sections refer to the same list of voters and it is, therefore, clear that the legislature did not intend that the list of voters should change from time to time during the process of election and the relevant Electoral Roll for the purpose of preparation of the list of voters must consequently be taken to be the Electoral Roll in force at the date when the election process commenced, that is when the calendar of events was published. [66A F] Chief Commissioner, Ajmer vs Radhey Shyam Dani, ; , explained . N. P. Ponnuswami vs Returning officer, Namakkal Constituency & Ors, ; , followed Shivappa Chanamallappa jogendra vs Basavannappa Gadlappa Bankar, [1965] Mysore L.J. 289. approved. Obiter: Till the election process has commenced by the issue of a notice fixing the calendar of events. there is no reason why the designed officer should not be entitled to rectify the list of voters for a division if it can be shown that the list of voters does not correspond exactly with the Electoral Roll for the territorial area and bring the list of voters in conformity with the Electoral Roll, but once the calendar of events is published and the election process has begun it is extremely doubtful whether any changes can be made in the list of voters for the purpose of setting right any such defect. [67 C]

tition Nos. 833 835 of 1979. (Under article 32 of the Constitution) P. Parmeswara Rao, G. D. Gupta and Ashwani Kumar for the Petitioners. U. R. Lalit and Miss A. Subshashini for the Respondent. The Judgment of the Court was delivered by PATHAK, J. In these three petitions under Article 32 of the Constitution, the petitioners separately pray for a restoration of the quota originally granted to them in their respective licences for the manufacture of fire arms. Writ Petition No. 833 of 1979 has been filed by Ranjit Singh who alleges that his father Pritam Singh commenced the business of manufacturing guns in 1950 under a licence issued by the Government of Jammu and Kashmir. The licence permitted him to manufacture 849 30 guns per month. The guns were manufactured by hand and were not proof tested. The licence was renewed annually and the quota was maintained throughout. Later, with the enactment of the , the licence was issued under that statute. The Government insisted that the guns manufactured by Pritam Singh should undergo proof testing, and for that purpose it became necessary for the manufacturer to purchase and install the necessary machinery and plant. The machinery was installed shortly after 1960 on a substantial investment of funds raised with great difficulty and, it is said, in the result the factory is now capable of manufacturing 50 guns per month. Until the year 1963, the licence in favour of Pritam Singh was renewed by the Government of Jammu & Kashmir for the full quota of 30 guns. But with effect from the year 1964 the Government of India began to issue the licences. The quota was reduced from 30 guns to 10 guns per month, and it is alleged that this has resulted in considerable hardship in view of the financial liability and the establishment expenses suffered pursuant to the installation of the machinery. On the death of Pritam Singh in 1969, the business was carried on by the petitioner and his mother, and the licence now stands in their names. Several representations were made to the authorities for the restoration of the original quota but there was no satisfactory response. The petitioner claims that his plea for the restoration of his original quota has been supported by the State Government. The petitioner cites a number of cases where the quota reduced in the case of other manufacturers has been restored and relies on other material to show that the determination of his quota has been arbitrary. Writ Petition No. 834 of 1979 has been filed by Bachan Singh. The facts incorporated in the petition run a materially similar course, except that the original quota granted to the petitioner consisted of 50 guns per month and has now been reduced to 5 guns per month. The petitioner in the third Writ Petition, No. 835 of 1979, is Uttam Singh. In his case, the original quota of 50 guns a month has been reduced to 15 guns a month. Here again, the pattern of facts is substantially similar to that traced in the other two writ petitions. In opposition to the writ petitions, the Union of India which is the sole respondent, relies on an Industrial Policy Resolution of 1956 which envisions an exclusive monopoly in the Central Government in the matter of manufacturing arms and ammunition while permitting existing manufacturers in the private sector to continue to carry on their business on a limited scale. It is asserted that in fixing a quota the manufacturing capacity of a concern is not a determining factor, 850 and it is denied that the Government has acted arbitrarily. It is also urged that the petitioners should be denied relief on the ground of laches. The Union of India rests its case on the Industrial Policy Resolution of 1956. Under that Resolution, however, it was decided that no objection would be taken to the continuance of the manufacture of arms and ammunition by existing units in the private sector already licensed for such manufacture provided the operation of those units was strictly restricted to the items already manufactured by them and that no expansion of their production or increasing the capacity of the items already produced was undertaken without the prior sanction of the Government of India. Plainly, what was envisaged was a prohibition against an increase in the quota, not its curtailment. Purporting to implement the Industrial Policy Resolution, the Government issued instructions that the quota fixed should be such that the market was not flooded with arms and ammunition. No objection can be raised to that. It is as it should be, but with that primary consideration defining the outer limits, there are other factors which govern the fixation of the actual quota. There is the production capacity of the factory, the quality of guns produced and the economic viability of the unit. The Government is bound to keep these in mind while deciding on the manufacturing quota. There is need to remember that the manufacture of arms has been the business of some of these units for several years and the Industrial Policy Resolution contains a specific commitment to permit the continuance of those factories. On the other side, the Government is entitled to take into consideration the requirements of current administrative policy pertinent to the maintenance of law and order and internal security. Any curtailment of the quota must necessarily proceed on the basis of reason and relevance. If all relevant factors are not considered, or irrelevant considerations allowed to find place, the decision is vitiated by arbitrary judgment. On the material placed before us, we are not satisfied that the Government of India has taken into careful consideration the several elements necessary for forming a decision on the quota permissible to each of these petitioners. We are of opinion that it should do so now. And, for that purpose, the petitioners should be entitled to place before the Government a fresh and complete statement of their case, with supporting written material, to enable the Government to reach a just decision in each case. We need not, in the circumstances, consider the other grounds on which the petitioners claim relief. 851 On behalf of the Government it is urged that there is no fundamental right under Article 19(1)(g) of the Constitution to carry on the manufacture of arms. That contention is disposed of shortly. The , expressly contemplates the grant of licences for manufacturing arms. An applicant for a licence is entitled to have it considered in accordance with the terms of the statute and to have for its grant on the basis of the criteria set forth in it. The other contention on behalf of the Government is that the petitioners are guilty of laches. We are not impressed by the contention for the reason that the licences are granted for specific periods with a right to apply for renewal on the expiry of each period. Each renewal constitutes a further grant of rights and it is open to the applicant to show on each occasion that the quota governing the preceding period should now be revised in the light of present circumstances. Besides, the petitioners have been continuously agitating for the restoration of their quota. Having regard to the peculiar circumstances of these cases, we are not inclined to deny them relief. Accordingly, we allow the writ petitions and direct the respondent Union of India to reconsider the manufacturing quota fixed in the case of each petitioner after allowing a reasonable period to the respective petitioners to set forth their case on the merits, with such supporting written material as they may choose to place before it. N.V.K. Petitions allowed.

In 1950, the State Government issued a manufacturing licence renewable every year to the petitioners for the manufacture by hand of a specified number of guns per month. The guns were however not proof tested. After the , came into force, the government insisted that the guns manufactured should undergo proof testing. Pursuant to that condition in 1960, the petitioners installed machinery and plant, by making substantial investment of funds. From 1964, the Government of India, reduced the monthly quota of guns. The petitioners in their writ petitions under Article 32 alleged that this reduction had resulted in considerable hardship to them because of the fixed overhead costs which could not be avoided. They also alleged that though in the case of a number of other such manufacturers quotas were restored, in their cases, the Government refused to restore the quotas. The Union of India, however, denied the allegation of arbitrariness, and stated that: (a) what was done was pursuant to the Industrial Policy Resolution of 1956 which envisioned an exclusive monopoly in the Central Government in the matter of manufacturing arms and ammunition and that in fixing the quota the manufacturing capacity of a concern was not a determining factor; (b) there is no fundamental right under Article 19(1)(g) of the Constitution to carry on the manufacture of arms; and (c) there was laches on the part of the petitioners. Allowing the writ petitions, ^ HELD: (a)(i) Any curtailment of the quota must proceed on the basis of reason and relevance. The Government is entitled to take into consideration the requirements of current administrative policy pertinent to the maintenance of law and order and internal security. If all relevant factors are not considered, or irrelevant considerations allowed to find place, the decision is vitiated by arbitrary judgment. [850F; E] In the instant case the Government of India had not taken into careful consideration the several elements necessary for forming a decision on the 848 quota permissible to each of the petitioners. That should be done and for that purpose the petitioners would be entitled to place before the Government a fresh and complete statement of their case, with supporting material, to enable the Government to reach a just decision. [850G H] (ii) The Industrial Policy Resolution envisaged a prohibition against an increase in the quota of guns, not its curtailment. No objection could be taken to the government 's instructions on the subject. The other factors governing the fixation of the actual quota are the production capacity of the factory, the quality of the guns produced and the economic viability of the unit. The Industrial Policy Resolution contains a specific commitment to permit the continuance of the factories which were functioning for several years earlier. [850C; D E] (b) The , expressly contemplates the grant of licences for manufacturing arms and an applicant for a licence is entitled to have it considered in accordance with the terms of the statute and to press for its grant on the basis of the criteria set forth in it. [851A B] (c) The licences are granted for specific periods with a right to apply for renewal on the expiry of each period. Each renewal constitutes a further grant of rights and it is open to the applicant to show on each occasion that the quota governing the preceding period should be revised in the light of present circumstances. [851C] In the instant case the petitioners had been continuously agitating for the restoration of their quota. They are, therefore, not guilty of laches and are entitled to relief. [851D]

Civil Appeal No. 59 of 1952. Appeal from the Judgment and Order dated 3rd January, 1952, of the High Court of Judicature at Patna (Ramaswami and Sarjoo Prosad JJ). in an application under article 226 of the Constitution registered as Miscellaneous Judicial Case No. 204 of 1950. Original Petition No. 20 of 1952 under article 32 of the Constitution was also heard along with this appea. P. R. Das (B. Sen, with him) for the appellants. M. C. Setalvad, Attorney General for India, and Mahabir Prasad, Advocate General of Bihar (G. N. Joshi, with them) for the respondents. February 20. The court delivered judgment as follows : PATANJALI SASTRI C. J. I concur in the judgment which my learned brother Mukherjea is about to deliver, but I wish to add a few words in view of the important constitutional issue involved. The facts are simple. The appellants obtained a settlement of about 200 bikhas of land in a village known as Sathi Farm in Bettiah Estate, in Bihar, 1131 then and ever since in the management of the Court of Wards on behalf of the disqualified proprietress who is the second respondent in this appeal. The lands were settled at the prevailing rate of rent but the salami or premium payable was fixed at half the usual rate as a concession to the appellants who are said to be distant relations of the proprietress. The appellants paid the salami and entered into possession of the lands on the 2nd November, 1946, and ' have since been paying the rents regularly. On the 13th June, 1950, the Bihar Legislature passed an Act called the Sathi Lands (Restoration) Act, 1950. The genesis of this legislation is thus explained in the counter affidavit filed on behalf of the State of Bihar, the first respondent herein. Report against the settlement of these lands with the petitioners as well as some other lands to Sri Prajapati Mishra and the unlawful manner in which these settlements were brought about, was carried to the Working Committee of the Indian National Congress, which body, after making such enquiry as it thought fit, came to the conclusion that the settlement of these lands with the petitioners was contrary to the provisions of law and public policy and recommended that steps should be to taken by the State of Bihar to have these lands restored to the Bettiah Estate. In pursuance thereof a request was made to the petitioners and to the said Prajapati Mishra to return the lands to Bettiah Estate. While Sri Prajapati Mishra returned the land settled with him, the petitioners refused to do so. The Statement of Objects and Reasons of the Sathi Lands (Restoration) Bill runs thus: "As it has been held that the settlement of Sathi lands in the District of Champaran under the Court of Wards with Sri Ram Prasad Narayan Sahi and Shri Ram Rekha Prasad Narayan Sahi is contrary to the provisions of the law and as Sri Ram Prasad Narayan Sahi and Sri Ram Rekha Narayan Sahi have refused to return the lands to the Bettiah Estate, Government 1132 have decided to enact a law to restore these lands to the Bettiah Estate." The impugned Act consists of three sections. Section 2(1) declares that "notwithstanding anything contained in any law for the time being in force" ', the settlement obtained by the appellants is "null and void", and that "no party to the settlement or his successor in interest shall be deemed to have acquired any right or incurred any liability thereunder". Sub section (2) provides that the appellants and their successors in interest "shall quit possession of the said land from the date of commencement of this Act and if they fail to do so, the Collector of Champaran shall eject them and restore the lands to the possession of the Bettiah Wards Estate". Subsection (3) provides for the refund of the amount of salami money and the cost of improvement, if any, to the lessees by the estate on restoration to it of the lands in question. In the "case" lodged in this court for the State of Bihar, the legislation is sought to be justified and its validity maintained on the following grounds: " It is well settled that a Legislature with plenary powers so long as it enacts law, within the ambit of its powers, is competent to enact a law which may be applicable generally to society or to an individual or a class of individuals only . It is submitted that grants of the lands belonging to the Bettiah Estate made by the Court of Wards were of doubtful validity; hence they have been dealt with by the impugned Act . No evidence has been adduced by the appellants, except a bare allegation, which has not been substantiated, that about 2000 acres of land were settled to show that persons in similar circumstances with whom similar settlements were made, were treated differently. It is submitted that in the context the impugned Act, has a reasonable basis of classification. " The decision of the majority of this Court in Chiran vs The Union of India(1) is relied on in suport of these contentions, In that case, however, the (1) ; , 1133 majority felt justified in upholding the legislation, though it adversely affected the rights and interest of the shareholders of a particular joint stock company, because the mismanagement of the company 's affairs prejudicially affected the production of an essential commodity and caused serious unemployment amongst a section of the community. Mr. Justice Das and I took the 'view that legislation directed against a particular named person or corporation was obviously discriminatory and could not constitutionally be justified even if such legislation resulted in some benefit to the public. In a system of government by political parties, I was apprehensive of the danger inherent in special enactments which deprive particular named persons of their liberty or property because the Legislature thinks them guilty of misconduct, and I said in my dissenting opinion: "Legislation based upon mismanagement or other misconduct as the differentia and made applicable to a specified individual or corporate body is not far removed from the notorious parliamentary procedure formerly employed in Britain of punishing individual delinquents by passing bills of attainder, and should not, I think receive judicial encouragement. " My apprehensions have come true. Recently we had before us a case from Hyderabad (Civil Appeal ,No. 63 of 1952Ameerunnissa Begum vs Mahboob Begum) ' where the duly constituted legislative authority of that State intervened in a succession dispute between two sets of rival claimants to the estate of a deceased person and " dismissed " the claim of the one and adjudged the Property to the other by making a special " law " to that effect. And now comes this case from Bihar of an essentially similar type. The appellants assert title to certain lands in Bettiah Estate under a settlement which they claim to have lawfully obtained from the Court of Wards, while it is now alleged on behalf of the Estate that the settlement was not for the benefit of the Estate and was contrary to law, as the Court of Wards did not then " apply its (1) Since reported as ; 147 1134 mind " to that question. This is purely a dispute between private parties and a matter for determination by duly constituted courts to which is entrusted, in every free and civilised society, the important function of adjudicating on disputed legal rights, after observing the well established procedural safeguards which include the right to be heard, the right to produce witnesses and so forth. This is the protection which the law guarantees equally to all persons, and our Constitution prohibits by article 14 every State from denying such protection to anyone. The appellants before us have been denied this protection. A political Organization of the party in power decides after making such enquiry as it thought fit, that the settlement in question was " contrary to the provisions of law and public policy " and the State Legislature, basing itself on such decision, purports to declare the settlement " null and void " and directs the eviction of the appellants and the restoration of the lands to the Estate. The reasons given for this extraordinary procedure are indeed remarkable for their disturbing implications. It is said that "there was agitation amongst the tenants of the locality and opposition on the part of persons living in the locality against the appellants ' possession of the lands which led to breach of the peace and institution of criminal cases ". Whenever, then, a section of the people in a locality, in 'assertion of an adverse claim, disturb a person in the quiet enjoyment of his property, the Bihar Government would seem to think that it is not necessary for the police to step in to protect him in his enjoyment until he is evicted in due course of law, but the Legislature could intervene by making a " law " to oust the person from his possession. Legislation such as we have now before us is calculated to drain the vitality from the rule of law which our Constitution so unmistakably proclaims, and it is to be hoped that the democratic process in this country will not function along these lines. MUKHERJEA J. This appeal, which has come before us on a certificate granted by the High Court of 1135 Patna under article 132 (1) of the Constitution, is directed against a judgment of a Division Bench of that court, dated 3rd January, 1952, by which the learned Judges dismissed a petition of the appellants under article 226 of the Constitution. The prayer in the petition was for a writ in the nature of mandamus, directing the opposite party, not to take any action, under an Act passed by the Bihar Legislative Assembly in 1950 and known as The Sathi Lands (Restoration) Act which was challenged as void and unconstitutional. To appreciate the points in controversy between the parties to the proceeding, it may be necessary to narrate the material facts briefly. Maharani Janki Koer, the respondent No. 2 in the appeal, is the present proprietress of an extensive Estate in Bihar known by the name of Bettiah Raj, which is held and managed on her behalf by the Court of Wards, Bihar, constituted under Bengal Act IX of 1879. On 19th July, 1946, the appellants, who are two brothers and are distantly related to the Maharani, made a representation to the Government of Bihar through the Manager of the Estate, praying for settlement in raiyati right, of 200 bighas of land preferably in Sathi farm or Materia farm along with a certain quantity of waste lands. On 20th July, 1946, the then Manager of the Wards Estate wrote a letter to the Collector of Champaran recommending that the applicants might be given settlement of the lands as prayed for, without payment of any selami. The Collector, however, did not. agree to this proposal, nor did the Commissioner of the Tirhut Division, and the matter then came up for consideration before the Board of Revenue which recommended that settlement might be made with the applicants provided they were agreeable to pay selami at half the usual rates. On 14th October, 1946, the recommendation of the Revenue Board was accepted by the Provincial Government and six days later the Court of Wards accepted a cheque for Rs. 5,000 from one of the lessees, towards payment of the selami money and rent for the year 1354 F.S. On the 2nd November, 1946, possession 1136 of the lands was given to the appellants and on the 18th of November following, the Manager of the Court of Wards recorded a formal order fixing the selami of the land at Rs. 3,988 annas odd and rent at Rs. 797 annas odd per year. On the same day, a Hisab Bandobasti form, which is the usual form employed in the Estate for raiyati settlements, was signed by the Circle Officer on behalf of the Court of Wards and by one of the lessees for himself as well as the constituted attorney of the other lessees. It is not disputed that the lessees continued to possess the lands since then on payment of the stipulated rent. On the 3rd June, 1950, the Bihar Legislative Assembly passed an Act known as The Sathi Lands (Restoration) Act which received the assent of the Governor on the 13th June, 1950. The object of the Act, as stated in the preamble, is to provide for restoration of certain lands belonging to the Bettiah Wards Estate which were settled contrary to the provisions of law in favour of certain individuals. Section 2, which is the only material section in the Act, enacts in the first sub section that the settlement of Sathi lands (described in the schedule to the Act) on behalf of the Bettiah Court of Wards Estate with the appellants, as per order of the Manager of the Estate dated the 18th November, 1946, is declared null and void and no party to the settlement ,or his successor in interest shall be deemed to have acquired any right or incur any liability under the same. The second sub section embodies a direction to the effect that the said lessees and their successor in interest shall quit possession of the lands from the date of the commencement of the Act and if they fail to do so, the Collector of Champaran shall eject them and restore the lands to the possession of the Bettiah Estate. The third and the last sub section provides that the Bettiah Wards Estate shall on restoration to it of the lands pay to the lessees the selami money paid by them and also such amount as might have been spent by them in making improvements on the lands prior to the commencement of the Act. 1137 In substance, therefore, the Act declared the lease granted by the Bettiah Wards Estate to the appellants on the 18th November, 1946, to be illegal and inoperative and prescribed the mode in which this declaration was to be given effect to and the lessees evicted from the lands. On the 28th August, 1950, the appellants filed the petition, out of which this appeal arises, under article 226 of the Constitution in the High Court of Patna, challenging the validity of The Sathi Lands Act and praying for a writ upon the respondents restraining them from taking any steps under the said Act, or from interfering with the possession of the appellants in respect of the lands comprised in the lease. It was asserted by the petitioners that in passing the impugned legislation the Bihar Legislature actually usurped the power of the judiciary and the enactment was not a law at all in the proper sense of the expression. The other material contentions raised were that the legislation was void as it conflicted with the fundamental rights of the petitioners guaranteed under articles 14, 19(1) (f) and 31 of the Constitution. The respondents opposite parties in resisting the petitioners ' prayer stated inter alia in their counter affidavit that the settlement of the lands in question with the appellants by the Court of Wards, was not for the benefit of the estate or advantage of the ward and that the transaction was entered into by the Wards Estate without properly applying their mind to it. It was stated further that after the settlement was made, there was a good deal of agitation among the tenants in the locality which led to the institution of certain criminal proceedings. In these circumstances, the matter was brought to the notice of the Working Committee of the Indian National Congress and the Working Committee was of opinion that the settlement of these lands was against public interest. The lessees, therefore, were asked to vacate the lands and on their refusal the legislation in question was passed. The petition was heard by a Division Bench consisting of Ramaswami and Sarjoo Pershad JJ. Ramaswami J. 1138 decided all the points raised by the petitioners against them and held that the Act was neither ultra vires the Bihar Legislature nor was void under article 13(1) of the Constitution. The learned Judge was further of opinion that it was not a fit case for interference by the High Court under article 226 of the Constitution. The other learned Judge expressed considerable doubts as to whether a legislation of this type, which in form and substance was a decree of a court of law, was within the competence of the legislature and warranted by the Constitution. He agreed, however, with his learned colleague that the case was not such as to justify an interference of the High Court in exercise of its discretionary powers under article 226 of the Constitution. The remedy of the petitioners might lie, according to him, in a regularly constituted suit. The result, therefore, was that the appellants ' petition was dismissed and it is the propriety of this judgment that has been assailed before us in this appeal. Mr. P. R. Das, who appeared in support of the appeal, put forward at the forefront of his arguments, the contention raised on behalf of his client in the court below that the impugned legislation was void by reason of its violating the fundamental rights of the appellants under article 14 of the Constitution. The point appeared to us to be of substance and after hearing the learned Attorney General on this point we were satisfied that the contention of Mr. Das was well founded and entitled to prevail, irrespective of any other ground that might be raised in this appeal. There have been a number of decisions by this court where the question regarding the nature and scope of the guarantee implied in the equal protection clause of the Constitution came up for consideration and the general principles can be taken to be fairly well settled. What this clause aims at is to strike down hostile discrimination or oppression or inequality. As the guarantee applies to all persons similarly situated, it is certainly open to the legislature to classify persons and things to achieve particular legislative objects; 1139 but such selection or differentiation must not be arbitrary and should rest upon a rational basis, having regard to the object which the legislature has in view. It cannot be disputed that the legislation in the present case has singled out two individuals and one solitary transaction entered into between them and another private party, namely, the Bettiah Wards Estate and has declared the transaction to be a nullity on the ground that it is contrary to the provisions of law, although there has been no adjudication on this point by any judicial tribunal. It is not necessary for our present purpose to embark upon a discussion as to how far the doctrine of 'separation of powers has been recognised in our Constitution and whether the legislature can arrogate to itself the powers of the judiciary and proceed to decide disputes between private parties by making a declaration of the rights of one against the other. It is also unnecessary to attempt to specify the limits within which any legislation, dealing with private rights, is possible within the purview of our Constitution. On one point our Constitution is clear and explicit, namely, that no law is valid which takes away or abridges the fundamental rights guaranteed under Part III of the Constitution. There can be no question, therefore, that if the legislation in the present case comes within the mischief of article 14 of the Constitution, it has got to be declared invalid. This leads us to the question as to whether the impugned enactment is, in fact, discriminatory and if So, whether the discrimination made by it can be justified on any principle of reasonable classification ? The appellants, it is not disputed, are only two amongst numerous leaseholders who hold lands in raiyati right under the Bettiah Wards Estate. It cannot also be disputed that the lands were settled with them on the recommendation of the Board of Revenue after due consideration of the respective views put forward by the Manager of the Estate on the one hand and the Collector and the Divisional Commissioner on the other. The appellants are admittedly paying rents which are normally assessed on lands of similar 1140 description in the locality. The learned AttorneyGeneral referred in this connection to the provisions of section 18 of the Court of Wards Act and argued that the lease in dispute was granted in contravention of that section. Section 18 of the Court of Wards Act provides as follows: "The Court may sanction the giving of leases or farms of any property under its charge . and may direct the doing of all such other acts as it may judge to be most for the benefit of the property and the advantage of the Ward". Apparently it makes the Court of Wards the sole judge of the benefit to the estate or advantage of the ward. But it is said that the Court of Wards did not apply its mind properly to this matter when it granted lease to the appellants at half the usual rate of selami. The Wards Estate thus suffered loss to the extent of nearly Rs. 4,000 which could legitimately have been recovered from any other lessee. This contention does not impress us much; the utmost that can be said is that this could have been put forward, for what it is worth and with what result, nobody can say, as a ground for setting aside the lease in a court of law. But that is not the question which is relevant for our present purpose at all; we were not called upon to decide whether or not the lease was a proper one or beneficial to the estate. The question for our decision is, whether the statute contains discriminatory provisions so far as the appellants are concerned and if so, whether these discriminations could be reasonably justified ? It is clearly stated in paragraph 9 of the affidavit made by the appellants in support of their petition that there are numerous other persons to whom leases on similar terms were granted by the Bettiah Wards Estate. Clauses (b), (c) and (d) of paragraph 9 of the affidavit stand thus: "(b) In this long course of management by tile Court of Wards, leases or settlement of lands used to be made without any selami on proper rent. This state of affairs continued down to recent times during 1141 which period thousands of bighas were so settled with numerous persons; (c) in 1945 the authorities decided to make settlements on large scale with war returned soldiers on a selami equal to 5 times the average rent prevailing in the locality for similar lands; (d) in 1946, 1947, 1948 and 1949 a good number of settlements covering about 2000 acres of lands were settled on the basis of IO years ' rental obtaining in the locality and in some cases for good reasons, at five years ' rental." In paragraph 12 of the counter affidavit put in on behalf of the respondents, these statements are not denied. In fact, they are admitted and the only thing said is, that these leases were granted in due course of management. Ramaswami J. has dismissed this part of the case by simply remarking that no details of these settlements were furnished by the appellants; but no details were at all necessary when the correctness of the statements was not challenged by the respondents. It will be interesting to note that the respondents themselves in paragraph 10 of their counter affidavit mentioned the name of Shri Prajapati Mishra as one of the persons with whom similar settlement of lands was made by the Bettiah Estate. It is stated in that paragraph that the cases of the appellants as well as of Prajapati Mishra were brought to the notice of the Working Committee of the Indian National Congress and the Committee came to the conclusion that both the settlements were contrary to the provisions of law. Thereupon a request was made to both these sets of lessees to restore their lands to the Estate, but whereas Prajapati Mishra returned his lands to the Bettiah Estate, the appellants refused to do so. In reply to this statement, the appellants stated in their rejoinder that the said Prajapati Mishra did not vacate the land,% but created a trust in respect of the same, he being the chairman of the board Of trustees and the lands were still in possession of the board of trustees. Strangely, as it seems, the State of Bihar raked up this matter again in a 148 1142 further affidavit where it was admitted that the said Prajapati Mishra did execute a trust and that the trustees took possession of the property. It was stated, however, that Prajapati Mishra, who was one of the trustees, did actually surrender the lands in two installments but the other trustees did not, and hence legal advice was being taken to find out ways and means of recovering the property from them. The whole thing smacks of disingenuousness and the State of Bihar, it seems, was not well advised in rely ing upon facts like these in their attempt to repel the appellants ' attack on the legislation on the ground of discrimination. Be that as it may, there is no doubt that the appellants were not the only lessees under the Bettiah Estate who got settlement of lands at a selami of five years ' rental. On the sworn statements of the appellants, which are not challenged by the other side, it appears that there are numerous persons occupying the same position as the appellants, who however were not subjected to this expropriatory legislation. But the vice in this legislation goes much deeper than this. It is not merely a question of treating the appellants differently from the other lessees under the Wards Estate, with whom settlements of land have been made on similar or identical terms. If a lease has been given by a Court of Wards, which is not for the benefit of the estate or advantage of the ward, it is for a court of ,law to decide whether it is warranted by the terms of the Court of Wards Act. If the lessor proceeds to cancel the lease, the lessee has a legal right to defend his claim and satisfy the court that the lease is not in contravention of law. If, on the other hand, the lessee is actually dispossessed, he has a right to sue in court for recovery of possession of the property on establishing that he has been illegally turned out. The dispute here, is a legal dispute pure and simple between two private parties. What the Legislature has done is to single out these two individuals and deny them the right which every Indian citizen possesses to have his rights adju dicated upon by a judicial tribunal in accordance with 1143 the law which applies to his case. The meanest of citizens has a right of access to a court of law for the redress of his just grievances and it is of this right that the appellants have been deprived by this Act. It is impossible to conceive of a worse form of discrimination than the one which differentiates a particular individual from all his fellow subjects and visits him with a disability which is not imposed upon anybody else and against which even the right of complaint is taken away. The learned Attorney General, who placed his case with his usual fairness and ability, could not put forward any convincing or satisfactory reason upon which this legislation could be justified. It is true that the presumption is in favour of the constitutionality of a legislative enactment and it has to be presumed that a Legislature understands and correctly appreciates the needs of its own people. But when on the face of a statute there is no classification at all, and no attempt has been made to select any individual or group with reference to any differentiating attribute peculiar to that individual or group and not possessed by others, this presumption is of little or no assistance. to the State. We may repeat with profit what was said by Mr. Justice Brewer in Gulf Colorado etc. Co. vs Ellis(1) that "to carry the presumption to the extent of holding that there must be some undisclosed and unknown reason for subjecting certain" individuals or corporations to hostile and discriminatory legislation is to make the protection clauses of the Fourteenth Amendment a mere rope of sand". In our opinion, the present case comes directly within the principle enunciated by this court in Ameerunnissa, Begum vs Mahboob Begum(2 ). The result is that we allow the appeal and set aside the judgment of the High Court. A writ in the nature of mandamus shall issue directing the respondents not to take any steps in pursuance of The Sathi Lands (Restoration) Act of 1950 or to interfere with the possession of the appellants in respect to the lands (1) 165 U section 150. (2) [1953] S.C.R 404. 1144 comprised in the lease referred to in that Act. The appellants will have their costs in both courts. VIVIAN BOSE J. I am in entire agreement with my Lord the Chief Justice and with my learned brother Mukherjea. GHULAM HASAN J. I agree with my Lord the Chief Justice and with my brother Mukherjea. BHAGWATI J. I entirely agree with the judgment just delivered by my Lord the Chief Justice and my brother Mukherjea and there is nothing which I can usefully add. Appeal allowed.

The Court of Wards granted to the appellants a large area of land belonging to the Bettiah Raj which was then under the management of the Court of Wards, on the recommendation of the Board of Revenue, at half the usual rates. A few years later, the Working Committee of the Indian National Congress expressed the opinion that the settlement of the lands was against public interest, and in 1950, the Bihar Legislature passed an Act called the Sathi Lands (Restoration) Act, 1950, which declared that, notwithstanding anything contained in any law for the time being in force the settlement granted to the appellants shall be null and void and that no party to the settlement or his successors in interest shall be deemed to have acquired any right or incurred any liability thereunder, and empowered the Collector to eject the appellants if they refused to restore the lands. The appellants, alleging that the Act was unconstitutional, applied under article 226 of the Constitution for a writ of mandamus against the State of Bihar restraining it from taking any action under the Act. It was found that there were several other settlements of lands belonging to the Bettiah Raj on similar terms against which the Government had taken no action: Held, that the dispute between the appellants and the State was really a private dispute and a matter to be determined by a judicial tribunal in accordance with the law applicable to the case, and, as the Legislature had, in passing the impugned enactment singled out the appellants and deprived them of their right to 1130 have this dispute adjudicated upon by a duly constituted Court, the enactment contravened the provisions of article 14 of the Constitution which guarantees to every citizen the equal protection of the laws, and was void. Legislation which singles out a particular individual from his fellow subjects and visits him with a disability which is not imposed upon the others and against which even the right of complaint is taken away is highly discriminatory. Though the presumption is in favour of the constitutionality of a legislative enactment and it has to be presumed that a Legislature understands and correctly appreciates the needs of its own people, yet when on the face of a statute there is no classification at all, and no attempt has been made to select any individual or group with reference to any differentiating attribute peculiar to that individual or group and not possessed by others, this presumption is of little or no assistance to the State. Ameerunnissa Begum vs Mahboob Begum ; and Gulf of Colorado etc. Co. vs Ellis ; referred to.

Appeal No. 243 of 1971. Appeal by special leave from the judgment and order dated September 3, 1970 of the Madhya Pradesh High Court in Miscellaneous Petition No. 256 of 1970. 797 C. K. Daphtary, L. M. Singhvi, section K. Mehta, K. L. Mehta and K. R. Nagaraja, for the appellant. B. Sen and I. N. Shroff, for respondents Nos. 1, 3 and 4. section section Khanduja, section K. Dhingra and Promod Swaroop for res pondent No. 2. It may at the outset be mentioned that the appointment of the Vice Chancollor of the Saugar University is made by the Chancellor of that University under section 13 of the University of Saugar Act, 1946 (hereinafter referred to as "the Act") from 1 panel of not less than three persons recommended by the Committee constituted under sub section (2) of that section. The Committee to be constituted under sub section (2) was to consist of three persons, two of whom shall be elected by the Executive Council by single transferable vote from amongst persons not connected with the University or a College and the third shall be. nominated 'by the 'Chancellor who was, also empowered to appoint one of them as Chairman of the Committee. It is unnecessary to refer to other provisions of this section because these are not relevant for the purpose of this appeal. It appears that under the above provisions a Committee to submit a panel of names for the appointment of a Vice Chancellor for the University was duly constituted consisting of two persons elected by the executive Committee of the University, namely, G. K. Shinde, Retired Chief Justice and Justice T. P. Naik of the Madhya Pradesh High Court while the third member Shri C. B. Agarwal Retired Judge of the, Allahabad High Court was nominated by tfie Chancellor, Rajmata Vijaya Raje Scindia who also appointed G. K. Shinde as the Chairman of the Committee. The Chairman thereafter appears to have carried on a correspondence to fix, a convenient place and time for the meeting, which was ultimately fixed at Indore on the 4th of April 1970. Justice Naik was, however, unable to attend the meeting and in, his absence the other two persons, Shri Shinde panel of and Shri Agrawal met; as a Committee and submitteds names from which the Chancellor appointed the appellant on 7th April 1970 as a vice Chancellor with effect from 22nd June 1970 for, a period of five years. The appellant at the time of the appointment, it seems, was acting as Vice Chancellor. 1061SupCI/72 798 On the 9th of April 1970, the Governor of Madhya Pradesh, Shri K. C., Reddy promulgated Ordinance No. I of 1970 by section 2 of which sub section (1) of section II was substituted by a new sub section (1) where under the Governor of Madhya Pradesh was made an ex officio Chancellor of that University. By section 3, it was provided that as from the date of the coming into force of that Ordinance, the Chancellor in office immediately, before the date aforesaid shall cease to hold office of the Chancellor and the Governor of Madhya Pradesh shall assume the said office. By virtue of this Ordinance Rajmata Vijaya Raje Scindia ceased to be. the Chancellor. On the 23rd April 1970, the Governor again passed another Ordinance by section 2 of which, he substituted section 43 of the Act by a new section 43. By section 3 a new section 43A was also added. Section 4 made the amendments made by sections 2 and 3 to operate retrospectively as from the commencement of the original Act. The amended sections 43 and 43A are as follows "43. If any question arises whether any person hi,,, been duly appointed, elected, nominated or coopted as, or is entitled to be, a member of any authority or other body of the University or any officer of the University, the matter shall be referred to the Chancellor whose decision thereon shall be final. 43A. The Chancellor may, either on his own motion or on the application of any party interested, review any order passed by himself or his predecessor in office if he is of the opinion that it is not in accordance with the provisions of this Act, the statutes, the Ordinance or the Regulations or is otherwise improper and pass such orders in reference thereto as he may think fit." After the above Ordinances were promulgated, the Secretary to the Governor of Madhya Pradesh wrote on the 20th May 1970 to the appellant as follows : "The question has come up before the Chancellor whether the meeting of the committee constituted by his predecessor under section 1 3 (2) (9 the Act held on 4th April 1970 at Indore at which only two members out of the three were present was legal, and whether the recommendations made by the committee at that meeting were legally valid. The Chancellor has been advised that the meeting held on the 4th April with only two men present and. the decisions taken at the meeting .were not legal. As, a consequence, the orders issued by the University office dated 14th April would have to be rescinded. 799 Before the Chancellor takes action in accordance with legal advice, he has desired that you should be asked if you have anything to state why such action should not be taken. I am desired to request you to send your reply as early as possible, and at the latest within a week". To this letter the appellant sent a reply on the 9th June 1970 after having earlier obitained an extension of time. In that reply he tried to make out a case that the recommendation of the Committee of two members out of three was perfectly valid and in support of it he cited various authorities and also a precedent of the same Governor who as the Chancellor of Indore University seems to have maintained the selection made 'by his predecessor in similar circumstances. The Governor did not, however, accept the appellant 's plea but passed the following impugned orders on the 15th June 1970 : "WHEREAS, on applications made in that behalf, the Chancellor is of the opinion that order dated the 7th April 1970, passed by his predecessor in office appointing Shri Ishwar Chandra as Vice Chancellor of the University of Saugar with effect from the 22nd June 1970, for a period of five years is not in accordance with provisions of section 13 of the University of Saugar Act, 1946 (XVI of 1946) (hereinafter referred to as the said Act); NOW, THEREFORE, in exercise of the powers conferred by section 43A of the said Act, 1, the Chancellor of the University of Saugar, hereby (i) cancel the aforementioned order dated the 7th April 1970 appointing Shri Ishwar Chandra as ViceChancellor; and (ii) direct that the committee be constituted for submission of panel in accordance with the provisions of section 13 of the said Act". On the 1st July 1970, a Writ Petition was filed in the High Court of Madhya Pradesh and it appears that on the 3rd July 1970 the Court directed the appellant to produce the correspondence between the Chairman, and the members of the Selection Committee in respect of the meeting to be held to recommend the names for the appointment of a Vice Chancellor. The appellant, if seems, produced the correspondence with an affidavit on the 25th July 1970 stating that he had obtained the correspondence from the Chairman of the Committee. the former Chief,Justice Shinde. On the ' 3rd of September 1970 'rule nisi was refused. 800 On the 19th September 1970 die application for leave to appeal to the Supreme, Court was also rejected. In the latter order two facts had 'been stated which have been challenged as incorrect. The first one was that the Chairman had at first fixed Bhopal as the venue of the meeting and secondly.that as the working Vice Chancellor of the University, the petitioner had access to all the documents relating to the meeting and his detailed reply given to the Chancellor was grounded on some of them. Though there is some justification in these contentions what has to be seen is whether the order rejecting the Writ Petition was justified, and if so, now that the order of the Chancellor has been impugned, i.e that order valid. It is clear from the Governor 's impugned order that the appellant 's appointment was held to be invalid because only two members of the Committee were present at the meeting. The High Court while holding that in the absence of any provision in the relevant enactment or the rules or regulations made thereunder, a majority of members of a selection committee like the one in the case before them would constitute the quorum, however presumed that the question for consideration of the Chancellor was not merely one relating to the existence of the quorum requisite for a valid meeting but something different. On that assumption it examined the correspondence which ensued between the Chairman and Justice T. P. Naik to ascertain whether in fact a valid meeting had been called. According to the learned Judges, Justice Naik had written to the Chairman to say that he, the Chairman, was determined to hold the meeting presumably in his absence, and, therefore, the High Court thought that if the Chancellor, acting under section 43A of the Act formed the opinion that the meeting held on that date was not legal, it cannot be said that there was no prima facie material for the formation of that opinion, reached by him after giving to the, petitioner an oppor tunity to state why the action proposed should not be taken. The assumption in this order rejecting the Writ Petition is not warranted, firstly, because the correspondence does not show that there was any deliberate attempt made by the Chairman to exclude one of the members in this case, Justice T. P. Naik, and secondly, that the Chancellor had because of this exclusion, declared the meeting held on the 4th April 1970 as not being valid. We have already pointed out that the Chancellor was merely concerned with the legality of the recommendation made by two out of three members and not that,any attempt was made by the ' Chairman, to, exclude one of the members, Neither the showcase notice, nor the reply given by the appellant to that notice, nor even: the order of the Chancellor indicates any such ground as that assumed by the High Court to form the basis of the,Chancellor 's order. The correspondence shows that the Chairman 801 had written a letter on the 12th February 1970 in which , he inquired of Justice Naik whether the 7th and 8th March 1970 would suit him to meet at Bhopal to consider the names for the panel. Later on the 20th February 1970, he wrote another letter saying that the other member was abroad, and therefore, the meeting which was proposed to be held on the 7th or 8th cannot be held and that he would let him know when a new date was fixed. In fact, Justice Naik replied on the 27th February 1970 acknow ledging these letters and asking him to let him know the date of the meeting as and when fixed. On the 8th March 1970 Mr. Shinde again wrote to Justice Naik fixing the meeting on the 12th March 1970 at 10.30 a.m. at Indore and also suggested that if necessary they may meet the next day, the 22nd March 1970. On the 16th March 1970 Shinde sent a telegram to Justice Naik asking him to wire if 4th April was suitable at Indore. On the 18th March 1970, he again sent a telegram to him saying : "Doctors Forbid travel stop wire whether 4th & 11th April suitable for Indore". Justice Naik sent two telegrams, one on the 21st March 1970 saying that 4th is suitable at Saugar or Bhopal and another on the 27th March 1970 stating that both 4th and lath suitable at Saugar or Bhopal. He also wrote two letters on the 26th and 27th to Shinde. Shinde had earlier written on the, 24th March 1970 to Justice Naik in which he said as follows "The contents of your telegram, were conveyed to me on the phone today. It appears that 4th and 11th. April both are suitable to you at Saugar and Bhopal. As I told you before, I am recovering from the attack of virus fever and am, therefore, not, ' strong enough to undertake a car journey of 120 miles to, Bhopal. There is no @ convenient plan ,to come: to Bbopal either. If I come by plane I shall have to stay over the night at the Circuit House and as I am still on diet, the Circuit House food will not suit me. As you can come up to Bhopal you can easily come to Indore either by Car or 'by Plane. The plane leaves Bhopal at about 9.00 a.m. and reaches Indore at about 9.30 am. After attending the meeting you can leave by plane which leaves for Bhopal at about 2.00 p.m. As far as Lunch is concerned, if you let me know if you are vegetarian or non vegetarian, I can arrange to give you lunch at my place. If it is impossible for You to come to Indore I would request you to send me your suggestions regarding suitable names for the post of Vice Chancellor of the Saugar University by the 3rd of April. I would, however, request you to make it colonyient to attend the meeting at Indofe. I have already sent you a tele gram to the effect that the meeting is fixed on the 4th 802 of April at Indore in the Meeting Room of the University of Indore at 10.30 a.m." Hoping to hear from you by the return of post and with kind regards". Before this letter reached to the telegram received by him, Justice Naik wrote a letter to Shinde as follows : "I am in receipt of your telegram intimating to me that you have fixed the meeting to consider panel of names for Saugar University on the 4th of April 1970, at 10.30 a.m. at Indore in the Indore University. I regret my inability to be present at Indore on the date and time specified, though I may be able to attend the meeting if 'the venue is changed to Bhopal. It is very surprising that you should have fixed the meeting on the 4th of April at Indore, even though I had informed you by a telegram on the 17th of March 1970, that it would not be possible for me to attend it there on that date. Anyway, knowing full well that it would not be pos sible for me to be present at Indore at 10.30 a.m. on April 4, 1970, you seem determined to hold the meeting there presumably in my absence. I can only regret your decision. If you are still interested in having my presence for the meeting, you may fix it either on the 4th or the, 11th April 1970 at Saugar or Bhopal, though Bhopal would be more convenient to me personality. I hope you have recovered from the effects of your illness by now". This letter shows that though Justice Naik knew about the illness of Shinde, he somehow seems to have assumed, and if we may say so, without justification that Shinde was determined to hold it there, presumably in his absence. On the 27th March 1970, the next day, he however, after the receipt of the letter of the 24th instant from Side did not take up the attitude that the meeting was being held presumably to keep him away from attending it. Justice Naik, however, tried to explain his difficulty. He said : "I am in receipt of your letter dated 24th March 1970. 1 am sorry to note that you have not yet recovered from the effects of your illness. I do hope you shall soon get well. 803 As for my coming to Indore, I had considered the possibility of my going there by. air from Bhopal but I am informed that the journey is very bumpy these days due to weather conditions and I do get terribly sick if the journey is bumpy. I had, therefore, to give up the idea of going by air, and as I cannot spare more than a day for the meeting, I had intimated to you that it would not be possible for me to come to Indore for the meeting scheduled for the 4th of April 1970 at 10.30 a.m. in Indore University. As for your kindly suggestion that I may by a letter suggest names to you for your consideration, I am of opinion that it would not only not be fair to the persons whose names I may suggest but also not be in keeping with the letter and spirit of the Saugar University Act. With kind regards". This letter clearly negatives the assumption in the High Court 's order that Shinde was trying to keep out Justice Naik from the meeting. On the other hand, Shinde in that letter had requested Justice Naik to suggest names of persons to be considered which prima facie negatives any intention on his part to keep Justice Naik away from the meeting. There is also nothing in the materials on the record to show that the correspondence cited above was persued by the Chancellor either at the time when the show cause notice was given to the appellant or at the time of making the impugned Order. It cannot, therefore, be assumed that the Governor was influenced by the above correspondence. It is rather unfortunate that the appellant 's Writ Petition was dismissed in limited and without a proper appreciation of all the relevant facts. There is little doubt that the impugned Order made by the Chancellor was based entirely on the legality of the meeting where only two out of three members were present when the name of the appellant was recommended. The High Court delivered into the correspondence to sustain the order of the Chancellor on grounds other than those relied upon by him in that order for dismissing the Writ Petition in limine, which in our view, was not justified. It is also not denied that the meeting held by two of the three members on the 4th April 1970 was legal because sufficient notice was given to all the three members. If for one reason or the other one of them could not attend, that does not make the meeting of others illegal. In such circumstances, where there is no rule or regulation or any other provision for fixing the quorum, the presence of the majority of the members would constitute it a valid meeting and matters considered there at cannot be held to be invalid. 804 This proposition is well recognised and is also so stated in Halsbury 's Laws of England, Third Edition (Vol. IX, page 48, Para 95). It is, therefore, unnecessary to refer to any decisions on the subject. In the view we have taken, the appeal is allowed with costs against respondent 3, the order of the Chancellor revoking the appointment of the appellant is set aside and the appellant is declared to have been validly appointed as Vice Chancellor Of the Saugar University as from the 22nd June 1970. G.C. Appeal allowed.

From a panel of names recommended by a Selection Committee constituted under section 13(2) of the University of Saugar Act, 1946 the then Chancellor of the University appointed the appellant as Vice Chancellor. Under Ordinance No. 1 of 1970 the Governor of Madhya Pradesh became, the Chancellor of the University. Exercising his powers of review under section 43A of the Act the Governor, as Chancellor, after notice to the appellant, set aside his appointment as Vice Chancellor on 'the ground that only two out of the three members of the Selection Committee were present when his name was included in the panel. The appellant filed a writ petition in the. High Court. The High Court called for the correspondence between the Chairman of the Committee and the member who was absent at the meeting. On the basis of a letter written by the absent member to the Chairman, the High Court can to the conclusion that the member had been deliberately kept out of the meeting and held that the Chancellor was justified in the opinion formed by him under section 43 (A). Allowing the appeal, this Court, HELD : (i) The High Court sustained the order of the Chancellor on grounds other than those relied upon by him in that order, for dismissing the writ petition in limine]. The order made by the Chancellor was based entirely an the legality of the meeting where only two of the three members were present. Then was nothing to show that the corres pondence was persued by the Chancellor. Further, the correspondence did not support the assumption in the High Court 's order that the Chairman was trying to keep out any member from the meeting. [803 D G] (ii) If for one reason or the other one of the members of the Committee, after due notice, could not attend, it did not make the meeting of the others illegal. in such circumstances where there was no rule or regulation or any other provision for fixing quorum in the presence of the majority of the members would constitute a valid meeting and matters considered thereat could not be held to be invalid. [803 H]

Appeal No. 761 of 1957. Appeal by special leave from the judgment and order dated February 24, 1955, of the former Bombay High Court in I.T.R. 48/X of 1954. Hardayal Hardy and D. Gupta, for the appellant. N. A. Palkhivala and I. N. Shroff, for the respondent. November 17. The Judgment of the Court was delivered by SHAH, J. The Income Tax Appellate Tribunal, Bombay Bench "A", referred under section 66(1) of the Indian Income Tax Act, 1922 hereinafter referred to as the Act the following question: "Whether the sum of Rs. 15,608 should have been included in the assessee Company 's "profit" for the purpose of determining whether the payment of a larger dividend than that declared by it would be unreasonable ?" The High Court answered the question in the negative. Against the order of the High Court, with special leave under article 136 of the Constitution, this appeal is preferred. M/s. Bipinchandra Maganlal & Co., Ltd. hereinafter referred to as the Company is registered under the Indian Companies Act, The Company is one in 495 which the public are not substantially interested within the meaning of section 23A Explanation of the Act. Its paid up capital at the material time was Rs. 20,800 made up as follows: 20 shares of Rs. 50 each fully paid up and 1980 shares of Rs. 50 each, Rs. 10 being paid up per share. In December 1945, the Company purchased certain machinery for Rs. 89,000 and sold it sometime in March, 1947, for the price for which it was originally purchased. In the books of account of the Company, the written down value of the machinery in the year of account 1946 47 (April 1, 1946 to March 31, 1947) was Rs. 73,392. The trading profits of the Company as disclosed by its books of account for the year 194647 were Rs. 33,245. At the General Meeting held on October 21, 1947. the Company declared a dividend of Rs. 12,000 for the year of account. In assessing tax for the year of assessment 1947 48, the Income Tax Officer computed the assessable income of the Company for the year of account 1946 47 at Rs. 48,761 after adding back to the profit of Rs. 33,245 returned by the Company, Rs. 15,608 realised in excess of the written down value of the machinery sold in March, 1947. The Income Tax Officer passed an order under section 23A of the Act that Rs. 15,429 (being the undistributed portion of the assessable income of the Company as reduced by taxes payable) shall be deemed to have been distributed as dividend amongst the shareholders as at the date of the General Meeting, and the proportionate share of each shareholder shall be included in his total income. Appeals preferred against his order to the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal proved unsuccessful, but the Appellate Tribunal at the instance of the Company referred the question set out hereinbefore to the High Court at Bombay under a. 66(1) of the Act. Section 23A(1) of the Act as it stood at the relevant time (in so far as it is material) was as follows: "Where the Income Tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company upto the end 496 of the sixth month after its accounts for that previous year are laid before the company in general meeting are less than 60% 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 dividend or a larger dividend than that declared would be unreasonable, make with the previous approval of the Inspecting Assistant Commissioner an order in writing that the 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 share holders as at the date of the general meeting aforesaid. . . Clearly, by section 23A, the Income Tax Officer is required to pass an order directing that the undistributed portion of the assessable income of any company (in which the public are not substantially interested) shall be deemed to have been distributed as dividends amongst the shareholders if he is satisfied that (i) the company has not distributed 60% of its assessable income of the previous year reduced by the Income tax and super tax payable, (ii) unless payment of a dividend, or a larger dividend than that declared, having regard to (a) losses incurred by the company in the earlier years or (b) the smallness of the profits made in the previous year, be unreasonable. The total assessable income of the Company for the year of account was Rs. 48,761 and the tax payable thereon was Rs. 21,332: 60% of Rs. 27,249 (assessable income reduced by the income tax and super tax due) exceeded the dividend declared by Rs. 4,458. The first condition to the exercise of jurisdiction by the Income Tax Officer under section 23A was therefore indisputably fulfilled. But the Income Tax Officer had 497 still to be satisfied whether having regard to the smallness of the profit (there is no evidence in this case that loss was incurred by the Company in earlier years), it would be unreasonable to distribute dividend larger than the dividend actually declared. The Income Tax Officer did not expressly consider this question: he rested his decision on the rejection of the contention raised by the Company that the difference between the price of the machinery realised by sale and the written down value in the year of account could not be taken into account in passing an order under section 23A. He, it seems, assumed that if that difference be taken into account, distribution of larger dividend was not unreasonable, and the Tribunal proceeded upon the footing that the assumption was correctly made. Counsel for the Revenue submits in support of the appeal that the expression " smallness of profit " means no more than smallness of the assessable income, and that in any event, in the computation of profits, the amount realised by sale of the machinery in the year of account in excess of its written down value was liable to be included in considering whether the condition relating to "smallness of profit" was fulfilled. At the material time, section 2(6C) of the Act defined "income" as inclusive amongst others of any sum deemed to be profits under the second proviso to cl. (vii) of sub section (2) of section 10. By section 10, in the computation of profits or gains of an assessee under the head "Profits and gains of business, profession or vocation" carried on by him, the amount by which the written down value of any building, machinery or plant which has been sold, discarded or demolished. or destroyed exceeds the amount for which the building, machinery or plant is actually sold or its scrap value is to be allowed as a deduction. This allowance is however subject to an exception prescribed by the second proviso to el. (vii) sub section (2) of section 10 that where the amount for which any building, machinery or plant is sold exceeds the written down value, so much of the 63 498 excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profit of the previous year in which the sale took place. In computing the profits and gains of the Company under section 10 of the Act, for the purpose of assessing the taxable income, the difference between the written down value of the machinery in the year of account and the price at which it was sold (the price not being in excess of the original cost) was to be deemed to be profit in the year of account, and being such profit, it was liable to be included in the assessable income in the year of assessment. But this is the result of a fiction introduced by the Act. What in truth is a capital return is by a fiction regarded for the purposes of the Act as income. Because this difference between the price realized and the written. down value is made chargeable to income tax, its character is not altered, and it is not converted into the assessee 's business profits. It does not reach the assessee as his profits: it reaches him as part of the capital invested by him, the fiction created by section 10(2)(vii) second proviso notwithstanding. The reason for introducing this fiction appears to be this. Where in the previous years, by the depreciation allowance, the taxable income is reduced for those years and ultimately the asset fetches on sale an amount exceeding the written down value, i.e., the original cost less depreciation allowance, the Revenue is justified in taking back what it had allowed in recoupment against wear and tear, because in fact the depreciation did not result. But the reason of the rule does not alter the real character of the receipt. Again, it is the accumulated depreciation over a number of years which is regarded as income of the year in which the asset is sold. The difference between the written down value of an asset and the price realized by sale thereof though not profit earned in the conduct of the business of the assessee is nationally regarded as profit in the year in which the asset is sold, for the purpose of taking back what had been allowed in the earlier years. A company normally distributes dividends out of its business profits and not out of its assessable income. 499 There is no definable relation between the assessable income and the profits of a business concern in a commercial sense. Computation of income for purposes of assessment of income tax is based on a variety of artificial rules and takes into account several fictional receipts, deductions and allowances. In considering whether a larger distribution of dividend would be unreasonable, the source from which the dividend is to be distributed and not the assessable income has to be taken into account. The Legislature has not provided in section 23A that in considering whether an order directing that the undistributed profits shall be deemed to be distributed, the smallness of the assessable income shall be taken into account. The test whether it would be unreasonable to distribute a larger dividend has to be adjudged in the light of the profit of the year in question. Even though the assessable income of a company may be large, the commercial profits may be so small that compelling distribution of the difference between the balance of the assessable income reduced by the taxes payable and the amount distributed as dividend would require the company to fall back either upon its reserves or upon its capital which in law it cannot do. For instance, in the case of companies receiving income from property, even though tax is levied under section 9 of the Act on the bona fide annual value of the property, the actual receipts may be considerably less than the annual value and if the test of reasonableness is the extent of the assessable income and not the commercial profit, there may frequently arise cases in which companies may have to sell off their income producing assets. The Legislature has deliberately used the expression "smallness of profit" and not "smallness of assessable income" and there is nothing in the context in which the expression "smallness of profit" occurs which justifies equation of the expression "profit" with "assessable income". Smallness of the profit in section 23A has to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional. This view appears to have been taken by the High Courts in India without any dissentient 500 opinion, see Sir Kasturchand Ltd. vs Commissioner of Income Tax, Bombay City (1), Ezra Proprietary Estates Ltd. vs Commissioner of Income Tax, West Bengal (2) and Commissioner of income Tax, Bombay City vs F. L. Smith & Co., (Bombay) Ltd. (3). By the fiction in section 10(2)(vii) second proviso, read with section 2(6C), what is really not income is, for the purpose of computation of assessable income, made taxable income: but on that account, it does not become commercial profit, and if it is not commercial profit, it is not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable. In our judgment, the High Court was right in holding that the amount of Rs. 15,608 was not liable to be taken into account in considering whether having regard to the smallness of the profit made by the Company, it would be unreasonable to declare a larger dividend. The appeal therefore fails and is dismissed with costs. Appeal dismissed. (1) (1940) XVII I.T.R. 493. (2) (1950) XVIII I.T.R. 762. (3) (1959) XXXV I.T.R. 183.

The respondent company purchased certain machinery for Rs. 89,000 and sold it for the same value, but in the books of account the written down value of the machinery was shown in the year of account as Rs. 73,392. The Income Tax Officer in computing the assessable income of the company added the difference, i.e. Rs. 15,608, between the actual value and the written down value to the profit of the company. The Income Tax Officer also passed an order under section 23A of the Income Tax Act, and directed that the undistributed portion of the assessable income, shall be deemed to have been distributed amongst the shareholders as dividend. Appeals against the order of the Income tax Officer proved unsuccessful and the Appellate Tribunal referred the following question to the High Court under section 66(1): "Whether the sum of Rs. 15,608 should have been included in the assessee company 's "profit" for the purpose of deter mining whether the payment of a larger dividend than that declared by it would be unreasonable. " The High Court answered the question in the negative. On appeal by special leave, Held, that the view taken by the High Court was correct. 494 By the fiction in section 10(2)(Vii) second proviso, read with s.2(6C), what is really not income is, for the purpose of computation of assessable income, made taxable income: but on that account, it does not become commercial profit, and if it is not commercial profit, it is not liable to be taken into account in assessing whether in view of the smallness of profits a larger dividend would be unreasonable. "Smallness of profit" should not be equated with "smallness of assessable income" but should be determined in accordance with commercial principles. Sir Kasturchand Ltd. vs Commissioner of Income tax, Bombay City, (1949) XVII I.T.R. 493, Ezra Proprietary Estates Ltd. vs Commissioner of Income tax, West Bengal, (1950) XVIII I.T.R. 762 and Commissioner of Income tax Bombay City vs F. L. Smith & Co. (Bombay) Ltd., (1959) XXXV I.T.R. 183, referred to.

Civil Appeal No. 1499 of 1985. From the Judgment and order dated 18.9.84 of the High Court of Himachal Pradesh in C.W.P. No. 155/84. K. Parasaran , Attorney General. A. K. Ganguli and A.K Chakravorty , for the Appellant. The Judgment of the Court was delivered by BHAGWATI , J. This appeal by special leave is directed against 679 two orders made by a division Bench of the High Court of Himachal Pradesh , one dated 24th July , 1984 and the other dated 18 September 1984 , in so far as they direct the Chief Secretary to the Government of Himachal Pradesh to file an affidavit setting out what action has been taken by the State Government towards implementation of the recommendation contained in paragraph 16 of the Report of the Anti Ragging Committee. The impugned orders are in our opinion wholly unsustainable and ordinarily we would not have taken time to deliver a reasoned judgment and merely set aside the impugned orders with a brief observation, but we think it necessary to state in some detail our opinion in regard to the directions given in the impugned orders , because we find that this is one of those few cases which demonstrates what we have often said before that public interest litigation is a weapon which has to be used with great care and circumspection and the judiciary has to be extremely careful to see that under the guise of redressing a public grievance it does not encroach upon the sphere reserved by the Constitution to the Executive and the legislature. D It appears that the Chief Justice of the High Court received a letter dated 4th April , 1984 , from the guardian of a student of the Medical College in Shimla complaining about the ragging of freshers by senior students within as also outside the college campus and the hostel. The guardian of the student had annexed along with his letter to the Chief Justice a letter dated 25th March, 1984 received by him from his son. The Division Bench of the High Court presided over by the Chief Justice treated these two letters as constituting the Memo of Writ Petition but directed that these two letters should not be placed on the record of the proceedings in view of the request made in paragraph 6 of the letter of the guardian that the identity of the writer should not be disclosed on account of fear of reprisal and for the self same reason the Division Bench ordered that the identity of the student and the guardian should not be disclosed in the proceedings. The Division Bench treating the two letters as a writ petition registered them as Civil Writ Petition No. 155 of 1984 and issued notice to the State Government , the Principal of the Medical College Simla , the Himachal Pradesh University and the Director of Health Services , Government of Himachal Pradesh who were arrayed as respondents Nos. 1 to 4. On receipt of the notice of the Writ Petition , the Government of Himachal Pradesh filed an affidavit setting out the steps which the H 680 State Government and the college authorities had taken to check the ragging of freshers by senior students. The Director of Medical Education cum Principal of the Medical College , Simla also filed an affidavit opposing the admission of the Writ Petition on the ground that the college authorities had taken various steps for the purpose of curbing the evil of ragging and in fact had taken action On at least two occasions awarding punishment to the students who indulged in ragging by suspending them for a period of 4 to 6 months , The Division Bench , on a consideration of this material placed before it , came to the conclusion that the practice of ragging was prevailing in the Medical College , Simla on a noticeable scale and that ragging took the form of subjecting freshers including female students to inhuman and humiliating treatment degenerating even into physical violence and that the college authorities had not been able to effectively control ragging with the result that the college administration had lost confidence of a sizeable section of student , parents and well wishers as regards its capacity to deal with the problem of ragging. The Division Bench accordingly gave various directions which included a direction to the State Government to constitute a committee consisting of the Vice Chancellor of the Himachal Pradesh University and the Secretary to the Government , Health Department , interalia , to make "recommendations in regard to the curative, preventive and punitive measures to be adopted by the college authorities to control and curb the evil of ragging and the machinery to be set up to enforce these measures. " This Committee which we shall for the sake of convenience refer to as the Anti Ragging Committee , was to complete its work and submit its report within a period of six months from the date of its constitution. The Anti Ragging Committee submitted its Report to the High Court on 26th June , 1984. The Report contained various recommendations intended to control and curb the ragging of freshers by senior students in the Medical College and its hostel. We are concerned here with only one recommendation namely that contained in paragraph 16 of the Report which was in the following terms: "In quite a number of States in the country there are Acts on ragging which make ragging a cognizable offence 681 and prescribe the types of punishment commensurate with the crimes committed. The Himachal Pradesh Government could be suggested to initiate such a legislation as early as possible. Pending such a legislation by the State Government, the University authorities could think of incorporating some provisions relating to ragging in the relevant ordinance of Discipline in the Ordinance of the University. The Division Bench by its order dated 24th July, 1984 gave directions for implementation of the various recommendations made in the Report and so far as recommendation contained in paragraph 16 of the Report was concerned, the Division Bench said: "The Chief Secretary to the State Government will file an affidavit within a period of 3 months from the date of receipt of the writ setting out the action proposed to be taken on the recommendation contained in paragraph 16 (First Part) of the relevant portion of the Report." Though this direction ostensibly did no more than call upon the Chief Secretary to inform the Court as to what action the State Government proposed to take on the recommendations to initiate legislation for curbing ragging, it was, in fact and substance, intended to require the State Government to Initiate legislation on the subject. If this direction were merely an innocuous one intended to inform the court whether the State Government intended to take any action on the recommendation to initiate legislation against ragging, no objection could possibly be taken against it, because it would leave the Government free to decide whether or not to initiate legislation in regard to ragging without mandatorily requiring the State Government to do so But as the subsequent event would show, what the Division Bench intended to achieve by giving this direction was not just to obtain information as to what the State Government proposed to do in the matter but to actually require the State Government to initiate legislation against ragging. That is why, when the Chief Secretary in deference to this direction filed an affidavit stating, inter alia, that the State Government had "taken notice of the recommendation to initiate legislation in this behalf, if found necessary and so advised", the Division Bench was not satisfied with this statement of the Chief Secretary and declined to close the proceeding so far as this particular aspect was concerned and proceeded, inter alia, to reiterate in its order dated 1 8th September 1984: 682 "The Chief Secretary to the State Government will file an affidavit within a period of 6 weeks from the date of receipt of the Writ setting out the further action taken in the direction of the implementation of the recommendation contained in paragraph 16 (First Part) of the relevant portion of the Report of the Anti Ragging Committee. " When this direction was given by the Division Bench, it clearly implied that what the Division Bench wanted the State Government to do was to initiate legislation against ragging and for this purpose, time of 6 weeks was granted to the State Government The State Government thereupon preferred the present appeal with special leave obtained from this Court. We may point out, even at the cost of repetition, that the direction given by the Division Bench in its order dated 24th July 1984 and reiterated in its order dated 18th September 1984 was not an innocuous direction issued merely for the purpose, of informing the Court as to what the State Governing proposed to do in regard to the recommendation in paragraph 16 of the Report to initiate legislation against ragging. The Division Bench would have been certainly justified in enquiring from the Chief Secretary as to what action the State Government proposed to take in regard to the recommendation of the Anti Ragging Committee to initiate legislation on the subject of ragging. Such enquiry could have been legitimately made by the Division Bench for the purpose of obtaining information on a matter which the Division Bench regarded, and in our opinion rightly, as necessary for eradicating the evil practice of ragging which is not only subversive of human dignity but also prejudicially affects the interests of the students and the discipline in the Campus and no exception could have been taken to it because it would have left the State Government free to decide whether or not to initiate any legislation on the subject and not mandatorily required the State Government to initiate any such legislation. If such only were the purpose of the direction issued by the Division Bench and the Division Bench did not intend anything more, the Division Bench would have closed the proceedings when the Chief Secretary intimated in his affidavit that the State Government would initiate legislation in this behalf "if found necessary and so advised". But despite this statement made by 683 the Chief Secretary on behalf of the State Government, the Division Bench persisted in reiterating its direction that the Chief Secretary should file an affidavit within a further period of 6 weeks setting out the further action taken by the State Government in the direction of implementation of the recommendation contained in paragraph 16 of the Report. This persistence in reiterating the direction to file an affidavit setting out the action taken by the State Government towards implementation of the recommendation to initiate legislation against ragging, clearly shows that what the Division Bench intended was not merely to obtain information as to what action the State Government proposed to take but to obligate the State Government to take action by way of initiation of legislation against ragging. The direction given by the Division Bench was really nothing short of an indirect attempt to compel the State Government to initiate legislation with a view to curbing the evil of ragging, for otherwise it is difficult to see why, after the clear and categorical statement by the Chief Secretary on behalf of the State Government that the Government will introduce legislation if found necessary and so advised, the Division Bench should have proceeded to again give the same direction. This the Division Bench was clearly not entitled to do. It is entirely a matter for the executive branch of the Government to decide whether or not to introduce any particular legislation. Of course, any member of the legislature can also introduce legislation but the court certainly cannot mandate the executive or any member of the legislature to initiate legislation, howsoever necessary or desirable the Court may consider it to be. That is not a matter which is within the sphere of the functions and duties allocated to the judiciary under the Constitution. If the executive is not carrying out any duty laid upon it by the Constitution or the law, the Court can certainly require the executive to carry out such duty and this is precisely what the Court does when it entertains public interest litigation. Where the Court finds, on being moved by an aggrieved party or by any public spirited individual or social action group, that the executive is remiss in discharging its obligations under the Constitution or the law, so that the poor and the under privileged continue to be subjected to exploitation and injustice or are deprived of their social and economic entitlements or that social legislation enacted for their benefit is not being implemented thus depriving them of the rights and benefits conferred upon them, the Court certainly can and must 684 intervene and compel the Executive to carry out its constitutional and legal obligations and ensure that the deprived and vulnerable sections of the community are no longer subjected to exploitation or injustice and they are able to realise their social and economic rights. When the Court passes any orders in public interest litigation, the Court does so not with a view to mocking at legislative or executive authority or in a spirit of confrontation but with a view to enforcing the Constitution and the law, because it is vital for the maintenance of the rule of law that the obligations which are laid upon the executive by the Constitution and the law should be carried out faithfully and no one should go away with a feeling that the constitution and the law are meant only for the benefit of a fortunate few and have no meaning for the large numbers of half clad, half hungry people of this country. That is a feeling which should never be allowed to grow. But at the same time the Court cannot group the function assigned to the executive and the legislature under the Constitution and it cannot even indirectly require the executive to introduce a particular legislation or the legislature to pass it or assume to itself a supervisory role over the law making activities of the executive and the legislature We are, therefore of the vie that the Division Bench was clearly in error in issuing a direction to the Chief Secretary to file an affidavit within 6 weeks setting out the action taken by the State Government with a view to implementing the recommendation contained in paragraph 16 of the Report. There is also one other error into which the Division Bench of the High Court seems to have fallen. The Division Bench of the High Court treated the letter of the guardian of the student along with the letter addressed to the guardian by the student as constituting a memo of Writ Petition. This was certainly within the jurisdiction of the High Court to do, since it is now settled law that this Court under Article 32 of the Constitution and the High Courts under Article 226 of the Constitution can treat a letter as a Writ Petition and take action upon it. We may of course make it clear that it is not every letter which may be treated as a Writ Petition by the Supreme Court or the High Court. It is only there a letter is addressed by an aggrieved person or by a public spirited individual or a social action group for enforcement of the constitutional or legal rights of a person in custody or of a class or group of persons who by reason of poverty, disability or sociallity 685 or economically disadvantaged position find it difficult to approach the court for redress that the Supreme Court or the High Court would be justified, nay bound, to treat the letter as a Writ Petition. There may also be cases where even letter addressed for redressal of a wrong done to an individual may be treated as a Writ Petition where the Supreme Court or the High Court considers it expedient to do so in the interests of justice. This is an innovative strategy which has been evolved by the Supreme Court for the purpose of providing easy access to justice to the weaker sections of Indian humanity and it is a powerful tool in the hands of public spirited individuals and social action groups for combating exploitation and injustice and securing for the under privileged segments of society their social and economic entitlements. It is a highly effective weapon in the Armour of the law for reaching social justice. : to the common man. The Division Bench was, therefore, certainly right in entertaining the two letters as a Writ Petition and no exception can be taken to it, but it was wholly in error in directing that these two letters on which the Division Bench acted should not be placed on the record of the proceedings and the identity of the guardian and the student should not be disclosed It is difficult to see how any proceedings can be entertained by the Court keeping the petitioner before it anonymous or his identity secret. If the identity of the petitioner is not disclosed, how would the respondent against whom relief is sought ever he able to verify the authenticity of the petitioner and the credibility of the case brought by him. It would be contrary to all canons of fair play and violative of all principles of judicial propriety and administration to entertain a Writ Petition without disclosing the identity of the petitioner, though the court knows who the petitioner is. We are, therefore, of the opinion that the procedure adopted by the Division Bench was wrong and the Division Bench was not justified in directing that the two letters on which action was initiated by the Division Bench should not be kept in the record of the proceedings and that the identity of the guardian and the student should not be disclosed. We accordingly allow the appeal and set aside the orders dated 24th July, 1984 and 18th September, 1984 in so far as they direct the Chief Secretary to file an affidavit setting out the action taken by the State Government in implementing the recommendation contained in paragraph 16 of the Report of the Anti ragging Committee. There will be no order as to costs of the appeal. N.V.K. Appeal allowed.

The Chief Justice of the High Court received a letter from the guardian of a student of the Medical College in Simla complaining about the ragging of freshers by senior students within as also outside the college campus and the hostel. The guardian of the student had annexed along with the said letter to the Chief Justice , a letter received by him from his son. The Division Bench of the High Court presided over by the Chief Justice treated these two letters as constituting the Memo of Writ Petition , but directed that these two letters should not be placed on the record of the proceeding in view of the request made by the guardian that the identity of the writer should not be disclosed in the proceedings. The Division Bench registered the two letters as a Writ Petition , and issued notice to the State Government, and the Principal of the Medical College. After bearing the respondents the Division Bench came to the conclusion that the practice of ragging was prevalent in the Medical College on a noticeable scale and that ragging took the form of subjecting freshers including female students to inhuman and humiliating treatment degenerating even into physical violence 677 and that the college authorities had not been able to effectively control such ragging. It gave various directions which included a direction to the State Government to constitute a Committee Anti Ragging Committee to go into the question and make recommendations in regard to the curative , preventive and punitive measures to be adopted by the college authorities to control and curb the evil of ragging. Anti Ragging Committee recommended that the State Government could initiate legislation which makes ragging a cognizable offence an l prescribe punishment commensurate with the crimes committed. When the matter was taken up again for hearing the Division Bench directed the State Government to file an affidavit indicating the action taken on the Report. An affidavit to the effect that the State Government had 'taken notice of the recommendations to initiate legislation this behalf if found necessary and so advised," was filed on behalf of the State Government. The Division Bench further directed the State Government to initiate legislation against ragging and for this purpose granted the State Government 6 weeks ' time. In the appeal by the State , to this Court it was contended that the Court could not give directions to the State Government to initiate legislation on ragging Allowing the Appeal. ^ HELD. The Division Bench was clearly in error in issuing a direction to the Chief Secretary to file an affidavit within 6 weeks setting out the action taken by the State Government with a view to implementing the Committee 's recommendation. [684] 2. The direction given by the Division Bench was really nothing short of an indirect attempt to compel the State Government to initiate legislation with a view to curbing the evil of ragging. [683C] 3. It is entirely a matter for the executive branch of the Government to decide whether or not to introduce any particular legislation. But the Court certainly cannot mandate the executive or any member of the legislature to initiate legislation , howsoever necessary or desirable the Court may consider it to be. That is not a matter which is within the sphere of the functions and duties allocated to the judiciary under the Constitution. [683E F] 4. If the executive is not carrying out any duty laid upon it by the Constitution or the law , the Court can certainly require the executive to carry out such duty and this is precisely that the Court does when it entertains public interest litigation. [683F] 678 section When the Court passes any orders in public interest litigation , the Court does so not with a view to mocking at legislative or exhaustive authority or in a spirit of confrontation but with a view to enforcing the Constitution and the law , because it is vital for the maintenance of the rule of law that the obligations which are laid upon the executive by the Constitution and the law should be carried out faithfully and no one should go away with a feeling that the Constitution and the law are meant only for the benefit of a fortunate few and have no meaning for the large number of half clad half hungry people of this country. [684B C] 6. It is now settled law that this Court under Article 32 , and the High Courts under Article 226 , can treat a letter as a Writ Petition and take action upon it. It is not every letter which may be treated as a Writ Petition by the Supreme Court or the High Court. It is on , y where a letter is addressed by an aggrieved person or by a public spirited individual or a social action group for enforcement of the constitutional or legal rights of a persons who by reason of poverty , disability or socially or economically disadvantaged position find it difficult to approach the court for redress that the Supreme Court or the High Court would be justified , nay bound , to treat the letter as a Writ Petition. There may also be cases where even a letter addressed for redressal of a wrong done to an individual may be treated as a Writ Petition where the Supreme Court or the High Court considers it expedient to do so in interests of justice. This is an innovative strategy which has been evolved by the Supreme Court. It is a highly effective weapon in the armoury of the law for reaching social justice to the common man. [684G H; 685A C] 7. The Division Bench was , certainly right in entertaining the two letters as a Writ Petition , but it was wholly in error in directing that these two letters on which the Division Bench acted should not be placed on the record of the proceedings and the identity of the guardian and the student should not be , disclosed. It would be contrary to all canons of fair play and violative of all principles of judicial propriety and administration to entertain a Writ Petition without disclosing the identity of the petitioner, though the court , knows who the petitioner is. [685D F]

minal Appeal No. 168 of 1959. Appeal by special leave from the judgment and order dated September 10, 1958, of the Patna High Court in Criminal Appeal No. 580 of 1953. B. B. Tawakley and R. C. Prasad, for the appellant. A. K. Dutt and section P. Varma, for the respondent. April 18. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. This appeal, by special leave, is against the order of the Patna High Court dismissing the appellant 's appeal against his conviction for offences under section 161, Indian Penal Code and a. 5(2) of the Prevention of Corruption Act, 1947 (Act 11 of 1947), hereinafter called the Act. The appellant was the Construction Engineer at Sindhri. R. B. Basu was a contractor living in Calcutta and carrying on the business of the company named and styled the Hindustan Engineering and Construction Company. The prosecution alleged, and the Courts below have found, that the appellant accepted the sum of Rs. 10,000 as illegal gratification from Basu at the Kelner 's Restaurant at Dhanbad Railway Station on July 18, 1951. The Courts disbelieved the appellant 's defence that he had taken the envelope containing this amount not knowing that it contained this amount, but knowing that it contained papers relating to Basu 's con. tracts. The contentions raised on behalf of the appellant are: (i)that the provisions regarding the presumption contained in section 4 of the Act are unconstitutional; (ii) that the case was tried by the Special Judge who had no jurisdiction to try it; (iii) that there had been no proper corroboration of the statement of Basu about the accused demanding the bribe and accepting the amount as illegal gratification. The Constitutionality of section 4 of the Act was sought to be questioned on the ground that it went against 52 the provisions of article 21 of the. Constitution which reads: "No person shall be deprived, of his life or personal liberty except;according to procedure established by law. " We do not consider this question to be a substantial question of law for the purpose of article 145(3), which lays down that the minimum number of Judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of the Constitution shall be five, in view of it being held that the word 'law ' in article 21 refers to law made by the State ' and not to positive law. It has been held in A. K. Gopalan vs The State of Madras (1) that in article 21, the word law ' has been used in the sense of State made law and not as an equivalent of law in the abstract or general sense embodying the principles of natural justice, and 'procedure established by law ' means procedure established by law made by the State, that is to say, by the Union Parliament or the Legislatures of the States, Section 4 has been enacted by Parliament and therefore it must be held that what it lays down is a procedure established by law. The appellant was tried by the Special Judge of Patna. The offence was committed at Dhanbad, in Manbhum District. The case was chalanned to the Magistrate at Dhanbad. On an application by the accused, the High Court transferred it to the Court of the Munsif Magistrate at Patna. Subsequent to this order of transfer, the Criminal Law Amendment Act, 1952 (Act XLVI of 1952) came into force on July 28, 1952. The case, thereafter, was forwarded to the Special Judge at Patna in view of section 10 of the Criminal Law Amendment Act. The contention for the appellant is that there was the Special Judge at Manbhum and flat he alone could have tried this case. Section 7 of the Criminal Law Amendment Act, reads: (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1898, or in any other law the offences specified in subjection (1) of section 6 shall be triable by special Judges only. (1) ; 53 (2) Every '.offence specified in sub section (1) of section 6 shall be tried by the special Judge for the area within which it was committed, or where there are more special Judges than one for such area, by such one of them as may be specified in this behalf by the State Government. (3)When trying any case, a special Judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial." Sub section (1) makes the offences under section 161, Indian Penal Code and section 5(2) of the Act triable by a; special Judge only. The appellant has been tried by a special Judge appointed under the Act. His grievance is not with respect to the competency of the Court which tried him, but is with respect to the trial Court having no territorial jurisdiction to try him, as sub section (2) of section 7 provides that such offences would be tried by the special Judge for the area in which the were committed. The offences were committed within the territorial jurisdiction of the special Judge at Manbhum and therefore could have been tried by him alone. It would therefore appear that the special Judge at Patna had no jurisdiction to try this case. Sub section (3) of section 8 of the Criminal Law Amendment Act reads: "Save as provided in sub section (1) or sub section (2), the provisions of the Code of Criminal Procedure, 1898 shall, so far as they are not inconsistent with this Act, apply to the proceedings before a special Judge; and for the purposes of the said provisions, the Court of the special Judge shall be deemed to be a Court of Session trying cases without a jury or without the aid of assessors and the person conducting a prosecution before a special Judge shall be deemed to be a public prosecutor. " It follows that the provisions of section 526 of the Criminal Procedure Code empowering the High Court to transfer any case from a criminal Court subordinate to it (1) ; 54 to any other Court competent to try it, apply to the case before any special Judge. If this case had been transferred to the Court of the Special Judge, Manbhum, on the coming into force of the Criminal Law Amendment Act, it would have been open to the High Court to transfer the case from that Court to the Court of the Special Judge, Patna. The case had been transferred from Dhanbad to Patna at the request of the appellant. The trial at Patna cannot be said to have prejudiced the appellant in any way. The mere omission of a formal forwarding of this case to the Special Judge at Manbhum and of a formal order of the High Court to transfer it to the Court of the Special Judge at Patna, have not, in our opinion, prejudiced the appellant in any way. When the case was taken up by the Special Judge, Patna, on October 23, 1952, the accused as well as the Public Prosecutor desired de novo trial. No objection to the jurisdiction of the Court to try the case was taken at that time. Such an objection appears to have been taken at the time of the arguments before the Special Judge and was repelled by him. Such an objection was not raised before the High Court when the appellant 's appeal was first heard in 1955 or in this Court when the State of Bihar appealed against the order of the High Court. All this indicates that the appellant did not feel prejudiced by the trial at Patna. In view of section 531 of the Code of Criminal Procedure, the order of the Special Judge, Patna, is not to be set aside on the ground of his having no territorial jurisdiction to try this case, when no failure. of justice has actually taken place. It is contended for the appellant that section 531 of the Code of Criminal Procedure is not applicable to this case in view of sub section (1) of section 7 and section 10 of the Criminal Law Amendment Act. We do not agree. The former provision simply lays down that such offences shall be triable by special Judges and this provision has not been offended against. Section 10 simply provides that the cases triable by a special Judge under section 7 and pending before a Magistrate immediately before the commencement of the Act shall be forwarded for trial to the 55 special Judge having jurisdiction over such cases. There is nothing in this section which leads to the non application of section 531 of the Criminal Procedure Code. We are therefore of opinion that the order of the special Judge convicting the appellant cannot be quashed merely on the ground that he had no territorial jurisdiction to try this case. The last contention for consideration is whether there had been proper corroboration of the statement of Basu about the accused demanding the bribe of Rs. 10,000 and accepting it on July 18, 1951, at the Kelner Refreshment Room, Dhanbad Railway Station. We may briefly indicate the salient facts deposed to by Basu in this connection. The appellant is said to have visited Calcutta in December 1950, to have gone to Basu 's house and to have asked him to pay a bribe of Rs. 10,000. There is no direct corroboration of this statement by the testimony of any other witness. Kanjilal, an employee of Basu, under in. structions of his master, met the appellant in May, 1951, enquired of him whether he would accept the amount he had demanded in December and had not been so far paid, and got the reply that the amount would be: acceptable. He conveyed this information to Basu. Nothing was done till over a month and then too, not to make the payment, but to inform the authorities. In June 1951, Basu informed Mr. K. N. Mookerjee, P. W. 3, the then Superintendent of Police, Special Police Establishment, about the accused 's demanding bribe and at his request delivered the letter, Exhibit 11/1, dated June 18, to him. He made mention in this letter about the demand made in December 1950, but made no reference to the appellant 's expression of readiness to accept the amount in the month of May. Mr. Mookerjee took steps for laying the trap and deputed Mr. section P. Mookerjee, P.W. 1. Kanjilal met the appellant on July 14 and arranged with him that he would go to Dhanbad railway station when Basu would also be reaching there and 'that the money would be paid there and that the date of that meeting would be communicated later. Basu was told of this arrangement at Calcutta. He, in his turn, informed the authorities. July 18 was fixed for the purpose. Kanjilal informed the appellant by telephone on July 16 that the meeting would be on the 18th and that Basu would be reaching Dhanbad by the Toofan Express at about 5 p.m. The trap arrangements were completed and the trap party reached Dhanbad by the Toofan Express on July 18. Kanjilal himself went to Sindhri on the morning of July 18 and confirmed the arrangement to the appellant. The appellant also reached Dhanbad railway station at about 5p.m. The members of the trap party took their seats at different tables in the corners of the Refreshment Room of Kellner 's Restaurant. Basu, with the appellant, reached there and occupied another table. Refreshments were taken. Thereafter, Basu talked over matters about the contract with the appellant, moved near him, took out the file from his satchel and then, after some conversation, took out the envelope containing the currency notes of the value of Rs. 10,000 and having its one long edge slit. This envelope was passed on to the appellant. Basu states that he made a statement at the time that there were Rs. 10,000, which he could, not pay to the appellant so far. The appellant took the envelope and put it in his trouser pocket. The trap party, after getting the signal that the bribe money had been paid, surrounded the appellant and got the envelope from him. , It was found to contain the very currency notes whose 'numbers had previously been noted by the Magistrate, Mr. Mahadevan. There is no verbal corroboration of Kanjilal 's statement about the message he conveyed to the appellant either in May or on the telephone or on the morning of the 18th of July. The Courts below have found corroboration of the statements of Basu from the circumstances that the demand of money in December 1950 was mentioned in June, 1951, to Mr. K. N. Mookerjee; that the trap must have been laid when Basu must have been 67 certain that the appellant would turn up at Dhanbad at the appointed time and that the appellant 's presence at Dhanbad railway station could not have been accidental but must have been the result of previous arrangement. No infirmity can be found in this reasoning. The appellant gave an explanation for his presence at the railway station that day. It has not been accepted by the Courts below. In fact, the learned counsel for the appellant did not press it for consideration at the second hearing of the appeal, on remand by this Court. No doubt, the trap arrangements must have been made when there was a practical certainty that the appellant would turn up at Dhanbad railway station. Basu is not expected to mention falsely in the month of June that the appellant made a demand of Rs. 10,000 in December 1950. Ordinarily, one is not expected to make a complaint of such a demand after such a long period of time. The interval of time seems to have been due possibly to a hope that matters may straighten out or that a lower sum might be acceptable as bribe to pass the pending bills of Basu. The omission of the trap witnesses to corroborate Basu 's statement at the time of the passing on of the envelope to the appellant, in forming the appellant of the envelope containing Rs. 10,000, is really surprising when the party consisted of four persons who had gone there for the purpose of being witnesses of the appellant 's accepting the bribe and who could therefore be expected to be alert to hear what passed on between the appellant and Basu. The question here is, what did the appellant expect the envelope to contain? It was no occasion for Basu to personally deliver any bills or papers concerning the contract business. Such papers could have been sent in the regular course of business to the appellant 's office. The appellant does not appear to have questioned Basu as to what the envelope contained, as he would have done, if he did not know for certain what it contained. The appellant 's statement that he understood the envelope to contain bills etc., is not consistent with his putting the envelope in his 8 58 pocket. The envolope is expected to be a fat one as it contained one hundred Rs. 100 currency notes. An envelope containing business papers is not expected to be put in the trouser pocket. One usually carries it in hand, or in one of the pockets of the coat or bush shirt one may be putting on. When it is held that the appellant must have gone to Dhanbad railway station by arrangement, it becomes a moot point, what the purpose of the arrangement was. Surely, it could not have been a mere delivering of certain bills and papers. As already mentioned, it could have been sent to Sindhri by post or through Kanjilal or any other messenger. The purpose of the meeting at Dhanbad railway station must have been different. The appellant has failed to mention any purpose which could be accepted as correct. It is true that the appellant was not specifically questioned, when examined under section 342, Criminal Procedure Code, with respect to his demanding Rs. 10,000 at Calcutta, Kanjilal 's visit to him in May and July and his telephonic call and the arrangement and about Basu 's statement at the time the envelope was passed on to him. But we are of opinion that this omission has not occasioned any failure of justice. The appellant fully knew what had been deposed to by witnesses and what had been the case against him. He denied the correctness of the main allegation that he received Rs. 10, 000 as bribe. We are therefore of opinion that the appellant knew when he took the envelope from Basu that he was getting Rs. 10,000 as bribe, which amount he had demanded, and that therefore the conviction of the appellant is correct. The appeal is therefore dismissed. Appeal dismissed.

The appellant accepted a sum of Rs. 10,000 from a con tractor. He was chalanned before a Magistrate at Dhanbad; but on an application by the appellant the High Court trans ferred the case to the Munsif Magistrate, Patna. Subsequently, the Criminal Law Amendment Act, 1952, came into force which made every offence under section 161 Indian Penal Code and section 5(2) Prevention of Corruption Act triable only by a Special judge for the area within which it was committed. The case of the appellant was forwarded to the Special judge at Patna who convicted him both under section 161 and section 5(2). The appellant contended: (1) that the Special judge at Patna had no jurisdiction to try the appellant as the offence was committed within the area of the Special judge at Dhanbad and (2) that the provisions regarding the presumption contained in section 4 of the Prevention of Corruption Act, 1947, offended article 21 of the Constitution. Held, that the order of conviction could not be quashed on the ground that the Special judge at Patna had no territorial jurisdiction to try the case as no failure of justice had been occasioned. Section 531 Code of Criminal Procedure was applicable to trials by Special judges. The High Court had also the power under section 526 of the Code to transfer a case from one Special judge to another, and the omission of a formal order transferring the case to the Special Judge at Patna had not prejudiced the appellant. Held, further that the procedure laid down by section 4 of the Prevention of Corruption Act, which was enacted by Parlia ment, laid down a procedure established by law. The question that section 4 offended article 21 of the Constitution was not a substantial question as to the interpretation of the Constitution within the meaning of article 145(3) and it was not necessary to refer it to a Bench of five judges. A. K. Gopalan vs The State of Madras, ; , followed.

Appeal No. 128 of 1954. Appeal from the judgment and decree dated January 25, 1951, of the Nagpur High Court in L. P. Appeal No. 10 of 1945, arising out of the judgment and decree dated March 29, 1945, of the said High Court in Second Appeal No. 453 of 1941, against judgment and decree dated April 5, 1941, of the Addl. District Judge, Yeotmal in Civil Appeal No. 47 A of 1940 arising out of the judgment and decree dated September 14, 1940, of the Addl. Sub Judge, First Class, Yeotmal in Civil Suit No. 72 A of 1940. Radhey Lal, for the appellant. P. N. Bhagwati, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for respondent No. 1. R. H. Dhebar, for respondent No. 2. 1958. March 31. The following Judgment of the Court was delivered by SINHA J. The main question in controversy in this appeal on a certificate of fitness granted by the High Court of Judicature at Nagpur (as it then was), is 335 whether the provisions of the Berar Land Revenue Code, 1928 (which will hereinafter be referred to as the Code), bar the suit out of which this appeal arises. In order to appreciate the points in controversy in this appeal, it is necessary to state the following facts: One Bhagchand Jairamdas was the occupant of a plot, situated in the District town of Yeotmal in what was then called the Province of Central Provinces and Berar, measuring 1,91,664 square feet in area, on which stood a ginning factory and its appurtenant buildings. Bhagchand aforesaid had executed a mortgage bond in favour of one Abubakar. The mortgagee aforesaid instituted a suit on the original side of the Bombay High Court, being Civil Suit No. 1543 of 1934, to enforce the said mortgage. A Receiver was appointed on October 20, 1936, during the pendency of the suit in respect of the mortgaged properties including the plot described above. The land and the buildings and the factory, have been valued by the courts below at about Rs. 70,000. The revenue payable in respect of the plot in question, at the rate of Rs. 129 per year, appears to have remained in arrears for two years, namely, 1936 37 and 1937 38. The Sub Divisional Officer of Yeotmal, functioning as the Deputy Commissioner under the Code, sold at auction the plot in question, free of all encumbrances, on December 17, 1937, without impleading or giving notice to the Receiver who was in charge of the estate of Bhagechand, as aforesaid. At that auction, Kanhaiyalal, the appellant, purchased the property for Rs. 270 only. The sale in his favour was confirmed on January 26, 1938, bit, it appears that the then Receiver had sent Rs. 275 by a cheque to the Sub Divisional Officer concerned, in full payment of the arrears of land revenue, and thus, to have the sale set aside. But it was received two days after the confirmation of the sale. Before the confirmation of the sale, the Receiver had made an application on Januaryt 19, 1938, to the Sub Divisional Officer, offering to pay the arrears, but it appears that through some bungling in the office, the attention of the Sub Divisional Officer was not drawn to the application until after the 336 confirmation of the sale. The Receiver then applied for a, review of the order confirming the sale, and the Sub Divisional Officer allowed the application and set aside the sale. The Deputy Commissioner, Yeotmal, and the Commissioner, Berar, also upheld the order setting aside the sale. Thereupon, the auction purchaser, Kanhaiyalal, moved in revision the Financial Commissioner who was then the highest Revenue authority under the Code, against the order of the Commissioner, and ultimately, the order setting aside the sale, was vacated by the Financial Commissioner on the ground that there was no application under s.155 or section 156 of the Code. The then Receiver, having ultimately failed in having the sale of the valuable properties by the revenue authorities, set aside, instituted the suit out of which this appeal arises, impleading the Provincial Government of Central Provinces and Berar, as the first defendant, Kanhaiyalal, the auction purchaser, as the second defendant, and Dulichand Bhagchand as the third defendant. He prayed for a declaration that the auction sale held on December 17, 1937, was void, on a number of grounds including the grounds that no notice of demand had been sent to the Receiver who was in charge of the property; that the attachment and sale proclamation had not been effected according to law, and that though the revenue authorities were aware of the appointment of a Receiver of the property, by the Bombay High Court, they did not implead the Court Receiver. This suit was contested on the preliminary ground that it was barred 157 and 192 of the Code. That with the trial court and the onal District Judge, Yeotmal). High Court of Judicature at Nagpur, the case was heard by a Single Judge, Nivogi J. who allowed the appeal by judgment dated March 29, 1945. On a Letters Patent appeal by the auction purchaser, Kanhaiyalal, the matter was heard by a Division Bench (Mangalmurti and Deo JJ.) The Bench affirmed the decision of the learned Single 337 Judge, and held that the suit was not barred. Hence, this appeal. It was urged on behalf of the appellant, the auction purchaser, who was the second defendant in the suit, and who only is interested in having the sale in question, sustained by the Court, that the sale without notice to the Receiver or without impleading him, was not void but only irregular, and secondly, that in any event, the suit was barred by the provisions of sections 157 and 192 of the Code. The first defendant, the State Government, which was represented by Mr. Dhebar, prayed that, in any event, there should be no order for costs either in favour of or against the Government. On behalf of the plaintiff respondent, it was urged that property in the hands of a Receiver is custodia legis, and is exempt from all judicial processes except to the extent that the Court which has appointed the Receiver, may accord permission to the Receiver or to third parties to institute proceedings in respect of the property;, that no permission of the Bombay High Court which had appointed the Receiver, having been taken for the sale of the property, the sale held without such a permission, is a nullity; that, at any rate, such a sale was not a mere irregularity but an illegality and could be avoided by suit; that there being no valid attachment of the property with notice to the Receiver, the attachment itself was illegal, and on that ground also, the sale was void; and lastly, that the suit was not barred by the provisions of the Code, as held by the High Court. The facts as set out above, are not in controversy. During the time that the proceedings culminating in the sale of the property, had been pending in the Revenue Courts, the Receiver was in effective control and management of the property. The revenue authorities had been apprised of the fact that the Receiver appointed by the Bombay High Court, was in charge of the property. As a matter of fact, an attempt had been made by the revenue authorities, in the first instance, to approach the Collector of Bombay for realising the 43 338 arrears of land revenue in respect of the plot in question, but the mistake was that no approach was made to the Bombay High Court or even to the Receiver for paying up the arrears of the Government demands. It was certainly the duty of the Receiver to see to it that all public demands in respect of the properties in his charge, were paid in due time, and in. this case, certainly, the arrears in respect of the year 1937 38, which fell due in August, 1938, accrued in his time, if not also the arrears in respect of the previous year 1936 37. If the Receiver had been more vigilant, or if the revenue authorities had made the demand from the Receiver in respect of the arrears, they may have been paid up in due course without the necessity of putting the property to sale. So far as the Indian Courts are concerned, it is settled law that a sale held without making attachment of the property, or without duly complying with the provisions of the law relating to attachment of property, is not void but only voidable. Rule 52 of 0. 21 of the Code of Civil Procedure, requires that where the property is in the custody of any court or public officer, attachment shall be made by a notice to such court or officer. But the absence of such a notice would not render the sale void ab initio, because the jurisdiction of the court or the authority ordering the sale, does not depend upon the issue of the notice of attachment. It is also settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under 0. 40, r. I of the Code of Civil Procedure, without the leave of that Court, are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held, do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the Court to be entitled to the same. The learned counsel for the respondent was not able to bring to our notice any ruling of any Court in India, holding that a sale held without notice to the Receiver or 339 without the leave of the Court appointing the Receiver in respect of the property, is void ab initio. In the instant case, we do not think it necessary to go into the question raised by the learned counsel for the respondents that a sale of a property in the hands of the Court through its Receiver, without the leave of the Court, is a nullity. The American Courts appear to have taken the view that such a sale is void. In our opinion, it is enough to point out that the High Court took the view that the sale was voidable and could be declared illegal in a proper proceeding or by suit. We shall assume for the purposes of this case that such a sale is only voidable and not void ab initio. On the assumption that the sale held in this case without the leave of the Court and without notice to the Receiver, is only voidable and can be declared illegal on that very ground, the suit had been instituted for the declaration that the sale by the revenue courts was illegal. The plaint was subsequently amended by adding the relief for recovery of possession, because in the meanwhile, the auction purchaser had obtained delivery of possession of the property through the revenue authorities, some time in 1940. The general rule that property in custodia legis through its duly appointed Receiver is exempt from judicial process except to the extent that the leave of that court has been obtained, is based on a very sound reason of public policy, namely, that there should be no conflict of jurisdiction between different Courts. If a court has exercised its power to appoint a Receiver of a certain property, it has done so with a view to preserving the property for the benefit of the rightful owner as judicially determined. If other Courts or Tribunals of co ordinate or exclusive jurisdiction were to permit proceedings to (lo on independently of the Court which has placed the custody of the property in the hands of the Receiver, there was a likelihood of confusion in the administration of justice and a possible conflict of jurisdiction. The Courts represent the majesty of law, and naturally, therefore, would not do anything to weaken the rule of law, or to permit any proceedings 340 which may have the effect of putting any party in jeopardy for contempt of court for taking recourse to unauthorised legal proceedings. It is on that very sound principle that the rule is based. Of course, if any Court which is holding the property in custodia legis through a Receiver or otherwise, is moved to grant permission for taking legal proceedings in respect of that property, the Court ordinarily would grant such permission if considerations of justice require it. Courts of justice, therefore, would not be a party to any interference with that sound rule. On the other hand, all Courts of justice would be only too anxious to see that property in custodia legis is not subjected to uncontrolled attack, while, at the same time, protecting the rights of ' all persons who may have claims to the property. After making these general observations, we have to examine the provisions of the Code, to find out how far that general rule of law is affected by those provisions. The Berar Land Revenue Code provides that " land revenue assessed oil any land shall be a first charge on that land and on the crops, rents and profits thereof " (section 131). Section 132 makes the occupant in respect of the land in question " primarily liable for the payment of the land revenue ", but section 133 provides that in case of default of payment of land revenue by the person who is 'primarily liable ', " the land revenue including arrears shall be recoverable from any person in possession of the land. " Hence, in this case, the revenue authorities could legally call upon the Receiver to pay the arrears of land revenue, and as pointed out above, it would have been the duty of the Receiver to pay up those arrears. Under section 135, the Receiver would be deemed to be a, I defaulter ' in respect of the land revenue. Section 140 makes the statement of account, certified by the Deputy Commissioner or the Tahsildar, conclusive evidence of the existence of the arrears and of the person shown therein as the defaulter, for the purposes of the Chapter in which the section finds a place, namely, Chapter XII, headed as, " Realization of Land Revenue ". One of the modes laid down in 341 s.141 (e) of the Code for the recovery of arrears land revenue, is " attachment and sale of the, holding on which the arrear is due. " If a sale is held under the provisions of section 141 (c), section 149 (2) provides that such a sale " shall transfer the holding free of all encur brances imposed on it. . . . Thus, the appellant, if the sale in his favour was a valid on acquired the property said to be worth Rs. 70,000, from from all encumbrances including the mortgage money due on the property, and for which the suit in the Bombay High Court had been instituted, even though he paid Rs. 270 only for it. The principal question for determination in the appeal, therefore, is whether, in view of the special provisions of the Land Revenue Code, the presesuit could be entertained by the civil court. It beyond question that the Code lays down a special machinery for the realization of Government reven which has been declared as the paramount charge the property. It lays down a summary procedure for the realization of public revenue, and all question coming within the purview of the Code, must I determined according to the procedure laid down that Code. Hence, in so far as the Code has laid do," specific rules of procedure, those rules and no other must apply in the determination of all controversies coming strictly within the terms of the statute One thing is absolutely clear, namely that the Code does not lay down any specific rules in respect of pro party which has been placed in custodia legis. The Code contemplates regular payment of Government revenue by the owner, possessor or the occupant, the property in respect of which Government revenue is payable. It also takes notice of devolution of interest by transfer or succession, but it does notice contemplate the inter position of a Receiver in respect of the property subject to the payment of Government revenue. This aspect of the matter becomes important because the only point for determination 'in, the appeal, is whether the auction sale held under the Code, without the leave of the Court or without notice to the Receiver appointed by the Court, should affair 342 Le interest which the Bombay High Court had, by pointing the Receiver, sought to protect, if the sale favour of the appellant, stands. The mortgagee 's security for the payment of the mortgage debt, in the vent of the auction sale being sustained, is to that tent adversely affected without his having any voice the matter. Perhaps, if the Receiver were not there, the mortgagee may have been more vigilant and by have taken timely steps to pay the Government demand in respect of the property if only for conserving it for satisfying his own dues on the mortgage. It has been strenuously argued on behalf of the appellant that the present suit cannot be maintained in few of the provisions of the Code, particularly, 157 and 192 which we now proceed to examine. action 157 is in these terms: " 157. (1) If no application under section 156 is made within the time allowed therefor, all claims on the ground of irregularity or mistake shall be barred. (2) Nothing in sub section (1) shall bar the institution of a suit in the civil court to set aside a sale on the ground of fraud or oil the ground that the arrear for which the property is sold was not due. " his section makes reference to proceedings under the previous. Section 156 contemplates an application for setting aside the sale " on the ground of some material irregularity or mistake in publishing or conducting it ", at the instance of a person " whose interests are affected by the sale ". Assuming that in the instant case, the Receiver is a person whose interest can be said to have been affected by the sale, the ground on which he could have moved the Revenue athorities for setting aside the sale, was limited to material irregularity or mistake in publishing or Inducting the sale. This provision proceeds on the assumption that the necessary parties have been apprised of the proceedings relating to the realization Government revenue. It assumes that the proceedings have been properly taken, but there may have been some material irregularity or mistake at a later age of the proceedings, namely, in publishing or enducting the sale. It is clear that the ground on 343 which the present suit is based, would not be covered by the crucial words quoted above, on which alone section 156 could be availed of " Publishing " the sale has reference to that part of the proceedings which relates to the sale proclamation, and conducting ' the sale has reference to acts or omissions, at a still later stage, of some officer or public authority who is entrusted with holding the sale. It is clear, therefore, that the provisions of section 156 are out of the way of the plaintiff in this suit. So also are the provisions of section 155 which relate to an application for setting aside a sale on deposit of arrears within 30 days from the date of the sale. An application under section 155 can only be made by a person "either owning such property or holding an interest therein by virtue of a title acquired before such sale ". A Receiver appointed under 0. 40 of the Code of Civil Procedure, unlike a Receiver appointed under the Insolvency Act, does not own the property or hold any interest therein by virtue of a title. He is only the agent of the court for the safe custody and management of the property during the time that the court exercises jurisdiction over the litigation in respect of the property. Section 157(1) of the Code, 'which positively bars a suit, is in express terms, confined to " all claims oil the ground of irregularity or mistake ". It does not cover grounds other than those for example, if a sale is attacked on the ground that the owner of the property was dead at the date of the sale, or that there had been some fraud in connection with the sale proceedings, or that he had been kept out of ' his remedy under the Code by some fraudulent act, or that there was really no arrear due in respect of the property sold, or such allied grounds suits based on grounds like these, would not be within the prohibition of section 157(1). Section 157(2) specifically saves certain suits of the kind referred to therein, but it does not necessarily follow that suits not directly within the terms of sub section (2) of section 157, are covered by the provisions of the positive bar laid down by section 157(1). There may be a tertium quid between the grounds covered by section 157(1) and section 157(2). It is clear that 344 the present suit is not covered either by the terms of section 157(1) or those of section 157(2). As already indicated, the position emerging in the present controversy, is not covered by the express provisions of section 157. But it has been argued on behalf of the appellant that even though the provisions of section 157 do not cover the ground raised in the present suit, section 192(1) of the Code, bars the suit. Section 192(1) is in these terms: " 192. (1) Except as otherwise provided in this Law, or in any other enactment for the time being in force, no civil court shall entertain any suit instituted or application made to obtain a decision or order on any matter which, the Provincial Government or any Revenue Officer . is, by this Law, empowered to determine, decide or dispose of; and in particular and without prejudice to the generality of this provision, no civil court shall exercise jurisdiction over any of the following matters: " It is not necessary to set out the clauses (a) to (p) under sub section (1) of section 192, because none of those clauses, has been claimed clearly to cover the present suit. Learned counsel for the appellant contended that setting aside a sale has been specifically provided for by the Code, which the several authorities under the Code have been empowered to determine, decide or dispose of, within the meaning of the section. There is no doubt that the matter of the setting aside of a sale by payment of the arrears under section 155, and on the specific grounds under section 156, as discussed above, has been provided for in the Code, but, as already observed, the suit does not raise any ground which is covered by the specific provisions of the Code for setting aside a sale. Strictly speaking, this is a suit for a declaration that the sale held by the revenue courts, does not affect the interests which are in the custody of the Court through its Receiver, and for recovery of possession as against the auction purchaser who is alleged to be in wrongful possession of the property which should have continued in possession of the Receiver, under the directions of the Bombay High Court. In short, this is not a suit simpliciter to 345 set aside the sale held by the revenue authorities but a suit for a declaration and a consequential relief A suit for such a declaration on the grounds taken by the Receiver and for possession, is not a matter, which the several authorities under the Code, have been empowered to determine, decide or dispose of. But the learned counsel for the appellant further contended that section 192 takes in its sweep all the relevant provisions of the Code bearing on the rights of the Receiver to have a sale set aside. Undoubtedly, it is so, but, as pointed out above, the Receiver could not have brought the present controversy within the terms of any one of those sections. In this connection, reliance was also placed on the provisions of sections 32, 38 and 159 of the Code. In our opinion, those sections have no bearing on the present controversy. Section 32 deals with appeals and appellate authorities, and lays down the hierarchy of officers to deal with an appeal. Section 38 prescribes the authorities to deal with revisional matters, and section 159 conserves the power of the Deputy Commissioner to pass orders suo moto that is to say, where no application has been made under section 155 or section 156, or even beyond the period of thirty days, which is the prescribed period for making applications under those sections. Thus, if the leave of the Bombay High Court had been taken to initiate proceedings under the Code, for the realization of Government revenue, or if the Receiver had been served with the notice of demand, it would have been his bounden duty to pay up the arrears of land revenue and to continue paying Government demands in respect of the Property in his charge, in order to conserve it for the benefit of the parties which were before the Court in the mortgage suit. If such a step had been taken, and if the Receiver, in spite of notice, had allowed the auction sale to be held for non payment of Government demands, the sale would have been valid and subject only to such proceedings as are contemplated under sections 155 and 156 of the Code. In that case, there would have been no conflict of jurisdiction, and therefore, no question 44 346 of infringing the sound principle discussed above. But the absence of the leave of the Court and of the necessary notice to the Receiver, makes all the difference between a valid and an illegal sale. The High Court has also relied upon the well known rule of natural justice audi alteram partem as another reason for holding the sale to be illegal. It is not necessary for the purposes of this case to pronounce upon the difficult question of how far a principle of natural justice can override the specific provisions of a statute. For the reasons given above, we agree with the High Court in its conclusion that the auction sale impugned in this case, was illegal, and that the suit was not barred by the provisions of the Code. The appeal is, accordingly, dismissed with costs to the Receiver who alone has contested the appeal. Appeal dismissed.

The appellant was the auction purchaser of the property at a revenue sale held under the provisions of the Berar Land Revenue Code, 1928, for recovery of land revenue due. The property at the time of the attachment and sale was in the possession of a Receiver appointed under Or. 40, R. i of the Code of Civil Procedure by the Bombay High Court. Notice to the Receiver, however, was not given of the attachment and sale of the property, nor was any leave of the Court taken for the sale. In a suit instituted by the Receiver for a declaration that the sale was a nullity or, at any rate, was illegal and liable to be set aside, the auction purchaser contended that the sale without notice to 334 the Receiver or without impleading him was not void but only voidable and that, in any event, the suit was barred by the provisions of sections I57 and 192 of the Berar Land Revenue Code, 1928: Held, (i) that the sale was illegal in the absence of the leave of the Court and the necessary notice to the Receiver; (2) that the suit was not barred by any of the provisions of the Code. Sub section (1) of section I57 of the Code which bars the institution of a suit to set aside a sale is confined only to claims on the ground of irregularity or mistake in publishing or conducting the sale as referred to in section 56, and suits based on other grounds, including those referred to in sub section (2) Of section 157, are not within the prohibition of sub section Section 192 of the Code is not applicable as the suit is not one simpliciter to set aside the sale held by the revenue authorities, but one for a declaration and consequential relief on the grounds taken by the Receiver not covered by the specific provisions of the Code for setting aside the sale which the several authorities under the Code have been empowered to determine, decide or dispose of within the meaning of section 192(I).

ew policy which is in vogue. The licensing period is for two years commencing from 1.4.1991 to 31.3.1993. Admittedly, the petitioner had not submitted any tender in terms of the new policy for manufac ture of rectified spirit or liquor for grant of D 2 and D 1 licences, the licences have already been granted to the third parties and they are not before this court. Any direc tion in this regard would not only interfere with the li cences granted to them, but also create a hiatus in opera tional system. This Court cannot direct the State Government to create a new policy of receiving private applications or to direct the Commissioner of Excise to carve out a new policy area and to grant licence to the petitioner. It is not possible to give such a direction for the reasons that the petitioner, admittedly, did not offer himself as a candidate for consideration when tenders were called for licensing period commencing from 1.4.1991. As regards the Government Distilleries at Ratlam is concerned for grant of D 1(s) licence, as requested for, we have no sufficient material whether any arrangements have 494 been made to any other parties for supply area in that regard. Under these circumstances, it is extremely difficult to accede to the request made by the counsel for the peti tioner. [498E 499A] & ORIGINAL JURISDICTION: Writ Petition No. 729 of 1988. (Under Article 32 of the Constitution of India). R.F. Nariman and P.H. Parekh for the Petitioners. V.N. Ganpule. V.M. Tarkunde, S.K. Agnihotri, S.K. Sinha, Rajinder Narain. R.S. Singh and Rameshwar Nath for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. In this writ petition under article 32 of the Constitution, the petitioner, a partnership firm seeks reliefs of mandamus to direct the State Government and the Commissioner of Excise of M.P. to allow the petitioner to set up a distillery pursuant to the cabinet policy dated December 30, 1984 and to grant D 2 licence; to declare the letter dated February 8, 1982 as unconstitutional, illegal and of no effect in law and to direct the respondent Nos. 1 and 2 to grant a licence to manufacture potable Alcohol within the state of Madhya Pradesh and to grant D 1 licence to supply country made liquor, etc. This case has behind it chequered history which is necessary to adumbrate. In the State of M.P. vs NandlaI Jaiswal & Ors., ; this court considered the legality of the policy, the subject matter in the writ petition. It was held therein that nine distilleries in the State of Madhya Pradesh in cluding the one at U j jain were set up on the lands and buildings belonging to the Government. The plants and ma chinery therein initially were of the Government, but in course of time the licensees installed or replaced the plants and machinery and became the owners. The petitioner and its predecessors had licence for the distillery at Ujjain for well over 40 years to manufacture rectified spirit. The last of the licences held by the petitioner was for the years April 1, 1976 to March 31, 198 1. The period of licence was at that time for five years. The practice as per the provisions of the M.P. Excise Act 1915 for short 'the Act ' and M.P. Distilleries, Breweries and Warehouses Rules for short 'the rules ' issued in exercise of the powers under section 62 was to call for the tenders to manufacture and supply the rectified spirit or denatured spirit, spirit (country made) to the retail vendors 495 within the area attached to the distillery. Rajdahani Dis tillers Corporation, for short 'RDC ' became the successful tenderer for the licensing period starting from April 1, 1981 to March 31, 1986. The petitioner challenged in Misc. Petition No. 701/81 in the M.P. High Court under article 226. Initially stay was granted, but later it was vacated on August 20, 1981 Licence was granted for the period starting from August 25,1981 to March 31, 1986 to RDC and the dis tillery, plant and machinery at Ujjain was handed over to RDC on August 28. 198 1. Thereafter the petitioner filed another writ petition No. 169/82 on March 16, 1982 for redelivery Of the plant and machinery and the warehouses and other consequential reliefs. That writ petition was dis missed by the High Court against which Civil Appeal No. 5483/83 was filed, which is just now disposed of. The peti tioner had applied for grant of licence on February 19, 1982 and he reiterated his request in number of reminders includ ing one oh November 3, 1986. In the interregnum the Govt. changed the policy by a Cabinet Sub Committee policy deci sion dated December 30, 1984 under which they decided to grant licence to the existing licensees of the distilleries and that they should construct the factories at their ex penses on the land allotted by the State Govt. or acquired and allotted by the State Govt. and that they shift the business to new factories and the licence would be for a period of five years. Calling in question of that policy several writ petitions including the one by the petitioner were filed in the M.P. High Court. The Division Bench partly allowed the writ petition and quashed part of the policy decision. Against it appeals and special leave petitions were filed by the State and the unsuccessful petitioners including the petitioner. It was disposed of by this court reported in Jaiswal 's case. During the hearing of the writ petition, the Attorney General of India conceded that if the petitioner makes any application for grant of licence it would be considered by the State Govt. and be disposed of quickly. That concession was noted and the argument was founded thereon to hold that the Govt. did not intend to create any monopoly in favour of the existing licensees. This court upheld the policy of the Govt. and allowed the appeals and dismissed the special leave petitions of the petitioner and other. Pursuant thereto the petitioner made an application on December 25, 1987 followed by several reminders. Ultimately the State Govt. rejected the petition by letter dated February 8, 1988, which is impugned in this writ petition. Under section 13 of the Act, the State Govt. is empowered to grant licence to manufacture, possession and sale of recti fied spirit and the liquor in the distilleries or the brew eries. Under section 14 and Rule XXII the licensee should also have licence to establish distillery to distil 496 rectified spirit or denatured spirit or liquor and a ware house wherein any intoxicant be deposited and kept without payment of duty, but subject to payment of the fee to the State Govt. as it may direct. No intoxicant shall be sold by operation of section 17, except under the authority and subject to the terms and conditions of the licence granted in that behalf. Rule XXII provides the method of disposal of the licence which reads thus: "XXII. Disposal of licences (1) Licence for the manufacture or sale of intoxicants shall be disposed of by tender. auction. fixed licence fee or in such other manner as the State Govt. may, by general or special order, direct. Except where otherwise prescribed, licence shall be granted by the Collector or by an Officer authorised by him in that be half." Rule III to V of the Distillery and Warehouse Rules also made inter alia under sub section 2(h) of section 62 deal with the subject of grant of ' licence and provide, in the follow ing terms, for different kinds of licences which may be issued, viz., licences in Forms D 1, D 1(s) and D 2: "III. Subject to the sanction of the State Government, the Excise Commissioner may grant a licence in Form D 1 and Form D 1(s) for the wholesale supply of country spirit to retail vendors. The Collector may issue, on payment of a fee of Rs. 1000 a licence in Form D 2 for the construction and working of a distillery to any person to whom a wholesale supply licence has been issued. V. Subject to sanction of the State Government the Excise Commissioner may issue a licence in Form D 2 for the construction and working of a distillery on payment of a fee of Rs. 1000. " The State Govt. rejected application of the petitioner on three grounds. namely, (1) that the petitioner requested to issue a licence at the old place at Ujjain Distillery which is no longer available; (2) present policy of the State and the Central Govt. was to discourage manufacture of liquor for drinking purpose, except for molasses. (3) 497 However, if it is manufactured from other raw materials other than the Mahua, his application would be considered. If the petitioner makes an application for establishment or manufacturing denatured spirit at other places and if they produce a No Objection Certificate from Central Government and Environmental Department, his application would be considered. The contention of Sri Nariman, the learned counsel for the petitioner, is that the State Govt. having made solemn undertaking before this court and the arguments were heard in Nandlal Jaiswal 's case on the basis that the application of the petitioner would be considered and disposed of it was with an intention to grant licence to the petitioner, but rejection is contrary to the undertaking given to this court. It was also contended that the petitioner have a long, clean and commendable history of 40 years in manufac turing country made liquor in the distillery and supply thereof within the area attached to U j jain Distillery. The State Government 's non grant of licence thereto is only a rouse to defeat the fundamental rights of the petitioner to establish and trade in the manufacture and distribution of the liquor in terms of the provisions of the Act and the rules and the instructions of the Govt. in that regard. Having given the licence to the other distilleries, the petitioner being similarly placed, non grant thereto is arbitrary, discriminatory and violating article 14 of the Constitution. It was also further contended that the peti tioner if for any reason cannot be granted D 2 licence at U j jain, D 2 licence may be granted on Government distillery at Ratlam and supply area attached to it under D 1(s) so as to do complete justice to the petitioner. It was resisted by Sri Ganpule, learned senior counsel for the State contending that pursuant to the undertaking given to this court, the application was considered and found not feasible to grant the licence to the petitioner due to grounds stated in the impugned order which are relevant and existant being in conformity with the change of the policy, and so this Court cannot interfere and may not issue the writ as prayed for. Though rule nisi was ordered on March 17, 1989, despite notice of the Registry dated April 24, 1989, neither copies of the writ petition, nor the requisite process fee for service of the rule nisi on the respondents were deposited in the court. As a result the rule nisi was not issued to the contesting respondents Nos. 3 to 10. Along with the connected appeal which is just disposed, Sri Tarkunde, the learned senior counsel appearing for RDC which was impleaded as 5th respondent to whom licence was given for Ujjain Distillery, contended that unless there is cut in the supply area of the operation of the existing 498 licences and a separate supply area is carved out, no D 2 licence could be issued to the petitioner. The licensing period of 1986 to 1991 had expired by efflux of time. New policy is in vogue for the succeeding licensing period of 199 1 to 1993. The licences having been granted to the respective persons, who are not represented in this court, the relief asked for cannot be granted in their absence. In our view there is force in the contentions of the respondents. The only question for consideration is whether it is a fit case for interference by this court due to the aforestated sequence of events. Undoubtedly the learned Attorney General assured this court that the application, if filed by the petitioner, would be considered. Obviously in accordance with the provisions of the Act and the rules. The policy of 1984 was upheld by this court under which nine distilleries were granted D 2 licences to manufacture recti fied spirit and liquor and to supply to the retailers under D 1 licence within the area attached to each of the distill eries. The petitioner admittedly made application to grant licence to manufacture country made liquor, obviously with Mahua flowers or molasses at Ujjain. The RDC established new distillery at Ujjain in terms of the new policy, at its expense, and is manufacturing and supplying the liquor. It vacated the old distillery at Ujjain which we are informed that the building is still existing. RDC had manufactured the spirit and country made liquor in terms of D 2 licence and supplied in terms of D 1 licence. The period of the licence also expired by efflux of time. Again there is change in the new policy which is in vogue. The licensing period is for two years commencing from April 1, 199 1 to March 31, 1993. Admittedly, the petitioner had not submitted any tender in terms of the new policy for manufacture of rectified spirit or liquor for grant of D 2 and D 1 licences, the licences have already been granted to the third parties and they are not before this court. Any direction in this regard would not only interfere with the licences granted to them, but also create a hiatus in operational system. This court cannot direct the State Govt. to create a new policy of receiving private applications or to direct the Commissioner of Excise to carve out a new supply area and to grant licence to the petitioner. It is not possible to give such a direction for the reasons that the petitioner, admittedly, did not offer himself as a candidate for consideration when tenders were called for licensing period commencing from April 1, 1991. As regards the Govt. Distilleries at Ratlam is concerned for grant of D 1 (S) licence as requested for, we have no sufficient material whether any arrangements have been made to any other parties for supply area in that regard. Under these circumstances, it is extremely difficult to accede to the request made by the 499 counsel for the petitioner, Though the petitioner had estab lished long career in the field to manufacture, supply and distribution of intoxicants in the State of Madhya Pradesh for about 40 years, we cannot issue any direction as asked for. Under these circumstances we are constrained to dismiss the writ petition, but without costs. Y.L. Petition allowed.

The petitioner and its predecessors had licence for distillery at Ujjain to manufacture rectified spirit and the last of such licence held by the petitioner was for the period 1.4.1976 to 31.3.1981. For the licensing period commencing from 1.4.1981 to 31.3.1986, the petitioner was unsuccessful and the licence was granted in favour of Rajd hani Distillery Corporation. The petitioner impugned the same but failed both before the High Court as also before the Court. Thereafter, the petitioner filed a writ petition in the High Court claiming restitution of the distillery but failed and an appeal against the High Court 's order was preferred before this Court, which has been disposed of whereby this Court has declined to grant restitution but directed that the petitioner should move an application before the State Government to have the value of the plants licence on February 19,1982 and reiterated his request by number of reminders including the one in November 3, 1986. In the interregnum, the Government policy was changed by a cabinet sub committe policy decision dated 30.12.1984, whereby they decided to grant licence to the existing licen sees of the distilleries and that they should construct the factories at their expenses on the land allotted by the State Government or acquired and allotted by the State Government and that they shift the business to new factories and the licence would be for a period of five years. Several writ petitions including the one by the petitioner were filed in the High Court challenging the policy. The High Court quashed part of the policy decision. Against that order, petitions were filed by the State and the unsuccess ful petitioners including the petitioner in this Court. Those petitions were disposed of by this Court by its judg ment in the case of State of M.P.v. Nandlal Jaiswal and Ors. , ; The court upheld the validity of the Government policy. During the course of the arguments, the Attorney General of India conceded that if the petitioner makes an application for grant of licence, it would be considered by the Govern 493 ment and disposed of quickly. Pursuant thereto the petition er made an application on December 25, 1987. The State Government rejected the application by letter dated February 8, 1988, which among other things is impugned in this peti tion under Article 32 of the Constitution. It is contended on behalf of the petitioner that the intention behind the solemn undertaking given by the State in Nandlal Jaiswal 's case clearly showed that the intention was to grant the licence to the petitioner rejection is contrary to the undertaking and violating the fundamental right of the petitioner to establish and trade in the manu facture and distribution of the liquor; further it is dis criminatory is as much as licences have been issued to others similarly placed. Alternatively, it is contended that if it is not found feasible to grant licence for Ujjain, the same be granted for Ratlam Distillery. Counsel for the State urged that it has not been found feasible to grant licence to the petitioner due to grounds stated in the order which are in confermity with the change in policy and the court should not interfere. On behalf of Rajdhani Distillery Corpn. it was urged that unless there is cut in the supply area of the operation of the existing licences and a sepa rate supply area is carved out, no licence could be issued to the petitioner; that new policy is in vogue for the succeeding licensing period of 1991 to 1993, and the li cences having been issued to persons, who are not represent ed in this court, the court should not grant the relief asked 1or in the writ petition. Dismissing the writ petition, this Court,

Appeals Nos. 1003 and 1004 of 1964. Appeals by special leave from the judgment and order dated January 7, 1963 of the Bombay High Court, Nagpur Bench in Civil Revision Applications Nos. 294 and 295 of 1962. section T. Desai, G. L. Sanghi and O. C. Mathur, for the appel lant (in both the appeals). C. B. Agarwala, section K. Gambhir and Ganpat Rai, for respondent No. 1 (in both the appeals). R. N. Sachthey, section P. Nayar for R. H. Dhebar, for the res pondent No. 3 (in both the appeals). The Judgment of the Court was delivered by Sikri, J. These two appeals, by special leave, are directed against the judgment of High Court of Judicature at Bombay (Nagpur Bench), dated January 7, 1963, allowing two Civil Revision applications Nos. 294 of 1962 and 295 of 1962, filed by Paramsukhdas, a respondent before us. The High Court, by this judgment, quashed orders dated April 9, 1962, in the Land Acquisition Cases No. 189 of 1961. and No. 190 of 1961 (as amended subsequently on July 6, 1962) and remitted the matter to the Court of the Civil Judge, Akola, for a fresh decision on merits with advertence to the remarks in the judgment. The High Court further directed that Paramsukhdas be allowed to be impleaded as a non applicant in the two proceedings and all parties will be allowed to amend their pleadings or make fresh pleadings with respect to the alleged compromise as filed before the High Court in Special Civil Application No. 232 of 1960. Mr. section T. Desai, the learned counsel for the appellant, con tends: (1)That the High Court has no jurisdiction under section 115. to interfere with the orders of the Civil Judge, dated April 9, 1962; 364 (2) That Paramsukhdas, respondent No. 1, is not a person interested in the compensation and is not entitled to be impleaded as a party to the references under section 18 of the Land Acquisition Act, 1894, (I of 1894) hereinafter referred to as the Act , (3) That, if at all, no revision but appeal lay to the High Court. Before dealing with the above contentions it is necessary to state the relevant facts. Sunderlal, appellant, owned some land (field No. 22) in Monza Umari, Taluq and District Akola. This field had been leased to Khushal Singh under a registered lease for 5 years commencing from April 1, 1954. The field was acquired by the Government. The Land Acquisition Officer made his award on January 30, 1960, and assessed the total compensation at Rs. 26,105.58, and apportioned the amount equally between Sunderlal and Khushal Singh. On February 17, 1960, the Land Acquisition Officer noted the following regarding Khushal Singh: "2. Khushalsing s/o Tolaram (a) According to letter No. 154 / 60 of 15th February 1960 from the Court of Civil Judge (Sr. Dn.) Khamgaon, and the attachment order issued by that Court, in C.S. No. 4 B/1958, the amount to be paid to Khushalsing Tolaram be kept in Revenue Deposit. (b) One Sunderlal minor guardian father Madanlal Harjimal, of Akola, has presented an objection petition against this payment. " Sunderlal filed an application for reference under section 18 of the Act, claiming more compensation and also complaining in regard to the apportionment of the amount of compensation between him and Khushal Singh. According to him, Khushal Singh was not a protected tenant and his period of lease having expired, he was not at all entitled to any portion of the amount of compensation. A reference under section 18 was made on June 27, 1961, and this reference was numbered Land Acquisition Case No. 189 of 1961. Khushal Singh also applied for a reference and he claimed enhancement of compensation and challenged the basis of apportionment adopted by the Land Asquisition Officer. The Collector made the reference and it was numbered Land Acquisition No. 190 of 1961. Before we deal with what happened before the Civil Judge, it is necessary to give some facts about the litigation between Sunderlal and Khushal Singh. 'On July 21, 1956, Sunderlal filed a suit (Civil Suit No. 133 B of 1956) against Khushal Singh for rent due on January 1, 1955, and January 1, 1956, in the, Court of Civil Judge, Akola. On July 22, 1957, the Civil Court referred the matter to the Revenue Court under section 16 A of the Berar Regulation of Agricultural Leases Act, 1951. On July 25, 1958, the Sub Divisional Officer, Akola, answered the reference 365 Revenue Case No. 79 of 1957 58) holding that Khushal Singh was not a protected lessee. On appeal, the Deputy Collector. Akola, held, on October 8, 1959, that Khushal Singh was a protected lessee. The Bombay Revenue Tribunal confirmed the order of the Deputy Collector on March 22, 1960. Sunderlal filed a petition before the High Court under article 226 of the Constitution. It was numbered Special Civil Application No. 232 of 1960. On February 8, 1961, a compromise petition (Civil Application No. 163 of 1961) was filed in the High Court, in Special Civil Application No. 232 of 1960. It was stated in. the compromise petition that Khushal Singh did not wish to dispute Sunderlal 's contention that the land was leased for horticulture purposes and that he had not acquired the status of a protected lessee, as defined in the Berar Regulation of Agricultural Leases Act, 1951. Khushal Singh further stated that he had no objection to the quashing of the orders of the Bombay Revenue Tribunal dated March 22, 1960, and of the Deputy Collector dated October 8, 1959. On March 11, 1961, Paramsukhdas filed an application (Civil Application No. 246 of 1961) in the High Court in Special Civil Application No. 232 of 1960, claiming to be heard. He alleged that he had obtained a decree against Khushal Singh and started execution proceedings for Rs. 20,013/ and the amount of Rs. 13,644.27 ordered to be paid to Khushal Singh as compensation had been attached by him for the satisfaction of his decree. He alleged that Khushal Singh and Sunderlal had mala fide entered into an agreement and had filed a compromise application asking for quashing of the orders of the Revenue Courts with the sole object of setting at naught the attachment and execution of his decree. He prayed, therefore, for leave to appear in the case as a party vitally interested. He further prayed that the compromise application should not be entertained and, should be dismissed in the interest of justice. It appears that on March 20, 1961, this application came up for hearing before the High Court. Paramsukhdas, however, took three weeks ' more time from the High Court, which was granted to him. It further appears that Paramsukhdas withdrew the said amount of Rs. 13,644 27 towards satisfaction of his decree. On April 18, 1961, he filed another application (Civil Application No. 365/61) wherein he stated that he had withdrawn the amount and alleged that he was now an interested party, and, therefore, he should be joined as a party. On the same date, his Advocate, Mr. Sohoni gave an undertaking in the following terms: "Mr. Sohoni undertakes to hold the moneys withdrawn 'by his client subject to the orders of this Court 'on this application." On August 3, 1961, the High Court disposed of Civil Applica tion No. 163 of 1961, Civil Application No. 246 of 1961 and Civil Application No. 365 of 1961. The High Court held that in L/S5SCI 10 366 the circumstances "we do not consider it advisable to proceed in this matter ourselves. The parties will be at liberty to file the compromise petition in the Civil Court where proceedings are pending on reference under section 18 of the Land Acquisition Act." The High Court, in order to safeguard the interests of the parties, kept these proceedings pending till the decision on the, compromise petition by the Civil Court. The compromise petition was directed to be returned to Sunderlal. On September 18, 1961, Sunderlal and Khushal Singh filed applications for compromise in both the Land Acquisition references. Paramsukhdas filed applications under 0. XXII r. 10, read with section 151, C.P.C., praying that his name be substituted or added as an applicant. He alleged that the compromise was fraudulent and that Khushal Singh was abandoning the case, and as an attaching creditor, he was entitled to be added a party to the case. Both Khushal Singh and Sunderlal objected, and by two orders dated April 9, 1962, the Civil Judge rejected the applications of Paramsukhdas. He framed the issue: "Whether Paramsukhdas can be permitted to be substituted or added as a party to these two references." He held that admittedly Paramsukhdas had not approached the Land Acquisition Officer in the proceedings in which the award was passed on January 30, 1960. He had not appeared before the Land Acquisition Officer as a person interested in the land or the compensation that would be determined by the authorities. He further held that under the circumstances Paramsukhdas was not one of the persons interested in the acquired land before the Collector, and he also could not be one, of the persons interested in the objections under section 20.(b) of the Act. After referring to Manjoor Ahmad vs Rajlaxmi Dasi (1) and Abu Bakar vs Peary Mohan Mukherjee (2), he hold that the scope of the reference under section 18 was limited and new questions not covered by the reference could not be entertained. He reviewed his orders on July 6, 1962, but nothing turns on that in the present appeals. Paramsukhdas filed two revisions, Nos. 294 and 295 of 1962, before the High Court on June 30, 1962. On August 22, 1962, Sunderlal filed an application for withdrawal of Special Civil Application No. 232 of 1960. The High Court, on September 24, 1962, ordered: "Allowed, main petition dismissed as withdrawn. No costs.". Before the High Court a preliminary objection was raised in Civil Revisions Nos. 294 and 295 of 1962, that revisions were not competent because appeals lay against the orders of the Civil (1) A.I.R, 1956 Cal, 263. (2) I.L.R. 367 Judge. The High Court overruled this objection. Regarding the ,claim of Paramsukhdas to be added as a party, the High Court ;held that his application showed that he was not claiming any interest in the lands themselves but was only claiming an interest in the compensation for the land which had been deposited in the Court for payment to the persons concerned, and as such was a person interested, as defined in section 3 (b) of the Act, and he. would, therefore, be entitled to claim that he should be allowed to join as a party. Mr. Desai contends that an attaching creditor is not interested in the amount of compensation as compensation. His interest, he urges, is only to get moneys belonging to the judgment debtor in enforcement of his rights, and accordingly he is not entitled to be made a party to the reference under section 18 of the Act. He further contends that the Court in hearing a reference under section 18 of the Act can only deal with an objection, which has been referred and cannot go into any matter beyond the reference. He con cludes: if this is so, even if Paramsukhdas is ordered to be added a party he would not be able to challenge the compromise between Sunderlal and Khushal Singh. The learned counsel for the respondent, Mr. C. B. Agarwala, controverts these submissions. ,He says that Paramsukhdas is a person interested in the objection within section 20, and is a person affected by the objection within section 21 of the Act. He also relies on 0. XXII r. 10(2), C.P.C., which is made applicable by section 53 of the Act. Before examining the authorities cited at the Bar, it is necessary to examine the scheme and the provisions of the Act insofar as they are relevant to the question of determination of compensation, the question of apportionment of the compensation, and the question as to the persons who are entitled to be heard. Section 3(b) defines the expression "person interested" as follows: "the expression person interested includes all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act, and a person shall be deemed to be interested in land if be is interested in an easement affecting the land. " It will be noticed that it is an inclusive definition. It is not necessary that in order to fall within the definition a person should claim an interest in land, which has been acquired. A person becomes a person interested if he claims an interest in compensation to be awarded. It seems to us that Paramsukhdas is a "person interested" within section 3(b) of the Act because he claims an interest in compensation. But before he can be made a party in a reference it has to be seen whether he comes within s, 20(b) and s.21 of the Act. L/S5SCI 10(a) 368 The scheme of the Act seems to be to first deal with persons who are interested in land. These persons are heard under section 5A of the Act. The ordinary meaning of "the person interested in land" is expanded by section 5A(3), for the purposes of this section, to include a person who would be entitled to claim an interest in compensation. It would be strange to come to the conclusion that the Legislature is keen that a person claiming an interest in compensation should be heard before the land is acquired but is not interested in him after the land is acquired. On the contrary, it follows from section 5A(3) that a person claiming an interest in compensation would be one of the persons whose interests are meant to be safeguarded. It appears from sections 6 to 10 that a person claiming an interest in compensation is not expressly mentioned. But in section 11 he is expressly mentioned, and it is directed that the Collector shall inquire into respective interests of the persons claiming the compensation and shall make an award. Section 12 makes the award final and conclusive as between persons interested, i.e., including persons claiming an interest in compensation. Under section 14 the Collector has power, inter alia, to summon the parties interested. Under section 18 any person interested can claim a reference. A person claiming an interest in compensation would also be entitled to claim a reference. After a reference is made the Court is enjoined under section 20 to determine the objections, and serve, among others, all persons interested in the objection. A person claiming an interest in compensation would, it seems to us, be a person interested in the objection if the objection is to the amount of compensation or the apportionment of compensation, and if his claim is likely to be affected by the decision on the objection. Section 21 restricts the scope of enquiry to a consideration of the interests of the persons affected by the objection. But it does not follow from section 21 that there is any restriction on the grounds which can be raised by a person affected by the objection to protect his interests. The restriction that is laid is not to consider the interests of a person who is not affected by the objection. Section 29 deals with apportionment of compensation, if there is agreement, and section 30 enables the Collector to refer disputes as to apportionment to the Court. From the above discussion it follows that a person claiming an interest in compensation is entitled to be heard under sections 20 and 21 of the Act. The provisions of the Act, including sections 20 and 21, do not prescribe that his claim to an interest in compensation should be "as compensation", as urged by Mr. Desai. This is really a contradictory statement. For, a fortiori, he has no interest in land, and compensation is given for interests in land. He can never claim compensation qua compensation for what he claims is an interest in the compensation to be awarded. This is not to say that a person claiming an interest in compensation may not claim that the compensation awarded for the acquired land is low, if it affects his interests, 369 In the view we have taken we are supported by some autho rities. Shah, J., speaking for the majority in Grant vs State of Bihar,(1) observed: "The right of the State of Bihar arose on May 22, 1952 when the title to the land vested in it by virtue of the notification issued under the Bihar Land Reforms Act. There is nothing in the Land Acquisition Act which prohibits the Collector from making a reference under section 30 for determination of the title of the person who has since the date of the award acquired a right to the compensation. If after a reference is made to the Court the person interested dies and his title devolves upon another person, because of inheritance, succession, insolvency, forfeiture, compulsory winding up or other form of statutory transfer, it would be open to the, party upon whom the title has devolved to prosecute the claim which the person from whom the title has devolved could have prosecuted. In Promotha Nath Mitra vs Rakshal Das Addy(2) it was held that a reference made by the Collector under section 30 of the Land Acquisition Act at the in stance of a proprietor of land may be prosecuted by the purchaser of his rights after the award at a revenue auction. If the right to prosecute a reference by a person on whom the title of the person interested has devolved be granted, there is no reason why the right to claim a reference of a dispute about the person entitled to compensation may not be exercised by the person on whom the title has devolved since the date of the award. The scheme of the Land Acquisition Act is that all disputes about the quantum of compensation must be decided by resort to the procedure prescribed by the Act; it is also intended that disputes about the rights of owners to compensation being ancillary to the principal dispute should be decided by the Court to which power is entrusted. Jurisdiction of the Court in this behalf is not restricted to cases of apportionment, but extends to adjudication of disputes as to the person who are entitled to receive compensation, and there is nothing in section 30 which excludes a reference to the Court of a dispute raised by a person on whom the title of the owner of land has, since the award, devolved. " In Golap Khan vs Bholanath Marick(3) an attaching creditor was directed to be made a party to the reference under the Land (1) ; (2) (3) 370 Acquisition Act, before the Civil Court. Mookerjee, J., observed: "The petitioner was entitled to be added as a party, not under Rule 10, but on the ground that he was a person interested in the subject matter of the litigation and that no order ought to have been made for its disposal without any opportunity afforded to him to establish his claim." In Siva Pratapa Bhattadu vs A.E.L. Mission(1) an attaching creditor was held to be a person interested within section 3(b) of the Act. Mr. Desai relies on Manjur Ahmed vs Rajlakshmi(2) but in that case the point decided by the Court was different. It was held there that if a party to a land acquisition proceeding before the Collector had not obtained a reference under section 18 of the Act, its representative could not do indirectly what they did not do directly, i.e. they could not be added a party in a reference pending at the instance of other parties in order that the nil award against the party might be reversed and in order that they might be awarded a share of the compensation money. Here no such point has been raised. It has not been urged before us that Paramsukhdas was a party before the Collector and that having not applied for a reference under section 18 he is now debarred from being added as a party. The case of Gobinda Kumar Roy Chowdhury vs Debendra Kumar Roy Chowdhury(3) was also decided on the same lines. Similar view was reiterated in Mahammad Safi vs Haran Chandra(4). Both these cases had followed Abu Bakar vs Peary Mahan Mukerjee(5). Maclean, C. J., observed as follows in Abu Bakar vs Peary Mohan Mukerjee(5). "If we read that section in connection with section 20 and section 18, I think it is impossible to avoid the conclusion that the Legislature intended that all that the Court could deal with was the objection which had been referred to it; and this seems to be a view consistent with commonsense and with the ordinary method of procedure in civil cases. The zemindar here could, if he liked, have raised the objection as to the whole com pensation for the trees being given to the tenants, but he did not do so. He must, therefore, be taken to have accepted the award in that respect; and it would be little less than dangerous if we were to hold that the Judge to (1) A.I.R. 1926 Mad. 307. (2) A.I.R. 1956 Cal. 263. (3) C.W.N. 98. (4) (5) 371 whom only one objection was referred could go into all sorts of questions and objections which had not been referred to him. " These three cases are distinguishable inasmuch as they are dealing with the cases of persons who having a right to seek a reference failed to claim that reference but ought to raise the point in a, reference made at the instance of another party. The case of Karuna Sindhu Dhar vs Panna Lal Paramanik(1) also does not assist the appellant. The High Court held in that case that as Rajmohan never claimed the entire compensation money before the Collector, the Land Acquisition Judge was not entitled to vary the awards by a declaration that Rajmohan alone was entitled to get the compensation. It seems to us that Paramsukhdas was clearly a person in terested in the objections which were pending before the Court in the references made to it and that he was also a person whose interest would be affected by the objections, within section 21. He was accordingly entitled to be made a party. In the result we uphold the order made by the High Court in this respect. Mr. Desai says that at any rate direction should be given that Paramsukhdas should not be entitled to challenge the compromise entered into between Sunderlal and Khushal Singh. We are unable to accept this submission. Paramsukhdas is entitled to raise all points to protect his interests which were affected by the objections. It is also in the interest of justice that there should not be multifarious proceedings and all points arising which are not expressly barred under section 21 should be gone into by the Court. This leaves only the two points regarding the jurisdiction of the High Court. In our view, the High Court is quite right in holding that the orders of the Civil Judge, dated April 9, 1962, were not awards within section 54 of the Act. The awards had still to be made. If no appeal lay, then the revisions were competent and the High Court was right in entertaining the revisions because the Civil Judge had either refused to exercise jurisdiction vesting in him or had acted with material irregularity in the exercise of his jurisdiction. In the result the appeals fail and are dismissed with costs in favour of Respondent No. 1; one hearing fee. Y.P. Appeal dismissed.

The land of the appellant was acquired under the Land Acquisition Act, 1894 and the compensation was apportioned between the appellant and his lessee. The appellant claimed that be was entitled to the whole of the compensation while his, lessee claimed a larger share. At their instance, references were made to the Civil Court under section 18 of the Land Acquisition Act, But, before the references were made, the respondent, who was a decree holder against the lessee, attached the lessee 's share of the compensation amount in execution of his decree. Subsequently the respondent withdrew the lessee 's share of the compensation amount in execution of his decree. The appellant and his lessee, filed a compromise petition before the Civil Judge and the respondent also applied to be impleaded as party to the References. The Civil Judge dismissed the respondent 's applications. The respondent thereupon, filed revision petitions in the High Court. The High Court, held: (1) that the respondent was a person interested in the compensation within the meaning of section 3 (b) of the Land Acquisition Act and was therefore entitled to claim that he should be allowed to join as a party; and (ii) that the revision petitions were competent. In appeal, this Court, Held: (i) The respondent was a 'person interested ' within section 3(b) of the Act, because, he was claiming an interest in the compensation. He was also interested in the objections which were pending before the Court in the references made to it and was a person whose interest would be affected by the objections. within section 21 of the Act. Accordingly, he was entitled to be made a party. [367H; 371C D] The definition of 'Person interested ' in section 3 (b) is an inclusive definition and in order to fall within it it is not necessary that a person should claim an interest in the acquired land. It is sufficient if he claims an interest in the compensation to be awarded. A person claiming art interest in the compensation would be a person interested in the objections to be determined under section 20 of the Act, if the objection is to the amount of compensation or the appor tionment of compensation, and if his claim is likely to be affected by the decision on the objection. Under section 21 the interest , of a person who is not affected by the objection are not to be considered but if he is affected, there is no restriction on the grounds which can be raised by him to protect his interest. Therefore, a person claiming an interest in the compensation is entitled to be heard under Ss. 20 and 21. The sections do not prescribe that his claim to an interest in compensation should be as 'compensation '. A person who has no interest in land can never claim compensation qua compensation, for what he claims is an interest in the compensation, to be. 363 awarded. That is not to say that a person claiming an interest in the compensation may not claim that the compensation awarded for the acquired land is low, if it affects his interests. [367G H; 368D H] Grant vs State of Bihar ; , followed. Golap Khan vs Bholanath Marick, , Siva Prasad Bhattadu vs A.E.L. Mission, A.I.R. 1926 Mad. 307 approved. Manjoor Ahmed vs Rajlaxmi Dasi, A.I.R. 1956 Cal. 263 Abu Bakar vs Peary Mohan Mukherjee, I.L.R. , Gobinda Kumar Roy vs Debendra Kumar Roy Mahammad Safi vs Haran Chandra and Karuna Sindhu Dhar vs Panna Lai Paramanik , distinguished. (ii) The High Court was right in holding that the orders of the Civil Judge were not awards within the meaning of section 54 of the Land Acquisition Act; and as they were not awards and no appeals lay, the revisions were competent and the High Court was justified in interfering as the Civil Judge refused to exercise a jurisdiction vested in him. [371F]

Appeals Nos. 118 119of 1956. Appeal from the judgment and decrees dated September 27, 1951, of the Patna High Court in Appeal from Original Decrees Nos. 252 and 254 of 1948, arising out of the judgment and decrees dated May 11, 1948, of the Court of Subordinate Judge Dhanbad in Title Suits Nos. 16 and 50 of 1945 respectively. 1403 M. C. Setalvad, Attorney General for India, Kshitindra Nath Bhattacharya, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellant. N. C. Chatterjee, section C. Bannerjee and P. R. Chatterjee, for respondents Nos. 7 to 13. P. K. Chatterjee, for respondents Nos. 2 4 and 6 (Minors). Gauri Dayal, for respondent No. 5. 1958. February 25. The following Judgment of the Court was delivered by KAPUR J. In these two appeals brought by leave of the Patna High Court against a judgment and two decrees of that court a common and the sole question for decision is one of adverse possession. Two cross suits were ' brought in the Court of the Subordinate Judge, Dhanbad, raising common questions of fact and law. The appellant and respondent Manilal Becharlal Sangvi were defendants in one (Suit No. 16 of 1945) and plaintiffs in the other (Suit No. 50 of 1945). Respondents Nos. 1 3 were the plaintiffs in the former suit and defendants in the latter. The other respondents were defendants in the latter suit and were added as plaintiffs at the appellate stage under 0. 1, r. 10, Code of Civil Procedure in the appeal taken against the decision in the former suit. Both the suits were decreed against the appellant and respondent Manilal Bacharlal Sangvi who took two appeals to the High Court at Patna. Both these appeals were dismissed by one judgment dated September 27, 1951, but two decrees were drawn up. Against this judgment and these decrees the appellant has brought two appeals to this Court which were consolidated and will be disposed of by this judgment. The facts necessary for the decision of these two appeals are that on November 26, 1894 Gang, Narayan Singh, a zamindar and proprietor of pargana Katras granted to Ram Dayal Mazumdar a lease of "the coal and coal mining rights" in two plots of land, one in mouza Katras and the other in mouza Bhupatdih. On November 6, 1894 he granted a similar lease in plots 1404 contiguous to the plots in the lease mentioned above to Bhudar Nath Roy. In Suit No. 32 of 1896 boundaries between these two sets of plots were fixed and this was shown in a map which was incorporated in ,,the decree passed in that suit. On the death of Ram Dayal, his sons Prafulla, Kumud, Sarat, Sirish and Girish inherited the leasehold rights which they on October 19, 1918, granted by means of a registered patta and kabulliat to Lalit Mohan Bose for a term of 999 years. One Bennett who along with one Bellwood had obtained a coal mining lease from Raja Sakti Narayan Singh of Katrasgarh on September 5, 1917, trespassed on the northern portion of the land within the area leased to Lalit Mohan Bose and sank two inclines and two airshafts and dug out coal from this area. This gave rise to a dispute between the parties which was amicably settled and the area trespassed was returned to the possession of Lalit Mohan Bose. This fact was denied by the appellant and Manilal Becharlal Sengvi respondent in their written statement and in their plaint. Lalit Mohan Bose died in 1933 leaving a will of which the executors were his widow, Radha Rani and his brother Nagendra Nath Bose. They leased out 17 bighas of land in possession of Lalit Mohan Bose to Keshabji Lalji in 1933. The remaining portion of the area leased to Lalit Mohan Bose was given on lease on March 15, 1938, to Brojendra Nath Ghose and Vishwa Nath Prasad respondents and to Ram Chand Dubey but the possession thereof had been given to them in July 1937 and they (the above two respondents) and Ram Chandra Dubey carried on colliery business in the name and style of West Katras Colliery. On the death of Ram Chandra Dubey his estate was inherited by his sons and widow who on June 25, 1944, sold their right, title and interest to Nagendra Nath Bose. These three, i.e., Brojendra Nath Ghose, Vishwa Nath Prasad and Nagendra Nath Bose were the plaintiffs in Suit No. 16 of 1945. As stated above Raja Sakti Narayan Singh leased an area of 256 bighas to Bennett and Bellwood on September 5, 1917, and they assigned their rights to 1405 the New Katras Coal Company Limited. This Company worked the coal mine for some time but went into liquidation and in Execution Case No. 293 of 1922 the right, title and interest of the company were sold and purchased by Nanji Khengarji father in law. of Shrimati Kashi Bai appellant and by one Lira Raja. In August 1923 Nanji Khengarji and Lira Raja effected a partition, the western portion of the leased coal field fell to the share of Nanji Khengarji and the eastern portion to Lira Raja. The former carried on the business in the name and style of Khengarji Trikoo & Co. and the Colliery came to be known as Katras New Colliery. On the death of Nanji Khengarji in 1928 his son Ratilal Nanji inherited the estate and on his death in September 1933 the estate passed to the appellant reemati KashiBai,widow of Ratilal. In December 1944 she (Sreemati Kashi Bai) entered into a partnership with Manilal Becharlal Sengvi respondent. On March 24, 1945 Brojendra Natb. Ghose, Vishwa Nath Prasad and Nagendra Nath Bose respondents Nos. 1 3 as plaintiffs Nos. 1 3 brought a suit (Suit No. 16 of 1945) against Sreemati Kashi Bai, defendant No. 1, now appellant and against Manilal Becharlal Sengvi defendant No. 2 now respondent No. 10 for fixation of the intermediate boundary and for possession of the area trespassed upon by the defendants and for compensation for coal illegally removed by the latter and also for an injunction. They alleged that the defendants had wrongfully taken possession of the area in dispute shown in the map attached to the plaint and had illegally removed coal from their mine. The defendants in their written statement of June 29, 1945, denied the allegations made by the plaintiffs. They pleaded that the area in dispute was acquired by Nanji Khengarji and Lira Raja and had been worked by them and they had been in sole, exclusive, uninterrupted and undisturbed possession of the area openly to the knowledge of the plaintiffs in that suit and had therefore acquired title by adverse possession. The claim of ownership which they had set up as a result 1406 of acquisition from Bennett and Bellwood was negatived by the courts below and is no longer in dispute before us, the sole point that survives being one of adverse possession. The cross suit No. 50 of 1945 was brought by the defendants in Suit No. 16 of 1945, i.e., Shrimati Kashi Bai (appellant) and Manilal Becharlal Sengvi (respondent) against the three plaintiffs of suit No. 16 of 1945 (respondents Nos. I to 3) and against heirs of Lalit Mohan Bose and against Purnendu Narayan Singh son of the original grantor Raja Sakti Narayan Singh. The allegations by the plaintiff in this suit ( No. 50 of 1945) were the same as their pleas as defendants in Suit No. 16 of 1945. The two suits were tried together with common issues. The learned Subordinate Judge decreed Suit No. 16 of 1945 and dismissed Suit No. 50 of 1945 which were thus both decided in favour of respondents Nos. I to 3. He held that the land in suit was included in the area leased to respondents Nos. I to 3, i.e., Brojendra Nath, Vishwa Nath Prasad and Nagendra Nath Bose and therefore the area in which two inclines of seam No. 9 were situate formed part of the area leased to them and that encroachment by the appellant and Manilal Becharlal Sengvi respondent on the land in dispute was proved. As to adverse possession he held that the two inclines and airshafts had been sunk in 1917 by Bennett in seam No. 9; that there had been no continuous working of the seam by Khengarji Trikoo & Co., except from the year 1923 to 1926 and from 1931 to 1933, working was again begun in 1939 but how long it was continued had not been proved and that the working of this seam had restarted in 1944. He also found that the disputed area was confined to seam No. 9. From these facts he was of the opinion that there was no dispossession of the respondents Nos. 1 to 3 and no adverse possession had been established as against them. He further held that the working of a part of seam (No. 9) would not give to the trespasser the right to the entire seam even if continuous possession was proved. In regard to compensation the learned Subordinate Judge held that 1407 respondents Nos. I to 3 were entitled to it as from December 1944 and the amount would be determined by the appointment of a Commissioner in a subsequent proceeding. The High Court on appeal confirmed the findings of the trial Court and held that the land in dispute was part of the land leased to respondents Nos. I to 3; that the appellant and Manilal Becharlal Sangvi respondent had encroached upon the land in dispute; that the working of the seam had not been continuous and it had only been worked for the periods mentioned above. The High Court also held that even if there was continuous possession and working of the mine no title by adverse possession could be acquired to the whole of the mine. In the High Court the validity of the lease in favour of the respondents Nos. I to 3 was raised because of section 107 of the Transfer of Property Act but as the question had not been raised or agitated in the trial Court, the High Court allowed defendants 4 to 10 of Suit No. 50 of 1945 to be added in the appeal arising out of Suit No. 16 of 1945 " for complete adjudication of the issues and to avoid multiplicity of proceedings ". This question is also no longer in dispute before us. The appellant has brought two appeals against the judgment and two decrees of the High Court of Patna. As the question of ownership of the land in dispute has been decided in favour of the respondents by both the courts below, that question has not been raised before us and the controversy between the parties is confined solely to the question of adverse possession. On behalf of the appellant the learned AttorneyGeneral submitted that the carrying on of the mining operations in the area in dispute even though intermittent as found by the courts below could only lead to one inference that the possession of the area as well as of the mine was of the appellant and as she had prescribed for the requisite period of 12 years, her possession had matured into ownership by adverse possession. In our opinion the operations carried on by the appellant were inconsistent with the continuous, open and hostile possession or with the assertion of 1408 hostile title for the prescribed period of 12 years necessary to constitute adverse possession. It was contended that for the purpose of adverse possession in regard to a coal mine it was not necessary that it should have been worked for 12 years continuously and it was sufficient if the appellant had carried on mining operations for a period of 12 years even with long stoppages as in the instant case. But we are unable to accept this contention. Even though it may not be necessary for the purpose of establishing adverse possession over a coal mining area to carry on mining operation continuously for a period of 12 years, continuous possession of the mining area and the mine would be a necessary ingredient to establish adverse possession. What has been proved by the appellant is that the two inclines opened by Bennett were worked in 1917 or 1918 by the predecessor in interest of the appellant, there were no mining operations till 1923 when they were restarted and were continued till 1926. The operations ceased in 1926 and were recommenced in 1931 and carried on till 1933 when they ceased again till 1939 and whether they were carried on in 1939 or not is not quite clear but there were no operations from 1939 to 1944 when they were recommenced by the appellant, During the period when there were no mining operations no kind of possession of the appellant has been proved and thus the presumption of law is not rebutted that during the period when the operations had ceased to be carried on the possession would revert to the true owner. Nageshuar Bux Roy vs Bengal Coal Co. (1) which was relied upon by the learned Attorney General does not support his contention. In that case the company claiming adverse possession had placed facts which were consistent with the assertion of rights to minerals in the whole village to which the company claimed adverse possession. They openly sank pits at three different places, two of them being 1/2 mile distant from the 3rd. The company selected the places where they were to dig up the pits at their own discretion, (1) [1930] L.R. 58 I.A. 29, 1409 brought their plant or machinery on the ground and erected bungalows for their employees. There was no concealment on the part of the company and they behaved openly as persons in possession of not one pit but all mineral fields underlying the whole village and they throughout claimed to be entitled to sink pits anywhere in the village they chose. The, company was under a bona fide belief that under their lease they were entitled to work the minerals anywhere in the area. In these circumstances the Privy Council held the suit to be barred by article 144 of the Limitation Act as the company had been in adverse possession of the minerals under the whole village for more than 12 years. It was pointed out by Lord Macmillan at p. 35, "possession is a question of fact and the extent of possession may be an inference of fact ". And at p. 37 it was observed: " Their Lordships are not at all disposed to negative or to weaken the principle that as a general rule where title is founded on an adverse possession the title will be limited to that area of which actual possession has been enjoyed. But the application of this general rule must depend upon the facts of the particular case. " The finding in favour of adverse possession in that case must be confined to the facts of that particular case. Another case relied upon by the learned AttorneyGeneral was Secretary of State for India vs Debendra Lal Khan(1). There a zamindar claimed title to a fishery in a navigable river by adverse possession against the Crown. It was held that possession may be adequate in continuity so as to be adverse even though the proved acts of possession do not cover every moment of the period. That was a case dealing with fisheries. It is true that to establish adverse possession nature of possession may vary. In the instant case no such possession has been proved which taking into consideration the nature of possession and the nature of the object possessed would lead to the only inference that the appellant had perfected her (1) [1933] L.R. 61 I.A. 78. 1410 title by adverse possession. Intermittent working of the mine in the manner and for the period described above is wholly insufficient to establish possession which would constitute adverse possession or would lead to an inference of adverse possession and we are in agreement with the view expressed by the High Court and would therefore dismiss these appeals with costs. One set of costs between the two appeals except as to Court fees. Appeals dismissed.

The appellants and the respondents were lessees of coal mining rights in adjoining areas. In 1917 the predecessors in interest of the appellants trespassed into a portion Df the lands leased to the predecessors in interest of the respondents, sank two inclines and two air shafts and (lug out coal therefrom. There were no mining operations till 1023 when they were restarted and continued till 1926, and were recommenced in 1931 and carried on till 1933. In 1939 the mine was worked for a short time. In 1944 the operations were recommenced by the appellants. In 1945 the respondents brought a suit for fixation of the intermediate boundary, for possession of the area trespassed upon and for compensation for coal illegally removed by the appellants. The appellants contended, inte alia, that they had been in sole, exclusive, uninterrupted possession of the area in dispute openly to the knowledge of the respondents and had acquired title by adverse possession: Held, that the intermittent working of the mine in the manner and for the period carried out by the appellants or their predecessors in interest was wholly insufficient to establish possession which could constitute adverse possession. During the period when there were no mining operations no, kind of possession of the appellants was proved and the presumption that during such periods possession reverted to the true owner was not rebutted. Nageshwar Bux Roy vs Bengal Coal CO , [1930] L.R. 58 I.A. 29 and Secretary of State for India vs Debendra Lal Khan, [1933] L.R. 61 I.A. 78, distinguished.

ivil Appeal No. 3255 of 1989. From the Judgment and Order dated 29.7.1985 of the Bombay High Court in W.P. No. 2137 of 1979. V.A. Bobde, S.D. Mudaliar and A.G. Ratnapaxkhi for the Appellant. S.K. Dholakia, A.S. Bhasme and A.M. Khanwilkar for the Respondents. For the Respondent No. 4 in person (not present). The Judgment of the Court was delivered by SHARMA, J. Notice for final disposal of the case was served on the respondents. Heard the learned counsel for the parties. Special leave is granted. This case is dependent on the correct meaning and scope of Rule 59 of the Mineral Concession Rules, 1960 (hereinafter referred to as the Rules). A certain area in village Bazargaon, District Nagpur was reserved for Nistar purposes (that is, for grazing of cattle etc.). The respond ent No. 4 applied for grant of a mining lease in regard to the said area which was allowed. The appellant, who is a local resident, challenged the allotment on the ground that the procedure for settlement as laid down in Rule 59 read with Rule 58 was not followed before the grant. Rule 58 deals with availability of areas for re grant of a mining lease and requires an entry to that effect to be made in a 832 register referred to in Rule 21(2) of the Rules, and a notification to be published in the official gazette at least 30 days in advance. The purpose obviously is to enable the members of general public to apply for the proposed lease. Rule 59 directs the procedure in Rule 58 to be fol lowed in the cases mentioned thereunder in the following terms: "59. Availability of certain areas for grant to be notified In the case of any land which is otherwise available for the grant of a prospecting licence or a mining lease but in respect of which the State Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved for any purpose, the State Government shall, as soon as such land becomes again available for the grant of a prospecting licence or mining lease, grant the licence or lease after following the procedure laid down in rule 58. " The appellant contends that as the prescribed procedure had not been followed, the grant in favour of the respondent No. 4 is illegal and fit to be set aside. ' 4. Admittedly the disputed area was reserved for Nistar purposes and when an application for grant of mining lease was earlier made by a third party it was rejected on the ground that it was so~ reserved. Further, there is no dis pute that before the impugned grant was made in favour of the respondent No. 4 the procedure prescribed by Rule 58 was not followed, and no opportunity was given to any other person before entertaining the request of the respondent No. 4. The question in this background is whether Rule 59 is attracted to the case. The appellant 's application under Article 226 of the Constitution was dismissed by the Bombay High Court on the ground that Rule 59 was confined to cases where earlier reservation was made for mining purposes. The stand of the respondents that the expression "reserved for any purpose" in rule 59 does not cover a case where the area was reserved for Nistar purposes or for any purpose other than that of mining was accepted. Earlier the expression "reserved for any purpose" was followed by the words "other than prospecting or mining for minerals", which were omitted by an amendment in 1963. Mr. Dholakia, learned counsel for the respondents, appearing in support of the 833 impugned judgment, has contended that as a result of this amendment the expression must now be confined to cases of prospecting or mining for minerals and all other cases where the earlier reservation was for agricultural, industrial or any other purpose must be excluded from the scope of the rule. We are not pursuaded to accept the suggested interpre tation. Earlier the only category which was excluded from the application of Rule 59 was prospecting or mining leases and the effect of the amendment is that by omitting this exception, prospecting and mining leases are also placed in the same position as the other cases. We do not see any reason as to why by including in the rule prospecting and mining leases, the other cases to which it applied earlier would get excluded. The result of the amendment is to extend the rule and not to curtail its area of operation. The words "any purpose" is of wide connotation and there is no reason to restrict its meaning. We do not see any ground for limiting the scope of the rule so as to deprive the members of general public to approach the State with competitive terms. It is clearly in the public interest to notify the proposal to grant a mining lease, so that the best deserving person may have a chance to be considered. The State and its authorities will, in that case, have the choice of selecting the most suitable person by following the just and equitable criteria laid down by the Rules. If, on the other hand, the rule is con strued as suggested by the respondents, a resourceful appli cant can succeed in striking an un deserved bargain to the prejudice of the public interest. We are, therefore, of the view that Rule 59 covered the present case and the grant in favour of the respondent No. 4 was illegally made in violation of Rule 58. According ly, the appeal is allowed, the judgment of the High Court is set aside and the decision to grant the mining lease in question to the respondent No. 4 is quashed. The State Government may now issue a notification and take other steps in accordance with law before proceeding further. There will be no order as to costs. P.S.S. Appeal allowed.

Rule 58 of the Mineral Concession Rules, 1960, which deals with availability of areas for regrant of a mining lease, requires a notification to be published in the offi cal gazette at least 30 days in advance. Rule 59 directs the procedure laid down in Rule 58 to be followed in the case of any land in respect of which the State Government had re fused to grant a prospecting licence or a mining lease on the ground that it was required to be reserved for any purpose. The expression "reserved for any purpose" was earlier followed by the words "other than prospecting or mining for minerals", which was omitted by an amendment in 1963. An application for grant of mining lease in respect of the disputed area had been rejected earlier on the ground that it was reserved for some other purpose. Subsequently, however, a mining lease in regard to the said area was granted in favour of respondent No. 4. The appellant chal lenged the allotment on the ground that the procedure for settlement as laid down in Rule 59 read with Rule 58 was not followed before the grant. The High Court dismissed that application on the ground that Rule 59 was confirmed to cases where earlier reservation was made for mining pur poses. Allowing the appeal, HELD: 1. The grant of mining lease in favour of respond ent No. 4 was illegally made in violation of Rule 58 of the Mineral Concession Rules, 1960. [833E F] 2.1 Rule 59 covered the instant case. Earlier the only category which was excluded from the application of this Rule was prospecting 831 or mining leases. The effect of the 1963 amendment is that by omitting the words "other than prospecting or mining for minerals", prospecting and mining leases have also been placed in the same position as the other cases. The other cases to which the Rule applied earlier have not thus been excluded. [833E B] 2.2 It is clearly in the public interest to notify the proposal to grant a mining lease. The State and its authori ties will, in that case, have the choice of selecting the most suitable person by following the just and equitable criteria laid down by the Rules. [833D]

ivil Appeal No. 4083 of 1986 110 From the judgment and order dated 13.4.1984 of the Andhra Pradesh High Court in C.R.P. No. 3072 of 1983. Dr. Y.S. Chitale, G.N. Narayan and N. Nittar for the Appel lant. T.S. Krishnamurthy Iyer, T.V.S.N. Chaff and Ms. V. Grover for the Respondent; The Order of the Court was delivered by PATHAK, J. This appeal is directed against the judgment and order of the High Court of Andhra Pradesh disposing of a revision petition filed by the Appellant in execution pro ceedings. The Appellant is a contractor, who entered into two agreements with the Government of the State of Andhra Pra desh for providing B.T. Macadam wearing coat and seal coat along two stretches of the Hyderabad Vijayawada National Highway. While the work was in progress, the contractor made certain claims in respect of the loss suffered on account of delay, escalation of rates and other heads. The claims were referred to arbitration. On September 4, 1979 the Arbitrator held the contractor entitled to a sum of Rs.99,00,000 under five heads of claim. The contractor applied to the Civil Court for making the award a rule of the Court while the State Government prayed for setting aside the entire award. The Civil Court set aside the award and refused to pass a decree in terms of the award. The contractor appealed to the High Court, and on April 19, 1982 the High Court allowed the appeal to the extent of one of the claims only, the claim being for loss of profit in the sum of Rs. 16,00,000 togeth er with interest. The appeal was dismissed in respect of the other heads of claim. For the realisation of the amount due under the decree the contractor filed Execution Petition No. 48 of 1982 before the V Additional Judge, City Civil Court, Hyderabad claiming recovery of Rs. 16,00,000 towards the decretal amount, Rs.7,80,000 towards interest in terms of the award up to the date of the execution petition and Rs.8,691 to wards costs of the Execution Petition. The State Government filed objections, contending inter alia that a sum of Rs.22,91,332 was recoverable by it from the contractor and claimed adjustment against the amount due to the contractor under the said decree. It urged that after adjusting the amount due to the State Government the balance payable to the contractor would stand reduced to Rs.76,667. This sum 111 together with the other deposits of the contractor with the Government and refundable to him, viz. Rs.3,92,236 was deposited in the Executing Court. The contractor withdrew the amount without prejudice to his rights to contest the adjustment. The Executing Court held that the State Govern ment was entitled to set off the amounts claimed by it, and accordingly adjourned the Execution Petition for further proceedings. The contractor filed a revision petition before the High Court and contended that the State Government was not enti tled to claim adjustment in execution proceedings. It was pointed out that the sum of Rs.22,91,332 of which adjustment was sought by the State Government against the amount for which the contractor had taken out execution, consisted of (a) an amount of Rs.10,21,800 claimed by the State Govern ment as due to it upon the preparation of the final bill in respect of the contracts covered by the award and (b) an amount of Rs. 12,69,532 claimed by the State Government under a separate contract on the ground that the contractor had committed a breach of that contract. The contractor disputed both claims. He contended that the final bill in respect of the earlier contract had been prepared in his absence and that he challenged the inclusion of several items in that bill. In regard to the latter amount he urged that he was not guilty of any breach of contract. The High Court has found that so far as the first claim to adjustment was concerned the State Government was justi fied in making it because the arbitration was effected while the work was still in progress and the contract was in the process of execution by the contractor, and having regard to clause 68 of the agreement final payment had to be made to the contractor after taking into account the amount which had been received by him earlier. The second claim to ad justment was made by the State Government under another contract, and the High Court justified that claim by refer ence to clause 71 of that contract, which permitted the Government to retain or deduct money due under the contract from an amount due to the contractor under any other con tract. However, it held that the adjustments claimed by the State Government could not be made against the decretal amount but must await determination upon due arbitration. Learned counsel for the Appellant contends before us that the State Government is not entitled to a set off at all because, he says, a set off can be claimed only under Order 21 Rule 18 of the Code of Civil Procedure and that provision does not apply in terms to the present 112 case. Learned counsel for the respondent urges, on the other hand, that the power of the Court extends to granting an equitable set off in appropriate cases, and the High Court was therefore justified in making the order which it did. We have no doubt that in certain cases the Court has the power to allow a set off even in cases which do not strictly fall within the terms of Order 21 Rule 18 of the Code. A Full Bench of the Andhra Pradesh High Court has discussed the matter in Bhoganadham Seshaiah vs Budhi Veerabhadrayya (died) and Others, AIR [1972] Andhra Pradesh 134 and has examined at some length the circumstances in which such set off may be granted. The facts before us, however, call for a somewhat different consideration. So far as the first claim to adjustment is concerned, the matter is covered by clause 68 of the contract. What was awarded to the contractor under the decree was an amount relating to a part only of the work entrusted to him. The contract was still in the process of execution. Any amount claimed by him for such work was subject to a final settlement of account on the preparation of the final bill. The right to payment depended on the terms of the contract. Any payment made while the contract was still being worked out was in the nature of a provision al payment. It was always subject to adjustment against amounts found due against the contractor on preparation of the final bill. Such adjustment was implied in the very terms of the contract. Therefore, in regard to the adjust ment claimed by the State Government on the first count the High Court is right, in our opinion, in holding that the amount claimed by the State Government, as determined on arbitration, was entitled to a set off against the decretal amount claimed by the contractor, and that payment of the decretal amount was to be subject to such adjustment. In regard to the claim to adjustment on the second count the position is more controversial. The claim is rounded in the doctrine of equitable set off, but we do not find evi dence before us to bring the case within the operation of the doctrine. It is not a case where cross demands rise out of the same transaction or the demands are so connected in their nature and circumstances that they can be looked upon as part of one transaction. Nor can assistance be derived from clause 71. The benefit of that provision can be claimed only if the amount sought to be retained is an ascertained sum, an amount which can be readily adjusted against the amount payable under the other contract. Here, the amount sought to be adjusted has yet to be determined as a liabili ty against the contractor. It has been disputed by the appellant. Accordingly, clause 71 cannot be invoked. In the result, the decision 113 of me High Court in respect of the adjustment of Rs. 12,69,532 cannot be sustained. In the circumstances, the appeal is allowed in part, the judgment and order of the High Court is modified in so far that while the adjustment claimed by the State Government on the basis of the final bill relating to the contract covered by the award is maintained, the direction in respect of the adjustment of the claim made under the other contract is set aside. The parties will bear their own costs. P.S.S. Appeal al lowed.

The appellant contractor entered into two agreements with the respondent State for carrying out certain road repairing works. Clause 68 of the agreement provided for preparation of the final bill of the contractor after taking into account amounts received by him earlier, while clause 71 permitted the State to retain or deduct money due under the contract from an amount due to the contractor under any other contract. While the work was in progress the contrac tor made certain claims in respect of loss suffered on account of delay, escalation of rates and other heads. The arbitrator held the contractor entitled to Rs.99 lacs. The civil court refused to pass a decree in terms of the award. The High Court on appeal allowed the claim to the extent of Rs.16 lacs together with interest. The contractor claimed recovery of decretal amount with interest in terms of the award and cost of execution proceedings. The respondent State contested the claim contending that a sum of Rs.22 lacs was recoverable from the appellant and claimed adjust ment against the amount due under the decree. The Executing Court held the respondent State entitled to set off. In the revision petition before the High Court it was contended for the appellant that the respondent State was not entitled to set off in execution proceedings, and that the sum of which adjustment was sought consisted of (a) an amount claimed by respondent State as due to it upon prepa ration of the final bill in respect of the contracts covered by the award, and (b) an amount claimed by the respondent State under a separate contract on the ground that the appellant had committed a breach of that contract. The High Court having regard to cl. 68 of the agreement found the respondent State entitled to set off so far as the first claim was concerned. It justified the second claim also by reference to cl. 71 of the contract but held that adjustment claimed could not be made against the decretal amount but must await determination upon the arbitration. 109 In this appeal by special leave it was contended that Order 21, Rule 18 of the Code of Civil Procedure, under which a set off can be claimed, does not apply in terms to the present case. Allowing the appeal in part, the Court, HELD: 1. The Court has the power to allow a set off in certain circumstances even in cases which do not strictly fail within the terms of Order 21, Rule 18 of the Code of Civil Procedure. [112B] Bhoganadham Seshaiah vs Budhi Veerabhadrayya (died) & Ors., AIR 1972 Andhra Pradesh 134, approved. The respondent State 's claim to adjustment of the amount due to it upon the preparation of the final bill is covered by cl. 68 of the contract. What was awarded to the contractor under the decree was an amount relating to a part only of the work entrusted to him. The contract was still in the process of execution. Any amount claimed by him for such work was subject to a final settlement of account on the preparation of the final bill. The fight to payment depended on the terms of the contract. Any payment made while the contract was still being worked out was in the nature of a provisional payment. It was always subject to adjustment against amounts found due on preparation of the final bill. Such adjustment was implied in the very terms of the con tract. The High Court was, therefore, right in holding that the amount claimed by the State Government on this count was entitled to be set off against the decretal amount claimed by the contractor. [112C E] 3.1 The claim to adjustment of the amount claimed on breach of another contract is rounded in the doctrine of equitable set off but there is no evidence on record to bring the case within the operation of the doctrine. It is not a case where cross demands rise out of the same transac tion, or the demands are so connected in their nature and circumstances that they can he looked upon as part of one transaction. [112F G] 3.2 The benefit of cl. 71 of the contract can be claimed only if the amount sought to. he retained is an ascertained sum, an amount which can be readily adjusted against the amount payable under the other contract. In the instant case, the amount sought to be adjusted had yet to be deter mined as a liability against the contractor. The decision of the High Court cannot, therefore, he sustained. [112GH, 113A]

Civil Appeal No. 136 of 1958. Appeal by special leave from the decision dated April 30,1956, of the Labour Appellate Tribunal of India at Lucknow in Appeeal No. III 45 of 1956, lip 919 arising out of the award dated February 6, 1956 of the State Industrial Tribunal, Allahabad, in reference No. 96 of 1955. Ram Lal Anand, I.M. Lal and section section Sukla, for the appellants. B. D. Sharma, for respondents Nos. 1 to 5. C.P. Lal and G. N. Dikshit, for respondent No. 6. 1960. February 9. The Judgment of the Court was delivered dy SUBBA RAO, J. This is an appeal by special leave against the order of the Labour Appellate Tribunal of India setting aside the award of the Industrial Tribunal, Allahabad, and directing the reinstatement of the workers in Kundan Sugar Mills at Amroha. " Kundan Sugar Mills " is a partnership concern and owns a sugar mill at Amroha. The respondents I to 4 were employed by the appellant as seasonal masons in the year 1946. In 1951 the partners of the appellant Mills purchased the building machinery and other equipment of another sugar mill at Kiccha in the district of Nainital. They closed the said mill at Kiccha and started it at Bulandshahr. The new factory was named Pannijee Sugar & General Mills, Bulandshahr. On January 19, 1955, the General Manager of the appellant Mills ordered the transfer of the respondents I to 4 from the appellant Mills to the new mill at Bulandshahr. The said respondents through their representative, the fifth respondent, protested to the General Manager against the said transfer. But the General Manager, by his letter dated January 22/24, 1955, insisted upon their joining the new mill at Bulandshabr. But the said respondents did not accede to his request. On January 28, 1955, the General Manager served a notice on the respondents 1 to 4 stating that they had disobeyed his orders and thereby committed misconduct under Standing Order No. L(a). They were asked to submit their explanation as to why action should not be taken against them under the Standing Order. The Labour Union, by its letter dated January 31, 1955, denied the charges. On February 2, 1955, the General Manager made an order dismissing the respondents 1 to 4 from service on the ground that 117 920 they had disobeyed his order of transfer and thus they were guilty of misconduct under Standing Order No. LI(a). The Labour Union thereafter raised an industrial dispute and the Government of U.P. by its notification dated November 7, 1955, referred the following issue for decision to the State Industrial Tribunal for U, P. at Allahabad: " Whether the employers have wrongfully and/or unjustifiably terminated the services of Sarva Shri Zia Uddin, Raisuddin, Shafiquddin and Ahmed Bux for refusal to obey the orders of tranfer to M/s. Pannijee Sugar and General Mills Co., Bulandshahr. If so, to what relief are the workmen entitled. " The State Industrial Tribunal by its order dated February 6, 1956, made its award holding that the management was within its rights and that, as the respondents 1 to 4 had disobeyed the order of the management, they were properly dismissed by the management. The said respondents through their Union, respondent No. 5, perferred an appeal to the Labour Appellate Tribunal of India and the said Appellate Tribunal held that the management had no right to transfer the respondents 1 to 4 to the new factory and therefore the order dismissing them was illegal. The management has preferred the present appeal against the said order of the Labour Appellate Tribunal. Learned counsel for the appellant raised before us the following two questions: (1) The right to transfer an employee by an employer from one of his concerns to another is implicit in every contract of service; (2) the State Industrial Tribunal having held that both the concerns, i.e., the mills at Amroha and the mills at Bulandshahr, formed one unit, the Appellate Tribunal had no jurisdiction to set aside that finding under section 7(1) of the Industrial Disputes (Appellate Tribunal) Act, 1950. To appreciate the first contention, it is necessary to notice the undisputed facts in this case. It is true that the partners of the Sugar Mills at Amroha own also the Sugar Mills at Bulandshahr; but they were proprietors of the former Mills in 1946 whereas they purchased the latter mills only in the year 1951 and 921 started the same in Bulandshahr in or about 1955. The respondents 1 to 4 were employed by the owners of the appellant Mills at the Sugar Mills at Amroha at a time when they were not proprietors of the Sugar Mills at Bulandshahr. It is conceded that it was not an express term of the contract of service between the appellant and the respondents I to 4 that the latter should serve in any future concerns which the appellant might acquire or start. It is also in evidence that though the same persons owned both the Mills they were two different concerns. In the words of the Appellate Tribunal, the only connection between the two is in th identity of ownership and, but for it, one has nothing to do with the other. It is also in evidence that an imported workman at Amroha is entitled to house rent, fuel, light and travelling expenses both ways, while at Bulandshahr the workmen are not entitled to any of these amenities. The workmen at Amroha are entitled to benefits under the Kaul Award while those at Bulandshahr are not so entitled. The General Manager, E.W.1, in his evidence stated that the interim bonus of the Bulandshahr factory as ordered by the Government in November 1955 was Rs. 1 1,000 while for Amroha it: was nearly 1 1/2 lacs ". He also stated that "the bonus for last year at Amroha would be probably equal to II months ' wages and at Bulandshahr equal to about 4 or 5 days ' wages. " It is also in evidence that apart from the disparity in the payment of bonus, the accounts are separately made up for the two mills. It is clear that the two mills are situated at different places with accounts separately maintained and governed by different service conditions, though they happened to be under the common management; therefore, they are treated as two different entities. The question of law raised in this case must be considered in relation to the said facts. The argument of the learned counsel for the appellant that the right to transfer is implicit in every contract of service is too wide the mark. Apart from any statutory provision, the rights of an employer and an employee are governed by the terms of contracts between them or by the terms necessarily implied therefrom. It is 922 conceded that there is no express agreement between the appellant and the respondents where under the appellant has the right to transfer the respondents to any of its concerns in any place and the respondents the duty to join the concerns to which they may be transferred. If so, can it be said that such a term has to be necessarily implied between the parties ? When the respondents 1 to 4 were employed by the appellant, the latter was running only one factory at Amroha. There is nothing on record to indicate that at that time it was intended to purchase factories at other places or to extend its activities in the same line at different places. It is also not suggested that even if the appellant had had such an intention, the respondents I to 4 had knowledge of the same. Under such circumstances, without more, it would not be right to imply any such term between the contracting parties when the idea of starting new factories at different places was not in contemplation. Ordinarily the employees would have agreed only to serve in the factory then in existence and the employer would have employed them only in respect of that factory. The matter does not stop there. In the instant case, as we have indicated, the two factories are distinct entities, situated at different places and, to import a term conferring a right on the employer to transfer respondents I to 4 to a different concern is really to make a new contract between them. The decisions cited at the Bar do not in the least sustain the appellant 's broad contention. In Alexandre Bouzourou vs The Ottoman Bank (1) the appellant was an employee of the respondent bank. The bank transferred him from one branch to another branch of the bank situated in different towns. As he refused to comply with the order of transfer, he was dismissed. Thereafter, he filed a suit to recover damages from the bank for wrongful dismissal. It was argued before the Judicial Committee that under the terms of his contract of service the sphere of his employment included only the head office and not the branches of the bank. The evidence in that case showed that transfer was one of the ordinary incidents of the bank 's employment, being usually concurrent with an (1) A.T.R. , 119. 923 increase of salary and responsibility, and suggest no more than that the bank considered their officials convenience where possible. Indeed the appellant therein did not even suggest in his correspondence thatthe transfer was a breach of his contract. On these circumstances the Judicial Committee observed as follows at p. 119: " From the point of view of proper organization of their staff it is difficult to assume that the Bank would willingly agree that their employees should not be bound to serve outside the place where the contract was made except with their consent, and, in their Lordships ' opinion such a condition of the contract would require to be clearly established. " The essential distinction between that case and the present one is that there the bank with its branches was one unit and the records clearly indicated that transfer was one of the ordinary incidents of service in the Bank. In such circumstances when a person joined such a service, the Privy Council found it easy to imply a term of transfer. That decision is therefore not of any relevancy to the present case. In Mary (Anamalai Plantation 'Workers ' Union) vs Seliparai estate (2), labour was recruited in the plantations without any differentiation being made between factory and field workers and it had been the common practice prevailing for several years to transfer the factory workers to the field and vice versa, according to the exigencies of work. A worker who had been appointed in such a plantation was transferred, owing to mechanisation in the factory, from the factory to the field. The Labour Appellate Tribunal of India held that in the circumstances of the case the liability to be so transferred must be deemed to be an implied condition of service. So too in Bata Shoe Company, Ltd. vs Ali Hasan (Industrial Tribunal, Patna & Ors.) (3) transfer of an employee in the circumstances of that, case from one post to another was held not to be an alteration of any service condition within the meaning of section 33 of the Industrial Disputes Act. That was a case of a management employing a worker in one concern and transferring him from one post to (2) [1956] I.L.L.J. 343. (3) 924 another. In such a case it was possible to imply the condition of right of the management to transfer the employee from one post to another. section N. Mukherjee vs Kemp & Co. Ltd. (4) was a case arising out of section 23 of the Industrial Disputes (Appellate Tribunal) Act, 1950. The complaint there was that an employee was transferred by the management with a view to victimize him and that it amounted to alteration in the conditions of employment. It was held that if an employer employed a person it was implicit in the appointment that he could be transferred to any place where the business of the employer in the same line was situated, unless there was an express condition to the contrary in the contract of employment. In that case the worker was employed by Kemp & Co., Limited, which had branches in different places. The decision assumed that the business was one unit and that the only question raised was that he should not be transferred to a place different from the place where he was actually discharging his duties. These observations must be limited to the facts of that case. It is not necessary to multiply the citation, for the other decisions relied on by the learned counsel for the appellant pursue the same reasoning followed in the aforesaid cases. We have referred to the decisions only to distinguish them from the present case, and not to express our opinion as to the correctness of the decisions therein. It would be enough to point out that in all the said decisions the workers had been employed in a business or a concern and the question that arose was whether in the circumstances of each case the transfer from one branch to another was valid or amounted to victimization. None of these decisions deals with a case similar to that presented in this appeal, namely, whether a person employed in a factory can be trans ferred to some other independent concern started by the same employer at a stage subsequent to the date of his employment. None of these cases holds, as it is suggested by the learned counsel for the appellant, that every employer has the inherent right to transfer his employee to another,place where he chooses to start (4) 925 a business subsequent to the date of the employment. We, therefore, hold that it was not a condition of service of employment of the respondents either express or implied that the employer has the right to transfer them to a new concern stared by him subsequent to the date of their employment. The respondents also relied upon a Government Order No. 6122 (ST)/XXXVI A 640(S) T 1953 in support of their contention that the order of transfer was bad. By this Order the Government of U. P. had directed that the employment of seasonal workmen in all vacuum pan sugar factories in the Uttar Pradesh should be governed by the rules contained in the annexure thereto. Rule I in the said annexure is to the following effect: " A worker who has worked or but for illness or any other unavoidable cause would have worked in a factory during the whole of the second half of the last preceding season will be employed in this season in such factory. " This rule has no relevancy to the question raised in the present case. This rule only enjoins upon an employer to employ a worker in the circumstances mentioned therein in the same factory in which he was working in the previous season during the next season also. This does not prevent the employer to transfer an employee if he has the right to do so under the contract of service or under any statutory provisions. We have already held that the employer in the present case has no such right. Lastly it is said that the Appellate Tribunal had no jurisdiction to set aside the finding of the State Industrial Tribunal, as it did not give rise to any substantial question of law within the meaning of section 7(1) of the Industrial Disputes (Appellate Tribunal) Act, 1950. The question raised was one of law, namely, whether the appellant had the right to transfer the respondents 1 to 4 from one concern to another. A substantial question of law involved between the parties and that raised also an important principle governing the right of an employer to transfer his employees from one concern to another of his in the circumstances of this case. We, therefore, hold that 926 a substantial question of law arose in the case and that it was well within the powers of the Labour Appellate Tribunal to entertain the appeal. In the result the appeal fails and is dismissed with costs. Appeal dismissed.

The General Manager of the appellant Mills ordered the transfer of four workmen from the appellant mill to a new mill, which had been purchased subsequently. The only connection between the two mills was the identity of ownership and, but for it, one had nothing to do with the other. The concerned workmen protested to the said order of transfer and did not acceed to the request, thereupon they were served with notice for disobedience of standing orders and were called upon for explanation which the workmen did and thereafter they were dismissed from service. The Labour Appellate Tribunal found that the management had no right to transfer the workmen to the new factory and therefore the order dismissing them was illegal. The appellants came up by special leave before the Supreme Court and contended that the right to transfer an employee by an employer from one of his concerns to another is implicit in every contract of service. The question is whether a person employed in a factory can be transferred to some other independent concern started by the same employer at a stage subsequent to the date of the employment. Held, that apart from any statutory provision, the right of an employee and an employer are governed by the terms of contracts between them or by the terms necessarily implied therefrom; but in the absence of an express agreement between the employer and employees it cannot necessarily be implied that the employer has the right to transfer the employee to any of its concerns in any place, and that the employee has a duty to join the concern to which he may be transferred. In the instant case, it was not a condition of service of employment of the concerned workmen either express or implied that the ' employer had the right to transfer them to a new concern started by the employer subsequent to the date of the employment. Alexandre Bouzourou vs The Ottoman Bank, A.I.R. 1930 P.C. 118, Mary (Anamalai Plantation Workers ' Union) vs Selali arai Estate, (1956) I.L.L.J. 243 and Bata Shoe Company, Ltd vs Ali Hasan, (1956) I.L.L.J. 278, discussed.

minal Appeal No. 918 of 1981. From the Judgment and Order dated 10.8.81 of the Punjab & Haryana High Court in Crl. A. No. 417 DB of 1980. U.R. Lalit, M. Qmaruddin and Mrs. M. Oumaruddin for the Appellant. Ranbir Singh Yadav and R.S. Suri (NP) for the Respondent. The Judgment of the Court was delivered by N.P. SINGH, J. The appellant has been convicted under Section 302 of the Indian Penal Code and has been sentenced to undergo imprisonment for life, for causing the murder of Paramjit Singh. It is said that the appellant and the deceased were intimate friends and they used to visit frequently each other 's house. But Paramjit Singh (hereinafter referred to as 'deceased ') misbehaved with the wife of the appellant and because of that the appellant had nursed a grudge. On July 8, 1979 in the morning the appellant asked the deceased to accompany him to Chandigarh and Mohali where he wanted to take some suitable shop for his business. They boarded a bus of the Road Transport Corporation at Patiala for Chandigarh at about 9.59 A.M. Gurcharan Singh (PW 8) also came to Chandigarh by the same bus. The appellant and the deceased reached Chandigarh at about 11.30 A.M. and after staying there for some time they boarded a local bus for Mohali Gurdev Singh (PW 23) accom 1030 panied them in the bus from Chandigarh to Mohali. At Mohali after getting down from the bus the appellant went to Raj Kumar Singh (PW 711) brother of his wife and borrowed a bicycle from him. During this period the deceased was sitting at a shop and taking aerated water. Shortly thereafter, the appellant arrived with the bicycle at the said shop and both left on the bicycle. The deceased was pedalling the bicycle and the appellant sat behind on the carrier. Both were seen going on the bicycle by Jaimal Singh (PW 5) by the side of the Gurdwara, Sahib Singh Sabha, Mohali. Jaimal Singh (PW 5) after taking his meals went to Gurdwara Sahib Singh Sabha at about 2.45 P.M. the same day. One Om Parkash, came there and told him that a Sikh gentleman was lying on the ground in the campus of the said Gurdwara in an injured condition. Jaimal Singh (PW 5) accompanied by Balwinder Singh, Sewadar, came to the spot and found the victim lying on the ground and bleeding profusely. He identified him to be the same person whom he had seen earlier on the bicycle. The victim could not speak. Jaimal Singh (PW 5) left Om Parkash and Balwinder Singh, Sewadar, at the spot and summoned members of the Gurdwara Committee. Some of the members who were available reached. But in the meantime the victim succumbed to the injuries. They searched for the assailant. Thereafter Jaimal Singh (PW 5) accompanied by Chatter Singh went to the Police Station Mohali and lodged the first information report at 4.00 P.M. the same day. It is further the case of the prosecution that near about the time of the occurrence the appellant was seen coming from the side of the Gurdwara Sahib Singh Sabha and was noticed on the way by Joginder Singh (PW 9) with blood on his hand. On being asked the appellant gave out that he had a fight with someone. and he was going to the hospital to get his injuries dressed. Gurdev Singh (PW 23) on his way back from the hotel also saw the appellant going on the bicycle and found him puzzled. He also saw the hand of the appellant stained with blood and blood marks on his clothes as well. On querry the appellant said that he had got the injury through barbed wire and was going to the doctor to get his wounds dressed. Last in the chain of events, the appellant reached the house of Raj Kumar Singh (PW 11) and returned him his bicycle. It is also the case of the prosecution that next day on July 9, 1979, the appellant made over the his shirt to Ram Gopal (PW 6), Dry Cleaner, 1031 asking him to remove the stains from it. A copy of the receipt prepared in connection with the aforesaid shirt was produced during the trial. The doctor who held the post mortem examination found several incised wounds on the person of the deceased including injury on the abdomen. There is no dispute that the prosecution case is based solely on the circumstantial evidence. If at a trial the prosecution adduces direct evidence to prove the charge, the Court is primarily concerned whether the witnesses who have testified about the role of the accused are reliable. Once the Court is satisfied that the witnesses who are said to have seen the occurrence are trustworthy and inspire confidence, the finding of guilt has to be recorded, if otherwise the accused has to be acquitted. But in a case based on circumstantial evidence neither the accused nor the manner of occurrence is known to the persons connected with the victim. The first information report is lodged only disclosing the offence, leaving to the investigating agency to find out the offender. It is said that men lie but circumstances do not. Under the circumstances prevailing in the society today, it is not true in many cases. Sometimes the circumstances which are sought to be proved against the accused for purpose of establishing the charge are planted by the elements hostile to the accused who find out witnesses to fill up the gaps in the chain of circumstances. In countries having sophisticated modes of investigation, every trace left behind by the culprit can be followed and pursued imme diately. Unfortunately it is not available in many parts of the this country. That is why Courts have insisted (i) the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established; (ii) all the facts so established should be consistent only with the hypothesis of the guilt of the accused and should be such as to exclude every hypothesis but the one sought to be proved; (iii) the circumstances should be of a conclusive nature; and (iv) the chain of evidence should not have any reasonable ground for a conclusion consistent with the innocence of the accused. A note of caution has also been struck regarding the role of imagination. In the case of Reg vs Hodge, (1838) 2 Lewin 227, it was said: "The mind was apt to take a pleasure in adapting circumstances to one another, and even in straining them a little, if need be, to force them to form parts of one 1032 connected while; and the more ingenious the mind of the individual, the more likely was it, considering such matter, to overreach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete. ' It has been impressed that suspicion and conjecture should not take place of legal proof It is true that the chain of events proved by the prosecution must show that within all human probability the offence has been committed by the accused, but the Court is expected to consider the total cumulative effect of all the proved facts along with the motive suggested by the prosecution which induced the accused to follow a particular path. The existence of a motive is often an enlightening factor in a process of presumptive reasoning in cases depending on circumstantial evidence. Coming to the facts of the present case, Pritam Kaur (PW 12), mother of the deceased, has deposed that the appellant went to her house in the morning and took the deceased with him saying that he win be accompanying him to Mohali because the appellant had to select a suitable shop. Thereafter both of them left together. There does not appear to be any reason on the part of the mother of the victim to falsely state about the deceased going along with the appellant in the morning of July 8, 1979. Gurcharan Singh (PW 8) has testified that at 9.30 A.M. he saw the appellant and the deceased at the bus stand. He exchanged greeting with them. They told him that they were going to Chandigarh or Mohali. The deceased purchased two bus tickets for Chandigarh in his presence. Gurcharan Singh (PW 8) travelled in the same bus with the appellant and the deceased and all the three came out from the bus at Chandigarh together. Sahib Chand (PW 24), an employee of the Punjab Roadways Transport Corporation, had sold two tickets. The yard control register was produced before the Court to prove in respect of sale of the two tickets which were recovered from the person of the deceased at the time to the post mortem examination. The two tickets were recovered on July 8, 1979, on the date. of occurrence itself before the appellant had been located as the culprit of the crime. The two tickets recovered from the person of the deceased 1033 establish that the deceased had travelled from Patiala along with one another person who was close to him because the deceased was keeping both the tickets in his pocket. This circumstances corroborates the evidence of Pritam Kaur (PW 12) as well as of Gurcharan Singh (PW 8). The other circumstance in the chain of events, according to the prosecution, is that the appellant and the deceased boarded a local bus at Chandigarh for Mohali reaching there at about 1.30 P.M. Gurdev Singh (PW 23), who was then employee in Colonization Department, Sector 22, Chandigarh, and residing at Badheri, also travelled in the same local bus. He belonged to Patiala. Gurdev Singh (PW 23) saw the appellant and the deceased getting down from the local bus at Mohali. They also exchanged greetings with him and on being asked the appellant told him that they were going to select a shop. They walked together for a short distance and thereafter Gurdev Singh (PW 23) went to take his meals at a dhaba. Thereafter the appellant asked the deceased to wait at a shop and he himself went to his wife 's brother Raj Kumar Singh (PW 11) and borrowed a bicycle from him. Raj Kumar Singh (PW 11) although a close relation of the appellant has testified that the appellant took his red bicycle from his house at about 1.30 P.M. Jaimal Singh (PW 5) saw the deceased taking aerated water at the shop and later saw the appellant and the deceased both going together on a red bicycle. The deceased was pedalling the bicycle and the appellant was sitting on the carrier. Gurdev Singh (PW23) aforesaid who had left the appellant and the deceased while going to the dhaba for taking his meals, after taking his meals, at about 2.30 P.M. again saw the appellant coming on the same bicycle alone. The appellant appeared to be puzzled and his hands were stained with blood. There were also blood spots on his clothes. Gurdev Singh (PW 23) asked him. as to what had happened to him. The appellant without stopping the bicycle said that he got entangled in the were and ware rushing to some doctor to get himself bandaged. Yet another witness Joginder Singh (PW 9) who had gone to Mohali in search of some plot saw the appellant at about 2.15 P.M. coming on a red colour bicycle. He also noticed the hand of the appellant stained with blood. On query the appellant told Joginder Singh (PW 9) that he had a fight with some person and was going to hospital for dressing of his wounds. Thereafter the appellant went to Raj Kumar Singh (PW 11) his brother in law to hand over the bicycle aforesaid. 1034 It may be mentioned that in the Court Raj Kumar Singh (PW 11) stated that this appellant had gone to his house at about 1.30 P.M. and taken his red colour bicycle which he returned the same day later. But he denied that he had stated during investigation that he had seen injuries on the hand of the appellant. He also denied that he had told the police during investigation that the appellant was mentally agitated. Still the fact that the appellant had taken from him his red colour bicycle at about 1.30 P.M. which the appellant returned to him later the same day has been testified by him. If this part of the evidence of Raj Kumar Singh (PW 11) is accepted which we find no reason to doubt then his evidence corroborates the evidence of Jaimal Singh (PW 5) and Gurdev Singh (PW 23) that the appellant was going with the deceased on a red colour bicycle at about 1.30 P.M. and about 2.30 P.M. the appellant was seen coming on the bicycle alone. Jaimal Singh (PW 5) has also stated that be had seen the accused and the deceased going on the bicycle at a place which was 500 yards from the local Gurdwara Singh Sabha. Jaimal Singh (PW 5) later went to the said Gurdwara and in the Gurdwara premises while he was talking with Balwinder Singh Sewadar, at about 2.45 P.M. one Om Parkash came there and informed that a Sikh gentlemen was lying on the ground in an injured condition. All of them went towards the place where the injured was lying. Jaimal Singh recognised the victim to be the same person whom he had seen earlier taking aerated water at the shop and later on the bicycle along with the appellant. Blood was coming out from his abdominal region. The victim was not in a position to speak. Jaimal Singh (PW 5) went to call the members of the Gurdwara Committee. Two members of the Gurdwara reached the spot. But by that time victim had succumbled to his injuries. Therefore they went to the Police Station Mohali where Jaimal Singh (PW 5) lodged the first information report at 4.00 P.M. Jaimal Singh (PW 5) did not know either the name of the appellant or that of the deceased but he stated in the first information report that he had gone to Dhaba and at about 1.30 P.M., while taking meals he saw a fair complexioned Sardar taking aerated water in the adjoining 'shop. After taking meals when he was going on the road, again he saw the same Sardar pedalling a cycle going towards Gurdwara Singh Sabha Mohafi and behind him a young Hindu Mona was sitting on the cycle. Then he gave the details as to how then at the Gurdwara, at about 2.45 P.M., one Om Parkash told him that one Sardar was lying in a comer of Gurdwara in an injured 1035 condition. He went and identified that he was the same young man whom he had seen taking aerated water at the shop and then on the bicycle. The first information report was lodged within one and a half hours of the occurrence giving the aforesaid details. The statements made in the first information report corroborate fully the testimony of Jaimal Singh (PW 5) in Court. Once the evidence of Jaimal Singh is accepted, it supports and corroborates the evidence of Gurdev Singh (PW 23) who had travelled with the appellant and deceased in local bus from Chandigarh to Mohali and had got down at Mohali at 1.30 P.M. He later saw the appellant at about 2.30 P.M. returning on the bicycle with injuries on hand and blood on clothes. Gurdev Singh (PW 23) knew the appellant as well as deceased from before. Apart from the evidence of the witnesses, who have proved the different links in the chain of events, the shirt which the appellant was wearing and on which blood had been noticed by witnesses as already mentioned above was recovered from the laundry of Ram Gopal (PW 6). According to Ram Gopal (PW 6) on July 9, 1979 the appellant had given that shirt to remove certain stains. He had issued a receipt to the appellant and one chit was tagged with the shirt for identification. The third was kept by way of record. The shirt was seized and sent to the chemical examiner who found human blood on the said shirt. The shirt as well as the bicycle were produced as exhibits before the Trial Court and have been identified by the witnesses who were examined on behalf of the prosecution. None of the witnesses examined on behalf of the prosecution appear to have been set up or planted by any inimical source. They are neither interested in the deceased nor have any bias against the appellant. So far the motive which impelled the appellant to commit the murder, it has been suggested on behalf of the prosecution that the appellant and the deceased were intimate friends but the appellant had a suspicion that the deceased was misbehaving with his wife, for which the appellant had a resentment. The resentment was never allowed to be surfaced by the appellant by way of strong protest or confrontation. However, he had mentioned this to Darshanjit Singh (PW 13), Kanwaljit Singh (PW 14) and Sarup Lal (PW 15). 'rile three witnesses aforesaid have deposed as to how the appellant was carrying a suspicion and was tense from inside in respect of the conduct of tile deceased. There is nothing on the record to show that the aforesaid three witnesses were either inimical to the appellant or 1036 interested in the deceased because of that they could have concocted a motive for commission of the crime by the appellant. According to us the evidence adduced on behalf of the prosecution is clear, unambiguous and in unmistakable terms establish that the appellant is the perpetrator of the crime and nothing has been brought to our notice which leaves any gap in the circumstances to establish the guilt of the appellant. The facts of the case stands the scrutiny and tests as laid down by this Court in the cases of Hanumant Govind Nargundkar vs State of Madhya Pradesh, AIR 1952 SC 343; Deonandan Mishra vs The State of Bihar, ; ; Govinda Reddy vs State of Nysore, AIR 1960 SC 29; Sharad Birdhichand Sarda vs State of Maharashtra, ; Ashok Kumar Chatterjee vs State of Madhya Pradesh, AIR 1989 SC 1890 and State of UP vs Ashok Kumar Srivastava, The appeal is accordingly dismissed. V.P.R. Appeal dismissed.

The prosecution case was that the appellant and the deceased were intimate friends. The appellant nursed a grudge against the deceased, as he misbehaved with the wife of the appellant. On July 8, 1979 in the morning the deceased accompanied the appellant to Mohali, where the appellant wanted to do business. At Mohali, the appellant went to the brother of his wife (P.W. 11) and borrowed a bicycle, leaving the deceased at a shop. later both left the shop on the bicycle. The deceased was pedalling the bicycle while the appellant was sitting behind on the carrier of the bicycle. P.W. 5 saw them going by the side of the Gurdwara, Sahib Singh Sabha. At about 2.45 P.M. on the same day, P.W. 5 when went to the Gurdwara, one Om Parkash came there and told P.W.5 that an injured Sikh gentleman was lying on the ground in the campus of the Gurdwara. P.W. 5 accompanied by one Balwinder Singh came to the spot. He identified the victim lying on the ground bleeding profusely. The members of the Gurdwara Committee were summoned. The members who were available reached. The victim succumbed to the injuries in the meantime. P.W. 5 accompanied by one Chatter Singh lodged the First Information Report at 4.00 p.m., the same day. The prosecution case was based solely on the circumstantial evidence and it could prove the chain events beyond reasonable doubt by the evidences of its witnesses. The appellant was convicted under section 302 of the Indian Penal Code and was sentenced to undergo imprisonment for life by the trial Court. 1027 1028 Dismissing the appeal, this Court, HELD : 1.01. It is said that men lie but circumstances do not. Under the circumstances prevailing in the society today, it is not true in many cases. Sometimes the circumstances which are sought to be proved against the accused for purpose of establishing the charge are planted by the elements hostile to the accused who find out witnesses to fill up the gaps in the chain of circumstances. [1031D] 1.02. In countries having sophisticated modes of investigation, every trace left behind by culprit can be followed and pursued immediately. Unfortunately it is not available in many parts of this country. That is why Courts have insisted (i) the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established; (ii) all the facts so established should be consistent only with the hypothesis of the guilt of the accused and should be such as to exclude every hypothesis but the one sought to be proved; (iii) the circumstances should be of a conclusive nature; and (iv) the chain of evidence should not have any reasonable ground for a conclusion consistent with the innocence of the accused. [1031E F] 1.03. If at a trial the prosecution adduces direct evidence to prove the charge, the Court is primarily concerned whether the witnesses who have testified about the role of the accused are reliable. Once the Court is satisfied that the witnesses who Pre said to have seen the occurrence are trustworthy and inspire confidence, the finding of guilt has to be recorded, if otherwise the accused has to be acquitted. But in a case based on circumstantial evidence neither the accused nor the manner of occurrence is known to the persons connected with the victim. [1031B C] 1.04. Suspicion and conjecture should not take place of legal proof. It is true that the chain of events proved by the prosecution must show that within all human probability the offence has been committed by the accused, but the Court is expected to consider the total cumulative effect of all the proved facts along with the motive suggested by the prosecution which induced the accused to follow a particular path. The existence of a motive is often an enlightening factor in a process of presumptive reasoning in cases depending on circumstantial evidence. [1032C D] 1.05. The evidence adduced on behalf of the prosecution is clear, 1029 unambiguous and in unmistakable terms establish that the appellant is the perpetrator of the crime and nothing has been brought to Court 's notice which leaves any gap in the circumstances to establish the guilt of the appellant [1036B] Reg vs Hodge, (1838) 2 Lewin 227; Hanumant Govind Nargundkar vs State of Madhya Pradesh AIR 1952 SC 343; Deonandan Mishra vs The State of Bihar, ; ; Govinda Reddy vs State of Mysore, AIR 1960 SC 29; Sharad Birdhichand Sarda vs State of Maharashtra, ; Ashok Kumar Chatterjee vs State of Madhya Pradesh, AIR 1989 SC 1890 and State of U. P. vs Ashok Kumar Srivastava, , referred to.

vil Appeals Nos. 1314 to 1318 of 1979. Appeals by Certificate from the Judgment and Order dated 4.4.1979 of the Judicial Commissioner Goa, Daman & Diu in Special Civil Application (Writ Petition) Nos. 75,76, 77 of 1977, 103 and 111 of 1978. AND Writ Petition No. 864 of 1988. (Under Article 32 of the Constitution of India). G. Ramaswamy, Additional Solicitor General, T.V.S. Krishnamoorthy Iyer, S.S. Ray, Y.S. Chitaley, Joachin Dias, A.B. Nadkarni, Arun Madan, Ms. A. Subhashini, section Ganesh and R. Swamy for the Appellants/Petitioners. Manohar section Usgaocar, F.S. Nariman, G.L. Sanghi, M.N. Phadke, R.F. Nariman, S.K. Mehta, Atul Nauda, Aman Vachher, Mrs. Nineti Sharma, S.M. Usgaocar and M.K. Dua for the Respondents. SHARMA, J. The civil appeals No. 1314 to 1318 of 1979 by certificate are directed against the decision of the Judi cial Commissioner of Goa, Daman and Diu, declaring the Goa, Daman and Diu Agricultural Tenancy (5th Amendment) Act, 1976, as unconstitutional. The respondents are landlords in Goa. The lands were in possession of the tenants who were cultivating the same and paying rent to the respondents. The respondents were divested of their title in the lands by the provisions of the impugned Act which came in force in 1976 vesting the same in the tenants. The respondents filed five writ applications in the court of the Judicial Commissioner challenging the validity of the Amendment Act. The writ petitions were allowed by the impugned judgment. It has been held that the Act violates Articles 14 and 19 of the Consti tution and the protection of Article 31A is not available as the scheme of the Act does not constitute agrarian reform. It has been contended on behalf of the respondent writ petitioners that the landlords in Goa are generally small land holders and their condition is not better than that of the tenants and in that view the Act divesting the landlords of their title in the land and veting the same in the tenants suffers from the vice of illegal discrimination. A similar Act was earlier passed by the Maharashtra Legisla ture also which has been found to be constitutionally valid. The writ petitioners have, before the court below, success fully argued that the decision in that case is not applica ble inasmuch as the Maharashtra Act contains provisions fixing ceiling to which the other provisions are subject to, while there is no such restriction in the present Act. The result is that although the Maharashtra Act had to be upheld as a measure of agrarian reform and thus protected by Arti cle 31A of the Constitution, the present Act cannot be so interpreted. During the pendency of these appeals the impugned Amendment Act along with the main Act were included in the 9th Schedule of the Constitution and the assent of the President was received on the 26th of August, 1984. Lakshmibai Narayan Patil, the writ petitioner in the three of the cases in the court of Judicial Commissioner (respond ent in Civil Appeals No. 1314, 1315 and 1316 of 1979) has challenged the constitutional amendment as illegal and ultra vires by filing an application under Article 32 of the Constitution which has 501 been numbered as Writ Petition No. 864 of 1988. By the impugned Amendment Act, Chapter IIA has been included in the Goa, Daman and Diu Agricultural Tenancy Act, 1964 (hereinafter referred to as the Act), Chapter III has been deleted and some consequential changes have been made in some other sections. Chapter IIA deals with "Special rights and privileges of tenants" as indicated by the head ing. Broadly speaking, by the provisions of section 18A of this Chapter the land belonging to a landlord not in his culti vating possession on the tiller 's day gets transferred to the tenant inpossession for a price to be paid to the land lord. The expression 'tenant ' has been given a larger mean ing under the Act by section 4. By the second proviso of section 4 a sub tenant cultivating any land on or after 1.7. 1962 has to be deemed to be a lawfully cultivating tenant notwithstand ing the fact that the creation of sub tenancy might have been prohibited by any law, and the tenant prior to the creation of the sub tenancy (who may be referred to as intermediary tenant) is not to be treated as a tenant. The price of the land in question has to be determined and the payment made in accordance with the provisions of Chapter IIA. Separate provisions have been made with respect to special cases where tenant is a minor or has been evicted by the landlord before the tiller 's day. The provisions of section 18 J provide for the resumption and disposal of the land not purchased by the tenant by reason of purchase being ineffec tive under section 18C or section 18H or due to the failure of the tenant to take steps under section 18B within time. A revenue officer described as Mamlatdar is vested with the power to dispose of such land in the manner provided in sub section (2) of section 18J. Such land has to be disposed of in the order of priority, whereunder 75% of such land is to be disposed of by sale to persons belonging to Scheduled Castes or Scheduled Tribes and thereafter the remaining land to serv ing members of the Defence Forces of the country or ex servicemen or freedom fighters who agree to cultivate the land personally. If the land still remains undisposed of, it first goes to agricultural labourers and thereafter to landless persons. If some of the land still remains avail able, it has to be sold to a co operative farming society. Section 18 K puts a restriction on transfer of the land which the tenant acquires by purchase under the Chapter. Only with the previous sanction of the Mamlatdar any trans fer whether by sale, gift, exchange, mortgage, lease or assignment can be made. If the land owner is himself cultivating it, there being no tenant or a deemed tenant he continues to be in possession without any curtailment of his rights. On the other hand, in a case where the tenant 502 after getting a tenancy from the landlord inducts another person as a sub tenant who cultivates the same, the benefits of the impugned provisions go to him and not to the tenant. The object of the Amending Act is thus clearly to vest the land in the tiller. The right of any person to receive merely rent is taken away for a price. The respondents who are landlords, have challenged the Amendment Act whereby Chapter IIA has been inserted in the Act on the ground of illegal discrimination. The argument is that in absence of provisions for ceiling the impugned Act bestows undeserved benefit on the tenants at the cost of the landlords, without reference to the respective areas in their possession. The Amendment was enforced as also the impugned judgment was delivered before the deletion of Clause (f) of Article 19(1) from the Constitution and one of the grounds which has been successfully urged before the High Court is based on Article 19(1)(f). So far Article 31A of the Constitution is con cerned, the case of the respondents which has found favour with the court below is that the provisions of the impugned Amendment Act cannot be held to be a step by way of agrarian reforms and, therefore, cannot have the protection of the Article. This is the main thrust of the argument of Mr. R.F. Nariman in this Court also. He has strenuously contended that for extending the protection of Article 31A(1)(a) to any particular law it is necessary that the law contains adequate measure against concentration of wealth in the hands of a few. It is claimed that fixation of ceiling is the heart and soul of agrarian reform without which it does not survive. It has been observed in the impugned judgment that from the transcripts of newspapers produced by the writ petitioners and the statements alleged to have been made by the late Chief Minister that there were very few big land holders in Goa, it can be assumed that the landlords in Goa are small holders of land. Certain statements made in the affidavit filed before the Court were also referred to in this connection. An attempt was made in this Court also to urge that there could not be many big landlords in Goa and therefore their deprivation of the lands cannot be deemed to be a step towards fair distribution. It was contended that in many a case, a cultivating tenant in possession of lands under different landlords may be having far larger area of land than his landlords and there cannot be any justifica tion in clothing such a tenant with title to the land at the cost of his comparatively poor landlords. The argument proceeded, that so far the holdings of the tenants are concerned. a necessity of placing ceiling on the holdings cannot be denied in view of the affidavit filed on behalf of the State stating that further legislation for that purpose was in contemplation. Mr. R.F. Nariman emphasized the fact that no such law has been 503 brought in force till now. To the last part of the argument it was tightly pointed out by the learned counsel for the appellants that since the Amendment Act was struck down by the Judicial Commissioner 's Court as ultra vires, further amendment in the Act by way of introducing provisions for ceiling had to await this Court 's judgment in the present civil appeals. Before proceeding with the main argument of Mr. R.F. Nariman and the cases relied upon by him, it may be useful to briefly refer to the nature of the right of the landlords and the tenants under the Act before the insertion of Chap ter IIA by the impugned Amendment Act. The rights of a tenant were heritable and Sections 8 and 9 prohibited the termination of his tenancy and his eviction except where the himself surrendered his right to the landlord or where the landlord established one of the grounds specified in this regard. By an Amendment in 1966. the tenant was given, by section 13A, the first option to purchase the land in case the landlord proposed to sell it. By Chapter III the landlord was permitted to resume the land, subject to the ceiling of an area of 2 hectares in case of paddy land and 4 hectares in other lands, on the ground of bona fide requirement for personal cultivation; but this right was also dependent on the fulfilment of certain conditions. This Chapter was to come into force only on a notification for the purpose which was never issued. By the impugned Amendment Act this Chapter was omitted from the Act. In effect the right of resumption contemplated by the Act never vested in the landlords before it disappeared from the statute book. It may be stated here that the 1964 Act is not under attack and the challenge is confined to its 5th Amendment whereby Chapter IIA has been included and Chapter III deleted. The statement of objects and reasons was placed before us wherein it has been mentioned that there was a similar legislation in force in the neighbouring State of Maharash tra. The reference obviously is to the Bombay Tenancy and Agricultural Lands (Amendment)Act, 1956, mentioned in para graph 2 above, introducing similar amendments in the Bombay Tenancy and Agricultural Lands Act,1948. In Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp 1 SCR 489, the validity of the Act was upheld by a Constitution Bench of this Court. It has been contended that the Maharashtra A mending Act including provisions fixing ceiling which effec tively prevented accumulation of large areas of land in possession of the tenants; and since there is no similar safeguard in the present 5th Amendment Act, the aforesaid decision does not come to its rescue 504 and leads to the conclusion that in absence of similar provi sions the Act cannot be sustained. The learned counsel for the respondents relied upon the observation of several decisions of this Court in support of his contention that provisions regarding ceiling are essential for a statute enacted as a measure of agrarian reform and in their absence the same cannot claim pro tection of Article 31A of the Constitution. Article 31A(1)(a) declares that no law providing for "the acquisition by the State of any estate or of any rights therein or the extinction or modification of any such rights", shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19. The 5th Amend ment Act has received the assent of the President as re quired by the first proviso. The expression 'estate ' is undisputedly applicable in the present case in view of the provisions of clause (2) of the said Article. Although Article 31A(1)(a) does not by express language restrict its application to a particular nature of law, it is now well settled that the protection of the Article is limited to the laws which serve the purpose of agrarian reform, and Mr. R.F. Nariman is right in relying upon the observations at page 90IF of the judgment in Godavari Sugar Mills Ltd. and Others vs S.B. Kamble and Others, [1975] 3 SCR page 885. The learned counsel has further urged that the other observa tions in this judgment support his main argument also that in absence of provisions for ceiling a statute cannot be held to be for agrarian reform. We are unable to agree. In that case the constitutional validity of the Act amending certain provisions of the Maharashtra Agricultural (Ceiling and Holdings) Act was under challenge and it was sought to be saved inter alia with the aid of Article 3 1A. While discussing the scope of Article 3 1A, the Court at page 902F relied upon the decision in Balmadies Plantations Ltd. and Another vs State of Tamil Nadu, ; , in the following terms: "In the case of Balmadies Plantations Ltd. & Anr. vs State of Tamil Nadu it was held while dealing with the provisions of Gudalur Janmam Estates (Abolition and Conver sion into Ryotwari) Act that the object and general scheme of the Act was to abolish intermediaries between the state and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the state. The Act, as such, in its broad outlines was held to be a measure of agrarian reform and protected by article 31A." 505 At page 903H it was observed that in a sense agrarian reform is wider than land reform. At page 905 the conclusion was summarised under 8 heads, and Mr. R.F. Nariman strongly relied on the last proposition stating, "(8) A provision fixing ceiling area and providing for the disposal of surplus land in accordance with the rules is a measure of agrarian reform. " It cannot be denied that the appropriately enacted statutes having provisions for fixing ceiling of holdings do fall in the category of legislation for agrarian reform, but the proposition relied upon, does not say and cannot be inter preted as holding that it is such an essential feature of agrarian reform without which a law cannot be included in that category. The observations at page 902F in respect of the judgment in Balmadies Plantations case, quoted earlier rather negative such an assumption. The case of Sri Ram Ram Narain Medhi (supra) has not only been distinguished in the impugned judgment but has been relied upon for supporting the writ petitioner 's argu ment. Reliance has been placed on the observations at page 495 of the reported judgment to the effect that the object of the Maharashtra Act, which was under consideration in that case. was to bring about such distribution of the agricultural lands as best to subserve the common good and this object was sought to be achieved by fixing ceiling on areas of holdings. It, however, does not follow that fixing ceiling area of land which can be held by a person is a basic and essential requirement of land reform. Since the challenge against the Maharashtra Act was being directed to the provisions fixing ceiling it became necessary to consid er and decide the effect of those provisions pointedly. But on a careful consideration of the entire judgment, there does not remain any element of doubt that a proper statute even without including provisions regarding ceiling may be entitled to the protection of Article 31A provided it is otherwise a measure of agrarian reform. As mentioned earli er, the Court was deciding the question of constitutional validity of the 1956 Act which amended the Bombay Tenancy and Agricultural Lands Act enacted in 1948. The original 1948 Act did not contain the provisions of ceiling which were later introduced by the impugned amendment. If the stand of the respondents be assumed to be correct, the 1948 Act could not have been in absence of the provisions of ceiling, held to be a step in agrarian reform. But the Court at page 492 stated that: 506 "The 1948 Act had been passed by the State Legislature as a measure of agrarian reform . " With respect to the 1956 Amendment Act, it was said at page 493 that, "With a view to achieve the objective of establish ing a socialistic pattern of society in the state within the meaning of Articles 38 and 39 of the Constitution, a further measure of agrarian reform was enacted by the State Legisla ture, being the impugned Act, hereinbefore referred to, which was designed to bring about such distribution of the ownership and control of agricultural lands as best to subserve the common goods thus eliminating concentration of wealth and means of production to the common detriment." (emphasis added) The use of the expression "further measure ' as mentioned above and the repetition of the said expression again at page 495 emphasise the fact that the original Act also was a measure of agrarian reform. Thus the decision, instead of helping the respondents lends support to the appellants ' argument. Mr. R.F. Nariman cited a number of other decisions dealing with the validity of provisions fixing ceiling and the Court upheld those provisions on the ground that they were measures of agrarian reform, but they do not support the reverse proposition as put forward on behalf of the respondents. All these decisions are, therefore, clearly distinguishable and we will mention briefly some of them which were heavily relied on by Mr. Nariman. In the case of Sonapur Tea Co. Ltd. vs Must. Mazi runnessa; , , writ petitions were filed in the High Court challenging the validity of the Assam Fixation of Ceiling on Land Holding Act, 1957. The High Court in dis missing the petitions held that the impugned Act was pro tected by Article 31A as it was a measure of agrarian re forms and imposed limits on lands to be held by persons in order to bring about its equitable distribution. The main question which was canvassed before this Court was whether the expression "the rights in relation to an estate" in the Article could cover the impugned Act, and it was answered in the affirmative by holding that the said expression is of a very wide amplitude. At page 729 this Court observed thus: 507 "This Article has been construed by this Court on several occasions in dealing with legislative measures of agrarian reforms. The object of such reforms generally is to abolish the intermediaries between the State and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the State." The 5th Amendment Act impugned in the cases before us satis fies this test. Similar was the position in Purushothaman Nambudiri y. The state of Kerala, [1962] Supp. 1 SCR 753. The case of Fida Ali and Others vs State of Jammu and Kash mir; , , was also considering a statute pro viding a scheme for agrarian reform which included provi sions in respect of ceiling. While upholding the Act the provisions fixing ceiling were upheld but the other observa tions in the judgment clearly indicate that the same cannot be assumed to be a condition precedent. Personal cultivation by the holder of land was emphasised as an important aspect in the following words at page 345G: "The golden web, throughout the warp and woof of the Act, is the feature of personal cultivation of the land. The expression 'personal cultivation ' which runs through sections 3, 4, 5, 7 and 8 is defined with care under section 2(7) in a detailed manner with a proviso and six explana tions. From a review of the foregoing provisions it is obvious that the Act contains a clear programme of agrarian reforms intaking stock of the land in the State which is not in personal cultivation (section 3) and which though in personal cultivation is in excess of the ceiling area (section 4). " In the ultimate paragraph of the judgment it was pointed that for framing a scheme for agrarian reforms it is not necessary or feasible to follow a set pattern in different parts of the country. It was observed, "On the other hand, the predominant object under lying the provisions of the Act is agrarian reforms. Agrar ian reforms naturally cannot take the same pattern through out the country. Besides the availability of land for the purpose, limited in scope in the nature of things, the scheme has to fit in with the local conditions, variability of climate, rainfall, peculiarity of terrain, suitability and profitability of multiple crop patterns, vulnerability of floods and so 508 many other factors in formulating a scheme of agrarian reforms suitable to a particular State". The decision, therefore, indicates that a flexible approach has to be adopted in deciding as to the nature of agrarian reform to be taken, rather than laying down a strait jacket rule for universal application. The observations in Datta traya Govind Mahajan and Others vs State of Maharashtra and Another, ; , were also made while examining an Act fixing ceiling of holdings and in justification of the impugned provisions it was observed that the policy in this regard was initiated following the report of the Agricultur al Labour Inquiry conducted in the 1960s and in implementa tion of this policy the Act under consideration was passed. The implication is that the fixation of ceiling was not essentially involved in agrarian reform but it had to be resorted to in the State of Maharashtra following the con clusion arrived at in the Agricultural Labour Inquiry. 13. The learned counsel for the respondents also placed two cases wherein Article 31A was held to be inapplicable. In K.K. Kochuni and Others vs The State of Madras and Oth ers, , the question of Article 31A did arise but in absolutely different context. The immediate predeces sor of the petitioner K.K. Kochini was the sthanee of the properties attached to the various sthanee held by him. On his death in 1925, the petitioner being the senior member became the sthanee and the respondents No. 2 to 17 being the junior members of the tarwad did not get any interest in the properties. In an earlier litigation which was commenced following the passing of an Act in 1932, the petitioners ' exclusive right was established up to the Privy Council stage. It was held that the Members of the tarwad had no interest therein. After the title of the sthanee was thus established, the Madras Legislature passed the impugned Act in 1955, which declared that every sthanam satisfying cer tain conditions mentioned in the Act would be deemed and would always be deemed to have properties belonging to the tarwad. The petitioner K.K. Kochuni challenged the Act as ultra vires before this Court by an application under Arti cle 32 of the Constitution. Two other petitions were also filed, one by his wife and daughters with respect to certain other properties gifted to them and the other by his son. In support of the constitutional validity of the Act it was argued on behalf of the respondents that the petitioner 's sthanam was an estate within the meaning of Article 31A and, therefore, enjoyed the protection under that Article. The argument was that a law relating inter se the rights "of a proprietor in his estate and the junior members of his family was also covered by the wide 509 pharseology used in clause (2)(b) of Article 31A. This Court rejected the plea, holding that: "The definition of "estate" refers to an existing law relat ing to land tenures in a particular area indicating thereby that the Article is concerned only with the land tenure described as an "estate". The inclusive definition of the rights of such an estate also enumerates the rights vested in the proprietor and his subordinate tenure holders. The last clause in that definition, viz., that those rights also include the rights or privileges in respect of land revenue, emphasizes the fact that the Article is concerned with land tenure. It is, therefore, manifest that the said Article deals with a tenure called "estate" and provides for its acquisition or the extinguishment or modification of the rights of the land holders or the various subordinate ten ure holders in respect of their rights in relation to the estate. The contrary view would enable the State to divest a proprietor of his estate and vest it in another without reference to any agrarian reform. It would also enable the state to compel a proprietor to divide his properties, though self acquired, between himself and other members of his family or create interest therein in favour of persons other than tenants who had none before." The Court, thus held that Article 31A (1)(a) will not apply to an Act which does not contemplate or see to regulate the fights inter se between the landlords and tenants leaving all their characteristics intact. The Court further consid ered the judgment in Sri Ram Ram Narain 's case (supra) and distinguished it on the ground that under the Bombay Act certain fights were conferred on the tenants in respect of their tenements which they did not have before. The other case of San jeer Coke Manufacturing Company vs Bharat Coking Coal Ltd. and Another, ; , relied upon by Mr. Nariman is also of no help as the same was dealing with certain legislation in regard to mines and minerals. The question of interpreting Article 31A (1)(a) did not arise there at all. As has been discussed above. the title to the land shall vest in the tiller and the landlord shall get the compensation. Earlier also his right to resume the land for personal cultivation was considerably restricted by the provisions of the 1964 Act. As a result of the impugned Amendment Act he has been divested of this limited right 510 for a price, and the tiller shall no more be under a threat of dispossession. The impugned provisions must therefore be accepted as a measure of land reform. We reject the argument of the respondents that in absence of provisions fixing ceiling on the area of land which can be held by a person a statute cannot be accepted as a measure of land reform. The 5th Amendment Act is, therefore, entitled to the protection of Article 3 IA and it cannot be struck down on the ground of violation of Articles 14 and 19 of the Constitution. The judgment of the Judicial Commissioner declaring the Act as ultra vires is accordingly set aside and the writ petitions filed by the respondents are dismissed. Consequently it is not necessary to deal with the writ petition (W.P. No. 864 of 1988) filed in this Court under Article 32 challenging the inclusion of the impugned Act in the 9th Schedule of the Constitution and the same is rejected. In the result, Civil Appeals No. 1314 1318 of 1979 are allowed, but, in the circumstances, the parties are directed to bear their own costs throughout. R.S.S. Appeals allowed Petition dismissed.

The respondents in the civil appeals and the petitioner in the writ petition were landlords in Goa, whose lands were in the possession of the cultivating tenants. Prior to the enactment of the Goa, Daman and Diu Agricultural Tenancy (5th Amendment) Act, 1976 the nature of the rights of the landlords and tenants were governed by the Goa. Daman and Diu Agricultural Tenancy Act, 1964. By Chapter III of the 1964 Act the landlord was permitted to resume his land for bona fide personal cultivation, subject to a ceiling. Chap ter III, however, was to come into force only on a notifica tion for the purpose, which was never issued. The impugned 5th Amendment omitted Chapter III from the 1964 Act and in its place included Chapter IIA. By the provisions of section 18A of Chapter IIA the land belonging to a landlord not in his cultivating possession on the tiller 's day got trans ferred to the tenant in possession for a price to be paid to the landlord. The respondents filed writ applications in the Court of the Judicial Commissioner challenging the validity of the 5th Amendment Act. The writ petitions were allowed by the Judicial Commissioner who held that the Amendment Act vio lated Articles 14 and 19 of the Constitution and that the protection of Article 31A was not available as the scheme of the Amendment Act did not constitute agrarian reform. 498 During the pendency of the present appeals the impugned Amendment Act along with the main Act were included in the 9th Schedule of the Constitution. The writ petition filed in this Court under Article 32 has challenged this constitu tional amendment as illegal and ultra vires. Before this Court it was contended on behalf of the respondentslandlords that fixation of ceiling was the heart and soul of agrarian reform; that provisions regarding ceiling were essential for a statute enacted as a measure of agrarian reform and in their absence the same could not claim protection of Article 31A of the Constitution; that in the absence of provisions for ceiling the impugned Amendment Act had bestowed undeserved benefit on the tenants at the cost of the landlords, without reference to the respective areas in their possession. In this connection it was submit ted that in many a case, a cultivating tenant in possession of lands under different landlords might be having far larger area of land than his landlords and there could not be any preference to clothing such a tenant with title to the land at the cost of his comparatively poor landlords. Allowing the appeals and dismissing the writ petition this Court, HELD: (1) It is well settled that the protection of Article 31A is limited to the laws which serve the purpose of agrarian reform. [504D] (2) It cannot be denied that the appropriately enacted statutes having provisions for fixing ceiling of holdings do fall in the category of legislation for agrarian reform, but that proposition does not say and cannot be interpreted as holding that fixing ceiling areas is a basis and essential feature of agrarian reform without which a law cannot be included in the category. A proper statute even without including provisions regarding ceiling may be entitled to the protection of Article 31A provided it is otherwise a measure of agrarian reform. [505C, F] Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 SCR 489; Godavari Sugar Mills Ltd. vs S.B. Kamble & Ors., ; and Balmadies Plantations Ltd. & Ant. vs State of Tamil Nadu; , , referred to. (3) The title to the land shall vest in the tiller and the landlord shall get the compensation. Earlier also his right to resume the land for personal cultivation was con siderably restricted by the provisions of the 1964 Act. As a result of the impugned 5th Amendment Act he has been 499 divested of this limited right for a price, and the tiller shall no more be under a threat of dispossession. The im pugned provisions must therefore be accepted as a measure of land reform. [509G H; 510A] (4) The argument of the respondents that in absence of provisions fixing ceiling on the area of land which can be held by a person a statute cannot be accepted as a measure of land reform is, accordingly, rejected. The 5th Amendment Act is. therefore, entitled to the protection of Article 31A and it cannot be struck down on the ground of violation of Articles 14 and 19 of the Constitution. [510A B] Sri Ram Ram Narain Medhi vs The State of Bombay, [1959] Supp. 1 SCR 489; Sonapur Tea Co. Ltd. vs Must. Mazirunnes sa; , ; Purushothaman Nambudiri vs The State of Kerala, [1962] Supp. 1 SCR 753; Fida Ali & Ors. vs State of Jammu & Kashmir, ; ; Dattatraya Govind Mahajan vs State of Maharashtra, ; ; K.K. Kochuni vs The State of Madras, and Sanjeev Coke Manufacturing Company vs Bharat Coking Coal Ltd. & Anr., ; , distinguished.

Appeal No. 591 of 1967. Appeal by special leave from the judgment and order, dated May 22, 1962 of the Allahabad High Court in Income tax Reference No. 424 of 1958. M.C. Chagla and B.P. Maheshwari, for the appellant. B. Sen, B.D. Sharma and R.N. Sachthey, for the respondent. The Judgment of the Court was delivered by Ramaswami, J. The appellant (hereinafter called the 'assessee ') carried on the business of manufacture and sale of blankets and other woollen cloth. For the assessment year 1948 49 the assessee claimed a deduction of Rs. 75,465 as commission paid to the General Manager Shri J.P. Vaish. According to the terms of appointment Shri J.P. Vaish was to draw a fixed salary of Rs. 1,000 p.m., commission of 12 1/2% on the net profits of the firm payable after the accounts had been ascertained fully by the ' auditors and a car allowance of Rs. 250 p.m. It was one of the terms of the appointment that in case the profits exceeded Rs. 1 lakh, the commission payable to Shri J.P. Vaish was 25%. Shri J.P. Vaish was also given free medical facility for himself and the members of his family. In terms of the letter of appointment Shri Vaish got no commission in the first year as the mill suffered a loss. In the next year the profit being less than Rs. 1 lakh, Shri Vaish received a sum of Rs. 4,063 as commission. For the. assessment year 1948 49, the assessee paid a sum of Rs. 75,465 as commission to Shri J.P. Vaish calculated at the rate of 25% on the profits. The assessee claimed deduction of the said amount from the assessable income. By his assessment order, dated June 30, 1949, the Income Tax Officer disallowed the claim on the ground that it was excessive and quite unreasonable looking to the salary paid to Shri Vaish. He also found that no general practice of giving commission at the rate of 25 % existed in the assessee 's line of business. Taking into account the circumstances of the case, the Income Tax Officer determined a sum of Rs. 5,000 as a reasonable amount payable as commission. Against the disallowance of Rs. 70,465 paid as commission to the General 527 Manager, the assessee preferred an appeal to the Appellate Assistant Commissioner of Income Tax who by his order, dated October 31, 1949 found that Rs. 5,000 was not sufficient and it was reasonable to allow the payment of commission at the rate of 121/2%. He accordingly increased the commission payable from Rs. 5,000 to Rs. 37,732 in that year. The assessee took the matter in appeal to the Income Tax Appellate Tribunal which by its order, dated July 10, 1950 dismissed the appeal. As directed by the High Court, the Appellate Tribunal submitted a statement of case under section 66(2) of the Income Tax Act, 1922 on the following question of law : "Whether in the circumstances of the case, the sum of Rs. 37,733 paid to the General Manager Shri J.P. Vaish, which has been disallowed by the income tax Appellate Tribunal was an amount laid out or expended wholly or exclusively for the purpose of the business of the assessee ?" By its judgment, dated May 22, 1962, the High Court answered the question against the assessee. Against the judgment of the High Court the present appeal is brought by special leave. Section 10(2)(x) and 10(2)(xv) of the Income Tax Act. 1922 at the relevant time read as follows: "10(2) (x): any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission: Provided that the amount of the bonus or commission is of a reasonable amount with reference to (a) the pay of the/employee and the ,conditions of his service; (b) the profits of the business. profession or vocation for the year in question; and (e) the general practice in similar business profession.or vocations; 10(2)(xv): Any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly or exclusively for the purpose of such business, profession or vocation. " It was contended on behalf of the assessee that in the circumstances of this case the amount of Rs. 37,733 paid to Shri J. P. 528 Vaish was an amount laid out or expended wholly or exclusively for the purpose of the business of the assessee and was wrongly disallowed by the Income Tax Appellate Tribunal. It was pointed out that Shri J.P. Vaish was in no way related to the proprietors of the firm and the commission on profits clause was inserted to create the interest of Shri J.P. Vaish in the running of the mill which was "old and unbalanced" and had never worked continuously or satisfactorily before it was taken over by the assessee. During the first 14 months the mills made no profit and Shri J.P. Vaish was paid nothing beyond his salary and car allowance. In the next 12 months he succeeded in securing an order for Lohis from Government and so the mill made some profit and the amount of the Manager 's commission was proportionately very small in terms of the agreement. The large profit in 1946 47 was made due to new design of civilian rugs Shri Vaish introduced for the first time in the mill after studying public tastes and the qualifies and designs prevailing in the market. It was also said that Shri Vaish had a special aptitude to show in his work so far as the marketability of the goods was concerned. After the death of Shri Vaish in July 1947, the firm was converted into a company and the post of the General Manager was abolished and one of the Directors who managed the affairs of the company was given Rs. 18,000 per annum as remuneration and Rs. 6,000 per annum as allowance for the .accounting year 1947 48. The Appellate Tribunal took the view that the post of General Manager carried the responsibility equal to that of the Director who was given the charge of the conduct of business after the death of Shri Vaish, the General Manager. Tiffs post carried a remuneration of Rs. 18,000 plus Rs. 6,000, i.e., a total remuneration of Rs. 24,000 per annum and therefore the commission paid to Shri Vaish in excess of tiffs amount Was not really paid wholly for the purpose of carrying on business. But it was pointed out on behalf of the assessee that Shri J.P. Vaish had taken over the mill at a time when it was old and dilapidated and in the first 14 months the mill made no profit and Shri Vaish was paid nothing beyond the salary and car allowance. the succeeding year he was able to secure an order from the account of ,which the mill made some profit. Shri Vaish introduced for the first time a new design of civilian rugs in the year 1946 47 during which a large profit was made. It was therefore contended on behalf of the assessee that the position of Shri Vaish who worked in the mill at the initial stage and of the Managing Director was not comparable and the Appellate Tribunal was wrong in taking this circumstance into consideration. Counsel for the assessee also pOinted out that Shri Vaish Was educated in a Public School at Dehra Dun and thereafter studied at the Benaras College and at the Engineering COllege of the Benaras Hindu University for Electrical and Mechanical Engi 529 neering and then joined the Commerce College at Delhi. After hat he had training in the Aluminium Corporation of India Ltd. Lakshmi Rattan Cotton Mills Ltd. and the Road Products Ltd. ,Ramput. ln view of the circumstances of the case it was urged on behalf of the assessee that the entire amount of Rs. 75,465 paid to Shri Vaish was an amount laid out wholly and exclusively for the purpose of the business of the assessee within the meaning of section 10(2)(xv) of the Income Tax Act, 1922. We should make it clear that in this case we are not called upon to decide whether the Income Tax Officer could exercise the power he exercised under section 10(2) (x) of the Income Tax Act. The question referred by the Tribunal and answered by the High Court only deals with the claim of deduction of the amount paid to Shri J.P. Vaish under section 10(2)(xv) and not under. section 10(2) (x) of the Act. The question as to whether an amount claimed as expenditure was laid out or expended wholly or exclusively for the purpoSe of business, profession or vocation as required under section 10(2)(X.v) of the Income Tax Act has to be decided on the facts and in the light of the circumstances of each particular case. But, as observed by this Court in Swadeshi Cotton Mills Co. Ltd. vs C.I.T., U.P.(1), the final conclusion on the admissibility of an allowance is one of law. In the present case, both the Appellate Assistant Commissioner and the Appellate Tribunal rejected the view of the Income Tax Officer that the rate of commission .paid to Shri Vaish was not fixed on account of business considerations but there was some collateral reason. But considering the practice in similar business concerns, the Appellate Assistant Commissioner expressed the view that the rate of 121/2 % commission was reasonable and the allowance was therefore restricted to half of the amount claimed by the assessee. The view of the Appellate Assistant Commissioner has been affirmed by the Income Tax Appellate Tribunal. The case of the assessee, however, is that a higher rate of commission of 25% was fixed for Shri J.P. Vaish because the mill was old and dilapidated and it never made profit of even a lakh of rupees in the past and that the rate of 25% was fixed in order to create special interest of the General Manager for accomplishment of the task entrusted to him. In our opinion, neither the High Court nor the Appellate Tribunal has applied the proper legal test in this case. As pointed out by this Court in C.I.T. Bombay vs Walchand & Co. Private Ltd., (2) in applying the test of commercial expediency for determining whether an expenditure was wholly and exclusively laid out for the purpose of the business, reasonableness of the expenditure has to be adjudged from the point of view of the businessman and not (1) (2) ; 530 of the Income Tax Department. It is, of course, open to the Appellate Tribunal to come to a conclusion either that the alleged . payment is not real or that it is not incurred by the assessee in the , character of a trader or it is not laid out wholly and exclusively for the purpose of the business of the assessee and to disallow it. But it is not the function of the Tribunal to determine the remuneration which in their view should be paid to an employee of the assessee. It was also pointed out in that case that an employer in fixing the remuneration of his employees is entitled to consider the extent of his business, the nature of the duties to be performed and the special aptitude of the employee, future prospects of extension by the business and a host of other related circumstances. In our opinion, the principle of this decision applies to the present case and it must accordingly be held that in the circumstances established by the assessee the entire amount of Rs. 75,465 paid to the General Manager Shri J.P. Vaish was an amount laid out or expended wholly and exclusively for the purpose of the business of the assessee. For the reasons expressed we hold that the question of law referred to the High Court must be answered in the manner indicated and this appeal is accordingly allowed with costs. Appeal allowed.

The assessee a Mill, appointed V, as its General Manager, on a salary of Rs. 1000/ p.m., and car allowance of Rs. 250/ p.m., plus commission of 121/2 % on the net profits of the firm and in case the profits exceeded Rs. 1 lakh, the commission payable was 25%. In the first year of the appointment the mill suffered loss, next year commission was paid at of the profits, and the next year commission paid was 25% as the profits exceeded the figure stipulated. After the death of V, one of the Directors was appointed to manage its affairs and given a total remuneration of Rs. 24,000/ per annum and the post of General Manager was abolished. The assessee claimed deduction from its assessable income the amount paid to V at the rate of 25% of the profits. The Income tax Officer disallowed the claim and determined Rs. 5,000/ as reasonable amount payable. Against the amount disallowed, the assessee appealed to the. Appellate Assistant Commissioner, who allowed payment of commission at 121/2% as in its view that rate was reasonable considering the practice in similar 'business concerns. The assessee appealed to the Appellate Tribunal and the appeal was dismissed. The Tribunal took the view that the ' General Manager carried 'responsibility equal to that of the Director, the commission paid to V, in excess of Rs. 24,000/ per annum, i.e., the. amount paid as total remuneration to the Director, was not really paid. wholly for the purpose of carrying on business. On reference, the High Court answered the question against the assesaee. The assessee in appeal to this Court contended that the higher rate of commission on profits was inserted to create the interest of V, who had special aptitude and experience in the line and the mill was running at a loss and it was only after sometime of V 's taking over that the mill made large profits, so the amount paid to V, was an amount laid out or expended wholly or exclusively for the purpose of the business of the assessee, and it was wrongly disallowed. HELD: In the circumstances established by the assessee, the entire amount paid to V, was an amount laid out or expended wholly and exclusively for the purpose Of the assessee. In applying the test of commercial expediency for determining whether an expenditure was wholly and exclusively laid out for the purpose of the. _ business, reasonableness of the expenditure has to be adjudged from the point of view of the businessman and not of the Income tax Department. It is, of course, open to the Appellate Tribunal tO come to a conclusion either that the alleged payment is not real or that it is not incurred by the assessee in the character of a trader or it is not laid out wholly and exclusively for the purpose of the business of the assessee and to disallow it. But it is not the function of the Tribunal to determine the remuneration which in their view should be paid to an employee Of the assessee. An employer in fixing the remuneration of his employees is entitled to consider the extent of his business, the nature of the duties to be performed ' and the special aptitude of the employee, future prospects of extension by 526 the business and a host of other related circumstances. The question as to whether an amount claimed as expenditure was laid out or expended wholly or exclusively for the purpose of business, profession or vocation as required under section 10(2) (xv) of the Income tax Act has to be decided on the facts and in the light of the circumstances of each particular case. But the final conclusion on the admissibility of an allowance is one of law. [529 D; 529H 530 C] C.I.T. Bombay vs Walchand & Co. Private Ltd. 65 I.T.R. 381, applied to. Swadeshi Cotton Mills Co. Ltd. vs C.I.T., U.P. , referred to.

Civil Appeal No. 80 of 1981. From the Judgment and Order dated 10.7.80 of the Allahabad High court in Civil Miscellaneous W.P.No. 5661 of 1979. Manoj Swarup for the Appellant. S.K. Bagga for the Respondent. The Judgment of the Court was delivered by VENKATACHALIAH, J. This appeal, by special leave, by the tenant arises out of and is directed against the Judgment dated 10.7.1980 of the Allahabad High Court in Civil Misc. Writ Petition No. 5661 of 1979 rejecting the appellant 's challenge to of the decrees of ejectment 249 granted in favour of the third respondent landlord on the ground that there was a denial of the title of the landlord within the meaning, and for purposes, of Section 3(1)(f) of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947 (Act III of 1947). The appeal raises a short question whether, in the circumstances of the case, there was a disclaimer on the part of the appellant of the landlord 's title, so as to incur forfeiture of the tenancy. The necessary and material facts may briefly be stated: The premises in question, i.e. No. 7/3, Shambhoo Barracks, Allahabad, originally belonged to a certain Shambhoo Lal Jain. Shamboo Lal died in the year 1943 leaving behind him his widow Rajul Devi; his two sons, Dayachand and Dhoomchand; and a daughter Mainavati. Dayachand, it is stated, went away in adoption to the family of one Banvarilal, a brother of Shamboo Lal. Pursuant to and in execution of a money decree obtained by the said Mainavati against her brother Dhoomchand, she brought the said premises for sale and claimed to have purchased the same at a Court sale on 21.5.1956. Mainavati, thereafter, conveyed the property by sale in favour of a certain Gopinath Agrawal. Appellant who was in occupation of the premises as a tenant even prior to the sale attorned the tenancy in favour of the purchaser Gopinath and came to pay the rents to Gopinath accordingly. Gopinath, in turn, sold the property in favour of Chhaya Gupta, the third respondent herein. Both the vendor Gopinath and the purchaser Chhaya Gupta issued notices to the appellant to attorn the tenancy in favour of the purchaser, Chhaya Gupta. But appellant tenant declined to do so and assailed not only the derivative title of the third respondent to the property but also the validity of the sale in favour of Gopinath himself. The provocation for the denial on the part of the appellant of the third respondent 's title was this: It would appear that in a separate litigation which culminated in the judgment dated 6.7.1971 of the Allahabad High Court in First Appeal No. 260 of 1968 between the said Mainavati on the one hand and a certain Chamanlal on the other, it was held that what Mainavati had acquired under the execution sale of 24.4.1956 was not the totality of all rights and interests in the property, but was only such right, title and interest as the judgment 250 debtor, i.e. Dhoomchand, had and that the Court sale did not convey to Mainavati the interest of Rajul Devi, the widow of Shamboolal Jain. It was also held that Chamanlal who obtained a decree against both Dhoomchand and the estate of Shamboolal would, notwithstanding the sale in favour of Mainavati, be entitled to bring the residuary interests in the same property for sale in his execution. Appellant sought to raise this defect in Mainavati 's title. But the point to note, however, is that the appellant had attorned the tenancy in favour of Gopinath Agarwal, paid rents through out the period during which Gopinath 's interest subsisted. The question was whether despite this attornment, the appellant could assail Gopinath 's title. Appellant sought to assert that the sale in favour of Gopinath was void and conveyed nothing. This act, on the part of the appellant, of denial and disclaimer of the title was the foundation of the proceedings in ejectment. The High Court, dismissing the appellant 's writ petition, has upheld the order of ejectment made by the Courts below. We have heard Shri K.B. Asthana, learned Senior Counsel for the appellant and Shri B.D. Aggarwal, learned Senior Counsel for the contesting third respondent. The point that Shri Asthana sought to put across was that the High Court was in error in its view that the stand taken by the appellant in his reply dated 3.4.1972 amounted in law to a denial of title of the land lord and that, at all events, the view of the High Court on the scope of a tenant 's estoppel was clearly untenable. Learned counsel submitted that the estoppel of a tenant does not go so far as to bar him from questioning the derivative title of an assignee of the reversion or from contending, as here, that, in addition to the particular person claiming to be the successor or assignee of the reversion, there were also others who were co owners of the reversion. On the first aspect, learned counsel submitted that where a tenant requires from the person, claiming to be assignee or successor in interest of the reversion, proof of the vestitive facts on which the claim rests or where the tenant alleges that the reversion vested not exclusively in the person so claiming, but in a body of co owners, there was no disclaimer of the position of the tenant as tenant. On the second aspect, learned counsel submitted that estoppel of a tenant is in respect of, and confined to, the title as at the time the tenant was inducted or let into possession, that appellant could yet show that the attornment made in favour of Gopinath Agarwal, from 251 whom the third respondent claims, was in ignorance of the full facts and the result of fraud and mis representation, and that under these circumstances, appellant 's acknowledgment of Gopinath Agarwal as the landlord, would not debar him from contending that Gopinath himself was not the full owner, but had acquired only an undivided share and interest in the property. The law as to estoppel of a tenant under Section 116 of the Evidence Act is a recognition, and statutory assimilation, of the equitable principles underlying estoppel in relation to tenants. The section is not exhaustive of the law of estoppel. The section, inter alia, predicates that no tenant of immovable property shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, title to such property. Referring to the reason underlying this branch of the doctrine of estoppel Marton B said: (Cuthberton vs Irwing, ". This state of the law in reality tends to maintain right and justice and the enforcement of contracts which men enter into with each other for so long as a lessee enjoys every thing which his lease purports to grant how does it concern him that the title of the lessor. is?" Shri Asthana may be right in his submission that a tenant who, without disclaiming his own position as tenant, however, seeks proof of title from an alleged assignee of the reversion cannot be held to have denied the landlord 's title. It may also be true that the estoppel of a tenant is primarily in relation to his landlord who had let him into possession and that, accordingly, such tenant is not precluded from questioning the alleged derivative title of a person claiming to be the successor to, or assignee of, the reversion, for want of proof of the vestitive facts on which the claim for attornment is based. The rule of estoppel does not also preclude a tenant from contending that the landlord 's title has since terminated by transfer or otherise or has been lost or defeated by title peramount. In English case law there was some authority for the proposition that the tenant was only estopped from denying his landlord 's title only if at the time he took the lease from the landlord he was not already in possession of the land. In Kumar Krishna Prasad Lal Singha Deo vs Baraboni Coal Concern Ltd. and Ors., the judicial committee noticed this contention thus: 252 "The defendant company contended before the High Court that the section only applies where it is shown that the landlord put the tenant into possession of the property, and that when a person already in possession of land becomes tenant to another there is no estoppel against his denying his lessor 's title. " However, it was held: "There is in English case law some authority for the view that a tenant is only estopped from denying his landlord 's title if at the time when he took his lease he was not already in possession of the land. But in Section 116, the Indian Legislature has formulated no such condition. The words 'at the beginning of the tenancy ' give no ground for it. When a demise of land is made and acted on, when the tenant proceeds to occupy and enjoy under the grant, gets the shelter of the grantor 's title and the benefit of his covenants, it is difficult to see why 'during the continuance of the tenancy ' he should be free of this form of estoppel. 'Tenant who has occupied but not entered ' is a difficult notion to thrust into Section 116 and quite impossible to find therein. In the present case the plea of the landlord is that the general principles of estoppel preclude the tenant from denying the title of the person to whom he has attorned. In Kumar Krishna Prasad 's case their Lordships observed: ". The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversions, though in such cases there may be other grounds of estoppel e.g., by attornment, acceptance of rent etc. ." "The section does not deal or profess to deal with all kinds of estoppel or occasions of estoppel which may arise between landlord and tenant . . . Whether during the currency of a term the tenant by attornment to A who claims to have the reversion, or the landlord by acceptance of rent from B who claims to be entitled to the term is estopped from disputing the claim which he has once admitted are important questions, but they are instances of cases which are outside Section 116 altogether . " (emphasis supplied) 253 In regard to the effect of attornment Spencer Bower on Estoppel says: "192. Where a tenant, with full knowledge of the facts, either expressly in writing, or impliedly by acts, such as the payment of rent, attorns tenant to a person other than his original landlord or one who is claiming the estate or interest of such original landlord by assignment, succession, or otherwise, he is ordinarily estopped from questioning the title of the person to whom he has so attorned. But, here too, it is open to the party sought to be estopped to explain away the attornment, and so escape the estoppel to which is would otherwise be subject, by proof that, when he so attorned, he was labouring under mistake or ignorance as to material facts affecting the title of the person to whom he attorned, particularly if such error or ignorance was due to the fraud of that person." (emphasis supplied) (Estoppel by Representation by Spencer Bower & Turner III Edn.) The concurrent findings of facts in this case it is indeed a matter of admission of the appellant that ever since the purchase by Gopinath Agarwal the appellant attorned the tenancy in his favour and paid rent to him. Appellant did not establish that there was misrepresentation on the part of Gopinath or mistake on the part of the appellant misleading appellant into this attornment. High Court observes: ". In the courts below, an attempt was made to get over the effect of the defendant having attorned to Gopinath Agrawal by trying to demonstrate that the attornment was as the result of fruad and mis representation practised by Gopinath Agrawal. Both the Courts below have rejected this plea, which is undisputably purely one of fact. Counsel for the petitioner made no attempt to show that the said finding of the courts below is wrong. Now, Section 3(1)(f) which refers to one of the grounds for eviction under the Act envisages: "(f) that the tenant has renounced his character as such or denied the title of the landlord and the latter has not 254 waived his right or condoned the conduct of the tenant;" There can be a denial of the title of his landlord without the tenant renouncing his character as such where, for instance, he sets up a plea of Jus tertii. The stance of the appellant against the third respondent 's title was not on the ground of any infirmity or defect in the flow of title from Gopinath, but on the ground that the latter 's vendor Mainavati herself had no title. The derivative title of the third respondent is not denied on any ground other than the one that the vendor, Gopinath to whom appellant had attorned had himself no title, the implication of which is that if appellant could not have denied Gopinath 's title by virtue of the inhibitions of the attornment, he could not question third respondent 's title either. Appellant did himself no service by this stand. It must, accordingly, be held on both the aspects contended for by Shri Asthana that what appellant did, indeed, amounted to a denial of title and that appellant was precluded from doing so on the general principles of estoppel between landlord and tenant. The principle, in its basic foundations. means no more than that under certain cricumstances law considers it unjust to allow a person to approbate and reprobate. Having regard to the circumstances of this case and the findings of fact recorded by the High Court it appears to us to be a clear case which attracted the grounds under Section 3(1) of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947 (Act 3 of 1947). The view taken by the High Court does not call for interference. We accordingly find no merit in this appeal which is dismissed but without an order as to costs. R.S.S. Appeal dismissed.

Mainavati, who had purchased the premises in question at a court sale, conveyed the same by sale in favour of Gopinath. The appellant who was in occupation attorned his tenancy in favour of Gopinath. Gopinath, in turn, sold the property in favour of Chhaya Gupta, the third respondent. The appellant tenant on being asked to attorn the tenancy in favour of Chhaya Gupta, declined to do so and assailed not only the derivative title of the third respondent to the property but also the validity of the sale in favour of Gopinath himself on the ground that Mainavati had not acquired the totality of all rights and interests in the property and, as such, her title was defective. This act of disclaimer of the title of Gopinath to whom the appellant had attorned was the foundation of proceedings in ejectment. The High Court, dismissing the appellant 's writ petition, upheld the order of ejectment made by the Courts below. Before this Court it was contended by the appellant: (1) that the High Court was in error in its view that the stand taken by the appellant amounted in law to a denial of title of the landlord, and (2) that the view of the High Court on the scope of a tenant 's estoppel was erroneous. Dismissing the appeal, it was ^ HELD: (1) The law as to the estoppel of a tenant under Section 116 of the Evidence Act was a recognition, and statutory assimilation, of the equitable principles underlying the doctrine of estoppel in rela 248 tion to tenants. The Section was not exhaustive of the law of estoppel. The section inter alia, predicated that no tenant of immovable property during the continuance of the tenancy, would be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, title to such property. [251B C] (2) There could be a denial of the title of his landlord without the tenant renouncing his own character as a tenant, where, for instance, he had set up a plea of Jus tertii. [254B] (3) The derivative title of the third respondent was not denied on any other ground than the one that the vendor, Gopinath to whom appellant had attorned had himself no title, the implication of which was that if appellant could not have denied Gopinath 's title by virtue of the inhibitions of the attornment, he could not question third respondent 's title either. What appellant did, indeed, amounted to a denial of title which appellant was precluded from doing on the general principles of estoppel between landlord and tenant. [254C D] (4) Having regard to the findings of fact recorded by the High Court, it appeared to be a clear case which attracted the grounds for eviction under section 3 (1) of the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, 1947. [254E F] Kumar Krishna Prasad Lal Singha Das vs Baraboni Coal Concern Ltd., , referred to.

Appeal No. 127 of 1966 Appeal from the judgment and order dated December 11, 1962 of the Calcutta High Court in Income tax Reference No. 47 of 1962. section T. Desai, A. N. Kirpal and R. N. Sachthey, for the appellant. A. K. Sen and B. P. Maheshwari, for the respondent. The Judgment of the Court was delivered by Bhargava, J. This appeal arises out of proceedings for registration of the firm, Juggilal Kamalapat, Calcutta, under section 26A ,of the Income Tax Act (hereinafter referred to as "the Act") for the assessment year 1943 44. Prior to this assessment year, the three Singhania brothers, Sir Padampat Singhania, Kamiapat Singhania and Lakshmipat Singhania, were carrying on a hosiery business in the name of Messrs. Juggilal Kamalapat with Head Office at Kanpur and a branch at Calcutta. On November 29, 1939, these three brothers executed a deed of partnership, by which one Jhabbarmal Saraf was taken in as a partner, and under this deed, all the four partners had equal shares. On October 27, .1941, the three brothers executed a trust deed known as the Kamla Town Trust, the principal object of which was the welfare of the employees of Juggilal Kamalapat Cotton Spinning and Weaving Mills Ltd. Under this deed, the three brothers became the first trustees. On December 2, 1942, a Deed of Relinquishment was executed by the three brothers, relinquishing their rights and claims to all the properties and assets of the firm, Juggilal Kamalapat, in favour of Jhabbarmal Saraf and of themselves in the capacity of the three first trustees of the Kamla Town Trust. This relinquishment deed purported to recognise an earlier oral relinquishment which was stated as having been operative with 786 effect from March 26, 1942. On December 1, 1942, a Partnership Deed was executed between Jhabbarinal Saraf and the three trustees, by which they purported to constitute a partnership firm taking effect from March 27, 1942, the two partners in the firm being Jhabbarmal Saraf and the Kamla Town Trust represented by these three trustees. The shares of the two partners in this partnership were: Kamla Town Trust . As. /12/ , and Jhabbarmal Saraf. As. The firm, Juggilal Kamalapat, which had been carrying on the business of hosiery, owned both movable and immovable properties at Belur near Calcutta. The immovable properties consisted of lands and buildings constructed for the use of the factory for manufacturing hosiery, and they were shown in their balance sheet as properties belonging to the firm. The firm had also been showing expenses incurred for maintaining or making additions or alterations to these buildings in their accounts and had been claiming depreciation in respect of them. It was in these circumstances that the new partnership, purporting to consist of the Kamla Town Trust and Jhabbarmal Saraf, applied for registration under section 26A of the Act for the assessment year 1943 44. The Income tax Officer rejected this claim and, in doing so, also took notice of the fact that a sum of Rs. 50,000/ had been introduced into this partnership firm by the Trust. The reason given by the Income tax Officer for not accepting the registration need not be mentioned here, because that reason was not accepted by the Tribunal and was not urged before the High Court or before this Court on behalf of the Commissioner. On appeal, the Appellate Assistant Commissioner upheld the order of the Income tax Officer for reasons given by him which were different from those given by the Income tax Officer. Those reasons are again immaterial because those reasons were not accepted by the Tribunal or the High Court and have not been relied upon before us. The Income tax Appellate Tribunal upheld the order rejecting the application for registration under section 26A on the main ground that the Relinquishment Deed dated 2nd December 1942, being an unregistered document, could not legally transfer rights and title to the immovables owned by the firm in favour of the Kamla Town Trust, and that the transfer of the immovable properties being thus legally ineffective and they being not separable from the other business assets, the entire business of the firm was not legally transferred in favour of the Kamla Town Trust. Two other reasons were also given that the constitution of the new firm was not notified to any of the Banks with which the old firm was dealing, and the new partnership was not got registered with the Registrar of Firms till May, 1946. On these facts, at the request of the respondent firm, Juggilal Kamalapat, the following question was referred by the Tribunal or opinion to the Calcutta High Court: 787 "Whether on the above facts and in the circumstances of this case, the partnership, as evidenced by the Deed of 1 st December 1942, legally came into existence and as such should be registered?" When this reference came up before the High Court on two different occasions, the High Court sent back the case for submission of further statements of the case to the Tribunal, because the High Court felt that facts, necessary to hold whether the respondent firm claiming registration was a genuine firm or not, had not been properly found by the Tribunal in its appellate order. On the first occasion, when submitting the supplementary statement of the case, the Tribunal purported to submit two different questions in lieu of the question which had been already submitted for opinion to the High Court. The two questions thus newly suggested were: "(1) Whether in the facts and circumstances of this case, can the non registration of Relinquishment Deed invalidate the transfer of the business assets to the new partnership ?, and (2)Can the registration application be rejected merely on the ground that the business assets were not legally transferred to the new partnership ?" The High Court disposed of the reference by giving the following answer: "Regard being had to the admissions made on behalf of the department, the facts and circumstances mentioned in paragraph 6 of the statement of case dated 13th March 1952 do not show that there was any legal flaw in the consti tution of the partnership firm as evidenced by the deed of 1st December, 1942. Upon such evidence, it must be concluded that it did come into existence and there is no impediment to its registration under Section 26A of the Income tax Act. It is made clear that the question itself postulates the facts and circumstances and therefore, the conclusion is based upon them. In view of the facts in this case, there will be no order as to costs. " This appeal has been brought up by the Commissioner of Income tax against this answer returned by the High Court on certificate under section 66A(2) of the Act. It appears from the judgment delivered by the High Court that when the reference came up before it, an argument was raised on behalf of the Commissioner of Income tax that the Tribunal had recorded a finding of fact that the firm seeking registration, consisting of the Kamla Town Trust and Jhabbarmal Saraf, was not a genuine firm and that this should be the answer returned by the 788 High Court to the Tribunal. It was in view of this point raised before the High Court that the High Court considered it necessary to remand the case twice to the Tribunal to ask for supplementary .statements of the case under section 66(4) of the Act. At the final hearing, however, the High Court held that it could not be accepted that the Tribunal had, as a question of fact, recorded the finding that this firm seeking registration was not genuine and had never come into existence, and, thereupon, proceeded to deal with the question referred as a question of law so as to determine whether the firm had come into existence as a legally valid firm. In this appeal before us, again, it was urged by Mr. section T. Desai on behalf of the Commissioner that the High Court was wrong in holding that it was not bound to return the answer to the Tribunal that the partnership seeking registration was not genuine in fact. In our opinion, the question sought to be raised on behalf of the Commissioner should not have been allowed to be raised by the High Court even at the earliest stage, and that it was the error .committed by the High Court in entertaining this question that has resulted in unnecessary proceedings and consequent delay. When the case first came up before the High Court, the question that was referred in the statement of the case was, as we have mentioned above, whether the partnership legally came into existence and, as such, should be registered. The existence of a firm could be challenged on two alternative grounds. One was that, in fact, on the evidence, it could not be held that such a firm had at all been constituted and had come into existence. The other was that even though it purported to come into existence as a fact, it could not claim to be a valid partnership because of some legal defect, or, in other words, whether its existence was valid in law. On the face of it, the question that was referred to the High Court for opinion was the second question and not the first one. The first question, in fact, could not have been referred to the High Court at all for opinion, because that would be a pure question of fact on which the decision of the Tribunal would be final and no reference to the High Court would lie under section 66. A reference to the High Court lies only on a question of law. The High Court, when requested to answer the question referred in the first statement of the case, should, therefore, have confined itself to the legal aspect of the existence of the partnership and should not have entered at all into the question whether the partnership had come into existence in fact or not. The Tribunal which had passed the appellate order in these proceedings consisted of two Members, and the first statement of the case was submitted by those very Members. It is clear that they themselves, when making the reference to the High Court, were of the view that they had not anywhere recorded a finding that the firm had not come into existence in fact, because, if they had come ,to such a finding, no question of law could possibly have been 789 referred by them to the High Court. The existence in law of a firm, which does not exist in fact, could not possibly be found by the High Court on the question referred. Consequently, we must reject the submission made on behalf of the Commissioner that, in this case, the High Court should have gone into the question of existence of the respondent firm as a question of fact; and in this appeal also, we must proceed on the basis that the respondent firm did in fact come into existence, and that all that the High Court was called upon to decide was whether it also came into existence It appears to us that, in this case, the submissions that were made on behalf of the Commissioner before the High Court and which have been made before us have ignored the effect of the important relevant documents and have unnecessarily placed too much reliance on the Deed of Relinquishment. The Tribunal found that a Kamla Town Trust had been constituted of which the three Singhania Brothers were the Trustees. The Tribunal also found that a deed of partnership was executed so as to constitute the firm Juggilal Kamalapat, consisting of two partners, the Kamala Town Trust, represented by the three trustees, and Jhabbarmal Saraf. Their shares in the profits and losses were also specified in the deed of partnership. There was the further finding by the Income Tax Officer that the Kamla Town Trust, which entered into the partnership, actually introduced a sum of Rs. 50,000/ as its capital ill this partnership firm. On these facts by themselves, it should have been held that a valid partnership had come into existence. So far as the deed of relinquishment is concerned, learned counsel appearing on behalf of the Commissioner has not been able to show to us any provision of law, or any decision of a Court laying down that a deed of relinquishment executed by partners of a firm in respect of their share and interest in a firm required registration, in case the firm owned immovable properties. In this connection, learned counsel for the respondent firm brought to our notice a recent decision of this Court in Addanki Narayanappa and Another vs Bhaskara Krishnappa (dead) and thereafter his heirs, and Others(1) where the question that came up for consideration was whether the interest of a partner in partnership assets comprising of movable as well as immovable property should be treated as movable or immovable property for the purposes of section 17(1) of the . The Court upheld the view of the Full Bench of the Andhra Pradesh High Court in Addanki Narayanappa & Anr. vs Bhaskara Krishtappa & Ors. () Mudholkar, J., speaking for this Court held: "It seems to us that looking to the scheme of the Indian Act, no other view can reasonably be taken. The whole concept of partnership is to embark upon a (1) ; (2) I.L.R. 1959 A.P.p. 387 790 joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is done, whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership. The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property. He would not be able to exercise his right even to the extent of his share in the business of the partnership. As already stated, his right during the subsistence of the partnership is to get his share of profits from time to time as may be agreed upon among the partners and after the dissolution of the partnership or with his retirement from partnership of the value of his share in the net partnership assets as on the date of dissolution or retirement after a deduction of liabilities ,ties and prior charges. " On this basis, the ultimate decision was that a deed, evidencing the transfer of an interest of a partner in partnership assets, does not require registration even though the partnership assets are comprised of movable as well as immovable property. A Full Bench of the Lahore High Court in Ajudhia Pershad Ram Pershad vs Sham Sunder and Others( ') held that the interest in a partnership of a partner is to be regarded as movable property when it is sought to be dealt with under 0 . 21 r. 49, Civil Procedure Code, notwithstanding that at the time when it is charged or sold, the partnership assets include immovable property. The Deed of Relinquishment, in this case, was in respect of the individual interest of the three Singhania Brothers in the assets of the partnership firm in favour of the Kamla Town Trust, and consequently, did not require registration, even though the assets of the partnership firm included immovable property, and was valid without registration. As a result of this deed, all the assets of the partnership vested in the new partners of the firm. In the alternative, we think that, even if it had been accepted that this deed of relinquishment required registration, that would not lead to the conclusion that the partnership seeking registration was not valid and had not come into existence in law. The deed of relinquishment could, at best, be held to be invalid in so far as it affected the immovable properties included in the assets of the firm; but to the extent that it purported to transfer movable assets of the firm, the document would remain valid. The deed could clearly be divided into two separate parts, one relating to immovable properties, and the other to movable assets; and the part of the deed dealing with movable assets could not be held invalid for want (1) I.L.R 28 Lab. 791 of registration. A deed of relinquishment is in the nature of a deed of gift, where the various properties dealt with are always separable, and the invalidity of the deed of gift in respect of one item cannot affect its validity in respect of another. This view was expressed by the Madras High Court in Perumal Ammal vs Perumal Naicker & Anr.(1) A deed of relinquishment, or a deed of gift, differs from a deed of partition in which it is not possible to hold that the partition is valid in respect of some properties and not in respect of others, because rights of persons being partitioned are adjusted with reference to the properties subject to partition as a whole. In the case before us, therefore, the deed of relinquishment was valid at least in respect of movable properties, and the partnership seeking registration, thus, became owner of all the movable assets of the,partnership in addition to having contributed a sum of Rs. 50,0001 as capital investment in it. The Kamla Town Trust and Jhabbarmal Saraf constituted the partnership under a deed of partnership, which was properly executed, and in these circumstances, the partnership that came into existence was clearly valid in law. There is, therefore, no force in this appeal and it is dismissed with costs. V.P.S. Appeal dismissed. (1) I.L.R 44 Mad.

Three brothers and J entered into a partnership business. The firm owned both movable and immovable properties. Later, the three brothers created a Trust, with themselves as the first three trustees. They also executed an unregistered deed of relinquishment by which they relinquished their rights in and claims to all the properties and assets of the firm, in favour of J. and of themselves in the capacity of trustees. A new partnership firm was constituted between J. and the Trust by means of a partnership deed which specified the shares of the two partners in the profits and losses. The Trust introduced a sum. of Rs. 50,000 as its capital in the new firm. For the assessment year 1943 44 the new firm applied for registration under section 26A of the Indian Income tax Act, 1922 but the Income tax Officer, Appellate Assistant Commissioner 'and the Appellate Tribunal rejected the application. The Tribunal relied mainly on the ground that the deed of relinquishment being unregistered could not legally transfer the rights and the title to the immovable properties owned by the original firm, to the Trust and that as the immovable properties were not separable from the other business assets there was no legal transfer of any portion of the business assets of the original firm in favour of the Trust. On a reference to the High Court, as to whether the new partnership legally came into existence and, as such, should be registered, it was contended on behalf of the Commissioner that the Tribunal had recorded a finding of fact that the firm seeking registration was not a genuine one and had never come into existence. The High Court, after calling for further statements, held that the Tribunal had not recorded any such finding of fact, that the firm did in fact come into existence, and that there was no impediment to its registration. in appeal to this Court, HELD : (i) The existence of a firm could be challenged on two alternative grounds; (a) that a firm had not come into existence at all, and (b) that though it came into existence in fact, its existence was not valid in law. In the present case it was only the second question that was referred to the High Court. The first could not at all be referred to the High Court as it would be a pure question of fact; and if the Appellate Tribunal had in fact recorded a finding of fact that the firm had not come into existence, the question of law referred to the High Court, would not arise at all. Therefore, the new firm did in fact come into existence. [788 E H] (ii)The new partnership between the Trust and J. was constituted under a deed which was property executed, was valid in law, and so the firm should be registered. [791 C D] 785 The deed of relinquishment was in respect of the individual interests of the three brothers in the assets of the original firm, in favour of the Trust, and consequently, did not require registration, even though the assets of that firm included immovable property. The deed was therefore valid without registration. [790 F] Addanki Narayanappa vs Bhakara Krishnappa, ; followed. Even if the deed of relinquishment required registration, it could only be invalid insofar as it affected immovable properties, but to the extent that it purported to transfer movable assets of the original firm, it would be valid. A deed of relinquishment is in the nature of a deed of gift where the various properties dealt with are separable. In the present case, therefore, the deed of relinquishment was valid at least in respect of movable properties, and the partnership seeking registration thus became owner of all the movable assets of the first partnership in addition to the Rs. 50,000 contributed as a capital investment by the Trust. [790 G; 791 A, C]

Appeal No. 5897 of 1983. From the Judgment and Order dated 25.7.1979 of the Madras High Court in Tax Case No. 54/76 (Reference No. 35/76.) T.A. Ramachandran and Janki Ramachandran for the Appellant. J. Ramamurthy, P. Parmeswaran (NP), Ranbir Chandra (NP), T.V. Ratnam and Ms. A. Subhashini (NP) for the Respondent. The Judgment of the Court was delivered by R.M. SAHAI, J. Legal issues that arise for consideration in this appeal, directed against the decision of the High Court in Commissioner of Income Tax, Tamil Nadu vs Universal Radiators, on questions of law referred to it in a reference under the Income Tax Act (in brief 'the Act ') are, if the excess amount paid to the assessee due to fluctuation in exchange rate was taxable either because the payment being related to trading activity it could not be excluded under Section 10(3) of the Act even if it was casual and non recurring in nature or it was stock in trade, therefore, taxable as revenue receipt or in any case the compensation for the loss of goods could not be deemed anything but profit. Shorn of details the assessee, a manufacturer of radiators for automobiles booked copper ingots from a corporation in the United States of America for being brought to Bombay where it was to be rolled into strips and sheets and then despatched to assessee for being used for manufacture. While the ingots were at sea, hostilities broke out between India and Pakistan and, the vessel carrving the goods was seized by the authorities in Pakistan. The claim of the assessee for the price paid by it for the goods was ultimately settled in its favour by the insurer in America. Meanwhile the Indian Rupee had been devalued and, therefore, in terms of rupees the appellant firm got Rs. 3,43,556 as against their payment 780 of Rs. 2,00,164 at the old rate. The difference was credited to profit on devaluation in the Profit and Loss Account. The claim of the appellant that the difference being a casual receipt and non recurring in nature, it was not liable to tax, was not accepted by the Income Tax Officer. In appeal the Appellate Assistant Commissioner was of opinion that the receipt was one which did not arise directly from carrying on business by the assessee but was incidental to it. But he did not find any merit in the submission that the ultimate realisation was in nature of capital gains and not revenue receipt. In further appeal the Tribunal held that when the goods were seized by the Pakistan authorities the character of the goods changed and it became sterlised and, therefore, it ceased to be stock in trade of the assessee. The Tribunal held that the devaluation surplus was in nature of. capital receipt and not a profit made by the assessee in course of business. It further found that the money which came to the assessee was as a result of the settlement of the insurance claim and, therefore, the profit that resulted from it could not be considered to have arisen in normal course of business. When the matter came to the High Court, in its advisory jurisdiction, at the instance of the department, on the following questions of law, (i) Wether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law, in holding that the devaluation surplus earned by the assessee consequent to the settlement of the claim by the insurance company is not assessable as revenue receipt for the assessment year 1967 68 ? (ii)Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the profit earned by the assessee on account of devaluation of Indian Currency was not in the course of carrying on of the business or incidental to the business ? It did not agree with the Tribunal as according to it if the assessee had got the goods imported into India and sold them it would have got higher amount as a result of devaluation. Therefore, it held that there could be no dispute that the assessee was liable to pay tax on difference of the sale price and the cost. The High Court further held that the nature of the amount which came in the hands of the assessee was revenue receipt. It 781 did not agree that the payment made to the assessee was otherwise than for business, as the whole transaction was part and parcel of the business carried on by the assessee and could not be described as extraneous to it. The High Court thus negatived the claim of assessee for two reasons, one, the difference in the cost price and the sale price, and the other, that it was revenue receipt. In observing that, 'If the assessee had got the goods imported into India and had sold them at a higher rate, which would have increased as a result of devaluation, then there can be no dispute that the assessee would be liable to tax on the difference between the sale price and the cost ', the High Court oversimplified the issue. May be any profit or gain accruing to an assessee as a result of difference between the sale price and the cost price in a year is income. And by that yardstick the devaluation surplus, irrespective of any other consideration, may be receipt which in common parlance may be income. But liability to pay tax under the Act arises on the income accruing to an assessee in a year. The word 'income ', ordinarily in normal sense, connotes any earning or profit or pin periodically, regularly or even daily in whatever manner and from whatever source. Thus it is a word of very wide import. Clause (24) of Section 2 of the Act is legislative recognition of its elasticity. Its scope has been widened from time to time by extending it to varied nature of income. Even before it was defined as including profits, gains, dividends and contributions received by a trust it was held to be a word, 'of broadest connotation ' which could not be 'understood in restricted or technical sense '. The wide meaning of the word was explained by this Court in Raghuvanshi Mills Ltd., Bombay vs Commissioner of Income Tax, Bombay city, and it was emphasised that the expression, 'from whatever source derived ' widened the net. But exigibility to tax is not the same as liability to pay tax. The former depends on charge created by the Act and latter on computation in accordance with the provisions in the Act and the rules. Surplus in consequence of devaluation of the currency was undoubtedly receipt, but the liability to pay tax on it could arise only if it was income for purposes of the Act and was not liable to be excluded from computation under any of the provisions of the Act or the rules framed thereunder. Section 10 of the Act provided for exclusion of certain income from computation. One of its subsection, which is relevant for this appeal, during the period under dispute, stood as under, In computing the total income of a previous year of any 782 person, any income failing within any of the following clauses shall not be included (3) any receipts which are of a casual and non recurring nature, unless they are (i) (ii)receipts arising from business or the exercise of a profession or occupation; or (iii) In substantive clause, an income which was casual and non recurring in nature was excluded from being charged as income of the assessee. Due to use of word, 'and ', existence of both the conditions was mandatory. Absence of any disentitled the assessee from claiming any benefit under the clause. C Casual ' according to dictionary means 'accidental or irregular '. this meaning was approved by this Court in Ramanathan Cheuiar vs Commissioner of Income Tax, Madras, Non recurring is one which is not likely to occur again in a year. But an income even after satisfying the two conditions may still not have been liable to be excluded if it fell in one of the exceptions carved out by the proviso. In other words, the receipt should not only have been casual and non recurring only but it should not have been 'receipts arising from business '. To put it the other way, if an income arose in the usual course of business, then it would not have been liable for exclusion even if it was casual or non recurring in nature. 'Casual ', as explained earlier, means accidental or irregular. But if the irregular or the accidental income arose as a result of business activity, then even if it was non recurring, it may not have fallen outside the revenue net. The real test, therefore, was the nature and character of income which accrued to the assessee. The casual nature of it or non recurring nature were only aids to decide if the nature of income was in the course of business or otherwise. In Raghuvanshi Mills Ltd. (Supra) it was held by this Court that a receipt even if it was casual and non recurring in nature would be liable to tax if it arose from business. 'Business ' has been defined in Clause ' 13 of Section 2 of the Act as including 'any trade, commerce or manfacture or any adventure or concern in the nature of trade, commerce or manufacture '. In Barendra Prasad Ray and Ors. vs Income Tax Officer, it has been held, by this Court, that the expression, 783 'business ' is of very wide import and it means an activity carried on continuously and systematically by a person by the application of his labour and skill with a view to earning the income. The width of the definition has been recognised, by this Court, even in S.G. Mercantile Corporation Pvt. Ltd. vs Commissioner of Income Tax and Commissioner of Income Tax vs Calcutta National Bank, And even a single venture has been held to amount to business and the profit arising out of such a venture has been held to be taxable as income arising from business. In Commissioner of Income Tax, Mysore vs Canara Bank Ltd., (1967) LXIII ITR 328 it was held, by this Court, that where money was lying idle and the blocked balance was not employed for internal operation or for business by the bank the profit accruing to the assessee on the blocked capital due to fluctuation in exchange rate could not be held to be income arising out of business activity or trading operation. The ratio reflects the rationale implicit in sub section (3) of Section 10 of the Act. An income which was casual in nature could be brought in the revenue net only if it arose from business. In other words the receipt or profit of the nature covered by Section 10(3) could be brought to tax if it was result of any business activity carried on by the assessee. The assessee carried on business of manufacturing radiators and not ingots. They were imported to be converted into strips and sheets at Bombay. The link which could create direct relationship between the finished goods and raw material was snapped even before it reached Bombay. Payment made for loss of such goods did not bear any nexus with the assessee 's business. May be that if it would have reached, it could have been after conversion into strips and sheets used as raw material. But so long it did not reach Bombay and was not converted into raw material, the connection it bore with the assessee 's business was remote. And any payment made in respect of it could not be said to accrue from business. In Strong and Company of Romsay, Limited vs Woodifield (Surveyor of Taxes), 5 Tax Cases p.215, a converse case where the assessee claimed deduction of certain payments made to a customer, for the injury caused to him by falling off a chimney due to the assessee 's servant 's negligence, it was held, "it does not follow that if a loss is in any sense connected with the trade, it must always be allowed as a deduction; for it may be only remotely connected with the trade or 784 it may be connected with something else quite as much as or even more than with the trade. I think only such losses can be deducted as are connected with it in the sense that they are really incidental to the trade itself. " The word 'from ' according to dictionary means 'out of. The income thus should have accrued out of the business carried on by the assessee. An income directly or ancillary to the business may be an income from business, but any income to an assessee carrying on business does not become an income from business unless the necessary relationship between the two is established. What was lost on the seas was not raw material, but something which was capable of being converted into raw material. The necessary nexus between ingots and radiators which could have resulted in income from ingots never came into being. Thus any devaluation surplus arising out of payment paid for loss of ingots could not be treated as income from business of the. assessee. For deciding the next aspect, namely, if the excess payment due to devaluation could be treated as revenue receipt, two questions arise, one, if the ingots were stock in trade and other the effect in law of its being blocked or sterlised. Stock in trade is goods or commodity in which the assessee deals in course of business activity. Good or commodity may be capital or revenue depending on. if it is bought or sold or is used or exploited by the assessee. Since the ingots by itself were not raw material and were not usable by the assessee for the business of manufacturing radiators, unless they were converted into strips and sheets, they could not be treated as stock in trade. The buying of the ingots by the assessee was not a part of its trading activity. Income from goods purchased for business is not an income from business. Ratio in State Bank of India vs Commissioner of Income Tar, Emakultam, relied on behalf of department is not helpful ' as the Bank of Cochin, as part of its banking business, had been purchasing cheque payment orders, mail transfers, demand drafts etc. drawn in foreign currencies which were sold or en cashed through assessee correspondent banks in foreign currencies concerned and proceeds credited to the current account of the assessee and therefore the foreign exchange was held to be stock in trade of the assessee, and any increase in value of foreign currency resulting in excess credited to the a 'ssessee 's account as a result of devaluation was held to be in consequence of assessee 's business activity. 785 Even assuming it was stock in trade, it was held by this Court in Commissioner of Income Tax vs Canara Bank Lid, (supra) that stock intrade, if it gets blocked and sterlised and no trading activity could be carried with it, then it ceased to be stock in trade, and any devaluation surplus arising on such capital due to exchange rate would be capital and not revenue. Applying the ratio of this case, the copper ingots, which even if assumed to be stock in trade, were blocked and sterlised due to hostilities between India and Pakistan, and, therefore, it ceased to be stockin trade and any surplus arising due to exchange ratio in the circumstances was capital receipt only. Coming to the issue whether devaluation surplus earned by the assessee consequent on the settlement of the claim by the insurance company could be treated as revenue receipt, it may be stated that taxability on profit or deduction for loss depends on whether profit or loss arises in course of business. The courts have maintained a distinction between insurance against loss of goods and insurance against loss of profits. The latter is undoubtedly taxable as is clear from the decision in Raghuvanshi Mills (supra) where any amount paid by the insurance company 'on account of loss of profit ' was held taxable. But what happens where the insurance company pays any amount against loss of goods. Does it by virtue of compensation become profit and is taxable as such. Taxability of the amount paid on settlement of claim by the insurance company depends both on the nature of payment and purpose of insurance. Raghuvanshi Mills ' decision is an authority for the proposition where the very purpose of insurance itself is profit or gain. Result may be the same where the payment is made for goods in which the assessee carried on business. Any payment being accretion from business, the excess or surplus accruing for any reason may be nothing but profit. (see the King vs B. C Fir and Cedar Lumber Company, Ltd. , Green (HM Inspector of Taxes) vs J. Gliksten & Son, Ltd Reports of Tax Gases Vol.14 p.365, Commissioner of Income Tax, Bombay City III vs Popular Metal Works & Rolling Mills (1983) ITR Vol. 142 p.361. But where payment is made to compensate for loss of use of any goods in which the assessee does not carry on any business or the payment is a just equivalent of the cost incurred by the assessee, but excess accrues due to fortuitous circumstances or is a windfall, then the accrual may be a receipt, but it would not be income arising from business, and, therefore, not taxable under the Act. In Commissioner of Inland Revenue vs William 's Executors, 26 Tax Cases p.23, 786 the distinction was explained thus, "A manufacturer can, of course, insure his factory against fire. The receipts from that insurance will obviously be capital receipts. But supposing he goes further, as the manufacturer did in that case, and insures himself against the loss of profits which he will suffer while his factory is out of action; it seems to me it is beyond question that sums received in respect of that insurance against loss of profits must be of a revenue nature. " The assessee did not carry on business of buying and selling ingots. The compensation paid to the assessee was not for any trading or business activity, but just equivalent in money of the goods lost by the assessee which it was prevented from using. The excess arose onsuch payment in respect of goods in which the assessee did not carry on any business. Due to fortuitous circumstances of devaluation of currency, but not due to any business or trading activity the amount could not be brought to tax. The Appellate Tribunal in the instant case had found, "the profit on account of devaluation is not business profit or income as it has nothing to do with the business or trading activity of the assessee. The profit arose since the clai m was settled by the Insurance Company and the Indian rupee was devalued. Even without paying for the goods contracted for, the assessee by an extraordinary set of fortuitous circumstances earned a profit which by its very nature is causal and non recurring. In this view of the matter the profit cannot be charged to tax." The High Court of Kerala in Commissioner of Income Tax vs Union Engineering Works, held : "In the instant case, the excess profit, as found by the Tribunal, was not a receipt arising from business; nor was it, as admitted on both sides, capital gains. This was part of the compensation received by the assessee from the insurer for damage caused to its goods. The claim for the compensation for damage caused to the goods had. been 787 settled with the insurer, and the sum, so settled did am include any excess profit. The excess profit arose entirely due to the , devaluation. This excess amount was in the nature of a windfall, being the unexpected fruit of devaluation, and it can not, therefore, be regarded as a receipt arising from business though it may be said in a sense to be a receipt in the course, of business. We hold that the Tribunal had correctly held that the sum of Rs.13,455.75 received by the assessee was not a recipt arising from its business within the meaning of section 10(3)(ii) 'of the Income Tax Act, 1961. " We are of the view that on the facts of that case, the High Court of Kerala was right in law in upholding the findings of the Tribunal while on the facts found in the instant case, the High Court, of Madras was wrong in law in reversing the well considered order of the Tribunal. For reasons stated by us this appeal suceeds and is allowed. Both the questions referred by the Tribunal to the High Court are answered in the affirmative, i,e, in favour of assessee and against the department. The assessee shall be entitled to its costs. N. V. K. Appeal allowed.

The appellant assessee a manufacturers of radiators for automobiles booked copper ingots from a corporation In the United States of America for being brought to Bombay where it was to be rolled Into strips and sheets and then despatched to the assessee for being used for manufacture. While the ingots were at sea, hostilities broke out between India and Pakistan and, the vessel carrying the goods was seized by the authorities in Pakistan. The claim of the assessee for the price paid by it for the goods was ultimately settled in its favour by the Insurer in America. The Indian Rupee In the meanwhile had been devalued and, therefore, in terms of rupees the appellant firm got Rs. 3,43,556/ as against their payment of Rs. 2,00,164/ at the old rates. The differnece was credited to profit on devaluation in the Profit and Loss Account. The claim of the appellant that the difference being a causal receipt and non recurring In nature, and as such was not liable to tax, was not accepted by the IncomeTax Officer. The Appellate Assistant Commissioner rejected the appeal of the assessee, being of the opinion that the receipt was one which did not arise directly from carrying on business by the assessee but was the incidental 776 to it, and not finding any merit in the submission that the ultimate realisation was in the nature of capital gains and not revenue recipt. In further appeal by the assessee, the Tribunal held that when the goods were seized by the Pakistan authorities the character of the goods changed and it became sterilized and, therefore, it ceased to be stock intrade of the assessee, that the devaluation surplus was in nature of capital receipt and not a profit made by the assessee in the course of business, that the money which came to the assessee was as a result of the settlement of the insurance claim and, therefore, the profit that resulted from it could not be considered in the normal course of business. The High Court in its advisory jurisdiction at the instance of the ' Department negatived the claim of the assessee for two reasons, one the difference in the cost price and the sale price, and the other that it was revenue receipt, and did not agree with the Tribunal as according to it if the assessee had got the goods imported into India and sold them it would have got higher amount as a result of devaluation, and held that there could be no dispute that the assessee was liable to pay tax on the difference of the sale price and the cost. It further held that the nature of the amount which came in the hands of the assessee was a revenue receipt, and did not agree that the payment made to the assessee was otherwise than for business, as the whole transaction was part and parcel of the business carried on by the assessee and could not be described as extraneous to it. In the assesses appeal to this Court, on the question whether the excess amount paid to the assessee due to fluctuation in exchange rate was taxable or not. Allowing the appeal, this Court, HELD : 1. The word 'income ', ordinarily in normal sense, connotes any earning or profit or gain periodically, regularly or even daily in whatever manner and from whatever source. It is thus a word of very wide import. Section 2(24) of the Income Tax Act is legislative, recognition of its elasticity. Its scope has even widened from time to time by extending it to varied nature of income. Even before it was defined as including profits, gains, dividends and contributions received by a trust it was held to be a word, 'of broadest connotation ' which could not be understood in restricted or technical sense. ' [781 D E] 777 Raghuvanshi Mills Ltd., Bombay vs Commissioner of Income Tax, Bombay City, , referred to. [781 E] 2. 'Casual ' means accidental or irregular. If the irregular or the accidental income arose as a result of business activity, them even if it was non recurring, it may not have fallen outside the revenue net. The real test, is therefore, what was the nature and character of the income which accrued to the assessee. The causal nature of it or non recurring nature were only aids to decide if the nature of income was in the course of business or otherwise. [782 F] Barendra Prasad Ray and Ors. vs Income Tax Officer, ; section G. Mercantile Corporation Pvt. Ltd. vs Commissioner of Income Tax, ; Commissioner of Income Tax vs Calcutta National Bank, and Commissioner of Income Tax, Mysore vs Canara Bank Ltd. (1967) LXIII ITR 328, referred to. [782 G, H, 783 B] 3. An income which was casual in nature could be brought In the revenue net only if it arose from business. In other words the receipt or profit of the nature covered by Section 10(3) could be brought to tax if it was the result of any business activity carried on by the assessee. [783 D] In the instant case, the assessee carried on business of manufacturing radiators and not ingots. The ingots were imported to be converted into strips and sheets at Bombay. The link which could create direct relationship between the finished goods and the raw material was snapped even before it reached Bombay. Payment made for loss of such goods did not bear any nexus with the assessee 's business. May be that if it would have reached, it could have been 'after conversion into strips and sheets used as raw material. But so long as it did not reach Bombay and was not converted into raw material, the connection it bore with the assessee 's business was remote. And any payment made in respect of it could not be said to accrue from business. [783 E] Strong and Company of Romsey, Limited vs Woodifieid (Survevor of Taves), 5 Tax Cases p.215, referred to. [783 F] 4. An income directly or ancillary to the business may be an income from business, but any income to an assessee carrying on business does not become an income from business unless the necessary relationship 778 between the two is established. [784 B] In the Instant case, what was lost was not raw material, but something which was capable of being converted into raw material. The necessary nexus between ingots and radiators which could have resulted in income from ingots never came into being. Thus any devaluation surplus arising out of payment paid for loss of ingots could not be treated as income from business of the assessee. [784 C] section Income from goods purchased for business is not an income from business. In the instant case buying ingots by the assessee was not a part of its trading activity. [784 F] State Bank of India vs Commissioner of Imcome Tax, Ernakulam, , distinguished. [784 F] 6. Taxability on profit or deduction for loss depends on whether profit or loss arises in the course of business. The courts have maintained a distinction between insurance against loss of goods and insurance against loss of profits. The latter is undoubtedly taxable. Taxability of the amount paid on settlement of claim by the insurance company depends both on the nature of payment and purpose of insurance. [785 D E] 7. Any payment being accretion from business, the excess or surplus accruing for any reason may be nothing but profit. But where payment is made to compensate for loss of use of any goods in which the assessee does not carry on any business or the payment is a just equivalent of the cost incurred by the assessee, but excess accrues due to fortuitous circumstances or is a windfall, then the accrual may be a receipt, but it would not be income arising from business, and, therefore, not taxable under the Act. [785 F G] Commissioner of Inland Revenue vs William 's Executors, 26 Tax Cases p.23, referred to. [785 H] In the instant case, the assessee did not carry on business of buying and selling of ingots. The compensation paid to the assessee was not for any trading or business activity, but just equivalent in money of the goods lost by the assessee which it was prevented from using. The excess arose on such payment in respect of goods in which the assessee did not carry on any business. Due to fortuitous circumstances of devaluation of currency, but not due to any business or trading activity the amount could not 779 be brought to tax. [786 C D] Commissioner of Income Tax vs Union Engineering Works, , approved. [786 G]

n No. 96 of 1955. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. Purushottam Tricumdas, J. B. Dadachanji Ravindra Narain and O. C. Mathur, for the petitioner. C. K. Daphtary, Solicitor General of India, B. R. L. Iyengar and T.M. Sen, for the respondents. October 23. The Judgment of Sinha, C. J., Das, Sarkar and Ayyangar, JJ., was delivered by Das, J. Mudholkar, J., delivered a separate Judgment. section K. DAS, J. This is a writ petition on behalf of two petitioners. The first petitioner is the Board of Trustees, Ayurvedic and Unani Tibbia College, Delhi, through Hakim Mohammed Jamil Khan, stated to be its properly elected Secretary. The second petitioner is Hakim 159 Mohammad Jamil Khan himself, who states that he is still one of the trustees or members of the said Board. The petition was initially filed on behalf of the first petitioner. Subsequently, an amendment petition was moved which was allowed by us. As a result of the amendments allowed petitioner No. 2 was added as one of the petitioners, and certain new grounds of attack were added in para. 14 of the petition. To these grounds we shall advert later. The short facts giving rise to the petition are these. One Hakim Mohammad Ajmal Khan was a physician (of Unani medicine) of all India repute. He lived in Delhi and started a pharmaceutical institute in the town known as Hindustani Dawakhana in the year 1903. He also established a medical college known as the Tibbia College. He died in the year 1927. But before his death, in the year 1911, he along with certain other persons formed a society styled Anjuman i Tibbia and had it registered under the (Act XXI of 1860). The name of the society was changed in 1915, and it became known as the Board of Trustees, Ayurvedic and Unani Tibbia College, Delhi. For convenience we shall refer to it as the Board. The Board ran the Tibbia College ' and an attached hostel. The pharmaceutical institute was also managed by it, though at one stage petitioner No. 2 claimed the institute as his private property. Certain rules and regulations were made for the functioning of the Board, which were amended from time to time. The main objects of the Board were thus stated in the rules : (a) to establish colleges for the purpose of imparting higher education in the Unani and Ayurvedic systems of medicine to the inhabitants of India; (b) to improve the indigenous systems of medicine on scientific lines and for that 160 purpose to establish one or more pharmaceutical institutes (dawakhanas); and (c) to have medical books compiled and translated and to adopt other means which might enhance the popularity of those systems and add to the information of the people in general on hygiene etc. The maximum number of members (called trustees in the rule) was 35 to be elected from all the then Provinces of India. It was stated in r. 5 that one third of the members of the Board should be Hakims and Vaids. The financial year of the Board was to be from April 1 to March 31 of each year, and the annual subscription to be paid by a member of the Board was fixed at Rs. 12/ per annum payable in advance before April 30 of each year. Rule 6 laid down the circumstances in which the office of a member should be deemed to be vacant, and one of such circumstances was the failure of a member to pay him annual subscription before the date fixed for such payment. There were also rules regarding (a) power of inspection of the college, hostel etc., (b) ordinary meetings of the Board of Trustees and (c) matters which could be dealt with by the Board and its sub committees. It is not necessary to state these rules in detail. Rule 13 provided for the formation of a Managing Committee consisting of nine members and six officials for a period of three years and the functions of the Managing Committee were also prescribed in the rules. The office bearers of the Board and the Managing Committee were to be the same and consisted of (1) a President, (ii) a Senior Vice President, (iii) a Junior Vice President, (iv) a Secretary, (v) a Financial Secretary, and (vi) a Joint Secretary. It was laid down in r. 26 that the office bearers of the Board were to be elected for three years by the members. The rules also laid down the powers and duties of the President, 161 Secretary, Financial Secretary and Joint Secretary. One of the rules said that the office of the Secretary of the Board shall, as far as possible, vest in the lineal descendants of Hakim Mohammad Ajmal Khan. Hakim Mohammad Jamil Khan son of Hakim Mohammad Ajmal Khan and petitioner No. 2 before us, was the first Secretary of the Board. In the year 1948 Shri Rameshwar Dayal, the then Collector of Delhi, and Dr. Yudhvir Singh the then President of the Delhi Municipal Committee, and certain other persons were elected as members of the Board. Dr. Yudhvir Singh was elected President and one Shri Mool Chand Gagerna was appointed Joint Secretary. Soon after the elections in 1948, a struggle ensued between different groups of members for obtaining control of the Board and the college, and for possession of the Hindustani Dawakhana. Certain criminal proceedings followed. On October 18, 1949, a suit was brought in the court of the senior Subordinate Judge, Delhi under H. 92 of the Code of Civil Procedure against the Secretary and 31 members of the Board. In that suit an application was made for the appointment of a receiver and on October 19, 1949, the Subordinate Judge appointed two local advocate as joint receivers with plenary powers. These receivers took possession of the Dawakhana and the college between October 19 and 23, 1949. When the suit was still pending, the Delhi State Legislature passed an Act called the Tibbia College Act, 1952 (Delhi Act No. 5 of 1952), hereinafter referred to as the impugned Act. This Act same into fore on October 10, 1952. The constitutional validity of the Act is the principal question for decision on this writ petition and we shall presently refer to the provisions thereof. We may only state here that by section 9 of the impugned Act, the Board stood dissolved and all property, movable and immovable, and all rights, powers and privileges 162 of the Board vested in a new Board constituted under the Act. This new Board is called the Tibia Delhi College Board and we shall Refer to it as the new Board. After the passing of the impugned Act, the suit instituted before the Subordinate Judge, the Delhi was withdrawn. On the withdrawal of the suit, an application was made for making over possession of the properties to the new Board. That application was allowed in spite of the objection of petitioner No. 1. Petitioner No. 1 unsuccessfully moved the High Court of Punjab against that order. Thereafter, petitioner No. 1 moved this Court under article 32 of the Constitution for the issue of a writ restraining the State of Delhi and the newly constituted Board under the impugned Act, the State from enforcing the provisions of the impugned Act and the new Board from exercising any functions thereunder. The respondents to the petition raised a number of preliminary objections, and on December 13, 1954, the writ petition was withdrawn. This was followed by some amendments of the rules of the Board and it is stated on behalf of the petitioners that a fresh election was held in accordance with the amended rules on January 6, 1955. On January 11, 1955, the Managing Committee passed a resolution authorising the Secretary to institute a proceeding in this Court to enforce the fundamental rights of petitioner No. 1. The present petition was then filed on March 14, 1955, in pursuance of that resolution. The petition was subsequently amended in the manner already indicated by us. The State of Delhi and the new Board are the respondents to the present petition. The learned Advocate for the petitioners has challenged the validity of the Act on two main grounds. His first ground that the Delhi State Legislature had no legislative power or competence to enact the impugned Act, which must on that ground be declared invalid and inoperative. The second ground proceeds on the footing that assuming 163 the Delhi State Legislature had power to enact the impugned Act, the Act is bad because its several provisions violate the fundamental rights guaranteed to the petitioners under article 14, 19 and 31 of the Constitution. Two subsidiary points have also been urged before us, one to the effect that the Delhi State Legislature could not by the impugned Act over ride the provisions of the which is a Central Act, and the other to the effect that the Delhi State Legislature acted mala fide in passing the impugned Act. We shall presently deal with these arguments in the order in which we have stated them. It is necessary to state here, however, that a preliminary objection similar to the one urged against the previous petition was also urged in respect of the present petition. The learned Solicitor General appearing on behalf of the respondents has urged that by reason of the failure of the members to pay the annual subscription in time, all of them ceased to be members in 1950 1951; therefore, the elections held in 1955 were of no effect there being no one competent to elect; and the Board as a Board ceased to exist before 1955 and neither petitioner No. 1 nor petitioner No. 2 could maintain the present writ petition. Some of the affidavits made on behalf of the parties containing averments with regard to the payment or non payment of subscription particularly in the years 1949 50 and 1950 51 were read, and exhibit B. series which were the cash books of the years 1951 to 1954 were also placed before us. On one side there is the averment on behalf of the respondents that no subscriptions were paid before the due date for the years 1949 50 and 1950 51 by any of the members. As against this, it is stated on behalf of the petitioners that petitioner No. 2 and some of the other members paid their subscription to the Financial Secretary for the years 1949 50 and 1950 51. An affidavit made by the then Financial Secretary was also placed before us. From appeal of the affidavits 164 and the documents filed it appeared to us that the . question being one of disputed facts could not be satisfactorily decided on the materials placed before us. We, therefore, thought it proper and convenient to consider the legal points urged as regards the constitutional validity of the impugned Act and of the action taken thereon. Now, we take up the first argument advanced on behalf of the petitioners. This argument has been put in the following way. The State of Delhi became a Part State on the coming into force of the Constitution of India. Under article 239 of the Constitution as it then stood, a Part State was to be administered by the President acting, to such extent as he thought fit, through a Chief Commissioner or a Lieutenant Governor to be appointed by him or throughout the Government of a neighbouring State. Article 240 of the constitution enabled Parliament by law to create or continue for any Part State a body, whether nominated, elected or partly nominated and partly elected, to function as a Legislature for the State. By virtue of the power conferred by article 240, Parliament enacted the Government of Part a States Act, 1951 (Central Act 49 of 1951), by which a Legislative Assembly was constituted for some of the Part C States including one for Delhi. Section 21 of the said Act laid down the extent of legislative power of the Legislative Assembly. This section said inter alia that the Legislative Assembly of a Part a State may make laws for the whole or any part of the State with respect to any of the matters enumerated in the State List (List II) or in the Concurrent List (List III). There was an exception provided with regard to the Legislative Assembly of the State of Delhi in respect of public order, police etc., which is not relevant for our purpose. Section 22 said that if any provision of a law made by the Legislative Assembly of 0, Part State was repugnant to any provision of a law made by Parliament, then the 165 law made by Parliament, whether passed before or after the law made by the Legislative Assembly of the State, shall prevail and the law made by the Legislative Assembly of the State shall, to the extent of the repugnancy, be void. There is an Explanation to the section which is not 'relevant for our purpose and need not be read. The point which the learned Advocate for the petitioners has emphasised is that under section 21 aforesaid, the extent of the legislative power of the Delhi State Legislature was limited to the making of laws for the whole or any part of the Delhi State with respect to any of the matters enumerated in the State List or in the Concurrent List of the Seventh Schedule to the Constitution. Now, item 32 of the State List (List II) is in these terms: "32. In corporation, regulation and winding up of corporations, other than those specified in List I. and universities, unincorporated trading, literary, scientific, religious and other societies and associations; co operative societies. " Items 43 and 44 of the Union List (List I) are in these terms: 43. Incorporation, regulation and winding up of corporations, including banking, insurance and financial corporations but not including co operative societies 44. Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities. " The argument of the learned Advocate for the petitioners is this. The old Board which was registered under the and is petitioner No. 1 before us, was a corporation, whose objects were not confined to the State of Delhi. Therefore, any legislation with regard to it could fall under item 44 of List 1 and not under 166 item 32 of List II. This argument consists of two parts first, that the old Board was a corporation, and, secondly, that its objects were not confined to one State. The learned Advocate urge that being the position, the Delhi State Legislature had no legislative competence to make the impugned legislation which went beyond the extent of its legislative power under 8. 21 of Act 49 of 1951. It is worthy of note here that if the Board were not a corporation, then the impugned legislation would not fall under item 44 of List I; alternatively, if the Board were not a corporation but its objects were confined to only one State, viz. the State of Delhi, then again item 44 would not be attracted. On behalf of the respondent there is a threefold reply to the argument stated above: firstly, that the Board was not a corporation; secondly, its objects did not extend beyond the State of Delhi; and thirdly, the impugned legislation is supportable under item 11 of List II relating to "Education" and item 28 of the Concurrent List (List III) relating to "Charities and charitable institution". The first and foremost question is whether the old Board was a corporation in the legal sense of that word. What is a Corporation? Corporations may be divided into two main classes, namely, corporations aggregate and corporations sole. We are not concerned in the present case with Corporation sole. A corporation aggregate has been defined as a collection of individuals united into one body under a special denomination, having perpetual succession under an artificial form, and vested by the policy of the law with the capacity of acting in several respects as an individual, particularly of taking and granting property, of contracting obligations and of suing and being sued, of enjoying privileges and immunities in common, and of exercising a variety of political rights, more or less extensive, according to the design of its institution, or the powers conferred upon it, either at the time of its creation or at any subsequent 167 period of its existence". (Halsbury 's Laws of England, 3rd Edn. Vol. 9, page 4.) A corporation aggregate has therefore only one capacity, namely, its corporate capacity. A corporation aggregate may be a trading corporation ora non trading corporation. The usual examples of a trading corporation are (1) charter companies, (2) companies incorporated by special acts of parliament, (3) companies registered under the Companies Act, etc. Non trading corporations are illustrated by (1) municipal corporations, (2) district boards, (3) benevolent institutions, (4) universities etc. An essential element in the legal conception of a corporation is that its identity is continuous, that is, that the original member or members and his or their successors are once In law the individual corporators, or members, of which it is composed are something wholly different from the corporation itself; for a corporation is a legal persona just as much as an individual. Thus, it has been held that a name is essential to a corporation; that a corporation aggregate can, as a general rule, only act or express its will by deed under its common seal; that at the present day in England a corporation is created by one or other of two methods, namely, by Royal charter of incorporation from the Crown or by the authority of Parliament that is to say, by or by virtue of statute. There is authority of long standing for saying that the essence of a corporation consists in (1) lawful authority of incorporation, (2) the persons to be incorporated, (3) a name by which tho persons are incorporated, (4) a place, and (5) words sufficient in law to show incorporation. No particular words are necessary for the creation of a corporation; any expression showing an intention to incorporate will be sufficient. The learned Advocate for the petitioners has referred us to various provisions of the and has contended that the 168 result of these provisions was to make the Board a corporation on registration. It is necessary now to read some of the provisions of that Act. The Act is entitled an Act for the registration of literary, scientific and charitable societies and the preamble states that it was enacted for improving the legal condition of societies established for the promotion of literature, science, or the fine arts, or for the diffusion of useful knowledge etc. , or for charitable purposes. Section 1 of the Act states that any seven or more persons associated for any literary, scientific, or charitable purpose, or for any such purpose as is described in s.20 of the Act may, by subscribing their names to a memorandum of association and filing the same with the Registrar of Joint stock Companies form themselves into a society under the Act. Section 2 lays down that the memorandum of association shall contain and one of the particulars it must contain is "the objects of the society". Section 3 deals with registration and the fees payable therefor. Sections 5 and 6 are important for our purpose and should be read in full. The property, movable and immovable, belonging to a society registered under this Act, if not vested in trustees, shall be deemed to be vested, for the time being, in the governing body of such society, and in all proceedings, civil and criminal, may be described as the property of the governing body of such society by their proper title. Every society registered under this Act may sue or be sued in the name of the president, chairman, or principal secretary, or trustee, as shall be determined by the rules and regulations of the society, and, in default of such determination, in the name of Such person as shall be appointed by the governing body for the occasion: 169 Provided that it shall be competent for any person having a claim or demand against the society, to sue the president or chairman, or principal secretary of the trustees thereof, if on an application to the governing body some other officer or person be not nominated to be the defendant. " Section 7 provides for non abatement of suits or proceedings and the continuance of such suite or proceedings in the name of or against the successor of the person by or against whom the suit was brought. Section 8 says that if a judgment is recovered against a person or officer named on behalf of the society such judgment shall not be put in force against the property, movable or immovable, or against the body of such person or officer, but against the property of the society. Section 10 provides that in certain circumstances mentioned therein a member of the society may be sued by the society; but if the defendant shall be successful in any such suit brought at the instance of the society and shall be adjudged to recover his costs, he may elect to proceed to recover the same from the officer in whose name the suit was brought, or from the society. Sections 13 and 14 provide for dissolution of societies and the consequences of such dissolution. These provisions have also an important bearing on the questions before us and are quoted in full. Any number not less than three fifths of the members of any society may determine that it shall be dissolved, and thereupon it shall be dissolved forthwith, or at the time then agreed upon, and all necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities, according to the rules o the said society applicable thereto, if any, and, if not then as the governing body shall find expedient, provided that, in the event of any 170 dispute arising among tho said governing body or the members of the society, the adjustment of its affairs shall be referred to the principal court of original civil jurisdiction of the district in which the chief building of the society is situate, and the Court shall make such order in the matter as it shall deem requisite: Provided that no society shall be dissolved unless three fifths of the members shall have expressed a wish for such dissolution by their votes delivered in person, or by proxy, at a general meeting convened for the purpose: Provided that whenever any Government is a member of, or a contributor to, or otherwise interested in any society registered under this Act, such society shall not be dissolved, without the consent of the Government of the state of registration. If upon the dissolution of any society registered under this Act there shall remain, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the said society or any of them, but shall be given to some other society, to be determined by the votes of not less than three fifths of the members present personally or by proxy at the time of the dissolution, or, in default thereof, by such Court as aforesaid: Provided, however, that this clause Shall not apply to any society which shall have been founded or established by the contributions of shareholders in the nature of a Joint Stock Company. " Now, the question before us is regard being had to the aforesaid provisions was the Board a corporation? Our conclusion is that it was not. The most important point to be noticed in this connection is that in the various provisions of the 171 , there are no sufficient words to indicate an intention to incorporate, on the contrary, the Provisions show that there all absence of such intention. Section 2 no doubt provides for a name as also for the objects of the society. Section 5, however states that the property belonging to the society, if not vested in trustees, shall be deemed to be vested in the governing body of the society and in all proceedings, civil and criminal, the property will be described as the property of the governing body. The section talks of property belonging to the society; but the property is vested in the trustees or in the governing body for the time being. The expression property belonging to the society" does not give the society a corporate status in the matter of holding or acquiring property, it merely describes the property which vests in the trustees or governing body for the time being. Section 6 gives the society the right to sue or be sued in the Name of the president, chairman etc. and 8. 7 provides that no suit or proceeding in a civil court shall abate by reason of the death etc of the person by or against whom the suit has been brought. Section 8 again says that any judgment obtained in a suit brought by or against the society shall be enforced against it. It has been submitted before that 88. 6, 7 and 8 clothe the society with a legal personality and a perpetual succession; and section 10 enables the members of the society to be sued as strangers certain circumstances, by the society, and the Costs awarded to the defendant in such a suit may be recovered, at his election, from the officer in whose name the suit was brought. Dealing with very similar provisions (sections 7. 8 and) of the English Trade Union Act, 1871 (34 and 35 Vict, . 31) Lord Lindley said in the celebrated case of Taff Vale Railway vs Amalgamated Society of Railway Servants (1). (1) ; 172 The Act does not in express terms say what use is to be made of the name under which the trade union is registered and by which it is known. But a trade union which is registered under the Act must have a name . It may acquire property, but, not being incorporated, recourse is had to the old well known machinery of trustees for acquiring and holding such property, and for suing and being sued in respect of it (ss.7, 8,9). The property so held is, however, the property of the union; the union is the beneficial owner. The Act appears to me to indicate with sufficient clearness that the registered name is one which may be used to denote the union as an unincorporated society in legal proceedings as well as for business and other purposes." In Trade Union Law ' by N. A. Citrine (1950 edn.) to which the learned Advocate for the petitioners has referred, it is stated at p. 143: The object of this section (section 9) was to provide a method of enabling legal proceedings to be brought in respect of the property of a registered trade union. Since the legislature had no intention of giving such unions corporate status with power to hold property and to sue and be sued in their registered names, it was necessary to provide for the vesting of their property in trustees and to permit them to bring or defend legal proceedings in respect of that property on the unions behalf. section 8 of this Act, having provided for the vesting of the union 's property in its trustees, the present section supplements that section by empowering the trustees to bring or defend, on the union 's behalf, civil or criminal proceedings concerning its property." In Bonsor vs Musicians ' Union(1) the position (1) (L. R.) 173 Of a registered trade union in England came under consideration of the House of Lords in an appeal from the Court of Appeal. On a review of earlier decision including the decision in Tuff Vale Railway vs Amalgamated Society of Railway Servants(1), Lord Macdermott, Lord Keith of Avenholm and Lord Somervell of Harrow held that a registered trade union was not juristic person distinguishable at any at any moment of time from the members of which it was composed. After referring to the various provisions of the Trade Union Act 1871 and some of the earlier decision bearing on the question Lord MacDermott said: ' "I base this opinion primarily on the statutes. The more closely they are examined the clearer it seems to be that the legislature, though minded to bestow upon registered unions some of the gifts and attributes of legal personality, had no intention of doing more and was, indeed, adverse to the idea of going the whole length and making those unions new creatures, distinct in law from their membership, and fundamentally different from the combination of persons which the definition requires all trade unions to be." Lord Morton of Henryton and Lord Porter, who expressed the minority view, held that a registered trade union though not an incorporated body, was yet capable of entering into contracts and of being sued as a legal entity, distinct from its individual members. It is clear from the aforesaid decisions that provisions similar to the previsions of sections 5, 6, 7 and 8 of the were held not to show any intention to incorporate; on the contrary, the very resort to the machinery of trustees or the governing body for the time being acquiring and holding the property showed that there was no intention to incorporate the society or (1) ; 174 union of as to give it a corporate capacity for the purpose of holding and acquiring property. It , appears to us that the legal position is exactly the same with regard to the provisions in sections 6, 6, 7 and 8 of the . They do J not show any intention to incorporate, though they confer certain privileges on a registered society, which would be wholly unnecessary if the registered society were a corporation. Sections 13 and 14 do not carry the matter any further in favour of the petitioners. Section 13 provides for dissolution of societies and adjustment of their affairs. It says in effect that on dissolution of a society necessary steps shall be taken for the disposal and settlement of the property of the society, its claims and liabilities, according to the rules of the society; if there be no rules, then as the governing body shall find it expedient provided that in the event of any dispute arising among the said governing body or the members of the said society, the adjustment of the affairs shall be referred to the Court. Here again the governing body is given a legal power somewhat distinct from that of the society itself; because under s.16 the governing body shall be the governors, council, directors, committee, trustees or other body to whom by the rules and regulations of the society the management of its affairs is entrusted. We have, therefore, come to the conclusion that the provisions aforesaid do not establish the main essential characteristic of a corporation aggregate, namely, that of an intention to incorporate the society. We may further observe that the scheme and provisions of the Societies Registration Act,1860 are very similar to those of the Friendly Societies Act, 1986 (59 and 69 Vict. 0.25), as amended in certain respects by subsequent enactments. It is appropriate to quote here what Dennis Lloyd has said in his 'Law relating to Unincorporated Association ' (1938 edn.) at page 59 in respect of the 175 provisions of the Friendly Societies Act, 1896 as modified by subsequent enactments. He has said: The modern legislation still maintains the policy of the older Acts in withholding corporate status from friendly societies. Registration does not result in incorporation, but merely entitles the society so registered to enjoy the privileges conferred by the Act. These privileges are of considerable importance and certain of them go a long way toward giving registered societies. a status in many respects analogous to a corporation strictly so called, but without being technically incorporated. Thus something in the nature of perpetual succession is conceded by the provision that the society 's property is to vest in the trustees for the time being of the society for the use and benefit of the societies and its members and of all persons claiming through the members according to the society 's rules, and further (and this is the most noteworthy provision) that the property shall pass to succeeding trustees without assignment or transfer. In the same way, though the society, being unincorporated, is unable to sue and be sued in its own name, it is given the statutory privilege of suing and being sued in the name of its trustees. " We think that these observations made with regard to similar provisions of the Friendly Societies Act, correctly and succinctly summarise the legal position in respect of the several provisions of the . Those provisions undoubtedly give certain privileges to a society registered under that Act and the privileges are of considerable importance and some of those privileges are analogous to the privileges enjoyed by a corporation, but there is really no incorporation in the sense in which that word is legally understood. 176 On behalf of the petitioners reliance has been placed on the decision in Krishnan vs Sundaram (1) where Kania, J., (as he then was) said: The position of a society registered under the is like that of a club or a joint stock company. " There was no discussion of the question of incorporation, and the decision cannot be accepted as authoritatively laying down that a society registered under the Societies Registration, Act is a corporation. There was a similar observation without any discussion in Boppana Rukminamma vs Maganti Venkata Ramadas(2) and N. A. Nannier vs Official Assignee, Madras (3). There is how ever, a fairly full discussion of the question in Satyavart Sidhantalankar vs The Arya Samaj, Bombay (4) where Bhagwati, J., held that a Society registered under the was a legal entity apart from the members constituting it, and it can sue and be sued in its own name. The question which fell for decision in that case was not whether a society registered under the was 'incorporated ' as that term is legally understood. The question there was whether such a society could sue or be sued accept in the manner provided by 6 and 7. It was held that it could and the reason given was thus expressed by the learned Judge: " I am of opinion that the provisions contained in sections 6, 7 and 8 of the are not inconsistent with the user of the registered name of the society in connection with legal proceedings. As Lord Lindley observed in Taffy Vale Railway Company`s case (supra), "I do not say that the use of the name is compulsory but it is at least permissive. " If this is the true legal position of a society registered under the Societies Registration (1) (140)43 Bom L.R. 56 (2) A.I.R. 1940 Mad. (3) A. I. R.1951 Mad.875. (4) 177 Act, the objection . that the plaintiffs and the defendants are one and the same and that the suit as framed is not maintainable by reason of the society being the plaintiffs as well as the defendants disappears. The plaintiffs are suing on behalf of themselves and all the members of the society. The First defendant is the president of the society and represents the society. As I have already observed the society on its registration with the Registrar of Joint Stock Companies becomes a legal entity apart from its members; it would be therefore idle to contend that the society arc the plaintiffs as well as the first defendant in this action ' It is unnecessary for use to consider the correctness or otherwise of the reason given; it is sufficient for use to state that we do not think that the decision proceeds on the footing that a society registered under the is a corporation in the sense of being incorporated as that term is legally understood, but if it does, we are unable to accept it as correct. " The precise question which has arisen before US arose in Servants of India Society, Poona vs The Charity Commissioner of Bombay ). The facts of that case were these. The "Servants of India Society" was an institution which was registered under the . It owned considerable movable and immovable property both in the State of Bombay as well as in other parts of India. The State of Bombay issued a notification under a 1(4) of the Bombay Public Trusts Act, 1950 (Bom. Act XXIX of 1950) which applied the provisions of that Act to a society formed for religious or charitable purposes and registered under the . An application was made under 8.18(1) of the Bombay Public trusts Act 1950 for registration of the Servants of India Society. During an enquiry into (1) ; 178 that application an objection was taken that the Servants of India Society having been registered under the was a corporation and had objects also outside the Bombay State and therefore, a legislation purporting to regulate the activities of such a society fell in entry 44 of List I and consequently the State Legislature had no power to make any law to regulate the affairs of such a society. This objection was dealt with first by the Assistant Charity Commissioner and then the Charity Commissioner; thereafter, an application Was made under 8. 72 of the Bombay Public Trusts Act, 1950 to the Court of the District Judge, Poona. Then the matter was taken to the High Court on appeal from the decision of the District Judge. The appeal came up for hearing before our learned brother Mudholkar, J. (who was then a Judge of the Bombay High Court) and Patel, J. After referring to several decision including the decision of Bhagwati, J. in Satyavart Sidhantalankar vs The Arya Samaj, Bombay (1) our learned brother held that the Servant of India Society registered under the was a legal entity and a quasi corporation. He further held that entry 44 in List I and the first part of entry 32 in List II relating to incorporation, regulation and winding up of corporations ' must be given a liberal construction and quasi corporations would come under those entries. Basing himself on a parity of reasoning relating to entry 7 in List III which related to 'Contracts ', he said that if quasi. contracts would come under entry 7, quasi corporation must also come under entries 43 and 44 of List I and the first part of entry 32 of List II. mr. Justice Patel took a different view. He said: A reference to entry 32 of the State List shows that, incorporation regulation and winding up of corporation, other than those specified in List I (Union List, entries 43 regulation and (1) 179 44), and universities are expected from Union List. Further "unincorporated trading, literary, Scientific, religious and other Societies and associations" and "co operative societies" are also excepted from the Union List. The emphasis would appear to be on the word unincorporated ' used in connection with "trading, literary, scientific, religious and other societies and associations". If an association or society is unincorporated, then it may not fall within the Union List. The question, therefore, that is pertinent to be decided is not whether or not an association or a society is a legal entity or a quasi corporation, but whether it is incorporated or unincorporated. If this is borne in mind, then it is amply clear that entries 43 and 44 of the Union List would cover only those societies and associations which are incorporated; and those which may have legal entity but which are not incorporated will not fall within the Union List. " The matter was then referred to a third Judge (Gokhale, J.) who thus expressed his view: In my judgment, societies registered under the societies Registration Act are neither corporations nor quasi corporations, but are unincorporated societies contemplated under the second part of entry 32 of the State List." Mr. Justice Gokhale also expressed the view that when Considering the ambit of an express legislative power in relation to an unspecified residuary power, abroad interpretation must be given to the former; the case, however, is different where under the Constitution there are two complementary powers each expressed in precise and definite terms and in such a case there is no justification for giving a broader interpretation one power rather than to the other. We find ourselves in agreement with 180 this view. It seems clear to use that entries 43 and 44 of list I when they talk of incorporation, regulation and winding up of corporations relate to such legal entities as have been incorporated and are corporations in the full sense of the term. Similarly,the first part of entry 32 of List II when it talks of "incorporation, regulation and winding up of corporation '` relates to such legal entities as are incorporated. This is further clarified by the second part of entry 32 which talks of "unincorporated trading. literary, scientific, religious and other societies and association". In entry 32 there is a dichotomy in the two parts thereof: the first part relates to incorporated societies which are corporations in the true sense of that term, and the second part relates to unincorporated societies. The justification is between incorporated societies and unincorporated societies and there can be no doubt as to which of the two parts in which a society registered under the will fall, be it called a quasi corporation or by any other name. A society registered under the may have characteristics which are analogies to some of the characteristics of a corporation; yet it is not incorporated and remains an unincorporated society. AS soon as it is held that it is an unincorporated society, it must come under the second Part of entry 32 of List II. In this view of the matter it is unnecessary to decide the further questions as to (1) whether the objects of the old Board extended beyond the State of Delhi, and (2) if other entries such as entry 11 of List II and entry 28 of List III can support the impugned legislation. We may, however, observe that if we had come to a different conclusion on the question whether the old Board was a corporation or not and it became necessary to decide question No. (1) above, we might have held that in view of the rules governing the old Board, its objects were not confined to the State of Delhi only in the sense 181 that it would not have been ultra vires of the old Board to have started colleges etc., outside the State of Delhi. We should however, add that the activities of the old Board did not, as a matter of fact, extend beyond the State of Delhi on the (late when the impugned Act was enacted. There is another aspect of the question which has to be considered here. Section 3 of the impugned Act is in these terms: 3. (1) With effect from such date as the Chief Commissioner may, by notification in the official Gazette, appoint (hereinafter referred to in this Act as "the appointed day"), the entire management and control of the Ayurvedic and Unani Tibbi College, Delhi now vested in the Board of Trustee of the Ayurvedic and Unani Tibbi College, Delhi, shall be vested in a Board to be called the Tibbia College Board". (2) The Board shall be a body corporate having perpetual succession and a common seal and shall by the said name sue and be sued. " Sub section (2) of 8. 3 says in express terms that the new Board constituted under the impugned Act is given a corporate status; in other words, the new Board is a corporation in the full sense of the term Does the impugned legislation still come within entry 32 of List II . We think it does and for these reasons. We have held that the old Board was not a corporation, even though it was registered under the . When, therefore, the Delhi State Legislature passed a law dissolving the old Board, it was really dealing with an unincorporated society or association By the impugned legislation, however, it gave the new Board a corporate status, but at the same time so delimited the powers and duties of the new Board as to confine them to the State of Delhi 182 only. The impugned Act is entitled an Act to provide for transfer of the management of the Ayurvedic and Unani Tibbi College, Delhi, founded by the late Hakim Ajmal Khan from its present trustees to a Board. " In other words, the Act deals only with the college in Delhi and the pharmaceutical institute attached to it. Section 7 which gives the powers and duties of the new Board is in these terms: 7. The Board shall exercise the following powers and perform the following duties, namely: (a) to maintain the Ayurvedic and Unani Tibbi College, Delhi with a view to impart higher eduction to men and women in the Ayurvedic and Unani Systems of Medicine and to promote and conduct research in the same: (b) to maintain and improve the Hindustani Dawa Khana and Rasayanashala; (c) to provide for studies to enable incorporation, where necessary of the principle of the modern system of Medicine and surgery in order to help the scheme of studies for the Ayurvedic and Unani systems according to the exigencies of time; (d) to help produce and publish books in order to facilitate the carrying out of the objects specified in the clauses (a) to (c); (e) to receive gifts, donations or benefactions from Government and to receive bequests, donations and transfer of movable or immovable properties from trustees, donors or transferors, as the case may be; (f) to deal with any property belonging to or vested in the Board in such manner as the Board may deem fit for advancing the objects specified in clauses (a) to (d); 183 (g) to do all such things as may be necessary incidental or conductive to the attainment of all or any of the subjects specified in clauses (a) to (d) Unlike the rules governing the old Board which enabled it to establish colleges outside Delhi for the purpose of imparting higher education ill the Unani and Ayurvedic systems of medicine, section 7 gives the new Board powers and duties with regard to the Ayurvedic and Unani Tibbi College at Delhi and the pharmaceutical institute and laboratory attached to it. This is made further clear by the definition of the word Board ' in 8. 2, incorporation section, namely, 8. 3, constitution of the Board as laid down in 8. 4, and the sections relating to the power of the chief commissioner to supersede the Board, to make rules to carry out the objects of the Act and the power of the Board to make regulations not inconsistent with the Act for carrying out the purposes thereof. None of the provisions of the impugned legislation accepting 8. 9 to which we shall presently refer give the new Board any powers or duties other than those connected with the college, attached pharmaceutical institute and laboratory, all situate in the State of Delhi. We now come to 8. 9 which is in these terms: "9.(1) As from the appointed day, the Board of Trustees of the Ayurvedic and Unani Tibbi College, Delhi, a society registered under the provisions of the Registration of Societies Act, 1860, on the 12th day of August, 1911, by the name Anjuman i Tibbia whose purpose, Constitution and name was amended on 25th November, 1915), shall stand dissolved and all property, movable and immovable, and all rights, powers and privileges of the said society which immediately before the appointed day belonged to or were vested in the said society shall vest in the 184 Board and shall be applied for the purposes for which the Board is constituted. (2) As from the appointed day all debts and liabilities of the said society shall stand transferred and attached to the Board and thereafter be discharged and satisfied by the Board. (3)Any will deed or other document whether made or executed before or after the commencement of this Act, which contains any bequests gifts, or trust in favour of the society shall as from the appointed day, be construed as if the Board were therein named instead of the Society. " It no doubt says that all rights, powers and privileges which immediately before the appointed day belonged to or were vested in the old Board shall vest in the new Board; but it adds that those rights, powers and privileges shall be applicable for the purposes for which the new Board is constituted. We must, therefore, read B. 9 as being subject to the provisions of 7 of the Act. In terms 9 says that the rights, powers and privileges of the old Board shall be available to the new Board and shall be applied for the purposes for which the new Board is constituted . The words underlined are important, and show clearly enough that the right, powers and privileges of tho old board are available to the new for a limited purpose only, namely, for the purposes for which the new Board is constituted. If the purposes for which the now Board is constituted are confined to the institutions in Delhi, then obviously the objects for which the new Board is incorporated do not extend beyond the State of Delhi. The conclusions at which we have arrived may now be summarised as follows: (1) On registration under tho , the old Board did not 185 become a corporation is the sense of being incorporated within the meaning entry 44 of List I; it remained and hoodwinked to be an unincorporated society though under the several provisions of the it had certain privileges, some of the privileges being analogous to those of corporation; (2) the impugned legislation while creating the new Board has given it a corporate statue, but has confined its powers and duties to the college, pharmaceutical institute and laboratory in Delhi and while giving the new Board rights, powers and privileges of the old Board has limited them to such purposes for which the new Board is constituted; (3) the impugned legislation therefore, falls under entry 32 of List II; so far as the dissolution of the old Board is concerned, under the second part of the entry and so far as incorporation of the new Board is concerned, under its first part. That being the position, the impugned legislation was well within the legislative competence and power of the Delhi State Legislature. We must, therefore, overrule the first ground of attack urged on behalf of the petitioners. We now proceed to a consideration of the second ground of attack. So far as the alleged violation of article 14 is concerned, The petitioners have stated in their petition: "There are various other institutions where there have been actual allegations of mismanagement but the State has picked out the petitioner. Assuming, without admitting, that there has been mismanagement by the petitioner of its affairs, there is not the slightest suggestion in the whole Act that it is promulgated on the ground of any mismanagement on the part of the petitioner. The said Act is an arbitrary piece of legislation and There is no reasonable 186 Classification whatsoever on which it can be supported. " To this the reply of the respondents is that the old Board was grossly mismanaging its affairs they said. "Before the said Act was passed, there was a great deal of discontent among the students of the said institution and also the general public and there was strong agitation against cross mismanagement by the trustees of the said Board. That owing to the gross mismanagement of the Board 's affairs by the trustees the situation had so deteriorated that early in 1949 there were constant students ' strikes, defalcation of funds and frequent interruption in work and studies of the institution. " In our view the petitioners have not made out any basis for the contention that (1) there were other institutions similarly situated, and (2) petitioner No. 1 was picked out for unequal treatment. The names of no other institutions similarly situated have been disclosed. In the first Sholapur case Chiranjit Lal Chowdhuri, vs The Union of India (1) it was held by a majority of Judges of this court that even one corporation, (in our case one society) or a group of persons can be taken as a class by itself for the purpose of legislation, provided it exhibits some exceptional features which are not possessed by others. The courts should prima facie lean in favour . Of constitutionality and should support the legislation if it is possible to do so on any reasonable ground, and it is for the party who attacks the validity of the legislation to place all materials before the court which would go to show that the selection is arbitrary and unsupportable. Throwing out of vague hints that there may be other (1) ; , 915, 914. 187 Instances of similar nature is not enough for this purpose". (per Mukherjea, J. at pp. 913 914 of the report. These observations apply with equal force to the present case and we are unable to sustain the contention of the petitioners that any right under article 14 of the Constitution has been violated. As to article 31 of the Constitution it seems clear to us that cl. (2) of the said Article as it stood at the relevant time has no application. The impugned legislation does not relate to nor does it provide for, compulsory acquisition of property for a public purpose. The impugned legislation provided for the transfer of the management of the Ayurvedic and Unani Tibbi College, Delhi, from the old Board to a new Board and for that purpose the old Board was dissolved and a new Board was created with certain rights, powers and privileges to be applied for the exercise of powers and performance of duties as laid down in 8. 7 of the Act. Such legislation does not fall under article 31(2) and cannot be judged by the tests laid down there in. As to cl. (1) of article 31 there is no question of any violation of that clause if the law by which the transference of management has been made is valid law. We have already held that the impugned legislation was well within the legislative competence of the Delhi State Legislature. Now the question is the impugned legislation bad on the ground that it violates the right of the petitioners under article 19(l)(f)? The property for the protection of which article 19(l)(f) is invoked belonged either to the Board or to the members composing the Board at the date of the dissolution. In either event, on the terms of 8. 5 of the Societies Registration Act, 1960, the property was to be deemed to be vested in the governing body of the Board. There could be no doubt that if the Board was dissolved by 188 competent legislative action, and in view of our conclusions on the first point raised it must be held that this had taken place the Board would cease to exist and having ceased to exist cannot obviously lay any claim to the property. This however may not be sufficient to negative the contention urged before us by the petitioners. If the legal ownership of the property by the Board or the vesting of it in the governing body was merely a method or mechanism permitted by the law whereby the members exercised their rights quoad the property, the dissolution of the Board and with it of the governing body thereof would merely result in the emergence of the right of the members to that property. It is, therefore, necessary to ascertain the precise rights the members of the Board possessed to see whether the changes effected by the impugned Act amount to on infringement of their rights within the meaning of article 19(l)(f). During the subsistence of the society, the right of the members was to ensure that the property was utilised for the charitable objects set out in the memorandum and these did not include any beneficial enjoyment Nor did the members of the Society acquire any beneficial interest on the dissolution of the society; for 8. 14 of the Act, quoted earlier, expressly negatived the right of the members to any distribution of the assets of the dissolved body. In such an event the property had to be given over to some other society, i.e., for being managed by some other charitable organisation and to be utilised for like purposes, and the only right of the members was to determine the society to whom the funds or property might be transferred and this had to be done by not less than three fifths of the members present at the meeting for the purpose and, in default of such determination, by the civil court. The effect of the impugned legislation is to vary or affect this privilege of the members and to vest the property in a new body created by it enjoined to administer it so to serve the same purposes as the dissolved 189 Society. The only question is whether the right to determine the body which shall administer the funds or property of the dissolved society which they had under the pre existing law is a right to 'acquire, hold and dispose of property ' within the meaning of article 19(l)(f), and if so whether the legislation is not saved by article 19(5). We are clearly of the opinion that right is not a right of property within the meaning of article 19(l)(f). In the context in which the words 'to dispose of ' occur in article 19(l)(f), they denote that kind of property which a citizen has a right to hold the right to dispose of being part of or being incidental to the right to hold Where however the citizen has no right to hold the property, for on the terms of 8. 14 of the Societies Registration Act the members have no right to hold ' the property of the dissolved society, there is, in our opinion, no infringement of any right to property within the meaning of article 19(l)(f). In this view, the question as to whether the impugned enactment satisfies the requirements of article 19(5) does not fall to be determined. The two decisions on which the learned Advocate. for the petitionary has relied are the State of West Bengal vs Subodh Gopal Bose (1) and Dwarkadas Srinivas vs The Sholapur Spinning, & Weaving Co. Ltd.(2). We do not think that these decisions have any application in the present case. In the State of West Bengal vs Subodh Gopal Bose(1) this Court was considering a piece of legislation which affected the right of the first respondent therein who had purchased a particular touzi at a revenue sale. As such purchaser he acquired under 8. 37 of the Bengal Revenue Sales Act, 1859, the right to avoid and annul all under tenures and forthwith to eject all under tenant" with certain exceptions. In exercise of that right the respondent gave notices of . ejectment and brought a suit in 1946 to evict certain tenants. The suit was decreed. When the appeal (1) ; (2) [1954] section C. R. 674. 190 was pending, a new legislation was made which took away the right of the first respondent which he had obtained by a decree of a court of law. In these circumstances it was held that the right of the first respondent under article 19(l)(f) was violated. The facts of that case were wholly dissimilar and the respondent`s right there did not depend on his being a member of a society. In the second Sholapur case Dwarkadas Srinivas vs The Sholapur Spinning & Weaving Co. Ltd .(1) a Controller was appointed by Government to supervise the affairs of the mills of a certain company under the Essential Supplies Emergency Powers Act, 1946. The controller made certain requisitions which the Directors refused to comply with. The Governor General then made an ordinance which was followed by an Act. Under the provisions of the ordinance the Central Government delegated all its powers to the Government of Bombay. The Government of Bombay then appointed certain Directors to take over the assets and management of the mills. These new Directors passed a resolution making a call of Rs. 50/ on each of the preference Shares payable at the time stated in the resolution. The appellant in that case was a preference shareholder who was called upon to pay Rs. 1,62,000/ in pursuance of the resolution aforesaid on the preference shares where which he held. The appellant then brought a suit challenging the validity of the ordinance and out of that suit appeal to this Court arose. It was held by this Court that the impugned ordinance and the act replacing it authorised in effect a deprivation of the property of the company within the meaning of article 31 without compensation and violated the fundamental right of the appellant therein as a preference shareholder, who was called upon to pay the moneys unpaid on his shares. The point to be noticed as distinguishing that case from the case under our consideration is this (1) ; 191 the Sholapur Spinning and Weaving Co. Ltd, which was the company in that case, had not been dissolved or brought to an end by the impugned ordinance or the Act replacing it and the appellant in that case continued to be a preference shareholder; not only did he continue to be a preference share holder but he was called upon to pay the moneys unpaid on his shares. It is obvious, therefore, that the appellant was entitled to complain that by the impugned ordinance he was being deprived of his property without fulfilling the requirements of article 31 of the Constitution. The position in the case under our consideration is, as pointed out already, entirely different. In our view the impugned legislation does not violate any fundamental right of the petitioners under articles 14, 19 or 31 of the Constitution. This disposes of the two main grounds on which the legislation in question has been impugned. We now turn to the two subsidiary points. It has been argued that some of the provisions of the impugned Act are in conflict with the provisions of the ; therefore under section 22 to the Government of part a States Act, 1951 the provisions of the impugned Act, in so far as they are repugnant to the provisions of the , must be held to be void. The simple answer to this argument is that 8. 22, to which we had earlier referred in the course of this judgment, has no application Section 22 provides for inconsistency between laws made by Parliament (in the sense in which the word Parliament ' is used in the Constitution of India) and laws made by the Legislative assembly of a Part State. The was not a law made by Parliament; therefore a 22 has no application in the present case. We have already held, for reasons earlier given, that the Delhi State Legislature had legislative competence or power either to amend the 192 in respect of unincorporated societies, or to make a law for a particular unincorporated society, and even to create a new corporate body provided its objects were confined to the State of Delhi of Delhi. In effect the impugned legislation provides for a disolution of the old Board which was an unincorporated society and for the creation of a new corporate body for the management of the Ayurvedic and Unani Tibbi College, Delhi. In this view of the matter, no question of any conflict with the arises in this case. It has also been argued that the impugned legislation is a piece of colourable legislation because the Delhi State Legislature acted mala fide in enacting it. This argument is completely answered by what this Court said in K. C. Gajapathi Narayan Deo vs The State of Orissa (1). This court said: It may be made clear at the outset that the dotrine of colourable legislation does not involve any question of bona fide or male fides on the part of the legislature. The whole doctrine resolves itself into the question of competency of a particular Legislature to enact a particular law. If the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant. On the other hand. if the legislature lacks competence, the question motives does not arise at all If the constitution of a State distributes the legislative powers amongst different bodies, which have to act within their respective spheres marked out by specific legislative entries, or if there are limitations on the legislative authority in the shape of fundamental rights, questioned do aries to whether the legislature in a particular case has or has not in (1) S.C.R. 1, 10, 11. 193 respect to the subject matter of the status or in the method of enacting it, transgressed the limits of its constitutional powers. Such 7 transgression may be patent, manifest or direct, but it may also be disguised, covert and indirect and it is to this latter class of 7 cases that the expression "colourable legislation" has been applied in certain judicial pronouncements. The idea conveyed by the expression is that although apparently a legislature in passing a statute purported to act within the limits of its powers, yet in substance and in reality it transgressed these powers, the transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise." From what we have said earlier it should be manifestly clear that the Delhi State Legislature did not transgress any of the limitations placed on it, when it enacted the impugned legislation. There being no transgress whatsoever, the further question of the transgression being veiled by a disguise or pretence does not really arise. Nor is it necessary for us to enquire into the motives which led the Delhi State Legislature to enact the impugned legislation. In the affidavits filed on behalf of the respondents enough materials have been placed to show why the Delhi State Legislature considered it necessary to dissolve the old Board and transfer the management of the college to a new Board. This was a matter for the Legislature to consider and not for this Court to investigate. In the result we hold that there is no merit in the petition which is accordingly dismissed with costs MUDHOLKAR, J. While I agree with my brother Das J., that the petition be dismissed I would like to say a few words. This petition under article 32 of the Constitution has been preferred by 194 the Board of Trustees, Ayurvedic and Unani Tibia College, through its Secretary, Hakim Mohammad Jamil Khan By Act 5 of 1952 called the Tibia College hi Act, 1952 the erstwhile Delhi State Legislative Assembly dissolved the Board of Trustees of the Ayurvedic and Unani Tibia (College, incorporated a Board called 'Tibia College Board ' and transferred to that Board all the property, rights, powers and privileges of the Board of Trustees of the Ayurvedic and Unani Tibia College also the management and control of the Ayurvedic and Unani Tibia College to the aforesaid Board. The reason for doing so would appear from the Statement of objects and Reasons appended to the Bill which are as follows: This Bill seeks to take powers for transferring the management of the Ayurvedic and Unani Tibia College, Delhi, from its present trustees to a Board under the control of the Delhi State Government. The College has been grossly mismanaged for some time past with the result that its reputation is very low today. In early 1949, the situation deteriorated to such an extent that there were students strikes, defalcation of funds and frequent interruptions in scholastic work. The Collector, Delhi made an interim prayer to the Civil Court for the appointment of receivers. This prayer was granted and three receivers appointed by the Civil Court are at present in charge of the properties and management of the institution. This arrangement, which is good so far as it goes, is inevitably temporary and inadequate, and it seems desirable to provide by legislation for the control and management of the College and the properties attached thereto." (Statement of objects and Reasons published in the Gazette of India, Extraordinary, Part II, section 2, July 18, 1952). The petitioner 's complaint is that its property has been taken may without compensation and 195 handed over to a Board in contravention of article 31 of the Constitution and that this has been done under a law which the Delhi legislature was not competent to make. The following four contentions were raised by Mr. Purshottam Trikamdas on behalf of the petitioner. (1) That the Delhi Legislative Assembly was not competent to pass the impugned Act. (2) Even assuming that it had legislative competence the Act offends articles 14, 19 and 31. (3) The under which the Board of Trustees were registered being a Central Act the Delhi legislative assembly had no power to over ride it. (4) The law was enacted by the legislature mala fide. I will confine my observations mainly to the first and third points because, it is only with regard to them that my view is somewhat different from that taken by my learned brother. The respondents point out that the petitioner Board having been registered under the is nothing more than an unincorporated society and that the Delhi State legislature was competent to enact a affecting it under the latter part of Entry 32 of List II which runs thus: ". . . unincorporated trading, literary, Scientific, religious and other societies. and assassination; co operative societies". According, however, to Mr. Purshottam, after the Board of Trustees was registered as a Society under the it blossomed into a corporation and since admittedly its objects extend beyond the limits of the Delhi State the State Assembly could not make any law affecting 196 it. This contention has been negatived by my learned brother. An alternative contention was also raised on behalf of the petitioner on the basis of certain decisions and my opinion in Servants of India Society, Poona vs The Charity Commissioner of Bombay (1) to the effect that upon registration J. the Board became at least a quasi corporation. This contention has also been negatived by my learned brother. If, as the petitioner says the Board, after registration under the was transformed into a corporation the Delhi Legislative assembly could not make a LAW with respect to it under Entry 32 because though under the first part thereof it can make a law affecting corporation, its powers cannot reach a corporation, the objects of which extend beyond the limit of the Delhi State. But as my learned brother has pointed out and with which I respectfully agree, the essence of a corporation is its incorporation ' and as the does not provide for incorporation the petitioner cannot be recorded as a corporation. It is true that even though it possesses some of the attributes of a corporation it ii not a corporation but in my view it is a near corporation ' or a quasi corporation '. This is what I have held in the Servants of India Society 's case (1) and I adhere to that view. There, relying on some Indian decision and the decision in The Taff Vale Railway Co. vs The Amalgamated Society of Railway Servants(2), I held that such a society is a legal entity and that a State legislature cannot make any law affecting it under the second part of Entry 32 of List II. The question whether a registered society which enjoyed more or less the same powers as those under the is a legal entity fell for consideration by the House of Lords in Bonsor vs Medicines ' Union(3) and there Lords Morton and Parker held that (1) ; 381 (2) ; (3) [1956] A.C.104 197 such a society is a legal entity though not a corporation and thus accepted the position that there is an intermediate semi corporation status. Lord Keith held that such a society is both a legal entity and association of individuals, that is, it is a quasi corporation to the extent recognized by the governing statute and a voluntary association for other purpose. Lords McDermott and Somervell, however, did not accept the position that there is any intermediate semi corporate status at all. With respect, I think that the view taken by the majority has much to commend itself. That this is the better view is the opinion of Prof. Dennis Lloyd (vide 1956 M. L. R. at p. 360) and of Dr. Glanville William (vide Salmond 's Jurisprudence, 1957 ed. p. 356). I have not come across a contrary opinion in any recent treatise or article. Now, under the , which was enacted by the Governor General in Council upon registration a society is entitled to sue and can be sued in the name of its President, Secretary etc., as shall be determined by its rules or by its governing body. A suit by or against the society would not abate by reason of the death of the person through whom or against whom the suit had been brought. A judgement obtained against a person sued as representing a society shall not be enforced against him but against the property of the society. The society can sue any of its members for arrear of subscription, damages etc. It can also enter into contracts as an entity. Upon dissolution, its property cannot be distributed amongst its members but must go to some other society. All these are the characteristics of a separate legal entity such as a corporation. If the law confers on a body all the normal powers of a legal person it will be a corporation in all but name. A registered society, however, cannot hold property and to that extent it must be treated a a voluntary 198 association, made up of its constituents. Therefore, it can be regarded as a quasi corporation or, in the words of Lords Morton and Porter, a near corporation". Now, a quasi corporation or a near corporation whatever we may call it being a legal entity at least for some purposes is not a mere society made up of its constituents. The question, therefore, must be considered whether the latter part of Entry 32 confers power on the State legislator to legislate about legal entities. ' Let US consider the scope of the latter part of Entry 32. It permits the making of laws concerning societies and associations which are not incorporated. This would imply that thereunder the legislature cannot provide for the incorporation ' of a society or association. One of the main results of incorporation is to confer upon the thing incorporated the status of a separate legal entity. Even so, under this Entry the legislator has a wide discretion in the matter of conferral of powers upon a society. But can it confer such powers on it as would alter its character as a society and convert it into a legal entity, may be only for certain purposes? By its very definition a society is a voluntary association and can have no existence separate from its constituents. It is thus not a separate legal entity ill any sense and for any purpose. That Entry makes it clear by using the word unincorporated ', that the power conferred by it is confined to such societies and associations only. Therefore, in my judgment the Entry does not permit of any law being made which confers on a society such powers as would constitute it into a legal entity. A fortiorari, it does not permit a law to be made which takes away from society already existing and which is a legal entity any of the powers of that legal entity, such as those conferred by the , much less can it destroy that entity For doing so it will have to take the aid of other entries, if any, which permit legislation concerning Legal entities . 199 The Board, as already stated, was registered under the . That was a law made by the Indian legislature under 24 & 25 Vict. 67 passed in the year 1860. That law conferred the power to make laws for the whole of British India on the Governor General in Council the ambit of whose power is set out in 8. 22 which runs thus: The Governor General in Council shall have Power at Meetings for the Purpose of making Laws and Regulations a aforesaid, and subject to the Provisions herein contained, to make Laws and Regulations for repealing, amending, or altering any Laws or Regulations whatever now in force or hereafter to be in force the Indian Territories now under the Dominion of Her Majesty, and to make Laws and Regulations for all Persons, Whether British or Native, Foreigners or others, and for all Courts of Justice whatever, and for all Places and Things whatever within the said Territories, and for all Servants of the Government of India within the dominions of Princes and States in Alliance with Her majesty; and the Laws and Regulations so to be made by the Governor general in Council shall control and supersede and Laws and Regulations in anywise repugnant thereto which shall have been made prior thereto by the Governors of the Presidencies of Fort Saint George and Bombay respectively in Council, or the Governor or Lieutenant Governor in Council of any Presidency or other territory for which a council may be appointed, with Power to make law and Regulations, under and by virtue of these Act: Provided always, that the said Governor General in Council shall not have the power of making any Laws or Regulations which shall repeal or in any way affect any of the Provisions of this Act. 200 Or any of the Provisions of the Acts of the Third and Fourth Years of King William the Fourth, Chapter Eighty five and the Sixteenth and Seventeenth Years of Her Majesty, Chapter Ninety five, and of the Seventeenth and Eighteenth Years of Her Majesty, Chapter Seventy Seven, which after the pacing of this Act shall remain in force: or any Provisions of the Act of the Twenty first and Twenty second Years of Her Majesty, Chapter one Hundred and Six entitled an Act for the better Government of India; or of the Act of the Twenty second and Twenty third years of Her Majesty, Chapter Forty one, to amend the same: or of any Act enabling the Secretary of State in Council to raise Money in the United Kingdom for the Government of India: or of the Acts for punishing Mutiny and Desertion in Her Majesty 's Army or in Her Majesty`s Indian Forces reflectively; but subject to the Provision contained in the Act of the Third and Fourth Years of King William the Fourth, Chapter Eighty five, Section Seventy three, respecting the Indian Articles of War: Or any Provisions of any Act passed in this present session of Parliament, or here after to be passed, in anywise affecting Her Majesty`s Indian Territories, or the Inhabitants thereof: Or which may affect the Authority of Parliament, or the Constitution and rights of the East India Company, or any Part of the unwritten Laws or constitution of the United Kingdom of Great Britain and Ireland, where on may depend in any Degree the Allegiance of any Person to the Crown of the United Kingdom, or the Sovereignty or Dominion of the Crown over any Part of the said Territories " 201 This clearly shows that the Governor General in Council was unhampered in the matter of making laws by any legislative lists and thus enjoyed plenary powers to make any kind of law on every conceivable topic which did not fall within the excepted Categories. Within the sphere of his powers the Governor General in Council was and could consequently make a law conferring upon a society such powers as could transform it into legal entity either for all purposes or only some. If he chose to confer all the powers of a corporation upon a registered society, that society would become a corporation in all but a name. The position of the State Legislature in the matter of making laws is not the same as that of the Governor General in Council under the statute of 1860. For, though it enjoys no less plenary powers than the Governor General in Council, its spheres of legislation are restricted by the legislative lists and it cannot overstep them by doing something directly which is patently outside Lists The only entry in List II on which reliance was placed on behalf of the respondents as conferring power on the Delhi legislature to make the impugned law is the latter part of Entry 32, List II. That entry speak of societies, that is, of associations of individuals as distinct from a legal entity, from that which has a separate legal existence. An association has no such separate existence, that is, none apart from its members. That entry therefore, could not furnish the Delhi legislature with the power to make a law affecting a separate legal entity such as the petitioner. Section of the impugned Act dissolved the petitioner, a legal entity and transfers its property, rights etc., to a corporation created by it. Thus it deals with a legal entity and the rights of that entity. This is wholly outside the ambit of the latter part of Entry 32. It would have been 202 possible for the State legislature to resort to the first part of that Entry had the object of the society been limited to the Delhi state but, as already ' ' stated, the objects extent beyond the Delhi State. The reason why I think it would have been possible is that the entry is not restricted to incorporation of a corporation but deals also with the regulation or winding up of a corporation which would include a quasi corporation or any other fictitious legal person, and further because the essence of winding up can be no different from that of dissolution. No doubt, ours is a federal constitution and the legislative fields of Parliament and of the state legislatures are demarcated, In addition we have a concurrent field in which Parliaments legislative power is exercisable and, subject to certain conditions, also that of the state legislatures. But even so, there is a certain amount of overlapping in the entries in the three lists pertaining to these three legislative fields. Therefore when a law is challenged on the ground of legislative competence what one has to ascertain is its pith and substance. It is well settled that if in pith and substance it is found that the legislature could make that law under a particular entry, the mere fact that it incidentally trenches upou some other entry, not pertaining to the legislation, it cannot be struck down as being beyond the competence of the legislature which made it. For finding out its pith and substance, let us examine the Act. It is comprised of 16 sections. Section 3 deals with the incorporation of the Tibia college Board and transferring to it the management and control of the Tibia College vested in the petitioner board. Section 9 deals with the dissolution and transfer of property of the Board of Trustee of the Ayurvedic and Unani Tibia College Delhi to the Tibia College Board and the remaining sections deal with incidental matters such as 203 definitions, constitution of the Board, powers of the Board and so on. One of the conclusion reached by my learned brother is that Ho far as the dissolution of the old Board is concerned the impugned law falls under the second part of Entry 32 and so far the incorporation of the new Board is concerned under its first part. It may be that a legislature may seek to derive its powers to enact a law concerning different topics from various entries in legislative List. But this aspect of a legislatures power has no significance when, in a divided jurisdiction its law is challenged on the ground of encrouchment on a field not open to it. Tho question which would then arise for consideration would be what is the pith and substance of the law? The degree of encroachment made by it on another field would be a guide for ascertaining its pith and substance . Here the impugned Act is aimed at dissolving the petitioner, Board and transferring all its property, rights etc. No doubt, the transfer is to be in favour of a corporation created be the At. No doubt also, that most of the provisions of the act, apart from 3 and 9, deal exclusively with matters pertaining to the newly created entity. But looking to the preamble as well as sections 3 and of the act the creation of new Board and its incorporation is not the pith and substance of the Act. The sole reason for its creation is to transfer to it what was, till then, with the petitioner Board. The new Board was thus to serve only a consequential purpose and its incorporation cannot be said to be the pith and substance of the impugned Act. The activities of the petitioner were not confined to the state of Delhi. That Act cannot there fore, be sustained by reference to the first part of Entry 2. The pith and substance of the law being the dissolution of the petitioner Board, a legal entity, and transference of its property and rights to someone else, it cannot be sustained by reference to the power conferred by the latter part of Entry 32. 204 For sustaining the law the learned Solicitor General had played reliance also on Entries 10 and 28 of List II. What we have to See, therefore, is whether the impugned law could be made by the Delhi Legislature under these entries . It is not disputed that the Petitioner Board is a trustee. It is also clear from the objects with which the trust was established, (which have been set out in the judgment of my learned brother) that it was for a charitable purpose. The petitioner is, therefore, a charitable trust and the object of the law is to dissolve it and transfer its property etc. Entries 10 and 28 of List III run thus: Entry 10: Trust and Trustees". Entry 28: "Charities and charitable institutions, charitable and religious endowments and religious legislatures". The entries are not limited to trusts or charitable institutions which are 'unincorporated societies ' as is the, latter part of Entry 32 of List II. Entry 10 clearly permits a law being made with regard to a trust or trustee which is a separate legal entity. Similarly Entry 32 permits a law to be made affecting charities and charitable institutions of every kind, whether consisting of voluntary associations of individuals or having a corporate or semi corporate character. For, institutions may have a corporate or a semi corporate character as for instance Hindu religious endowments and these are plainly included in the later Entry. The Delhi legislature had, therefore, competence to make a law dissolving a charitable trust and transferring its property, right etc. , to another institution. The aforesaid two entries permit making a law of this kind. No doubt these entries are in the concurrent field but sine the impugned Act was reserved for the assent of the President and was assented to by him on September 12, 1952, it 205 cannot be called in question on the ground of repugnancy with an 'existing law ' or a law made by Parliament. I agree with the view taken by my learned brother on the second and the fourth points urged by Mr. Purshottam and have nothing to add. As regards the third point the argument on behalf of the petitioner is that section 22 of the Government of Part States Act, 1951 (which created a legislature for the Delhi State, then a Part State) precluded the Delhi legislature from enacting a law repugnant to an Act of Parliament and that as the impugned Act contains provisions which are repugnant to those of the , it is ultra vires. Apart from the fact that what a 22 prohibits is a repugnancy with a law made by Parliament itself the is not one of such law the argument does not really arise upon the view I have taken. The petitioner Board upon Registration under that Act becomes a quasi corporation and thus a separate legal entity. Even though it owed its existence to the provisions of the , the Delhi legislature was free to deal with it under its powers under List III because by doing so it did not enact a law repugnant to the provisions of the . That Act still retains its full force and rigour and is unaffected by the impugned Act. The petitioner Board may, by operation of the impugned law, not be able to exercise any of its powers under the but that would be not because the provisions of that law are abrogated in any sense but because the petitioner Board has ceased to exist a a legal entity. The argument must, therefore, be rejected. The petition is, therefore, dismissed with costs. Petition dismissed.

The Board of Trustees, Ayurvedic and Unani Tibbia College, Delhi was registered under the . It ran the Tibbia College, Delhi and an attached hostel and managed the Hindustani Dawakhana. The Delhi State Legislature passed the Tibbia College Act, 1952, which dissolved the Board, incorporated a new Board and vested all the property and all the rights, powers and privileges of the old Board in the new Board. The petitioners challenged the validity of the Act on the grounds that the old Board was a corporation whose objects were not confined to Delhi and legislation with regard to it would fall under Entry 44 of List I of the Seventh Schedule to the Constitution and as such the State Legislature was not competent to pass the impugned Act, (ii) that the setting up of a new Board as corporation was beyond the powers of the State Legislature, (iii) that the Act violated articles 14,19 and 31 of the Constitution, (iv) that the Act could not override the which was a Central Act, and (v) that the legislature acted mala fide in passing the impugned Act. ^ Held, (per Sinha, C. J. Das, Sarkar and Ayyangar,JJ.) that the State Legislature was competent to enact the impugned Act. On registration under the the old Board did not become a corporation in the sen e of being incorporated within the meaning of Entry 44 of List I; it continued to be an unincorporated society though under the provisions of the it had certain privileges analogous to those of corporations. The provisions in the impugned Act relating to the dissolution of the old Board fell within the second part of Entry 32 of List II which included unincorporated societies. Though the impugned Act while creating the new Board gave it a corporate status, it confined its powers and duties to institutions 157 in Delhi and limited its rights, powers and privileges to the purposes for which it was created. The provisions of the impugned Act relating to the incorporation of the new Board fell within the first part of Entry 32 of List II. Taff Vale Railway vs Amalgamated Society of Railway Servants, and Bonsor vs Musicians ' Union, , referred to. Krishnan vs Sundaram, (1940) 43 Bom. L.R. 562, Boppana Rukminiamma vs Maganti Venkata Ramadas, A.I.R. 1940 Mad. 946, and M. A. Nunnier vs Official Assignee, Madras, A.I.R. 1951 Mad. 875 and Satyavart Sidhantalankar vs The Arya Samaj, Bombay, , distinguished. The Servants of India Society, Poona vs The Charity Commissioner of Bombay, (1960) 63 Bom. L.R. 379, approved. Held, further, that the impugned Act did not violate articles 14,19 or 31. The petitioner had failed to show that there were other institutions similarly situated as the petitioner and that the petitioner had been picked out for unequal treatment. Since the transfer of management was made by a valid law there was no question of violation of article 31 (1); and since the impugned Act did not provide for compulsory acquisition of property article 31(2), as it stood at the relevant time, had no application. Neither the dissolved Board nor its member had any right to hold the property of the dissolved Board and there was no infringement of article 19(1)(f) involved in the Act vesting the property in the new Board. Under the , the members of a society did not acquire any beneficial interest on the dissolution of the society; the only right which they had was to determine as to which other society the property should be ' given to for management. This was not a right to property within the meaning of article 19(1)(f) and the taking away of such a right by the impugned Act did not violate article 19(13(f). (Chiranjit Lal Chowdhuri vs The Union of India, ; , relied on. State of West Bengal vs Subodh Gopal Bose, ; and Dwarkadas Shrinivas vs The Sholapur Spinning and Weaving Co., Ltd. ; , distinguished. Held, further, that there was no question of conflict between a law made by Parliament and a law made by the State Legislature as the , was not a law made by Parliament. The State Legislature had the power either to amend the in respect of unincorporated societies, or to make a law relating to a corporation provided its activities were confined to Delhi. The Delhi State Legislature did not transgress any of its limitations in 158 enacting the impugned Act and no question of mala fides of the legislature arose. K.C. Gajapati Narayn Deo vs The State of Orissa, relied on. Per, Mudholkar, J., Though the old Board could not be regarded as a corporation as the does not provide for incorporation it possessed some of the attributes of a corporation and it was a 'near corporation ' or a 'quasi corporation '. It was a legal entity. The second part of Entry 32 of List II did not permit a law to be made which took away from an existing legal entity its powers such as those conferred by the and which destroyed the legal entity. The impugned Act could not be supported under the first part of Entry 32 of List II as the objects of the Board were not limited to the Delhi State. But Entries 10 and 28 of List III permitted the State Legislature to make a law dissolving a charitable trust and transferring its property, rights etc. to another institution and the impugned Act could be sustained under these Entries. Servants of India Society, Poona vs The Charity Commissioner of Bombay, (1950) 63 Bom. L. R. 397, The Taff Vale Railway Co. vs The Amalgamated Society of Railway Servants, ; and Bonsor vs Musicians ' ' Union, , referred to.

Appeal No. 365 of 1965. Appeal by special leave from the Judgment and order dated February 18, 1963 of the Madhya Pradesh High Court (Indore F Bench) in Second Appeals Nos. 68 and 70 of 1961. C. B. Agarwala, B. Dutta, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the appellant. K. B. Chaudhry, for the respondent. B. R. L. lyengar, G. L. Sanghi and A. G. Ratnaparkhi for Intervener No. 1. J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for interveiier No. 2. The Judgment of the Court was delivered by Shah, J. Ramgopal respondent in this appeal was a tenant F of certain Inam land situate in village Nanda Panth in Indore Tahsil. the appellant Rao Nihalkaran holder of the Inam 429 served a notice terminating the tenancy on the ground that he needed the land for personal cultivation, and commenced an action in the Court of the civil Judge, Class 11, Indore, on July 21, 1950, against Ramgopal for a decree in ejectment. The Trial Court decreed the suit. During the pendency of the appeal to the District Court, Indore, by Ramgopal against the decree, Madhya Bharat Muafi & Inam Tenants and Sub tenants Protection Act 32 of 1954 was enacted, and pursuant to the provisions thereof hearing of the appeal remained stayed till 1960. in the mean time the Madhya Pradesh Land Revenue Code (Act 20 of 1959) was brought into force. Ramgopal urged before the District Court that he had by virtue of section 185 of the Code acquired rights of an occupancy tenant and the appellant 's right to obtain an order in ejectment on the ground set up must be refused. The District Judge accepted the contention of the respondent and allowed the appeal. Against the decree passed by the District Court, Indore, the appellant appealed to the High Court of Madhya Pradesh, Indore Bench. Following their judgment in Rao Nihalkaran vs Ramchandra and Others (1), the High Court confirmed the decree of. the District Judge, and dismissed the appeal. With special leave granted by this Court, this appeal has been preferred. The dispute in the appeal centres round the meaning of the expression "tenant" used in section 185(i) cl. (ii) (a) of the Madhya Pradesh Land Revenue Code. The material part of the clause reads: "Every person who at the coming into force of this Code holds (i) (ii) in the Madhya Bharat region (a) any Inam land as a tenant, or as a sub tenant or as an ordinary tenant, shall be called an occupancy tenant, and shall have all the rights and be subject to all the liabilities conferred or imposed upon an occupancy tenant by or under this Code. " It is common ground that the tenancy of ran occupancy tenant may be determined under section 193 of the Madhya Pradesh Land Revenue Code by an order of the Sub Divisional Officer on the grounds specified in that section, and personal requirement of the land lord is not one of such grounds. But counsel, for the appellant urged that the rights of an occupancy tenant arise in favour of a person under section 185 (1) cl. (ii) (a) only if there is between him and the claimant to the land a subsisting relation under which he holds land (1) L. P. A. No. 14 of 1961 decided on Sept. 24, 1962. 430 as a tenant at the date when the Code came into force. The Code has, it is said, no retrospective operation, and the person who under the law in force before the commencement of the Code had ceased to be a tenant because, of termination of the contract between, him and the landlord is not invested with the rights of an occupancy tenant under section 185 (1) (ii) (a). In the alternative it is contended that by virtue of section 261 and section 262(2), operation of section 185 is expressly excluded, when a person against whom proceedings have been instituted prior to the commencement of the Code for ' a decree in ejectment in enforcement of a right acquired under the law then in force, claims the states of an occupancy tenant. The District Court held that the expression "tenant" within the meaning of section 185 (1)(ii)(a) of the Code includes a person whose tenancy stood determined before the commencement of the Code, and with that view the High Court agreed. Counsel for the appellant complained that in reaching this conclusion, the Courts below ignored the definition in section 2(y) of the Code that the expression "tenant" means a person holding land from a Bhumiswami as an occupancy tenant under Ch. XIV, and said that a person qua whom the contractual relation under which he was inducted as a tenant was determied prior to the commencement of the Code is not a tenant within the meaning of section 185(i)(ii)(a). To appreciate this argument it is necessary to examine the relevant legislative history culminating in the enactment of the Code in 1959. In 1948 twenty Indian States including the States of Gwalior, Indore and Malwa formed themselves into a Union. Five more States were later incorporated into this Union. Under the Constitution, Madhya Bharat was formed as a Part B State out of the territories of the United States of Gwalior, Indore & Malwa and certain enclaves merged therein and the Chief Commissioner 's Province of Panth Piploda. Under the a new State of Madhya Pradesh was formed as from November 1, 1956 consisting of the Part B State of Madhya Bharat, parts of the former State of 'Madhya Pradesh, the territories of the States of Bhopal and Vindhya Pradesh and Sironj sub division of Kotah in the former State of Rajasthan. Apparently the diverse land tenures prevalent in the covenanting States and the laws governing them remained in operation in their respective territories, even after the formation if the Part B State of Madhya Bharat. Attempts were made to evolve a uniform pattern of revenue administration in conformity with the directive principles of State Policy in the Constitution to bring the tiller of the soil into direct relation with the State. The Legislature of the Part B State of Madhya Bharat enacted Act 66 of 1950 to consolidate and declare the law relating to revenue administration in the United States of Gwalior, Indore and Malwa and land revenue, land tenure 431 and other matters connected with the land in the Ryotwari tracts or villages of the United States. Section 54 of Act 66 of 1950 defined "Pakka tenant", "ordinary tenant", "sub tenant" and prescribed the duties of a tenant by section 55. By section 73 a "Pakka tenant" was prohibited from sub letting for any period any land comprised in his holding, unless he belonged to any of the classes mentioned in section 74. By section 74 certain classes of disabled persons were permitted to sub let the whole or any part of their holding. But such a sub lease made in pursuance of the provisions of the Act was to cease to be in force after one year of the determination of the disability by death or otherwise. By section 75 it was provided that a sub lease of the whole or any part of the holding of a "Pakka tenant" effected "properly and legally" prior to the commencement of the Act was to terminate after the expiry of the period of sub lease or expiry of four years after the commencement of the Act, whichever period was less. By section 76 a sub lessee failing to hand over pos session after expiry of his right was to be deemed a tresspasser and liable to ejectment in accordance with the provisions of the Act. The Legislature with the object of improving the conditions of agriculturists and with a view to remove the middleman between the State and the tiller of the soil also enacted the Zamindari Abolition Act and the Abolition of Jagirs Act. Another statute which has a bearing on the dispute in this appeal the Madhya Bharat Muafi and Inam Tenants and Sub tenants Protection Act 32 of 1954 was enacted to provide, for the duration of the Act, for the protection of tenants or ordinary tenants and sub tenants of Muafidars, Inamdars and Istumurardars in Madhya Bharat against eviction by such Muafidars or Inamdars of their tenants, as the case may be, and for stay of suits and other proceedings relating to such eviction. By section 2(ii) the terms "tenant", "sub tenant", "ordinary tenant" and "rent" were given the same meaning as was assigned to them in sub sections (1) (7), (8) & (9) of section 54 of Act 66 of 1950. By section 1 a restriction was placed, upon eviction of any tenant, sub tenant. or ordinary tenant of Inam land during the continuance Act and it was declared that the tenant, sub tenant or ordinary tenant shall not pay rent higher than what he was 'paying in the agricultural year ending June 30, 1948. By section 4 all suits, proceedings in execution of decrees or orders and other proceedings for the eviction of Inam land tenants, sub tenants or ordinary tenants from Inam lands, or in which a claim for such eviction was involved, pending in the Court at the commencement of the Act or which may be instituted after such commencement, were to be stayed subject to the provisions contained in the Act. By sub section (II) of section 4 it was provided that if the Inamdar, Muafidar or Istumurardar had taken possession of the land illegally from a tenant, sub tenant or an ordinary tenant after August 15, 1947 such a tenant, sub tenant or an ordinary 432 tenant may apply to the Tahsildar to be restored to possession of such land and on such application the Tahsildar shall cause the land to be returned to such tenant, sub tenant or ordinary tenant from the Inamdar, Muafidar, or Istumurardar, as the ease may be. By section 6 it was provided that all suits and proceedings shall, after the expiration of the Act, be proceeded with subject to the provisions of any law which may then be in force from the stage which had been reached when the suit or proceeding was stayed. Act 32 of 1954 was intended initially to remain in force for a period of two years, but its life was extended by later enactments. Protection against eviction during the continuance of Act 32 of 1954 by enforcement of a decree passed in a suit or a proceeding either before or after the date on which the Act was brought into force was conferred upon tenants, sub tenants and ordinary tenants. It is clear from the terms of sections 3 & 4 of the Act that the Legislature did not seek to grant protection only to persons between whom and the claimants for protection there was a subsisting contractual relation. A person who was inducted into the land as a tenant, sub tenant or ordinary tenant and who continued to hold the land at the commencement of the Act was entitled to protection, notwithstanding that under the law in force prior to the Commencement of the Act the contractual relation was determined. The Madhya Pradesh Land Revenue Code was enacted in 1959. By section 157 of the Code it was declared that there shall be only one class of tenure holders of lands held from the State to be known as Bhumiswami, and by section 158 it was provided that every person, who at the time of coming into force of the Code, belongs to any of the four classes specified shall be called a Bhumiswami, and shall have all the rights and be subject to all the liabilities conferred or imposed upon a Bhumiswami by or under the Code, and among the persons specified is "every person in respect of land held by him in the Madhya Bharat region as a Pakka tenant or as a Muafidar, Inamdar or Concessional holder as defined in the Madhya Bharat Land Revenue and Tenancy Act Samvat 2007". The argument of counsel for the appellant is that the respondent not being a tenant at the commencement of the Code could not acquire the rights of an occupancy tenant, and that any proceeding instituted against the tenant must be heard and disposed of according to the law in force prior to the commencement of the Code. The definition of the expression "tenant" in section 2(y) postulates a subsisting tenancy, but that definition may be resorted to for interpreting section 185 (1) only if the context or the subject matter of the section does not suggest a different meaning. A tenant is by the definition a person who holds land as an occupancy tenant from a Bhurmiswami: but the status of a Bhumiswami is recognized 433 for the first time by the Code, and an occupancy tenant from a Bhumiswami would mean only a person belonging to that class who acquires rights of occupancy tenant after the Code comes into force. The position of a tenant prior to the date on which the Code was brought into force does not appear to have been dealt with in this definition. The definition which is specially devised for the purpose of the Act throws no light on the nature of the right which invests. the holder of land with the status of an occupancy tenant at the commencement of the Code. In the context in which the expression "tenant" occurs in section 185 the defi nition could not be intended to apply in determining the conditions which invest upon a holder of land the status of an occupancy tenant. If the expression "tenant" in section 185 (1) be released from the artificial definition as given in section 2(y), in view of the context in which it occurs, the expression "tenant" in section 185(1)(ii)(a), having regard to the object of the enactment would be ascribed the meaning that expression had in Act 32 of 1954. This view is strengthened by certain indications found in cl. (ii)(b) if section 185 (1) which provides that in the Madhya Bharat region every person who at the commencement of the Code holds any land as ryotwari sub lessee as defined in the Madhya Bharat Ryotwari Sub Lessee Protection Act 29 of 1955 shall be called an occupancy tenant. Unless a ryotwari sub lessee as defined in Act 29 of 1955 included a sub lessee whose tenure was terminated before the commencement of the Code, that clause would not apply to any concrete case. The Court would not unless compelled by unambiguous language impute to the Legislature an intention to enact a provision which was ineffective. By section 73 of Act 66 of 1950 a Pakka tenant could not sub let for any period any land comprised in his holding except in the cases provided for in section 74,, and by section 75 it was provided that all sub leases in force at the commencement of the Act were to terminate either on the expiry of the period of sub lease or expiry of four years whichever was earlier. All sub leases except those which were covered by section 74 i.e. sub leases granted by disabled persons before the commencement of Act 66 of 1950 stood terminated some time before the end of 1954 and by the express terms of section 76 the sublessees were to be deemed trespassers and liable to ejectment in accordance with the provisions of the Act. Notwithstanding these provisions, by another Act 29 of 1955, scheme of which was substantially the same as the scheme of Act 32 of 1954, ejectment of ryotwari sub lessees other than a sub lessee under section 74 of Act 66 of 1950 was suspended for the duration of the Act, and all suits and proceedings in execution for ejectment were to be stayed. By section 2(b) of Act 29 of 1955 "Ryotwari sub lessee" was defined as meaning "a person to whom a Pakka tenant of any ryotwari land has sub let on sub lease any part of his ryotwari land". By 434 section 3 a ban was imposed against ejectment of all ryotwari sub lessees other than sub lessees under section 74 of Act 66 of 1950. By section 4 provision was made for ejectment of ryotwari sub lessees and provisions similar to sections 5 & 6 of Act 32 of 1954 were made in this Act also. A ban was therefore imposed against eviction of ryotwari sub lessees and proceedings for eviction against them were stayed by Act 29 of 1955. Therefore ryotwari sub lessees who had ceased by determination of the sub leases to have right in the lands were still protected from eviction during the pendency of Act 29 of 1955, and by section 185(1)(ii)(b) of the Code upon the ryotwari sub lessees the rights of occupancy tenants were conferred. If the expression "ryotwari sub lessee" were to be construed to mean a ryotwari sub lessee between whom and his lessor there was a subsisting contract of sub letting, the protection for all purposes would be ineffective, for, by express statutory provision read with section 74 of Act 66 of 1950 all ryotwari sub leases stood determined before Act 29 of 1955 was brought into force, and by virtue of section 185 (3) of the code a holder of land from a disabled Bhumiswami belonging to a class mentioned in section 168(2) of the Code does not qualify for the status of an occupancy tenant. It may be noticed that in the class of disabled persons in sub s (2) of section 168 of the Code are included all persons who are declared disabled by sub section (2) of section 74 of Act 66 of 1950. If ryotwari sub lessees of disabled persons mentioned in subs. (2) of section 74 of Act 66 of 1950 cannot claim rights of occupancy tenants by virtue of section 185 (3) of the Code and other ryotwari sublessees cannot qualify for those rights because of the determination of their interest as sub lessees by virtue of sections 75 & 76 of Act 66 of 1950 section 185, (1)(ii)(b) of the Code will not apply to any class of ryotwari sub lessees. This is a strong ground in support of the view taken by the High Court that the expression "ryotwari sublessee" in section 185 (1)(ii)(b) of the Code include persons whose contractual relation has been det ermined either under the terms of contract of sub lease or statutorily under Act 66 of 1950. If that be the true meaning of the expression "ryotwari sub lessee ' there would be no reason to think that the Legislature sought to make a distinction between tenants, sub tenants and ordinary tenants of Inam land in section 185(1)(ii)(a) of the Code and ryotwari sub lessees of other lands in section 185(1)(ii)(b). A member belonging, to those classes would therefore be included in the protection provided at some time prior to the date on which the Code was brought into force, if he was in possession of land as a tenant, sub tenant or ordinary tenant and he continued to hold the land till the date of commencement of the Code. The alternative argument that section 185 of the Code has Po application in respect of pending proceedings for ejectment is without substance. By section 261 of the Code a large number of 435 statutes specified in Sch. II were repealed. By section 261 certain enactments specified in Sch. 11 including the Madhya Bharat Land Revenue and Tenancy Act 66 of 1950 and the Madhya Bharat Muafi and Inam Tenants and Sub tenants Protection Act 32 of 1954 were wholly repealed. But it is expressly provided in section 261 that the repeat shall not affect(a) the previous operation of any law so repealed or anything duly done or suffered thereunder; or (b) any right, privilege, obligation or liability acquired, accrued or incurred under any law so repealed or (c ) any penalty, forfeiture or punishment incurred in respect of any offence committed against any law so repealed; or (d) any invest igation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the Act had not been passed. Section 262 which deals with transitory provisions by sub section (2) provides: "Any case pending in Civil Court at the coming into force of this Code, which would under this Code be exclusively triable by a Revenue Court, shall be disposed of by such Civil Court according to the law in force prior to the commencement of this Code." Relying upon these two provisions it was urged that persons who were tenants, sub tenants or ordinary tenants of Inam land prior to the date on which the Code was brought into for , whose rights have consistently with the law in force before that date been terminated, cannot set up rights of occupancy tenants acquired under section 185, for, within the meaning of section 261 the right to eject a tenant has accrued to the landlord before the commencement of the Code and a proceeding for enforcement of that right may be continued and the right enforced as if the Code had not been passed, and the Court in which the proceeding is pending would be bound to dispose of the proceeding according to the law in force prior to the commencement of the Code. The argument is misconceived. Act 66 of 1950 did not deal With the right of a landlord to evict a tenant from land. Act 66 of 1950 was expressly repealed by the Code, but since the right to evict a tenant was governed G by the general law of landlord and 'tenant the proviso to section 261 had no operation. In terms the proviso to section 261 protects a right, privilege, obligation, or liability which had been acquired, accrued or incurred under the law repealed by the Code. The right to obtain possession not having been acquired under the law repealed, a legal proceeding pending at the date of the commencement of the Code will be disposed of according to the law "then in force '. That was expressly provided by section 6 of Act 32 of 1954 and by section 6 of Act 29 of 1955. If at the date of the trial the tenant had acquired the right of an occupancy tenant, he could not be evicted 436 otherwise than in the manner and for reasons mentioned in section 19 3 of the Code. Personal requirement for cultivation of land is not, however, a ground on which claim, since the commencement of the Code, for ejectment may be maintained. Section 262(2) is a transitory provision which enables a Civil Court to hear and dispose of a suit notwithstanding that under the Code such a proceeding would be triable by a Revenue Court. It is expressly declared that such a proceeding shall be disposed of according to the law in force prior to the commencement of the Code. That however does not imply that the contract between the parties which was sought to be enforced unaffected by the statutory declaration of occupancy tenants under section 185 in favour of the tenant may be enforced. In our view sub section (2) is only procedural: it provides that a Civil Court will continue to have jurisdiction to dispose of a civil suit pending before it at the commencement of the Code, which if it had been instituted after the Code was passed, would have been tried by a Revenue Court, and in the disposal of such a suit the Civil Court will be governed by the procedural law applicable thereto prior to the commencement of the Code. There is nothing in section 262(2) which seeks to nullify the statutory conferment of occupancy rights upon persons in the position of tenants, sub tenants or ordinary tenants against whom proceedings were taken at the date when the Code was brought into force. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

The appellant (holder of an inam in Madhya Pradesh) served a notice an his tenant, the respondent, terminating to tenancy on the ground that he wanted the land for personal cultivation and filed a suit for ejectment. The trial court decreed the suit. During the pendency of the appeal in the District Court, article 32 of 1954 was enacted, and pursuant to its provisions the hearing of the appeal was stayed. After the Madhya Pradesh Land Revenue Code came into force in 1959, the District Court held that by virtue of section 185 of that Code the respondent acquired the rights, of an occupancy tenant and dismissed the suit. The High Court confirmed the judgment of the District Court. In appeal to this Court, it was contended that : (i) the rights of an occupancy tenant arise in favour of a personl under section 185(1) (i) (a) only if there was between him and the landlord a subsisting tenancy at the date when the Code came into force and since under the law in force before the commencement of the Code, the respondent had ceased to be a tenant because of the notice terminating the contract of tenancy the respondent was not invested with the rights of an occupany tenant; and (ii) bi virtue of sections 261 and 262(2), the operation of section 185 is expressly excluded when a person, against whom ejectment proceedings have been instituted prior to the commencement of the Code in enforcement of a right then acquired, claims the status of an occupancy tenant. HELD : (i) The respondent acquired the right of an occupancy tenant under the Code, because the expression "tenant" in section 185 (1) (ii) (a) includes a person whose tenancy was terminated before the commencement of the Code. The definition of the expression "tenant" in the Code postulates a subsisting tenancy, but the position of a tenant prior to the date on which the Code was brought into force is not dealt with in the definition. In the context in which the expression "tenant" occurs in section 185(1), that definition could not be intended to apply in deter ining the conditions which invest a holder of land with the status of an occupancy tenant at the commencement of, the Code. Therefore having regard to the object of the enactment the expression should be ascribed the meaning it 'has in Act 32 of 1954. Under sections 3 & 4 of that Act a person who was inducted into the land as a tenant and who continued 'to hold the land at the commencement of the Act was entitled to protection against eviction and continue as tenant, notwithstanding that under the law in force prior to the commencement of the Act. the contractual relationship of landlord and tenant was determined. [432 D; 432 14 433 C] 428 There is no reason to think that the Legislature sought to make a A distinction between tenants of Inam land in section 185 (1) (ii) (a) and ryotwari sub lessees of other lands in section 185(1)(ii)(b). Therefore, if the expression "ryotwari sub lessee ' in section 185(1)(ii)(b) includes a sub lessee whose tenaure was terminated before the commencement of the Code, a tenant of inam land, whose tenancy has been terminated would also be included in the protection, provided at some time prior to the date on which the Code was brought into force, he was in possession of the land as a tenant, and he continued to hold the land till the date of the commencement of the Code. [434 E H] (ii) The provisions of the Code appeal to tenants in proceedings for ejectment pending at the commencement of the Code. The proviso to section 261 protects a right which had been acquired under a law repeated by the Code and the right could be enforced as if the code had not been passed. But the right to evict a tenant was governed by the general law of landlord and tenant and was not acquired under any repealed law. The proviso had no operation and a legal proceeding pending at the date of the commencement of the Code will be disposed of according to the law enacted in the Code. Therefore, the tenant could not ' be evicted otherwise than in the manner and for reasons mentioned in a. 193 of the Code but, personal requirement for cultivation of land is not a ground on which a claim for ejectment could be maintained. [435 G436 A] Section 262(2) is only procedural it provides that a civil court will continue to have jurisdiction to dispose of a civil suit pending before it at the commencement of the Code, Which, if it had been instituted after the Code was passed would have been tried by a revenue court; and in the disposal of such a suit, the civil court will be governed by the procedural law applicable there to prior to the commencement of the Code. It does not nullify the statutory conferment of occupancy right upon persons in the position of tenants against whom proceedings were taken at the date when the Code was brought into force. [436 B D]

No. 142 of 1962. PetitioN under article 32 of the Constitution of India for the enforcement of fundamental rights. B.Chhangani and B. D. Sharma, for the petitioners. 222 C.K. Daphtary, Solicitor General of India, Kan Singh, section K. Kapoor and P. D. Menon, for the respondents. December 14. The judgment of ' the Court was delivered by WANCHOO, J. This petition under article 32 of the Constitution challenges the constitutionality of a scheme finalised under section 68D (3) of the Motor Vehicles Act, No. IV of 1939, (hereinafter referred to as the Act) in the State of Rajasthan. The petitioners are holders of stage carriage permits on Jodhpur Bilara and Bilara Beawar routes. A draft scheme was published under section 68C of the Act by the Rajasthan Roadways, which is a State Transport Undertaking, (hereinafter referred to as the Roadways), on January 26, 1961. It provided for taking over of the transport service on the Jodhpur BilaraBeawar Ajmer route by the Roadways. Further it provided for taking over three overlapping routes or portions thereof which were entirely on Jodhpur Bilara Beawar Ajmerroad, namely, Jodhpur Bilara, Bilara Beawar, and Beawar Ajmer, and as required by r. 3 of the Rajasthan State Road Transport Services (Development) Rules, 1960, (hereinafter referred to as the Rules), the names of the permitholders on these three overlapping routes with their permits were also specified for cancellation, and no transport vehicles other than the vehicles of the Road ways were to ply on the route to be taken over. The usual time was also given for filing objections to all those whose interests were affected by the draftscheme. The petitioners filed objections under s.68D of the Act, which were heard by the Legal Remembrancer to the Government of Rajasthan, he being the person appointed to hear and decide the objec tions, The objectors wanted to lead evidence and did produce some witnesses but some witnesses to whom summonses were issued did not turn up and 223 the objectors wanted the issue of coercive processes against them. The Legal Remembrancer however refused this on the ground that lie had no power to issue coercive process. As the objectors did not produce any further witnesses, the arguments were heard and the Legal Remembrancer gave his decisions on May 31, 1962. One of the main points then raised before the Legal Remembrancer was that there were a dozen other overlapping routes which were not touched by the scheme, and therefore the scheme was bad on the ground of discrimination. It may be mentioned that these overlapping routes were not completely overlapping the route to be nationalised, though the vehicles paying on those twelve routes had to pass over part of the Jodhpur Bilara Beawar Ajmer road. It was urged on behalf of the Roadways before the Legal Remembrancer that the intention was to render ineffective the permits on these twelve routes also insofar as they overlapped the route to be taken over, though these, routes were not mentioned in the draft scheme like the three routes which were completely covered by the Jodhpur Bilara Beawar Ajmer route and no notice was apparently given to the seventy two permit holders on these twelve partially over lapping routes. The Legal Remembrancer held that even though these routes were not specified in the draft scheme and no notice had been given to the permit holders thereof, it was open to him to render the permits ineffective with respect to these routesalso and proceeded to pass orders accordingly. Thereupon five writ petitions were filed in the High Court of Rajasthan by the permit holders on the three routes which had been notified in the draftscheme as well as by some of the permit holders of the twelve partially overlapping routes which had not been notified but which had been 224 affected by the order of the Legal Remembrancer. Two main points were urged before the High Court in support of the cbchallenge to the validity of the scheme as finally published on June 16, 1962. In the first place, it was urged that the State Government when publishing the scheme as required by section 68D(3) of the Act had made certain changes in it beyond the decision of the Legal Remembrancer and therefore the final scheme as published was invalid as it was not open to the State Government to make any changes in the scheme as approved by the Legal Remembrancer. Secondly, it was urged on behalf of the operators on the twelve partially overlapping routes which had not been notified in the draft scheme that it was not open to the Legal Remembrancer to affect their interests when their routes were not specified in the draft scheme and they had been given no notice thereof. The High Court accepted both these contentions. It was of the opinion that it was not open to the State Government to make any modification in the decision of the Legal Remembrancer and inasmuch as that had been done the final scheme as published was invalid. It also held that as the twelve partially overlapping routes were not notified in the draftscheme and no notice had been given to the permitholders thereof, it was not open to the Legal Remembrancer to pass any orders with respect to them. It therefore set aside the scheme as published under section 68D (3) of the Act. Finally, the High Court observed that as the scheme as published was not the scheme as approved by the Legal Remembrancer and as the decision of the Legal Remembrancer becomes final when it is published, it was open to the Legal Remembrancer to modify his decision, even though he may have signed and pronounced it. The Legal Remembrancer was thus directed to go into the matter again and leave the question of the twelve partially overlapping routes for a subsequent scheme. The final scheme as published under section 68D (3) of the Act was set aside and the Regional Transport 225 Authority was directed not to implement it until it was regularised in accordance with law. The matter then went back to the Legal Remembrancer who considered the draft scheme in the light of the decision of the High Court and after hearing further agruments disposed of the objections. The main effect of his decision was that all the twelve partially overlapping routes were left out of the scheme and only the three routes notified in the draft scheme which were completely covered by the route Jodhpur Bilara Beawar Ajmer, were affected. The decision of the Legal Remembrancer approving the scheme as modified by him was published on August 31, 1962, and the present petition is directed against that decision. The decision of the Legal Remembrancer is being challenged before us on the following grounds: (1)A draft scheme under the Act has to be approved as a whole and the procedure of approving a part of the scheme once and another part later is illegal, and therefore, the approval given to the draft scheme by the Legal Remembrancer does not result in approving the scheme, as required by law. (2)It was not open to the Legal Remembracer to review his order dated May 31, 1962 even after the decision of the High Court, and insofar as the Legal Remembrancer did so in obedience to the order of the High Court he abdicated his own judgment, and the approval therefore after such abdication of his own judgment, is no approval in law. (3)As the scheme as published on June 16, 1962 was set aside by the High Court, it was the duty of the Legal Remembrancer to give a fresh hearing ab initio to the objectors which he did not do, and therefore the approval accorded by him to the draft scheme 226 after the judgment of the High Court is no approval in law. (4)Hearing requires taking of evidence; but as the Legal Remembrancer expressed his inability to compel attendance of witnesses, there was no hearing as contemplated by law, and therefore the approval of the draft scheme without a proper hearing is no approval in law. (5) There was discrimination inasmuch as the operatorsof the twelve partially overlapping routes were left out of the scheme. (1) &(2). There is no doubt that a draft scheme has to be considered as a whole and all objections to it have to be decided before it can be approved by the State Government or by the officer appointed in that behalf, and the Act does not envisage approving of a part of the scheme once and putting it into effect and leaving another part unapproved and left over for enforcement later. It is also true that the Act does not provide for review of an approval once given by the Legal Remembrancer, though he may be entitled to correct any clerical mistakes or inadvertent slips that may have crept in his order. It is also true that the Legal Remembrancer when considering the objections has to exercise his own judgment subject to any directions that the High Court. might give on questions of law relating to a particular draftscheme. But we do not think that this is a case where the draft scheme has been approved in part and another part of it has been left unapproved to be taken up later; nor is this a case where the Legal Remembrancer abdicated his own judgment or reviewed his earlier decision when he proceeded to reconsider the matter after the High Court had set aside the scheme as published under section 68D (3) of the Act on June 16, 1962. 227 Let us see what the draft scheme was meant to provide in this case. As we have already indicated, the draft scheme was published in order to take over the Jodhpur Bilara Beawar Ajmer route. It also provided for taking over all the three completely overlapping routes, namely, Jodhpur Bilara, Bilara Beawar, and Beawar Ajmer routes, and also portions thereof falling entirely on this road from Jodhpur Ajmer. There was no indication in the draft scheme for taking over what are called partially overlapping routes, only parts of which overlapped on the Jodhpur Bilara Beawar Ajmer road. These partially overlapping routes were of two kinds. In some cases one terminus was on Jodhpur Bilara Beawar Ajmer road while the other terminus was not on this road. In other cases, both the termini of the overlapping routes were not on this road, though a part of the route fell on this road. Rule 3 of the Rules provides for indi cating all such overlapping routes as are intended to be affected and the draft scheme in the present case only indicated three routes which were completely on this road namely, Jodhpur Bilara, Bilara Beawar, and Beawar Ajmer, and was not concerned at all with the other overlapping routes, where overlapping was only partial. It was therefore in our opinion unnecessary to bring in the question of the twelve partially overlapping routes when objections to this draft scheme were being considered. There is no doubt that the Roadways was also responsible for the introduction of this confusion for it seems to have been urged on its behalf, when the objections were considered on the first occasion, that these partially overlapping routes were also meant to be covered by the draft scheme, even though they were not mentioned in the draft scheme as required by r. 3 of the Rules and no notice had been issued to the permitholders of those routes. The petitioners also raised a point with respect to these overlapping routes, and that is how on the first occasion, the Legal Remembrancer held that even though these routes had 228 not been included in the draft scheme and no notice had been given to the permit holders thereof, it was open to him to pass orders with respect thereto and he proceeded to render the overlapping part of these routes ineffective. It is obvious from a perusal of the draft scheme that these twelve partially overlapping routes were not included in it at all and they were brought in only because of the objection raised by the petitioners and the reply of the Roadways that they were meant to be included. That is why when the writ petitions were decided by the High Court, it pointed out that the scheme did not intially include the partially overlapping routes. The High Court then went on to observe that if the Legal Remembrancer thought fit to include these routes in the scheme also, he should have given notice to all concerned to file their objections. With respect, it seems to us that this observation of the High Court is not correct. If the scheme did not include the partially overlapping routes as it undoubtedly did not, in spite of what the objectors might have said and what the Roadways might have maintained before the Legal Remembrancer on the first occasion it was not open to the Legal Remembrancer to include these overlapping routes in the scheme at all and he could not do so even if he had given notice to the permit holders on these overlapping routes. The question therefore whether the final approval of the draft scheme as published on August 31,1962 is an approval of a part of the scheme only, leaving another part of the scheme unapproved and therefore liable to enforcement later, can only admit of one answer, namely, that the approval was of the scheme as a whole. The contention therefore on behalf of the petitioners that part of the scheme has been approved and the rest of it has been left unapproved, can have no force on the facts of the present case. The twelve overlapping routes were never meant to be affected by the scheme which left them untouched. The contention that only part of the scheme has been 229 approved appears to have been based on the fact that these routes have not been rendered ineffective as to the overlapping part. But as these routes were never included in the draft scheme, the approval given to the draft scheme without touching these routes cannot in the circumstances be called an approval of a part of the scheme. Nor do we think that there is any force in the contention that the Legal Remembrancer abdicated his judgment when going into the question on the second occasion after the judgment of the High Court. The order of the Legal Remembrancer dated August 17, 1962 shows that he reconsidered the entire matter after hearing further arguments and there can be no doubt that he was exercising his own judgment when he finally decided to approve the draft scheme with certain modification. What the Legal Remembrancer has done in this case is to reappraise the evidence in the light of the legal position indicated by the High Court. Nor do we think that there is any substance in the argument that the order of the Legal Remembrancer dated August 17, 1962, is a review of his earlier order dated May 31, 1962. No question of review of that order arises for that order was in effect set aside when the High Court set aside the final scheme as published on June 16, 1962. It is true that publication made certain further modifications into the scheme as approved by the Legal Remembrancer but that in our opinion makes no difference to the fact that the order of the High Court setting aside the final scheme as published on. June 16, 1962 put an end to the order of the Legal Remembrancer dated May 31, 1962 also. This argument as to review has been raised because of the observation in the Judgment of the High Court that the scheme as finally published on June 16, 1962 was not the decision of the Legal Remembrancer because of the changes made in it by the State Government and 230 therefore it was open to him to modify it, though he might have signed his decision and pronounced it. With respect, we consider that this observation is not correct. It may be that the State Government had no authority to modify the decision of the Legal Remembrancer but when the High Court set aside the finally approved scheme as published on June 16, 1962, it meant the decision of the Legal Remembrancer dated May 31, 1962, also came to an end, for the final scheme as published on June 16, 1962 was undoubtedly based on it, even though there were further changes in that decision at the time of publication. In the present case the order of the High Court was analogous to a remand as understood in courts of law. What the Legal Remembrancer did on the second occasion was to reappraise the evidence in the light of the law laid down by the High Court. Therefore, it cannot be said that the decision of the Legal Remembrancer on August 17, 1962, is a review of his earlier decision dated May 31, 1962. It must be treated as a fresh decision, after the High Court had set aside the final scheme as published on June 16, 1962. Though therefore the proposition put forward on behalf of the petitioners may be accepted as correct, there is no scope for applying the principles contained in these propositions to the facts of this case. The contention therefore that the scheme as finally published on August 31, 1962 is bad because it militates against these principles must be rejected. (3) & (4). It is urged that after the High Court set aside the final scheme as published on June 16, 1962, the Legal Remembrancer should have given a fresh hearing ab initio and that he did not do so. It is further urged that in as much as there is no provision in the Rules for compelling the attendance of witnesses whom an objector might like to produce, there 231 can be no effective hearing of the objection, and therefore the scheme as finally published on August 31, 1962, is invalid. It is not disputed that the Legal Remembrancer did give a hearing to the objectors after the order of the High Court. What is urged however is that the objectors should have been allowed to give evidence afresh before the Legal Remembrancer finally disposed of the objections. We are of opinion that though the result of the order of the High Court was to set aside the order of the Legal Remembracer dated May 31, 1962, it cannot be said that the order of the High Court wiped out the evidence which the objectors had given before the Legal Remembrancer on the first occasion. We have already mentioned the two grounds on which the High Court set aside the final scheme as published on June 16, 1962, and those grounds had nothing to do with the evidence which was already produced. In our opinion, it was open to the Legal Remembrancer to take that evidence into account and it was not necessary that evidence should be given again, particularly when no fresh issues arose; nor was the Legal Remembrancer bound to take fresh evidence simply because the final scheme as published on June 16, 1962 had been set aside on account of certain technical and Legal defects. When the objectors had been given full opportunity to lead evidence on the previous occasion which was still there for the Legal Remembrancer to take into account, it was sufficient for the Legal Remembrancer to hear the objectors ' arguments in full after the order of the High Court in the light of the observations made by it, and the petitioners therefore cannot have any grievance on the score that they were not given any hearing after the order of the High Court. If it is borne in mind that the order passed by the High Court in the proceedings was in the nature of a remand order, all these objections will plainly be untenable. 232 As to the contention that the Rules do not provide for compelling the attendance of witnesses and all that the Legal Remembrancer can do is to summon witnesses who may or may not appear in answer to the summonses, it is enough to say that the proceedings before the Legal Remembrancer though quasi judicial are not exactly like proceedings in court. In proceedings of this kind, it may very well be concluded when a witness is summoned and does not appear, that he does not wish to give evidence, and that may be the reason why no provision is made in the Rules for any coercive process. We think in the circumstances of the hearing to be given by the Legal Remembrancer, it is enough if he takes evidence of the witnesses whom the objectors bring before him themselves and if he helps them to secure their attendance by issue of summonses. But the fact that the Rules do not provide for coercive processes does not mean in the special circumstances of the hearing before the Legal Remembrancer that there can be no proper hearing without such coercive processes. We are therefore of opinion that the Legal Remembrancer did give a hearing to the objectors after the order of the High Court and that in the circumstances that hearing was a proper and sufficient hearing. The challenge therefore to the validity of the scheme as published on June 16, 1962, on this ground must be rejected. Lastly we come to the question of discrimination. The argument is based on the fact that the twelve partially overlapping routes to which we have already alluded have not been touched by the scheme. That is undoubtedly so. We have already pointed out that in the case of some of these routes one terminus is on the Jodhpur Bilara Beawar Ajmer road while the other is not on this road. In some cases neither termini is on this road and only a part of 233 the route overlaps this road. The argument is that as the permit holders on these partially overlapping routes have not been touched by the scheme, there is discrimination inasmuch as the permit holders on the three routes which were totally overlapping the route which was being taken over, have been completely excluded. We do not think that this amounts to discrimination. It may be pointed out that under section 68C it is open to take over any area or route to the complete or partial exclusion of other persons. Therefore, it was open to the State Government to take over this route only and exclude those who may be plying completely on this route or parts thereof and unless it can be shown that others who are similarly situated have not been excluded from the scheme there can be no question of discrimination. In our opinion it cannot be said that those permit holders whose routes were completely covered by the route taken over stand on the same footing as those whose routes were only partially covered by the route taken over. It may very well have been considered that in the first instance only those permit holders will be excluded whose routes are completely covered by the routes taken over, and if that is permissible under the law it cannot be said that that would amount to discrimination when there is an obvious distinction between routes completely covered by the route to be taken over and the routes partially covered by the route to be taken over. We have been informed that since this scheme was approved steps have been taken even to exclude those permit holders whose routes are partially covered by making their permits ineffective over the overlapping part of the route. But that apart, we can see no ground to uphold the plea of discrimination in the present case, for routes completely covered by the route taken over stand on a different footing from the routes only partially covered. The contention therefore that the final scheme as published on August 31, 1962 is bad because it discriminates in this manner, must be rejected. 234 We therefore dismiss the petition but in the circumstances of this case pass no order asto costs. Petition dismissed.

The petitioners were holders of Stage carriage permits on Jodhpur Bilara arid Bilara Beawar routes. The Rajasthan Roadways published a draft scheme which provided for taking over the transport service on the Jodhpur Bilara Beawar Aj mer route by the Roadways and also for taking over three overlapping routes or portions thereof which were entirely on Jodhpur Bilara Beawar Ajmer road and the names of the permit holders on these three overlapping routes with their permits were also specified for cancellation and no other transport vehicles were to ply on the route to be taken over. The petitioners filed objection and challenged the scheme on the ground of discrimination before the Legal Remembrancer as some overlapping routes were not notified. He held that even though these routes were not specified in the draft scheme and no notice had been given to the permit holders thereof, it was open to him to render the permits ineffective with respect to these routes also and passed orders accordingly. The permitholders affected by the order of the Legal Remembrance filed writ petitions in the High Court. The High Court directed the Legal Remembrancer to go into the matter again and to leave the question of the twelve partially overlapping routes for a subsequent scheme. The effect of the decision of the Legal Remembrancer considered in tile light of the decision of the High Court was that all the twelve partially overlapping routes were left out of the scheme and only the three routes notified in the draft scheme were affected. The present petition is directed against his decision approving the scheme as modified by him and published on August 31, 1962. In this Court it was urged (1) that the procedure of approving a part of the scheme once and another part later was illegal; 221 (ii)that the approval of the scheme by the Legal Rem embrancer after abdication of his own judgment was not a valid approval ; (iii) that the Legal Remembrancer ought to have given a fresh hearing ab initio to the objectors ; (iv) that there was no proper hearing and (v) that there was discrimination, as the, operators of the twelve partially overlapping routes were left out of the scheme. Held, that as the twelve overlapping routes were never included in the draft scheme, the approval given to the craft scheme without touching these routes cannot be called 0an approval of a part of the scheme. Held, further that in the present case the order of the High Court was analogous to a remand order and therefore, the decision of the Legal Remembrancer must be treated as a fresh decision and not a review of his earlier decision and there was no abdication by him of his functions. Held, further, that when the objectors had been given full opportunity to lead evidence on the previous occasion which was still there for the Legal Remembrancer to take into account, it was sufficient for him to hear the objector 's arguments. If it is borne in mind that the order passed by the High Court in the proceedings was in the nature of a remand order, this objection must fail. Held, further, that the fact that the rules did not provide for a coercive process to secure attendance of witnesses did not mean that there could be no proper hearing without it. Held, further, that under section 68C it was open to the State Government to take over any area or route to the complete or partial exclusion of other persons and there was no discrimination in the present case, for routes completely covered, by the route taken over stand on a different footing from the routes only partially covered.

l Appeals Nos. 1549 to 1552 of 1968. Appeals from the judgment and order dated September 28, 1964 of the Calcutta High Court in Income tax Reference No. 18 1961. Sukumar Mitra, section K. Aiyar, R. H. Dhebar, R. N. Sachthey and B. D. Sharma, for the appellant (in all the appeals). 806 M. C. Chagla, T. A. Ramachandran and D. N. Gupta, for the respondent (in all the appeals). The Judgment of the Court was delivered by Ramaswami, J. These appeals are brought by certificate from the judgment of the Calcutta High Court dated 28th September, 1964 in Income Tax Reference No. 18 of 1961. The respondent (hereinafter called the assessee) is a private limited company incorporated in India and is a subsidiary of the Imperial Chemical Industries, London, which holds the entire share capital of the assessee. The business of the assessee consists mainly of acting as selling agents in India for a large variety of goods such as chemicals, dyes, explosives etc. , manufactured or purchased by its London principals and sold in India. The Imperial Chemical Industries (Export) Glasgow [hereinafter referred to as the I.C.I. (Export) Ltd.] is another subsidiary of I.C.I. London which holds the entire share capital of I.C.I. (Export) Ltd. The I.C.I. (Export) Ltd. had appointed as their selling agents in India four companies, viz., (1) Gillanders Arbuthnot & Co. Ltd., Calcutta, (2) Best & Co. Ltd., Madras, (3) Anglo Thai Co. Ltd. Bombay and (4) Shaw Wallace & Co. Ltd. With effect from 1st April, 1948, the I.C.I. (Export) Ltd. terminated the services of the aforesaid selling agents and appointed the assessee as its sole selling agent. The I.C.I. (Export) Ltd. had agreed to pay to the former selling agents compensation at the rate of two fifth, two fifth and one and two fifths of the commission earned by the assessee for the three years from 1st April, 1948. The compensation was paid to the four companies through the accounts of the assessee. For this purpose the modus operandi adopted was as follows : The compensation payable to the former agents was spread over a period of three years and on the assumption that the turnover was constant, the compensation payable to the selling agents was on an average, an amount equal to the 11/15th of the commission earned by the assessee at the normal rates. In order to arrive at the amount of commission to be credited to the assessee 's profit and loss account each year the assessee in the first place credited the commission account and debited the I.C.I. (Export) Ltd. account with the full amount of compensation earned by it at normal rates on sales effected during the year. Next, the assessee transferred from the commission account to a special reserve account called the 'Explosives Ex Agents Compensation Reserve Account ', the proportion payable to the ex agents as compensation, namely, 11/15th (2/5+2/5+7/5= 11/5 X 1/3 = 11/15) (leaving 4/15th towards commission account) so that funds might be accumulated for payment to the four companies from time to time. 807 The year of account of the assessee is from 1st October to 30th September every year. As a result of the above method of accounting, the following figures appeared in the assessee 's books of accounts Gross Transfer toNet Commission Reserve forCommission compensa tion Rs. Rs. Rs. 1st April 1948 to 30th September 1948 2,91,396 2,03,503 87,893 Year ending 30th September 1949 7,67,294 5,41,526 2,25,768 Year ending 30th september 1950 7,52,204 5,29,284 2,22,920 year ending 30 th september 1951 10,20,922 4,00,052 6,20,870 TOTAL 28,31,816 16,74,365 11,57,451 For the assessment years 1949 50, 1950 51, 1951 52 and 1952 53 the assessee showed the net amounts of commission earned on the selling agencies by the I.C.I. (Export) Ltd. adding a foot note that the amounts were arrived at after deducting the amount of compensation payable to the out going agents. By his order dated 28th January, 1957 for the assessment year 1951 52 the Income Tax Officer held that the deductions were not permissible. In an appeal preferred by the. assessee the Appellate Assistant Commissioner confirmed the assessment by his order dated 25th November, 1957. The assessee took the matter in further appeal to the Appellate Tribunal which dismissed the appeal. The Appellate Tribunal held that there was no justification for the absence of a written agreement between the I.C.I. (Export) Ltd. and the assessee when the former selling agencies were terminated and the assessee was appointed as the sole selling agent. It was observed that the assessee was not collecting any commission on behalf of the outgoing agents and it was not their legal obligation to pay compensation to the out going agents. If the assessee was not entitled to more than 3/5th of commission during the first two years, it should have credited that amount whereas the assessee had actually credited four fifteenth on a notional basis which was not in consonance with the arrangement. The conclusion reached by the Appellate Tribunal was that "there was no agreement between the assessee and the I.C.I. (Export) Ltd. and if there was one it was not acted upon". It was held by the Appellate Tribunal that the payment of compensation was not because of an overriding title created either by the act of the parties or by operation of law. At the instance of the assessee the following question of law was referred to the High Court under section 66(1) of the Income Tax Act, 1922 (hereinafter called the Act): 808 "Whether the inclusion by the Income Tax officer. of Rs. 2,03,503, Rs. 5,411,526, Rs. 5,29,284 and 4,00,052 in the assessment for the years 1949 50, 1950 51, 1951 52 and 1952 53, for relevant accounting years ending the 30th Sept. 1948, 1949, 1950 and 1951 respectively in the computation of the total income of the assessee is justified and correct ?" The High Court answered the question in the negative in favour of the assessee holding that the inclusion of the amount of compensation in the total income of the assessee for the relevant assessment years was not justified. On behalf of the appellant it was contended that the High Court had no legal Justification for interfering with the finding of the Appellate Tribunal that there was no proof of the agreement between the assessee and the I.C.I. (Export) Ltd. with regard to the quantum of commission to be paid to the assessee for the period between 1st April, 1948 and 31st March, 1951. On this point reference was made by Mr. Chagla to (a) the letter dated 11th March, 1947 from the I.C.I. (Export) Ltd. to M/s. Gillanders Arbuthnot & Co., (b) the affidavits of Mr. W. A.Bell and Mr. J. W. Donaldson and (c) the letter dated 3rd January, 1958 of M/s. Lovelocke and Lewes, Chartered Accountants, Calcutta. It was argued that these documents established that there was an agreement between the I.C I. (Export) Ltd. and the assessee, that for the period 1st April 1948 to 31st March, 1951 the assessee was entitled to receive as its commission only the amounts representing the, difference between the normal rates of commission and the compensation payable to the former agents during that period. The Appellate Tribunal had considered all these documents and reached the conclusion that there was no agreement between the I.C.I. (Export) Ltd. and the assessee and 'if there was one it was not acted upon '. The Appellate Tribunal remarked that the letter dated 11th March, 1947 from the I.C.I. (Export) Ltd. set forth only the terms and conditions subject to which the selling agencies of the out going agents were terminated. It was silent on the crucial question of commission to be paid to the assessee during the three years from the date of its appointment as sole selling agent. The affidavits of Mr. Bell and Mr. Donaldson were produced for the first time before the Appellate Assistant Commissioner. The affidavits were made many years 'after the crucial date of the appointment of the assesee as the sole selling agent of the I.C.I. (Export) Ltd. The affidavits did not mention the amount of commission to be paid to the out going agents and the affidavits were also not consistent with the entries in the books of accounts of the assessee. The letter of M/s Lovelocke and Lewes was produced at a very late stage during the hearing of the appeal before the Tribunal and even, otherwise the 809 letter merely explains the method of accounting adopted by the assessee and did not carry the matter any further in the circumstances, the Appellate Tribunal held that there was no agreement between the assessee and the I.C.I. (Export) Ltd. and if there was any such agreement it was not acted upon. It is manifest that the finding of the Appellate Tribunal on this question is a finding on question of fact and the High Court was not entitled to interfere with this finding. It is well established that the High Court is not a Court of Appeal in a reference under section 66(1) of the Act and it is not open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate Tribunal. It is the, duty of the High Court while hearing the reference to confine itself to the facts as found by the Appellate Tribunal and to answer the question of law in the context of those facts. It is true that the finding of fact will be defective in law if there is no evidence, to support it or if the finding is perverse. But in the hearing of a reference under section 66(1) of the Act it is not open to the assessee to challenge such a finding of fact unless he has, applied for the reference of the specific question under s.66(1). In India Cements Ltd. vs Commissioner of Income Tax( ') it was held by this Court that in a reference the High Court must accept the findings of fact reached by the Appellate Tribunal and it is for the party who applied for a reference to challenge those findings of fact, first, by an application under section 66(1). If the party concerned has failed to file an application under section 66(1) expressly raising the question about the validity of the finding of fact, he is not entitled to urge before the High Court that the finding is vitiated for any reason. The same view has been expressed by this Court in Commissioner of Income Tax vs Sri Meenakshi Mills Ltd.(2) and Commissioner of Income Tax, Bombay City I vs Greaves Cotton & Co. Ltd.(3).In the present case the assessee has in his application under s.66(1) expressly raised the question about the validity of the finding of the Appellate Tribunal as regards the agreement but the question was not referred by the Appellate Tribunal to the High Court and the contention of the assessee with regard to the question must be deemed to have been rejected. The assessee did not thereafter move the High Court under section 66(2) of the Act requiring it to call for a statement of the case on that specific question. We are therefore of opinion that the High Court was in error in embarking upon a reappraisal of the evidence before the Appellate Tribunal and setting aside the finding of the Appellate Tribunal that "there was no agreement as alleged in the affidavits of Mr. W. A. Bell and Mr. J. W. Donaldson and "if there was such an agreement it was not acted upon". (1) (2) (3) 810 It was argued by Mr. Chagla that even if the agreement was not established,, the amount, Paid by the assessee as compensation to the ex agents was an expenditure laid out wholly and exclusively for the purpose of the business such is allowable under s.10(2) (xv) of the Act. The contrary view point was urged on behalf of the appellant,. It was pointed out that the assessee was acting as the agent of the I.C.I. (Export) Ltd. for the payment of compensation of the ex agents and the payment was made not in the character of a trader but in the character of the agent of its Principal. The contention of the appellant was that the assessee got the right to sell goods after 1st April 1948 and for getting that right the assessee parted with a portion of its commission for the first two years after 1st April 1948 and paid very much more than the commission earned in the third year. This position was borne out by the accounts of the respondent which show that the assessee received the commission at full rates and out of it created a reserve account of which these compensations were made to the ex agents. We have already referred to the finding of the Appellate Tribunal that no agreement between the assessee and the I.C.I. (Export) Ltd. has been proved. In the absence of proof of the exact terms and conditions of the 'agreement it is not possible to accept the argument of the assessee that the amount paid as compensation to the ex agents was an "expenditure laid out wholly and exclusively for the purpose of the business" under section 10(2) (xv) of the Act. It was finaly contended on behalf of the respondent that by virtue of an overriding title the income was diverted before it reached the assessee, and so, the amount of compensation paid to the ex agents did not form part of the income of the assessee. In other words, the contention was that the compensation payable to the ex agents was diverted from the income of the assessee by ,an overriding title arising under the agreement between the assessee and the I.C.I. (Export) Ltd. The argument was stressed that the commission payable as compensation to the ex agents did not form part of the income of the assessee. We are unable to accept this argument as correct. We have already pointed out that the finding of the Appellate Tribunal is that the precise terms of the agreement between the assessee and the I.C.I EXPORT Ltd. have not been established. In any event, even on basis of the affidavits of Mr. Bell and Mr. Donaldson the payment of compensation to the " agents was apparently made by the assessee for and on behalf of the I.C.I. (Export) Ltd. The assessee 's documents suggest that the payment of compensation was the exclusive liability of the I.C.I. (Export) Ltd. and the assessee was not under a legal obligation to pay the amount of compensation to the out .going agents. It is not established that the payment of compensation ,was by an overriding title ,created either by the act of the parties 811 or by the operation of law. An obligation to apply the income in a particular way before it is received by the assessee or before it has accrued or arisen to the assesses results in the diversion of income. An obligation to apply income accrued, arisen or received amounts merely to the apportionment of income and the income so applied is not deductible. The true test for the application of the rule of diversion of income by an overriding title is whether the amount sought to be deducted 'in truth never reached the assessee as his income. The leading case on the subject is Raja Bejoy Singh Dudhuria vs Commissioner of Income Tax(1) where the step mother of the Raja had brought a suit for maintenance and a compromise decree was passed in which the step mother was to be paid Rs. 1,100 per month, which amount was declared a charge upon the properties in the hands of the Raja by the Court. The Raja sought to,deduct this amount from his assessable income, which was disallowed by the High Court at Calcutta. On appeal to the Judicial Committee Lord Macmillan observed as follows "But their Lordships do not agree with the learned Chief Justice in his rejection of the view that the sums paid by the appellant to his step mother were not 'income ' of the appellant at all. This in their Lordships ' opinion is the true view of the matter. When the Act by section 3 subjects to charge 'all income ' of the individual, it is what reaches the individual as income which it is intended to charge. In the present case the decree of the court by charging the appellant 's whole resources with a specific payment to his step mother has to that extent diverted his income from him and has directed it to his step mother; to that extent what he receives for her is not his income. It is not a case of the application by the appellant of part of his income in a particular way, it is rather the allocation of a sum out of his revenue before it becomes income in his hands". Another case of the Judicial Committee is reported in P. C. Mullick vs Commisisoner of Income Tax(2), where, a testator appointed the appellants as executors and directed them to pay Rs. 1,00,000 out of the income on the occasion of his addya sradh. The executors paid Rs. 5,537 for such expenses, and sought to deduct the amount from the assessable income. The Judicial Committee confirmed the decision of the Calcutta High Court disallowing the deduction and observed that the payments were made out of the income of the estate coming to the hands of the executors and in pursuance of an obligation imposed upon them by the testator. The Judicial Committee observed that it was not a case in which (1) (2) 812 a portion of the income had been diverted by an overriding title from the person who would have received it otherwise and distinguished Bejoy Singh Dudhuria 's case(1). In Commissioner of Income Tax Bombay City II vs Sitaldas Tirathdas(2), Hidayatullah, J., speaking for the Court observed as follows "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, if 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 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". In view of the principle laid down in these authorities we are of ,opinion that the payment of compensation by the assessee to the ex agents was not by an overriding title created either by act of the parties or by operation of law. We accordingly reject the argument of Mr. Chagla on this aspect of the case. For the reasons expressed we hold that the judgment of the Calcutta High Court dated 28th September, 1964 should be set aside and the question referred by the Appellate Tribunal should be answered in the affirmative and against the assessee. The appeals are accordingly allowed with costs. One hearing fee. G.C. Appeals allowed.

The Imperial Chemical Industries (Export) Glasgow was a subsidiary of Imperial Chemical Industries London. With effect from 1st April 1948 the former terminated the services of four selling agents in India and in their place appointed the respondent company (another subsidiary of the Imperial Chemical Industries, London) as their sole selling agents. The four former selling agents were to be paid compensation for the termination of their services and this was done through the accounts of the respondent. In its income returns for the years 1949 50, 1950 51, 1951 52 and 1952 53 the respondent showed as its income the net amount of commission arrived at after deducting from the gross commission the compensation paid to the former selling agents. The Income tax Officer in his order for the year 1951 52 held that the said deductions were not permissible. His order was confirmed by the Appellate Assistant Commissioned and the Income tax Appellate Tribunal. The Tribunal held that there was no agreement between the Imperial Chemical Industries (Export) Glasgow and the respondent company casting on the latter the liability to pay the compensation to the former selling agents out of the commission earned by it; the Tribunal further said that even if there was an agreement it was not acted upon. In reference under section 66(1) of the Indian Income tax Act, 1922 the High Court took the opposite view and held that the claim made by the respondent company was allowable. The revenue appealed to this Court. The questions that fell for consideration were : (i) whether the High Court was justified in interfering with the Tribunal 's finding of fact on a question not referred to it; (ii) whether the compensation amounts paid by the respondent to the former selling agents were expenditure laid out wholly and exclusively for 'the purpose of business; (ii) whether the income in question was diverted before it reached the respondent by virtue of an overriding title. HELD : (i) It is well established that the High Court is not a Court of Appeal in a reference under section 66(1) of the Act and it is not open to the High Court in such a reference to embark upon a reappraisal the evidence and to arrive at findings of fact contrary to those of the Appellate: Tribunal. It is the duty of the High Court while hearing the reference to confine itself to the facts as found by the Appellate Tribunal and to answer the question of law in the context of those facts. It true that the finding of fact will be defective in law if there is no evidence 805 to support it or if the finding is perverse. But in the hearing of a reference under section 66(1) of the Act it is not open to the assessee to challenge such a finding of fact unless he has applied for the reference of the specific question under section 66(1). [809 B D] In the present ease the assessee had in its applications under section 66(1) expressly raised the question about the validity of the finding of the Appellate Tribunal as regards the agreement but the question was not referred by the Appellate Tribunal to the High Court and the contention of the assessee with regard to the question must be deemed to have been rejected. The assessee did not thereafter move the High Court under section 66(2) of the Act requiring it to call for a statement of the case on that specific question. The High Court was therefore in error in embarking upon a reappraisal of the evidence before the Appellate Tribunal and setting aside the finding of the Appellate Tribunal that there was no agreement as claimed by the assessee for the payment of compensation to the former selling agents out of its own commission and. that if there was such an agreement it was not acted upon. [809 F H] India Cements Ltd. vs Commissioner of Income tax, 60 I.T.R. 52, Commissioner of Income tax vs Sri Meenakshi Mills Ltd., and Commissioner of Income tax, Bombay City I vs Greaves Cotton & Co. Ltd., , applied. (ii) In the absence of proof of the exact terms and conditions of the agreement it was not possible to accept the argument that the amount paid as compensation to the ex agents was an 'expenditure laid out wholly and exclusively for the purpose of the business ' under section 10(2)(xv) of the Act. [810 D] (iii) The assessee 's documents suggested that the payment of compensation was the exclusive liability of the I.C.I. (Exports) Ltd. and the assessee was not under a legal obligation to pay the amount of compensation to the outgoing agents. It was not established that the payment of compensation was by an overriding title created either by the Act of the parties or by the operation of law. An obligation to apply the income in a particular way before it is received by the assessee or before it has accrued or arisen to the assessee results in the diversion of income. An obligation to apply income accrued, arisen or received amounts merely to the apportionment of income and the income so applied is not deductible. The true test for the application of the rule of diversion of income by an overriding title is whether the amount sought to be deducted in truth never reached the assessee as his income. [810 H 811 H] Raja Bejoy Singh Dudhuria vs Commissioner of Income tax, , P. C. Mullick vs Commissioner of Income tax, and Commissioner of Income tax, Bombay City II vs Sitaldas Tirathdas, , applied.

minal Appeal No. 207 of 1967. Appeal by special leave from the judgment and order dated April 17, 1967 of the Andhra Pradesh High Court in Criminal Revision Petition No. 735 of 1965. P. Ram Reddy and A. V.V. Nair, for the appellant. G.S. Rama Rao, for the respondents. The judgment of the Court was delivered by Shah, J. K. Meerayya, K. Venkatanarayana respondents in this appeal and two others were charged before the Judicial Magistrate, IInd Class, Avanigadda, for offences under sections 323 and 324 I.P. Code for voluntarily causing injuries to Seetharamayya and Veeraraghavayya on June 22, 1964. The Trial Magistrate convicted Meerayya and Venkatanarayana the first under the offence under section 324 and the second for the offence under section 323 I.P. Code. In appeal to the Court of Session, 1006 Krishna Division, at Machilipatnam, the order was confirmed. The High Court, in exercise of its revisional jurisdiction, set aside the order of conviction and sentence. The State of Andhra Pradesh has appealed to this Court, with special leave. The case raises a question of some importance in the administration of justice. The findings recorded by the Trial Magistrate and confirmed by the Sessions Judge were that the respondents had committed assault upon Seetharamayya and Veeraraghavayya and that they could in law be properly convicted. But it was urged that there was a bar against prosecution of the two accused Meerayya and Venkatanarayana because of the "principle of issue estoppel". The plea is raised on the ground that the Station House Officer, Kodur Police Station, had instituted proceedings in the Court of the Sub Divisional Magistrate, Bandar, under section 107 ' Code of Criminal Procedure, against 96 persons, amongst whom were the two respondents, and an order under section 112 Code of Criminal Procedure was made stating that the persons named therein were indulging in acts of violence involving breach of public peace and tranquillity in the village of Salempalam and were endangering peace in the village, and that they had formed themselves into a party and were thereby disturbing the public peace and tranquillity by committing, acts of violence, and on that account they were required to show cause why each person named should not execute a bond for keeping the peace for a period of one year in the sum of Rs. 1,000 with two sureties in a like amount each. In the order requiring the parties to show cause, four incidents were referred to the first of which is material. It was recited that on June 22, 1964, 11 persons including the two respondents had beaten Seetharamayya and Veeraraghavayya with crow bars and sticks, and a case in Crime No. 20/64 under sections 148, 323 and 325 I.P. Code had been registered and was being investigated. The Sub Divisional Magistrate held an inquiry and was of the view that since the evidence led in support of the first incident was not supported by reliable evidence, and there were inherent discrepancies in the testimony of the witnesses and the recitals in the complaint, the first incident was not proved against any of the eleven persons. It was urged that the order of the Sub Divisional Magistrate holding that the respondents were not concerned in the incident had become final and it was not open to the Judicial Magistrate, IInd Class, Avanigadda, to hold a trial against the respondents in respect of the same incident. The Trial Magistrate rejected the plea, and the Sessions Judge agreed with him. But in the view of the High Court since in the proceeding under section 107 of the ,Code of Criminal Procedure the incident which was made the subject matter of the complaint against the respondents in the Court of the Judicial Magistrate was one of the incidents 1007 relied upon and was held not proved, it was not open to the State to commence or continue a prosecution against the respondents in respect of the same incident. In so holding, the High Court held that on the principle of "issue estoppel" approved by this Court in Manipur Administration vs Thokchom, Bira Singh(1) so long as the finding, that the respondents were not concerned in the incident, was not set aside by appropriate proceeding, no prosecution on any allegation legally inconsistent with that finding could be commenced against the respondents. Counsel for the State contended that the rule of issue estoppel is inconsistent with the statutory provisions contained in section 403 of the Code of Criminal Procedure, and cannot be resorted to in criminal trials and that in any event the rule of issue estoppel had no application, since there was no "previous trial" of the respondents for any offence alleged to arise out of the incident in respect of which they were tried. It was urged that it was not the law even recognised by the Australian Courts where the rule of issue estoppel had its origin that evidence on which a criminal proceeding was held cannot be utilised in any subsequent proceeding between the same parties. The first contention raised by counsel for the State cannot be entertained in view of a large body of authority in this Court. If the matter were res integra the argument that the Courts cannot travel outside the terms of the Code of Criminal Procedure : and extend the rule of autre fois acquit incorporated in section 403 of the Code of Criminal Procedure may have required serious consideration. The following important rules emerge from the terms of section 403 of the Code,of Criminal Procedure: (1) An order of conviction or acquittal in respect of any offence constituted by any act against or in favour of a person does not prohibit a trial for any other offence constituted by the same act which he may have committed, if the Court trying the first offence was incompetent to try that other offence. (2) If in the course of a transaction several offences are committed for which separate charges could have been made, but if a person is tried in respect of some of those charges, and not all, and is acquitted or convicted, he may be tried for any distinct offence for which at the former trial a separate charge may have been, but was not, made. (3) If a person is convicted of any offence constituted by any act, and that act together with the consequences which re suited therefrom constitute a different offence, he may again be tried for that different offence arising out of the consequences, if (1) ; L 6 Sup C1169 13 1008 the consequences had not happened or were not known to the Court to have happened, at me time when he was convicted. (4) A person who has once been tried by a court of competent jurisdiction for an offence and has been either convicted or acquitted shall not be tried for the same offence or for any other offence arising out of the same facts, for which a different charge from the one made against him might have been made or for which he might have been convicted under the Code of Criminal Procedure. Section 403 of the Code of Criminal Procedure enacts the rule of autre fois acquit and autre fois convict applicable to criminal trials. The rule is that so long as an order of acquittal or conviction at a trial held by a Court of competent jurisdiction of a person charged with committing an offence stands, that person cannot again be tried on the same facts for the offence for which he was tried or for any other offence arising there/fore. But the rule of issue estoppel in criminal trials evolved by the High Court of Australia and approved by the Judicial Committee has been applied to criminal trials in India, apart from the terms of section 403 of the Code of Criminal Procedure. Lord MacDermott in Sambasivam vs Public Prosecutor, Federation of Malaya(1) observed at p. 479: "The effect of a verdict of acquittal pronounced by a competent court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence. To that it must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to the adjudication. The maxim "Res judicata pro veritate accipitur" is no less applicable to criminal than to civil proceedings. Here, the appellant having been acquitted at the first trial on the charge of having ammunition in his possession, the prosecution was bound to accept the correctness of that verdict and was precluded from taking any step to challenge it at the second trial. And the appellant was no less entitled to rely on his acquittal in so far as it might be relevant in his defence. That it was not conclusive of his innocence on the fire arm charge is plain, but it undoubtedly reduced in some degree the weight of the case against him, for at the first trial the facts proved in support of one charge were clearly relevant to the other having regard to the circumstances in which the ammunition and revolver were found and the fact that they fitted each other." 1009 In Sambasivam 's case(1) the appellant was tried for the offence of being in possession of ammunition in violation of Reg. 4(1)(b) of the Emergency (Criminal Trials) Regulations, 1948. He was acquitted of the charge. Later he was tried for the offence of carrying a fire arm contrary to Reg. 4(1)(a) of the Emergency Regulations and was convicted by the Supreme Court of the Federation of Malaya. An appeal was carried to the Judicial Committee and the legality of the conviction was challenged on the grounds, inter alia, that so long as the order of acquittal in respect of the carrying of ammunition stood, the facts proved in support of that charge were in the circumstances of the case clearly relevant to the second charge, and the appellant was entitled to rely upon the acquittal in so far as it was relevant to his defence. The plea so raised was accepted by the Judicial Committee. Pritam Singh vs The State of Punjab(a) this Court held that where a person has been tried under section 19(f) of the Arms Act and is acquitted because the prosecution has failed to establish the possession of a revolver by the accused as alleged, in a subsequent trial of the offence of murder, where the possession of the revolver was a fact in issue which had to be established, the prosecution could not ignore the finding at the previous trial. In several later judgments of this Court the principle of issue estoppel has received approval: Manipur Administration vs Thokchom, Bira Singh(a). Banwari Godara vs The State. of Rajasthan(4). Lalta & Ors. vs The State of U.P.(5) It was also accepted in The Assistant Collector of Customs and another vs L.R. Malwani and another(x). It is too late now to make a departure from the rule accepted by this Court. In the American Courts also the rule of issue estoppel has received approval: Sealfron vs United States(7). It is true that in Connelly vs Director of Public Prosecutions(8) decided by the House of Lords there was some difference of opinion amongst the Law Lords as to the applicability of the rule to criminal trials in the English Courts. Our Criminal jurisprudence is largely rounded upon the basic rules of English Law though the procedure is somewhat different. Trials by jury have been practically abolished and the cases are being tried by Judges. Several charges arising out of the same transaction can be tried under the Code of Criminal Procedure together at one trial, and specific issues are always raised and determined (1) (2) L A.I.R. 1956 S.C. 415. (3) ; (4) Cr. A. No. 141 of 1960 decided on Feb. 7, 1961. (5) Cr. A. No. 185 of 1966 decided on Oct. 25, 1968. (6) Cr. 15 & 35 of 1967 decided on Oct. 16, 1968. (7) [1948] 332 U.S. Rep. 575. (8) L.R. 1010 by the Courts. Under the English system of administration criminal jaw, trials for serious offences are held with the aid of the jury and it is frequently impossible to determine with certitude the specific issues on which the verdict of the jury is founded. In criminal trials under the Code of Criminal procedure, there is no uncertainty in the determination of issues decided. Difficulties envisaged in Connelly 's case(1) in the application of the rule of issue estoppel do not therefore arise under our system. But it is necessary to notice the true basis of the rule. Dixon 1., in The King vs Wilkes(2) observed at pp. 518 519: " . it appears to me that there is nothing wrong in the view that there is an issue estoppel, if it appears by record of itself or as explained by proper evidence., that the same point was determined in favour of a prisoner in a previous criminal trial which is brought issue on a second criminal trial of the same prisoner. There must be a prior proceeding determined against the Crown necessarily involving an issue which again arises in a subsequent proceeding by the Crown against the same prisoner. The allegation of the Crown in the subsequent proceeding must itself be inconsistent with the acquittal of the prisoner in the previous proceeding. But if such a condition affairs arises I see no reason why the ordinary rules of issue estoppel should not apply. Such rules are not to be confused with those of res judicata, which in criminal proceedings are expressed in the pleas of autre fois acquit and autre fois convict. They are pleas which are concerned with the judicial determination of an alleged criminal liability and in the case of conviction with the substitution of a new liability. Issue estoppel is concerned with the judicial establishment of a proposition of law or fact between parties. It depends upon well known doctrines which control the relitigation of issues which are settled by prior litigation . " The rule, does not predicate that evidence given at one trial against the accused cannot again be given in the trial of the accused for a distinct offence. As Lord Morris of Borty Y Gest observed in Connelly 's case(1) at p. 1325: " . there is no rule or principle to the effect that evidence which has first been used in support of a charge which is not proved may not be used to, support a subsequent and different charge, (1) (2) 77 C.L.R. 511. 1011 Can it be said in the present case that there has been a trial of the accused on an issue in a prior litigation, and an attempt is made to relitigate the same? It may be recalled that the respondents were not tried at any criminal trial in the previous case. The earlier proceeding was for binding over the respondents and 94 others to keep the peace on the case that it was apprehended that they were likely to commit breach of peace or disturb public tranquillity. The primary issue which the Court was called upon to determine was whether there was any apprehension of the breach of peace or disturbance of public tranquillity which necessitated the passing of the order requiring the respondents and others to give security. It is true that in support of that order the Station House Officer in his report had relied upon four incidents, one of which specifically set out the details which formed the subject matter of ' the trial from which the present appeal arises. But there was no trial of the respondents for an offence in the earlier proceeding and there was no order of conviction or acquittal. The rule of issue estoppel cannot, in our judgment, be extended so as to prevent evidence which was given in the previous proceeding and which was held not sufficient to sustain the other for being used in support of a charge of an offence which the State seeks to make out. The rule of issue estoppel prevents relitigation of the issue which has been determined in a criminal trial between the State and the accused. If in respect of an offence arising out of a transaction a trial has been taken place and the accused has been acquitted, another trial in respect of the offence alleged to arise out of that transaction or of a related transaction which requires the Court to arrive at a conclusion inconsistent with the conclusion reached at the earlier trial is prohibited by the rule of issue estoppel. In the present case, there was no trial and no acquittal. The rejection of evidence given in the earlier proceeding to sustain an order for binding over the respondents to keep the peace does not preclude the trial of the respondents in respect of the specific incident which together with the other incident was sought to be made the basis of the order of binding over the respondents. This Court in L.R. Malwani 's case(1) declined to apply the rule of issue estoppel to a case arising under the Sea Customs Act in which there was an inquiry held by the Collector of Customs and a criminal prosecution was then filed. In our judgment, the High Court was in error in holding that the respondents could not be tried and convicted of offences under section 324 and 323 I.P. Code because in the earlier proceeding under section 107 of the Code of Criminal Procedure, evidence with regard to the incident out of which offences which are the subject matter of the present appeal was taken, and was regarded as insufficient to sustain the order. (1) C:r, As. 15 & 35 of 1967 decided on Oct. 16, 1968, 1012 The appeal is allowed, and the order passed by the High Court is set aside. As, however, the sentences passed by the learned Trial Magistrate and confirmed by the Court of Session were of short duration and the respondents have been released on bail, we do not think that they should be called upon to undergo the remaining sentences. We reduce the sentences of imprisonment to the period already undergone. The appeal is allowed and the order of the Session Court is restored, subject to the modification in the sentence of imprisonment. R.K.P.S. Appeal allowed.

Proceedings were instituted under section 107 Cr. P.C. against four persons including the two respondents and an order was made against them under section 112 Cr. P.C. stating that they were indulging in various acts of violence involving breach of peace and requiring them to show cause why each of them should not execute a bond for keeping the peace. This order referred to four incidents, the first of which was that on June 22, 1964, eleven persons including the two respondents had indulged i.n certain acts of violence as a result of which a case under sections 148, 323 and 325 I.P.C. had been registered. After holding an inquiry, the Magistrate was of the view that the evidence led in support of the first incident was not reliable and the first incident was not proved against any of the eleven persons. Subsequently the respondents were convicted at a trial of offences under sections 323 and 324 I.P.C. committed in the first incident in the order under section 112 Cr. The Court of Session in appeal confirmed the conviction but the High Court, in revision, set it aside holding that on the principle of "issue estoppel" approved by this Court in Manipur Administration vs Thockchom Bira Singh, ; , since in the proceedings under section 107 Cr. P.C. the incident which was made the subject matter of the complaint against the respondents in the Trial Court was one of the incidents relied upon and was held not proved, it was not open to the State to prosecute the respondents in respect of the same incident. In appeal to this Court with special leave, it was contended that the rule of "issue estoppel" had no application in the present. case, since there was no "previous trial" of the respondents for any offence alleged to arise out of the incident in respect of which they were tried; and furthermore, that the rule of issue estoppel was inconsistent with the statutory provisions contained in section 403 Cr. P.C. and could not be resorted to in criminal trials. HELD: (i) The High Court was in error in holding that the respondents could not be tried and convicted of offences under sections 324 and 323 I.P.C. because in the earlier proceeding under section 107 Cr. P.C., evidence with regard to the incident out of which the offences arose which were the subject matter of the present appeal was taken, and was regarded as insufficient to sustain the order. The rejection of evidence given in the earlier proceeding to sustain an order for binding over the respondents to keep the peace did not preclude the trial of the respondents in respect 1005 of the specific incident which together with the other incidents was sought to be made the basis of the order of binding over the respondents. The rule of "issue estoppel" prevents relitigation of the issue which has been determined in a criminal trial between the State and the accused. If in respect of an offence arising out a transaction a trial has taken place and the accused has been acquitted, another trial in respect of the offence alleged to arise out of that transaction or of a related transaction which requires the Court to arrive at a conclusion inconsistent with the conclusion reached at the earlier trial is prohibited by the rule of issue estoppel. In the present case there was no trial of the respondents for an offence in the earlier proceeding and there was no order of conviction or acquittal. [1011 D F, H] (ii) Section 403 Cr. P.C. enacts the 'rule of autre fois acquit and autre fois convict applicable to criminal trials. The rule is that so long as an order of acquittal or conviction at a trial held by a court of competent jurisdiction of a person charged with committing an offence stands, that person cannot again be tried on the same facts for the offence for which he was tried or for any other offence arising therefrom. But the rule of "issue estoppel" in criminal trials evolved by the High Court of Australia and approved by the Judicial Committee has been applied to criminal trials in India, apart from the terms of section 403. [1008 C] Manipur Administration vs Thokchom, Bira Singh, ; ; Sambasivam vs Public Prosecutor, Federation of Malaya, ; Pritam Singh vs The State of Punjab, A.I.R. 1956 S.C. 415; Banwari Godara vs The State of RaJasthan, Cr. A. No. 141 of 1960 decided on Feb. 7, 1961; Lalta & Ors. vs The State of U.P., Cr. A. No. 185 of 1966 decided on Oct. 25, 1968; The assistant Collector of Customs and another vs L.R. Malwani and another, Cr. ,As. 15 & 35 of 1967 decided on Oct. 16, 1968; Sealfron vs United States, (1948) 332 U.S. Rep. 575 and The King vs Wilkes; , , referred to. Connelly vs Director of Public Prosecutions, , distinguished.

Nos. 1694 and 1730 of 1968. Appeals from the judgment and order dated August 11, 1967 of the Calcutta High Court in Income tax Reference Nos. 106 and 215 of 1963. section R. Banerjee, N. N. Goswamy and section N. Mukherjee, for the appellant (in both the appeals). V. section Desai, R. N. Sachthry and B. D. Sharma, for the respondent (in both the appeals). A. K. Sen, T. A. Ramachandran and D. N. Gupta, for the intervener (in both the appeals). The Judgment of the Court was delivered by Sikri C.J. Beg J. gave a concurring but a separate opinion. These appeals have been referred by a Division Bench of this Court 'to a larger Bench as the Division Bench felt :that the decision of this Court in Travancore Titanium Product ,Ltd. vs Commissioner of Income Tax(1) might require reconsideration. The only point involved in these appeals is whether the Wealth Tax paid by the assesse, a 'trading company is deductible as an expenditure under section 10 ( 1 ) and section 10 (2) (xv) of the Income tax Act, 1922. The facts in both the appeals are similar. They relate to two separate accounting and assessment years and two assessment orders have been challenged. We may give a few facts in one appeal The Indian Aluminium Co. Ltd., in respect of the year of assessment 1959 60 (accounting period Calendar year 1958), paid Rs. 1,59(630/ as Wealth Tax and, claimed to deduct this amount as expense from their assessable income. Income Tax Officer allowed the deduction but the Appellate Assistant Commissioner held that the Company was not entitled to the deduction of Wealth Tax as an expense. The Appellate Tribunal upheld the order of the Appellate Assistant Commissioner. On the application of the assessee, the following question was referred to the High Court : "Whether on the facts and circumstances of case the sum of Rs. 1,59,630/ paid by the assessee as wealth tax legally deductible as a business expense in computing the assessee 's income from business?" The High Court, following the decision of this Court in Travancore Titanium case(1), answered the question against the assessee. Having obtained certificate of fitness from the High Court, the assessee has appealed to us. Basing himself on Keshav Mills Co. Ltd. vs C.I.T.(2) it was contended by the learned counsel for the Revenue that we should not review our decision in Travancore Titanium case(1). Gajendragadkar, C.J., speaking, for the Court, had observed in that 'case that "it is not possible or desirable, and in any case it would be inexpedient to lay down any principles which should govern the approach of the Court in dealing with the question of reviewing and revising its earlier decisions. " He further observed "It would always depend upon several relevant considerations : What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based ? On the earlier occasion, did some patent aspects of the question remain unnoticed, was the attention of the Court not drawn to any relevant and material statutory provision, or was any previous decision of this Court bearing on the point not noticed ? Is the Court hearing such plea fairly unani mous that there is such an error in the, earlier view ? What would be the impact of the error 'on the general administration of law or on public good ? Has the earlier decision been followed on subsequent occasions either by this Court or by the High courts ? And, would the reversal of the earlier decision lead to public inconvenience, hardship or mischief ?" (1) ; (2) 20 We are inclined to review our earlier decision 'in Travancore Titanium case(, '), because, as will presently appear, certain aspects of the question were not brought to the attention of the Court and remained unnoticed, and our decision is not likely to cause any public inconvenience, hardship or mischief. We are all of the opinion that the decision was erroneous. The decision will affect numerous assessees. In the circumstances we think we should review the decision. Section 10 (1) of the Indian Income tax Act, 1922, reads: "10(1) The tax shall be payable by an assessee under the he, id profits and gains of business, profession or vocation in respect of the profit or gains of any business, profession or vocation carried on by him." Section 10(2) provides : "Such profits or gains shall be computed after making the following allowances, namely,. " (xv) any expenditure not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive and not being, in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. " The language seems to be simple enough but it has engendered judicial conflict not only in India but also in England Eminent Judges halve striven to formulate correct tests to determine whether an expenditure has been laid out or expended wholly and exclusively for the purposes of business or not, but no one has been able to find a test in the application of which differences of opinion do not arise. It seems to us therefore essential that in each case, the Courts must always keep in mind language of the section. One of the tests which have been laid down and applied by some of the Judges in England is whether the expenditure has been made in the capacity of a trader or an owner. One of the earliest cases in which this test was suggested was Strong and Company of Romsey Ltd. vs Woodfield(2). In that case the Brewing Company, which also owned licensed houses in which they carried on the business of lnnkeepers, incurred damages and costs on account of injustice caused to a visitor staying at one of their houses by the falling in of a chimney. The House, of Lords (1) [1066] 3 S.C.R. 321 (2) ; 21 held that the damages and costs were not allowable as a deduction in computing the Company 's profits for Income Tax purposes. The Lord Chancellor observed: "In my opinion, however, it does not follow that if a loss is in any sense connected with the trade, it must always be allowed as a deduction; for it may be only remotely connected with the trade or it may be connected with something else quite as much as or even more than with the trade. I think only such losses can be deducted as are connected with it 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 accident 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 to be deducted. Lord Davey did not apply this test and put the matter thus: I think that the payment of these damages was not money expended "for the purpose of the trade". These words are used in other rules, and appear to me to mean for the purpose of enabling a person to carry on and earn profits in the trade, &c. I think the disbursements permitted are such as are made for that purpose. It is not enough that the disbursement is made in the course of, or arises out of, or is connected with, the trade or is made out of the profits of the trade. It must be made for the purpose of earning the p rofits." Lord Chancellor 's observations in Woodfield 's case were not accepted by Lord Atkinson in Smith vs Lion Brewery Com pany(1). The Brewery_ Company were the owners or lessees of a number of licensed premises which they had acquired as part of their business as brewers and as a necessary incident of its profitable exploitation. The licensed premises were let to tenants, who were "tied" to purchase their beers from the company. Under the Licensing Act, 1904, compensation Fund Charges were levied in respect of the excise "on" licences held by the tenants who paid the charges and recouped themselves by (1) 22 deduction from the rents which they paid to the company. It was claimed by the company that in computing their, profits for assessment to Income Tax they should be allowed to deduct the sum of the amounts ultimately borne by them in respect of the Compensation Fund Charges. The Court of King 's Bench held that the deduction claimed was inadmissible. This decision was reversed in the Court of Appeal (Kennedy, L.J., dissenting), and opinions in the House of Lords being equally divided the judgment of the Court of Appeal was sustained. Earl Halsbury, in holding in favour of the Brewery, observed that "lie (trader) must if he carries on that business or that trade pay this tax; it is the act of the Legislature which makes him pay it and it is not a thing that is open to his own will or option." Lord Atkinson observed "Again,, it is urged that the landlord pays his contribution as landlord and because of his proprietary interest in the premises and not as trader, since he would be equally liable to it whether he traded or not. That, no doubt, is so, but in the present case the Company have become landlords and thus liable to pay the charge, for the purpose solely and exclusively of setting up the tied house system of trading. If the Company took under lease a plot of land to enlarge their brewery or took similarly premises in which to establish a depot to sell their beer through an agent, the same criticism might be applied with equal force to the payment of the rent reserved by the lease. They would pay it as lessees, not as brewers. They would pay it whether they continued to brew or not. Yet under the provisions of the very rule relied upon in this case, they would be entitled to deduct the rent from the profits earned, and that, too, utterly irrespective of whether the receiver of the rent used it to pay for his support or for his pleasure or even to set up a rival brewery. Indeed, even in a contract made for the purchase of material such as hops or malt, the Company would have to pay for the commodity supplied, not because they are brewers, but because they were contracting parties, utterly irrespective of whether they carried on their trade or had abandoned it. Yet it can hardly be suggested that the price paid for the hops or malt under the contract should not be deducted from the receipts. There is, therefore, in my opinion, nothing in this ob jection." In Usher 's Wiltshire Brewery Ltd vs Bruce(1) a brewery company were the owners or lessees of a number of licensed premises which they had acquired solely in the course of and for the purpose of their business as brewers and as a necessary incident to the more profitably carrying on of their said business. The licensed premises were let to tenants who were "tied" to purchase their beers, etc. from the Company. The Company claimed that in the computation of their profits for assessment under Schedule D, the following expenses incurred in connection with these tied houses should be allowed (A) repairs to tied houses; (B) differences between rents of leasehold houses or Schedule Assessment of freehold houses on the one hand and the rents received from the tied tenants on the other hand; (C) fire and licence insurance premises; (D) rates and taxes; It was held by the House of Lords that all the expenses claimed were admissible as being money wholly and exclusively laid out of expended for the purpose of the trade of the Brewery Company. In this case, Horridge, J. held that "on the facts found the Fire and Licence insurance Premiums, the Rates and Taxes and the Gas and Water were all expenditure essential to the earning of the profits, and I think they also are governed by Smith vs The Brewery Company(1) and are proper deductions. " The Court of Appeal, regarding Rates and Taxes, said "The next head is "D., Rates and Taxes pound 3 8 7s. " These are sums which the tenants were under a legal obligation to pay pursuant to their covenant in the tenancy agreement. The Company, however, did not, for the reasons stated under A in the Case enforce the tenants ' covenants to pay, and consequently paid the rates and taxes themselves. These reasons have been stated and appear in the Case, and need not be repeated; in brief; They are commercial interest and expediency, and avoidance of inconvenience. I am of opinion that these rates and taxes so paid are in no sense deductions which are allowable from the Company 's profits. " (1) (2) 24 The ' House of Lords, however, allowed these items. Lord Atkinson at page 422 of the report said "Stated broadly, I think that that doctrine amounts to this, ,hat where a trader bona fide creates in himself or acquires a particular estate or interest in premises wholly and exclusively for the purposes of using that interest to secure a better market for the commodities which it is part of his trade to vend, the money devoted by him to discharge a liability imposed by Statute on that estate or interest, or upon him as the owner of it, should be taken to have been expanded by him wholly and exclusively for the purposes of his trade;" Then regarding these items he observed: "The small items were not much contested in arguments. I concur, however, with Mr. Justice Horridge in thinking they ought to be allowed." Lord Parker observed: "My Lords, the Appellants claim deductions under three other heads : (1) Fire and licence insurance premiums, (2) Rates and taxes, and (3) Legal and other costs. The Attorney General did not object to these deductions being allowed, and indeed having regard to what I have already said and to the facts ad mitted in the Supplementary Statement, p. 7, of the Appendix, it would be difficult to contend that they were not proper and necessary deductions in ascertaining the balance of profits and gains of the Appellants ' ,trade, or that they are within any of the prohibitions contained in the Rules. " Lord Summer observed "The remaining items, rates and taxes, premiums and costs call for no special observation. In my view, the case means to find them all to be disbursements and money "wholly and exclusively expanded for the purposes of the trade,", and that being so in fact, I ,think there is no reason why they may not be so in law. They are accordingly covered by the decision on the rent and the repairs." It may be mentioned 'that there was no express statutory provision for deduction of rates and taxes in the English Income Tax Act and yet they were allowed as a necessary deduction for the 'purpose of carrying on trade. There is no doubt that in one 25 sense when rates and taxes on property are,, paid by a trader he pays them as owner or occupier because taxes are either on possession of property or on its ownership. But when the assessee has a dual capacity, i.e., he is owner cum trader, why should it be not deductible when according to ordinary commercial principles he would be treated as paying it as trader. Take the case of taxation on a motor vehicle. The tax is levied under the Motor Vehicles Act on the possession or owner ship of a motor car, When a owner cum trader pays the tax in respect of a vehicle used solely for the purpose of trade, nobody doubts, and the, learned counsel for the Revenue did not contest the position, that the tax would be deductibles as an expense. Now, why is it deductible ? The only rational explanation seems to us to be that when a person has a dual capacity, of a tradercum owner, and he pays tax in respect of property which is used for the, purpose of trade, the payment must be taken to be in the capacity of a trader according to ordinary commercial principles. This aspect is also clearly brought out in Moffatt vs Webb(1), which was not cited before this Court then. The taxpayer was a grazier, and during the year '1911, carried on business, and was still carrying on ' business as such in Victoria upon lands of the fee simple, of which he was during the said year and still was the owner. The, said lands comprised 17,970 acres or thereabouts, and their unimproved value had for the purposes of the Land Tax Assessment Act 1910 of the Commonwealth of Australia been assessed at pound 44,924. He paid Commonwealth land tax amounting to pound 3 87 on the unimproved value of the Said lands. The taxpayer claimed to deduct this tax from his income as an outgoing incurred by him "as a disbursement" or expenditure being wholly and exclusively laid out or expanded for the purpose of his trade. The High Court of Australia held that the tax was properly deductible either as an outgoing actually incurred by him in production of income or a disbursement of money wholly and exclusively laid out or expanded for the purpose of trade. Griffith, C.J., summed up the argument as follows : "The, possession of land is necessarily incident to carrying on the business of a grazier the payment of land tax is it necessary consequence of the possession of land of tax, able value, whether the land is freehold or leasehold; the payment of land tax is therefore a ' necessary incident of carrying on the business of grazing. The case therefore, seems to me to come within the exact words of the first paragrapher sec.9." (Sec. 9 is substantially similar to section 10(2) (xv) of the Indian Income Tax Act, 1922). Barten, J., observed ". the sole use to which the appellant puts the land is for the purposes of his business as a grazier. He needs a large area of land for that purpose, and this area of about 18,000 acres is applied to his business needs. It seems too much 'altogether to say that he would have to pay. the federal tax on this land if he did not carry on the grazing business. Somebody would be wed, no doubt, but would it be the appellant ? It cannot be predicated that he would own the land at all if he carried on any other business. It is scarcely an inference from the case to say that he hold ' the lands simply as an instrument essential to the proper conduct of his business : I think it is the fair meaning of the first paragraph at which we can arrive without inserting anything not imported by the words. If I am right there, then is 'the land tax payment a disbursement or expense wholly and exclusively laid out or expanded for the purposes of the business ? It may not be so if the criterion is whether the business could be carried on without payment of the tax. But I do not think that is the criterion. Is the payment wholly and exclusively incidental to the carrying on of the business ? Well, it is only by reason of the necessity of land for his business that he holds this land, and it is only because of his holding it for his business that he necessarily pays the tax, for without the business it cannot be said that he would hold the land at all. In view, then, of the particular facts, I think the payment is incidental to the conduct of his business, and that it is money wholly and exclusively expended for the purposes of his trade." Issaes, J., was impressed by the reasoning of Lord Halsbury and Lord Atkinson in Smith vs Lion Brewery, Co. Ltd.(1). He observed : "And Lord Atkinson reasons out the position and shows convincingly, to my mind that, though a tax may in I one sense be paid as owner or lessee, in another it is paid as trader. The instance he puts as to licences are undeniable, and I cannot distinguish them from this case. To carry the matter further : Suppose the Federal Parliament were to, lay a tax on the owners of motor cars, and carts, and guns, and dogs and sheep. so that (1) 27 the tax was payable whether these things were employed in trade or not could it be doubted that the tax would be a real outgoing necessary for the production of the income of a business in which they were all used? The land is as necessary To the business as the personal property. And the fallacy of the contrary doctrine consists in this; it confuses, not so much the meaning, as the application of the word "purpose". The land tax is enacted by legislature for its own purpose, that is, to tax the owner; and when he pays it to the Crown, he pays it as the owner, it is true, but so far, not for any purpose of his. He simply pays it because he is obliged to by law. But when he uses the property to produce an income that is, for his business purposes, he pays the tax inseparably connected with the land also for his business purposes, namely, as an outlay necessary in the existing state of the law to obtain that income by means of that land." The unsoundness of the test of the capacity in which payment is 'Made was commented upon in Harrods (Bueonos Aires) Ltd. vs Taylor Gooby(1) by the Court of Appeal. The facts can be conveniently taken from the head note. "The Appellant Company, which was incorporated and resident in the United Kingdom, carried on the business of a large retail store at Buenos Aires. In consequence the Company was liable in Argentina to a tax known as the substitute tax, which was levied on joint stock companies incorporated in Argentine, and on companies incorporated outside, Argentine which carried on business there, as did the Appellant Com pany, through an "empress estable". The tax was charged annually at the rate of one per cent on the Company 's capital and was payable whether or not there were profits liable to Argentine income tax. Under Argentine law there were sanctions available to remedy non payment of the tax. On appeal against an assessment to Income Tax under Schedule D for the year 1959 60 it was contended on behalf of the Company that it paid the substitute tax solely for the purpose of enabling it to carry on business in the Argentine since, if it had not paid it, it would have been unable to carry on its business there, and that the tax was therefore deductible as "money wholly and (1) 28 exclusively laid out or expended for the purposes of (its) trade", within the meaning of Section 137(a), Income Tax Act, 1952. For the Crown, it was contended (inter alia) that the Company paid the tax in the capacity of taxpayer rather than trader. " Willmer, L.J., referred to Commissioners of Inland Revenue vs Dowdall O 'Mahoney & Co. (1) and observed: "I can find no sup port whatever in this case for the proposition that the question depends on the capacity in which the taxpayer pays the taxes. " After referring to Smith vs Lion Brewery(2) case he observed "It appears to, me that these two decisions of the House of Lords are not only quite inconsistent with the principal submission put forward on behalf of the Crown in the present case, but that the ratio decidendi of both cases, as stated by Lord Atkinson, is really decisive in favour of the Company. " Dancwerts, L.J. observed "In Rushden Heal Co. Ltd. vs Keens(3), to which I have referred, Lord Greene, M.R., in 30 T.C. page 316 7, introduced a test of a different kind from that to which I have referred. He seems to draw a distinction between payments made by a trader in the character of taxpayer and not, or not wholly, as trader. I find this idea difficult to, follow and not very helpful in, discussing the subject in issue. It seems to me very difficult to say where to draw the line between the two capacities, and not as satisfactory as the test which has been adopted in the cases to which I have referred. Everyone who pays taxes pays because be is taxed and is a taxpayer." Diplock, L.J., also criticized the test in these words "it is contended for the Crown that the Company Paid the tax in its capacity as a taxpayer, not in, its capacity as a trader. But with great respect to Lord Greene, M.R. 's Judgment in the Rushden Heel Co. 's on which this Convention was mainly based, this is merely playing with words. As pointed out by Willmer, L J., this. ratio decidendi "was not adopted by the House (1) (3) (2) 29 of Lords in the same case and cannot, in my, view, survive Lord Atkinson 's earlier criticism of a similar argument in the Lion, Brewery case which Willmer L.J., has already cited. You can always find some label other than "trader" to describe the capacity in which a trader makes any disbursement for the of his trade. He pays rent for his business premises in the capacity of "tenant", rates in the capacity of "Occupier ", wages in the capacity of "employer", the price of goods in the capacity of "buyer". But if he has become tenant or occupier of those particular pre mises, employer of those particular servants or buyer of those particular goods solely for the purposes of his trade, the money which he has expended in any of the capacities so labelled is a deductible expense in computing the profits of his trade. The learned counsel for the Revenue did not say that these cases had been wrongly decided." What he said was that if the real nature of wealth tax is appreciated, it is impossible to equate the "net wealth" with "land" used by the grazier in Moffatt vs Webb(1) or with "tied house in Smith vs Lion Brewery Compnay(2) or with the "Company 's Capital" in Harrods (Bueonos Aires) Ltd. vs Taylor Gooby(3). He said that in all these cases the tax was being levied on the asset of the business which was being used for the purpose of business. In the present case, according to him, the net wealth could not be likened to an asset owned by the trading company. To this the learned counsel for the appellant retorted that in the case especially of a trading company all the assets are owned and liabilities incurred for the purposes of trading, as outlined in its Memorandum of Association; if, all the assets are owned and used for the purpose of the trade the net wealth would also be owned and used for the purpose of trade. He said that it would be possible for a company to mortgage its net assets to a bank and if a company did that, it could not be said that the net wealth or net assets had not been used for the purposes of business. If tax was levied on the capital value of assets without allowing deduction of debts it is clear that the tax would be deductible. What difference does it make if debts are deducted from the capital value of assets. The net wealth is as much an instrument of trade as the capital value of assets. We find it very difficult to distinguish the case of a trading company like the assessee, on principle, from that of the grazier or the brewery company, in the cases referred to above. (1) ; (2) (3) 30 In our view the test adopted by this Court in Travancore Titanium case(1) that "to be a permissible deduction, there must be a direct and intimate connection between the expenditure and the business, i. e., between the expenditure and the character of the assessee as a trader, and not as owner of assets, even if they are assets of the business" needs to be qualified by stating that if the expenditure is laid out by the assessee as Owner cum trader, and the expenditure is really incidental to the carrying on of his business, it must be treated to have been laid out by him as a trader and as incidental to his business. It was pointed out by the learned counsel for the Revenue that it would be difficult to allow the deduction of wealth tax in respect of individuals who have both business assets and debts and non business assets and debts. But the Wealth Tax Return form itself requires the assessee to show what are the business assets and liabilities and what are non business assets and liabilities. At any rate it should not be difficult to evolve a principle or frame statutory rules to find out the proportion of the tax which is really incidental to the carrying on of the trade. On the facts of this case it is clear that payment of wealth tax was really incidental to the carrying on, of the assessee company 's trade. Accordingly, we hold that the appellant is entitled to succeed. The appeals are allowed, the judgment of the High Court set aside and the question answered in favour of the assessee. Parties will bear their own costs throughout. Beg, J. My lord the Chief Justice has quoted certain tests laid down by Gajendragadkar, C.J., speaking for this Court, in Keshav Mills Co. Ltd. vs Commissioner of Income Tax, Bombay North(2), which have to be satisfied before we could properly dissent from a previous decision of this Court. In such a case, I think I should indicate my reasons for reaching a concurring conclusion, with very great respect, that an earlier, opinion of this Court, on the very question before us now, needs revision. The error which crept into the decision of Travancore Titanium Products Ltd. vs Commissioner of Income tax, Kerala(1) could be traced to an application of the rather speciously stated criterion laid down, in the House of Lords in Strong & Co. of Romsey Ltd. vsWoodfield(3), by the Lord Chancellor who said there that expenses cannot be deducted, in computing profits, "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". But, Lord Davey, looking at the case from (1) ; (2) ; (3) ; 31 a somewhat different angle, "said:, "it was not enough that the bursement is made in the course of, or arises out of, or is connected with, the trade or is made out of the profits of the trade. It must be made for the purpose of earning profits". 'The two tests were not identical. The ratio decidendi of Strong 's case would not have been open to criticism if the noble Lords could have held there and had made it clear that they were holding nothing beyond that a tradesman who has to pay damages for injury to his customer due to his personal neglect in maintaining his premises, even though these premises are used for trade, was not entitled to deduct them in computing his profits for the purposes of paying income tax just as he Could not claim a deduction for damages he will have to pay as a wrong doer for assaulting or defaming a customer who comes into his shop. It is no part of normal business to commit such wrongs. Liabilities so incurred could very well be looked upon ,is outside the course of trading altogether even if they arise out of commercial activity or result from something connected with or meant to serve any commercial purpose. Their Lordships, however, used language which could cover more than what could be attributed to the tradesman 's own purely personal wrongs. The facts of that case show that the negligence which resulted in payment of damages, for which a deduction was claimed, was that of servants employed as an ordinary incident of trading so that the master was only vicariously liable as an inn keeper and an employer. And, this aspect of the case made Lord James, in Strong 's case, doubt the correctness of the opinion which he, very hesitatingly, decided to accept. In Smith vs Lion Brewery Company, Limited(1), compensation fund charges levied under statutory provisions were held, by the Court of Appeal, to be permissible deductions in computing profits on the ground that they were "wholly or exclusively laid out ' for the purpose of earning profits. This decision had to be upheld by the House of Lords where opinion was evenly divided when the case was taken up there. Hence, the test laid down there by the Court of Appeal was held by Farl Loreburn to he binding upon him, in Usher 's Wiltshire Brewery Ltd. vs Bruce(2), although lie had himself not accepted it in Lion Brewery 's case. in In Rushden Heel Co. Ltd. vs Commissioner of Inland Revenue (3) Lord Greene, M.R., in disallowing deduction of expenses incurred in contesting claims for payment of Excess Profits Duty, from a computation of profits for purposes of paying Income tax, applied the test of character or capacity in which the expense was incurred. He held that the disbursment had to be disallowed on the ground "that the expenditure was incurred by the Company primarily in its capacity as a taxpayer and for the purpose of regulating the Position as between itself as a taxpayer and the Crown. " The House of Lords upheld the decision, following its slightly earlier pronouncement by a majority, in Smith 's Potato Estates Ltd. vs Bolland(1), but it did so on the ground that the expenses under consideration, incurred on litigation, related to a computation of Excess Profits Duty which had to take place after profits had been calculated. In Artherton vs British Insulated and Helsby Cables Ltd.(1), however, the test in Usher 's Wiltshire Brewery case (supra) was applied to hold that even sums expended "not of necessity with a view to a direct and immediate benefit to the trade, but voluntarily and on the grounds of commercial expediency and in order to directly facilitate the carrying on. the business may yet be expended wholly and exclusively for the purposes of the trade". In Mogan vs Tata & Lyle Ltd. (3), the House of Lords had used Lord Davey 's test in Strong 's case (supra) to justify deduction of sums spent on propaganda to oppose threatened nationalisation of, the Sugar Refinery industry as money spent "wholly and exclusively for the company 's trade". The decision of the Court of Appeal, in Harroda (Buenos Aires) Ltd. vs Taylor Gooby (4), fully exposed the fallacy involved in applying, without close examination, the test of capacity, for the possession of which in a tax may be imposed, to every levy of a tax, by extending the alluringly simple formula of the Lord Chancellor, in Strong 's case, to cases for which it could not have been meant. In Harrods ' case, deduction was claimed, in computing annual profits of a Company, of a 'Substitute Tax which had to be paid on the Company 's capital in Argentina, irrespective of the profits made on it (just like the Wealth Tax before us). The Court of Appeal quoted passages from the opinions of the Law Lords, in Rushden Heel Co. 's case (supra) and Smith 's Potato Estates ' case (supra), to show that the ratio decidendi of these two decisions confined the principle applied there to cases where taxes, like the Income Tax and the Excess Profits Tax, had to be paid upon and after a calculation of profits and did not extend to other cases. In other words, where profits, the net gains of business determined after making all permissible deductions, are taxed, the disbursements to meet such taxes cannot be deducted where the tax was levied, as it was in Harrods ' case, on capital or assets used for the purpose of earning these profits, it was a permissible deduction in calculating profits. (1) 30 T.C. p. 267. (2) 10 T. C. P. 15 5. (3) 35 T.C. p. 367. (4) 41 T.C. p. 450. 33 In Harrods ' case, both Willmer, L.J., and Diplock, L.J. had made use of Lord Davey 's test set out above, from Strong 's case (supra). They held the ratio decidendi of the "tied house" cases and not Lord Loreburn 's test to be applicable to payment of taxes on assets used for trading exclusivelye. Willmer, L.J., quoted the following passage from Lord Halsbury 's opinion in Lion Brewery case (p.466) "Again, it is urged that the landlord pays his contribution as landlord and because of his proprietary interest in the premises and, not as trader, since he would be, equally liable to it whether he traded or not. That, no doubt, is so, but in the present case the Company have become landlords and thus liable to pay the charge, for ,the purpose solely and exclusively of setting up the tied house system of trading." Lord Atkinson 's view, expressed in the following words in the same case, was also relied upon by the learned Judge (p.466) : "Stated broadly, I think that doctrine amounts to this, that where a trader bona fide creates in himself or acquires a particular estate or interest in premises wholly and exclusively for the purposes of using that interest to secure a better market for the commodities which it is part of his trade to vend, the money devoted by him to discharge a liability imposed by Statute on that estate or interest, or upon him as the owner of it, should be taken to have been expended by him wholly and exclusively for the purposes of his trade". In Harrods case, the Court of Appeal, after a comprehensive survey of all the relevant English authorities, considered the proposition accepted by it, that the 'substitute tax ', levied on the company 's capital, was a permissible deduction in calculating the profits of a company for paying income tax, to be so clear and free from doubt, on the authorities then existing and applied, that it refused even leave to appeal to the House of Lords. If there could be any doubt about the correct position of a tax like the one before us, a perusal of the opinions given by Australian Judges, in Moffat vs Webb, (1) where after a discussion of the relevant English authorities, land tax paid by a grazier on land used by him to earn income was held to be deductible in computing it for paying income tax, would lay to rest, if I may so put it , the disembodied ghost of a tradesman 's non trading character, a pure abstraction, which is sought to be used before us, by the learned Counsel for the Income tax Department, to prevent wealth tax paid on even the wholly commercial assets, (1) 16 Commonwealth Law Reports p. 120, 34 constituting a part or whole of the taxable "net wealth", used ,exclusively for purposes of trade, from being deducted as allowable expense, under Sec 10(2)(xv) of the Income tax Act, 1922. On the earlier occasion, when Travancore Titanium Co. 's case (supra) was argued in this Court, Moffat vs Webb (supra) was not cited. Although, there are references in the, judgment ,of this Court, in the earlier case, to the "tied house" cases and to Harrods ' case (supra), these were held to be distinguishable on facts, but, the test propounded by Lord Chancellor Loreburn, in Strong 's case, was applied to disallow deduction of wealth tax in computing profits. After going through all the relevant authorities, I have no doubt whatsoever left in my mind that it is the ratio decidendi of "tied house" cases and Harrods ' case (supra) which is the same as that of the Australian case, that applies here and not Lord Chancellor Lorebum 's test laid down in a very different context than that of payment of a tax as a necessary precondition of earning more profits. I do not think that the test of trading character, when incurring an expense for which a deduction is claimed, is without its uses. There are cases where the question has arisen whether a payment was gratuitous or unnecessary or not made for a bona fide commerical purpose or connected more with some ulterior object really falling outside the normal sphere or regular course of commerce, such as the compounding of an offence even if committed while trading. In J. K. Cotton Spinning & Weaving Mills Co. Ltd. vs Commissioner of Income Tax(1), I had occasion to consider, a case where the test of trading character or capacity in which a payment is made as well of causal connection between, the payment and a legitimately commercial purpose could, it seemed to me, be both simultaneously employed. But, in cases of payment of taxes, a concentration on the test of capacity for which payment becomes necessary is certainly liable to mislead us. A question which did trouble my mind was whether, in view what this Court had held in Travancore Titanium case (supra), it could be said that any "accepted commercial practice and trading principles" could exclude wealth tax from the computation of profits, with which Sec.10 sub.section (1) and (2) of the Income tax Act are concerned. One of the grounds given by this Court, to support, its view there, was that "the nature of the expenditure of the outgoing must be adjudged in the light of accepted commercial practice and trading principles". Speaking for myself, I was inclined to take the view that, if the earlier decision of this Court could be justified by a reference to some "commercial practice or trading principles" which could be implied by, or, read into, the very process of computation of profits with which provisions of Section (1) A.T.R. 1967 All.p. 513.35 10(1) & (2) of the income tax Act, 1922, are concerned, it must stand. I find, however that no case, apart from the Observations mentioned above, contained in the Travancore Titanium Co. 's case was cited to support this line of reasoning. All the other cases brought to our notice, which are discussed above, indicate that ,.commercial practice and trading principles" also warrant such deductions of a tax on assets for capital used wholly and exclusively for carrying on trade or earning profits. They may preclude deductions of taxes on net profits but not those imposed on net assets or wealth used exclusively for making profits. "Commercial practice and trading principles" could vary ' These terms appear to be rather vague and indefinite. The meanings of the relevant statutory provisions seem much more fixed and definite. All that the language of Sec.10(2)(xv) apparently requires, for claiming its benefit, is proof of a direct causal connection between an outgoing and the commercial purpose which necessitates it. Whatever "commercial practice or trading principles" may imply or import, they could not alter the meaning of statutory pro visions or travel beyond it. Another question which engaged my attention was whether Wealth Tax could be excluded from the purview of of Sec.10(2)(xv) simply because it was a tax on assets or "net wealth" paid by its owner so as to reduce his wealth. This, line of thinking, however, seemed to me to bring in, through the backdoor, the misleading test of either the capacity as owner for the possession of which or the purpose for which the wealth tax may be demanded, instead of the inevitable need and the purpose of the trader in paying the tax, as relevant matters. In Lion Brewery 's case (supra), Lord Halsbury had declared the unavoidable need to satisfy a statutory demand for the purpose of making profits as the really relevant question for consideration in such cases. He said, about "the purpose for which the Government have exacted the tax"; "whatever that purpose may be it is immaterial". It may be that the purpose of the tax before us could be considered in order to determine whether its nature is such as to necessarily imply that it cannot be taken into account in calculating profits or gains of business under Sec.10 sub, section (1) & (2) of the Income tax Act. The nature of the Wealth Tax was examined by this Court in Union of India vs Harbhajan Singh Dhillon(1). where the following passage was quoted from "Readings on Taxation in Developing Countries, by Bird & Oldman, dealing with the concept of Wealth tax : "The term 'net wealth tax ' is usually defined as a tax annually imposed on the net value of all assets less liabilities of particular tax payers especially individuals. (1) [1971] (2) Supreme Court Cases p. 779 @ 806. 36 This definition distinguished the net wealth tax from other types of taxation of net wealth, such as death duties and a capital levy; the former are imposed only at infrequent intervals once a generation while the latter is a one time charge, usually with the primary Purpose of redeeming a war time national debt. The net wealth tax is really intended to tax the annual yields of capital rather than the principal itself as do death ' duties or a capital levy, even though it is levied on the value of the principal. Since it tax es net wealth, it also differs from Property taxes imposed on the gross value of property primarily real property in a number of countries. The net wealth tax gives consideration to the tax payer 's taxable capacity through the deduction of all outstanding liabilities and personal exemptions as well as through other devices, while the property tax generally does not take these factors into account. The net wealth tax is therefore deemed to be imposed on the person of the taxpayer, while the property tax often deemed to be imposed on an object the property itself". It is, true that wealth tax is imposed on "net wealth" of assessees , as defined by Sec.2 sub section(c), who are all "persons". These persons are both natural and artificial. In the case of an artificial or juristic person like the Company before us, it seems very difficult to separate the purpose of the juristic "persona" which is certainly commercial, from the character of the "persona" itself. Even as regards other traders, that part of tax which falls on what is used exclusively for trade could be really ascribed only to a trading character. To the extent it is a tax on property used for earning profits, it must enter into a computation of profits from trading. On going through the provisions of Wealth Tax Act as well as the Income tax Act it was not possible for me to infer that the payment of Wealth tax must be excluded from the computation of profits under Sec.10 sub.section (1) & (2) of the Income tax Act. It appears to me that nothing less than express statutory provision would justify a denial of the right to a deduction which the language of Sec.10 sub.section (2) (xv) confers upon an assessee. On looking at the position of law in America on this subject, I find that there are statutory provisions which deny deductions of certain taxes only, such as income tax, and taxes on war profits and excess profits, gifts, inheritance, legacies, and succession (See U.S. Code 1958, ed.Titles 22 26 "Internal Revenue Code", p. 4287 paragraph 164). A general statement of the law on this subject there is that it 37 "does not prevent (a) a deduction therefor under Sec.23(a) provided it represents an ordinary and necessary expense paid or incurred during the taxable year, by a corporation or an individual in carrying on any trade or business, or, in the case of an individual, for the production or collection of income, or for the management, Conservation, or maintenance of property held for the production of income, or (b) the inclusion of such tax paid or incurred during the taxable year by a corporation or an individual as a part of the, cost of ac quisition or production in the trade or business, or, in the case of an individual, as a part of the cost of property held for the production of income with respect to which such tax is paid or incurred". (See Jacob Mer tens Law of Federal Income Taxation: Vol 5, 1954 Cumulative Pock et Supplement, Chapter 27, paragraph 27.01). Learned Counsel for the Department relied upon the diffi culty in separating that Dart of the tax which is levied on any part of the net wealth, used wholly and exclusively for trade,, from the rest of it. We arc, strictly speaking, concerned only with the correct interpretation of Sec.10 sub section (2) (xv) of the Act and with the definition of "net wealth" given in Sec. 2(m) of the Wealth Tax Act on which incidence of the tax levied under Sec.3 falls. In order to determine whether, as a matter of principle, a tax so defined and imposed would be covered by Sec.10 sub.s.(2)(xv) of the relevant Income tax Act, the difficulty which may arise in actually computing the deductible amount does not seem ,to be a material consideration. Moreover, the fact that "net wealth" is an amount by which an aggregation of all the assets exceeds all the debts does not seem to impose any intractable difficulty in the way of calculating what part of the net wealth is used for trade or business of an assessee and what is not. An aggregation means a collection of items added up which can be separated and not a mixture the ingredients of which become inseparable. Assuming, however, that there is some difficulty in separating that part of the tax which is payable in respect of net ,wealth used only for trade from that part of it which is imposed on a portion of net wealth not so used, I fail to see how the principle involved or meaning of the relevant provisions, with which we are concerned here, will be affected. Mr. Chagla, appearing for an assessee, drew our attention to the division into two heads, one of business assets and another of the "other assets", which is found in form 'A ' prescribed by the rules for the Wealth Tax return. This means that the Wealth Tax Act itself makes that part of the net wealth separable which can be utilised wholly and exclusively for trade from the remainder of it. If this can be, done, it is difficult to see how that part of Wealth Tax could escape 38 deduction, under Sec.10(2) (xv) of the Income tax Act, which is attributable to such portion of the net wealth as is used wholly and, exclusively for earning profits. To lay down, as we are doing in this case, that it is the causal connection between payment of tax and that part of net wealth which is used wholly and exclusively for trade and not the mere character or capacity for the possession of which the tax is demanded, which determines whether it is an allowable deduction or not, under Sec. 10(2)(xv) of the Act, seems to me to amount to nothing more than to give effect to the plain and literal meaning of a provision of a taxing statute. There seems no need in such a clear case, to invoke the aid of the well established cannon of construction that, where a taxing provision is reasonably capable of two equally possible constructions, the one which favours the assessee must be preferred. of course, the burden of proving whether the whole or a part of the Wealth tax paid by an assessee is attributable wholly and exclusively to the carrying on of a trade, and, therefore, is an allowable deduction, must rest upon the assessee in each case. The argument on behalf of the assessees, as I understand it, goes no further. One of the tests laid down in Keshav Mills Company 's case (Supra) for deciding whether a previous erroneous view should be set right by this Court, was whether any possible advantage to the public resulting from doing so would be outweighed by the mischief or harm a revision may cause. of course, the ultimate determination of what public good requires the law to be must take place elsewhere But, in deciding whether a previous interpretation of the law, as it exists, by this Court, even if it be erroneous in some respe ct , needs revision by it, a consideration of what public good demands undoubtedly lies within the province of our powers. It seems to me that the Wealth Tax Act was not intended to strike at or check expansion of commercial activites by either individuals or companies. Its underlying purpose was the removal of disparities of individual or personal wealth and not injury to trade. It could be said to be a tax aimed at individuals whose wealth exceeds certain limits. In so far as Ole particular interpretation which we are abandoning, because of the infirmities found in it, seemed to penalise mere expansion of business and 39 trade 'without serving the assumed underlying purpose of Wealthtax, a revision of opinion does not appear to involve any such mischief or injury to the public as could stand in the way of correcting an erroneous view. I have, therefore, no hesitation left in my mind in holding that the view expressed by this Court in Travancore Titanium case (Supra) must be modified as indicated by My lord the Chief Justice. V.P.S. Appeal allowed.

The assessee, a trading company, paid wealth tax and sought to, deduct it as a business expense under section 10(1) and section 10(2) (xv) of the Income Tax Act, 1922, in computing its assessable incomes from business for the purpose of the Income Tax Act. The High Court held against the assessee following the decision of this Court in Travancore Titanium Product Ltd. vs C.I.T., ; The test adopted by this Court in the Travancore Titanium case was that "to be a permissible deduction, there must be a direct and intimate connection between the expenditure and the business, that is, between the expenditure and the character of the assessee as a trader, and not as an owner of the assets, even if they are the assets of the business". Allowing the appeal to this Court, HELD : The Court is unanimous that the test laid down in the decision in the Travancore Titanium case should be modified. [20A, 39B] (Per S.M. Sikri, C. J., A. N. Grover, A. N. Ray and D. G. Palekar, JJ.) : (1) Certain important aspects of the question were not brought to the attention of this Court when the earlier case was decided. if that decision is modified as erroneous, it is not likely to cause any public inconvenience hardship or mischief; and numerous assessees would be affected by the decision. [20A B] Keshav Mills, Co. Ltd. vs C.I.T. ; , 922, followed. (2) There is no doubt that in one sense when rates and taxes on property are paid by a trader he pays them as owner or occupier, because taxes are either on possession of property or on its ownership. But when a person has the dual capacity of a trader cum owner, and he pays tax in respect of property which is used for the purpose of trade, the payment must be taken to be in the capacity of a trader according to ordinary commercial principles. [25A B, C D] Moffatt vs Webb, ; applied (Not cited in the Travancore Titanium case. Smith vs Lion Brewery Company, , Usher 's Wiltshire Brewery Ltd. vs Bruce, , Harrods (Buenos Ayres) Ltd. vs TaylorGooby, and observations of Lord Davey in Strong and Co. Romsey Ltd, case ; , referred to. (3) In the case of a trading company all the assets are owned and the liabilities are incurred for the purpose of trading, as outlined in its memorandum of association. If all the assets are owned and used for the purpose of trade, the net wealth would also be owned and used for the ,purpose of trade. The net wealth is as much an instrument of trade as the capital value of assets. Therefore,.the test laid down in the earlier case should be qualified, by stating that, if the expenditure is I aid out by the 16 assessee as owner cum trader, and the expenditure is really incidental to the carrying on of his business, it must be treated as having bean laid out by him as a trader and as incidental to his business. [29F H, 3OA C] (4) It may be difficult for the Revenue to allow the deduction of debts, and non business assets and debts. But the wealth tax return form itself requires the assessee to show what are business assets and liabilities and what are the non business assets and liabilities. At any rate, it should not be difficult to evolve a principle or frame statutory rules to find out the proportion of the tax which is 'really incidental to the carrying on of the trade. [30C E] (Per M. H. Beg, J.) : (1) One of the tests laid down in Keshav Mills co 's case ([1965]/2 S.C.R.908), for deciding whether a previous erroneous view should be set right by this Court, is whether any Possible advantage to public resulting from doing so would be outweighed by the mischief or harm a revision may cause. [38E F] The Wealth Tax Act was not intended to strike at or check expansion of commercial activities by either individuals or companies. Its underlying purpose is the removal of disparities of individual or personal wealth and not injury to trade. The interpretation placed in the Travancore Titanium case ([1966] 3 S.C.R. 321) seems to penalise mere expansion of business and trade without serving the underlying purpose of wealth tax. Therefore, a revision of opinion does not involve any such mischief or Such injury to the public interest as would stand in the way of correcting an erroneous view. [38G H, 39A B] (2) The error which crept into the Travancore Titanium decision could be traced to an application of the criterion stated by the Lord Chancellor in Strong and Co. of Romsey vs Woodfield ; , that if. the expenses fall on the trader in some character other than that of a trader, they could not be deducted in computing profits. But in the same case, another Law Lord laid down a somewhat different test that the payment to be deductible must have been made for the purpose of earning profits. [30G H, 31A B] (3) Liabilities incurred by a trader to pay damages for injury to his customer due to his personal neglect in maintaining his premises, even though the premises were used for trade, could be looked upon as outside the course of trading altogether even if they arise out of commercial activity or result from something connected with or meant to serve a commercial purpose. But in Strong and co. 's case the negligence which resulted in payment of damages, for which the deduction was claimed, was that of servants employed as an ordinary incident of trading, so that, the master was only vicariously liable; and the language used by the Lord Chancellor in that case covers more than what could be attributed to the trade man 's own personal wrongs. [31B E] (4) In later English cases the test adopted is whether the expenses sought to deducted 'wholly or exclusively laid out for the purpose of earning profits. [31F] Smith vs Lion Brewery Company Limited, ; Usher 's Wiltshire Brewery Ltd. vs Bruce ; Atherton vs British Insulted and Halsby Cables Ltd., ; Margan vs Tate and Lyle Ltd., , referred to. Rushden Hell Co. Ltd, vs Commissioner of Inland Revenue, and Smith 's Potato Estates Ltd. vs Bolland, 30 T.C. 267 explained 17 Where profits, the net gains of business, determined after making all permissible deductions. are taxed, the disbursements to meet such taxes cannot be deducted. But, when the tax 'was levied on capital, or assets used for the purpose of earning those profits, it was a permissible de duction in calculating profits. [32G H] Harrods (Buenos Ayres) Ltd. vs ' Taylor Gooby, , referred to. (6) The principle, that tax paid by an assessee on property used by him to earn income is deductible in computing the income for paying income tax, was also laid down in Moffatt vs Webb ; , which was not cited before this Court when the Travancore Titanum case was argued.[34A B] (7) The test of trading character when incurring an expense for which deduction is claimed can be utilised usefully only in cases where the question is whether a payment was gratuitous or unnecessary or not made for a bona fide commercial purpose or connected more with some ulterior object really failing outside the normal sphere or regular course of commerce, such as the compounding of an offence even if committed while trading; but this could not be so in cases of payment of taxes[34D F] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs Commissioner of Income Tax, A.I.R. 1957 All. 513, referred to; (8) There is no accepted commercial practice or trading principle according to which wealth tax could not be deducted in the computation of profits under section 10(i) and (ii) of the Income Tax Act. Except the observation in the Travancore Titanium case, all the other cases indicate that commercial practice and trading principles 'also warrant such deductions of tax on capital assets used wholly and exclusively for carrying on trade or for earning profits. Deductions of taxes on net profits may not be permited, but those imposed on net assets or wealth, used exclusively for making profits, can be deducted in, computing income for purposes of income tax. Moreover, whatever commercial practice or trading principles may imply or import, they could not alter the meaning of statutory provisions. All that the Language of section 10(2)(xv) requires, for claiming its benefit, is proof of direct causal connection between an outgoing and the commercial purpose which necessitated it. To lay down that it is the causal connection between the payment of tax and that part of the net wealth which is used wholly and exclusively for trade, and not the mere character or capacity for the possession of which the tax is demanded, which determines whether it is an allowable deduction or not, under section 10(2) (xv), nothing more than giving effect to the plain and literal meaning of a provision of a taxing statute. [35A B, 35B C] (9) To exclude from the purview of section 10(2)(xv) wealth tax simply because it was a tax on assets or net wealth paid by its owner so as to reduce his wealth, is to bring in the misleading test of either of capacity of the owner for the possession of which, or the purpose for which, the wealth tax may be demanded. instead of the inevitable need and the purpose of the trader in paying the tax, as relevant matters. [35D F] (10) Wealth tax is imposed on net wealth of of assessees who are persons both natural and artificial. In the case of an artificial or juristic person like a company, it is difficult to separate the purpose of the Juristic "persona" which is certainly commercial, from the character of the "persona" itself. Even as regards other traders that part of the tax which falls on assets used exclusively for I trade could 'be really ascribed 18 only to a trading character. To the extent it is a tax on property used for earning profits it must enter into a computation of profits from trading. Therefore, nothing less than express, statutory provision would justify a denial of the right to a deduction which the language of section 10(2) (xv) confers upon assessees. [36D F] (11) The Court is not concerned with any difficulty in separating that pail of the tax which is levied on any part of the net wealth, used wholly or exclusively for trade, from the rest of it. The Court is concerned only with the interpretation of section 10(2)(xv) and not with any difficulty which may arise in actually computing the deductible amount. Moreover, since net wealth is an amount by which an aggregation of all the assets exceeds all the debts there can be no intractable difficulty in calculating what part of the net Wealth is used for trade or business of an a sessee and what is not, an aggregation being collection of items n being collection of items which can be separated, and not a mixture whose ingredients became inseparable. Further, the wealth tax return form divides wealth under two heads, one of business assets and another of other assets, showing that the Wealth Tax Act its itself makes that part of the net wealth separable which is used wholly and 'exclusively for trade from the reminder of it. If this can be done, there is no difficulty in separating that part of the wealth tax which could be deducted under section 10(2)(xv) of the Income Tax Act. [37D G] Assuming there is some difficulty the principle involved or. the meaning of the relevant previsions will not be affected thereby.

Appeal No. 105 of 1952. Appeal from the Judgment and Decree dated the 16th September, 1949, of the High Court of Judicature at Madras (Subba Rao and Chandra Reddi JJ.) in Appeal No. 162 of 1946 arising out of Judgment and Decree dated the 30th November 1945 of the Court of the Subordinate Judge of Tanjore in Original Suit No. 34 of 1945. section Ramachandra Iyer, for the appellant. T. R. Srinivasan, for the respondents. February 27. The Judgment of the Court was delivered by MAHAJAN J. One Thangathammal who was a dasi (dancing girl) lived in the Tanjore district in Madras State and died possessed of some properties. She left her surviving three daughters, Saraswathi, Jagadambal and Meenambal. Jagadambal filed the suit out of which 941 this appeal arises against her sisters for partition of the movable and immovable properties set out in the plaint and for allotment of a third share to her therein. She alleged that her mother was married to one Thyagaraja Pillai, that the properties in suit were the stridhanam properties of her mother who died intestate on 26th July, 1943, and that according to the law or custom of the community to which the parties belonged she and her sisters were entitled to share equally the properties of her mother. Saraswathi Ammal, the 1st defendant contested the suit. She pleaded that her mother was not a married woman but a dasi who followed her hereditary occupation and was attached to Shri Saranatha Perumal temple at Tiruchurai in the Tanjore district, that of the three daughters the plaintiff and the 2nd defendant married and lived with their husbands, while she (1st defendant) was duly initiated as a dasi in the said temple and remained unmarried and that according to the law and custom of the community, the mother 's property devolved solely on her to the exclusion of the plaintiff and the 2nd defendant. The 2nd defendant supported the 1st defendant 's case. The material issue in the suit was issue No. 1 which was in these terms: " Who is the proper heir of Thangathammal. Whether according to custom as set tip by the plaintiff, all the daughters are heirs, or according to the custom put forward by the 1st defendant, the unmarried daughters alone are entitled to inherit." The Subordinate Judge dismissed the suit holding that Thangathammal was a dasi and not a married woman, that according to the custom of the dasi community in South India, a dasi daughter is regarded as a nearer heir to the mother than a married daughter and that the 1st defendant was entitled to remain in possession of the suit properties. Against this decision an appeal was taken to the High Court. The High Court reversed the decree of the Subordinate Judge and held that the custom pleaded by the 1st defendant 942 was not proved and that the rule of propinquity of Hindu law as a rule of justice, equity and good conscience, governed the succession and the married and dasi daughters were equally entitled to the inheritance. It was further held that a dasi daughter was not in the status of a maiden or unmarried daughter for purposes of succession to stridhanam property. Leave to appeal to the Supreme Court was granted under article 133 of the Constitution. After bearing the learned counsel for the appellant, we feel no hesitation in concurring with the decision of the High Court. It was contended that the High Court was in error in holding that the custom set up by the defendant was not proved. To prove the custom that a dasi daughter was a preferential heir and excluded her married sisters reliance was placed on, the evidence of some members of the community and reference was also made to certain instancese same kind of evidence was led by the plaintiff support of her case. The evidence of both the parties on the the issue of custom is of an unsatisfactory and inconclusive character and from it no inference can be drawn of the existence of a uniform, certain and ancient custom prevailing in the community on this point. Out of the defendant 's witnesses, the first witness, Rajagopal Pillai, deposed that his wife was the daughter of dasi Kamakshi who had six daughters of whom three were married and three were dasis, that on Kamakshi 's death, her dasi daughters alone would take the inheritance and that his wife, would be excluded. This statement does not hurt him in any way as his wife will not be bound by what be might state. His bald assertion about the custom in the community is not of much value. He does not disclose any source of his information. In cross examination he admitted that he did not know a single specific instance where such a custom was enforced . The second witness on the point is the first defendant. She stated that one Tulasi 's sister Mangalam got no share in her mother Ammani 's properties. In cross examination it was admitted that Mangalam died about fort years ago, 943 i.e., some time before the defendant was born. She could therefore have no personal knowledge about Ammani 's instance. No written record of that inheritance is forthcoming. Mangalams son Govindaswami Pillai appeared as D. W. 3. He deposed that Mangalam 's mother Ammani had divided her properties between her dasi daughters in her lifetime. The instance therefore is not an instance concerning succession and cannot be treated as relevant in this enquiry. The 1st defendant further deposed to an instance in Srirangam when succession opened out on the death of dasi Chellappa. It was said that her property was taken by her dasi daughter Visalakshi to the exclusion of her married daughters Marakatham and Rukmini and that the assets were worth a lakh of rupees. One would have expected some written documents about that sucession if it took place in the manner deposed to. In the absence of any evidence from the descendants of Chellappa and in the absence of any documentary evidence regarding that succession it is difficult to place any reliance on this so called instance. Defendant No. I stated that her knowledge of it was only from hearsay, and the requirements of section 32 of the Evidence Act not being fulfilled, her evidence on this point cannot be treated as admissible. The third witness, about whom reference has already been made, apart from deposing as to Mangalam 's instance also deposed about the instance of dasi Meenakshi. Her daughter Jeevaratnam is married to the witness. He said that Meenakshi 's dasi daughters inherited her property and that his wife was excluded. The only property alleged to belong to Meenakshi was a house, the value of which is not known. The succession is said to have occurred over twenty years ago. None of the daughters of Meenakshi have been examined as witnesses in the case, to enable the court to find out the details about it and merely on the statement of this witness the instance cannot be held proved. The fourth witness for the defendant is her non contesting sister. She said nothing on the on the question of custom. She, however, stated 944 that she was not entitled to a share in the assets of her mother. When asked why she was making that statement, she said that she was saying so because her husband and some. elders (whose names were. not disclosed) had told her so. Evidence of this character on the question of custom cannot be seriously considered. Venugopal Pillai is the fifth,witness for the defendant. He is the husband of the second defendant. His evidence regarding the instance of Chellappa is purely, hearsay. He deposed that he had learnt that a dasi 's married daughter is not entitled to claim a share as she is not her heir in the presence of a dasi daughter and therfore he told his wife not to claim a share. He did not disclose the source of his information. Janaki Ammal, the sixth witness, is a dasi. She deposed that she has five daughters of whom two are married, one is a dasi and the other two are young girls and that according to their caste custom her properties on her death would devolve on her dasi daughters and that the married daughters must remain content with the presents given at their marriage. In cross examination she admitted that she was deposing about the caste custom not from any specific instance in which the custom was observed but at the request of the defendant, and that she bad heard of this custom from her elders whose names she did not disclose. She further admitted that she had an uncle living but she did not even ask him about the custom. The witness, it appears, knows nothing about the custom and is giving evidence in order to oblige the defendant. The next witness 'Who gave evidence on the issue is D. W. 8, Kamalathammal, a dasi. Her mother was also a dasi. She deposed that her mother 's properties were divided between her and her other dasi sister and Amba, her third sister, who was married, was not given a share. In cross examination she admitted that Amba never asked for a share. Neither was Amba produced, nor any written munici pal records showing that the witness actually inherited the property of her mother to the exclusion of Amba. It is difficult to hold this incident proved merely on the 945 vague testimony of this witness. Pappathi Ammal, the next witness in the case, is also a dasi. She deposed that her father 's mother 's property devolved on her two dasi daughters on her death and that there was no married daughter in existence. This evidence is of a neutral character and is not of much use on the question of custom pleaded in the case. Apart from asserting that in this community dasi 's property devolves on her death only on the dasi daughters to the exclusion of married daughters, she cited the instance of Chellappa, a dasi of Srirangam. It was elicited in cross examination that Chellappa left a house and landed properties. No explanation is forthcoming why documentary evidence of revenue records about this instance has been withheld. Oral evidences as to instances which can be proved by documentary evidence cannot safely be relied upon to establish custom, when no satisfactory explanation for withholding the best kind of evidence is given. The last witness in the case is Rajamani Ammal, another dasi who does service in Sri Ranganathaswami temple. She also referred to the instance of Chellappa. She said that her jewels which were worth Rs. 1,000 would pass on her death to her dasi daughter. She went to the length of saying that if a dasi leaves an only child who is a married woman, even then her properties will pass to a next heir such as a cousin and not a married daughter. This is all the evidence led by the defendant to prove custom. On this meagre and unsatisfactory material we cannot hold that the custom pleaded is proved. The opinion evidence is not of a convincing character and evidence as to specific instances in support of the custom is really nil. Our attention was also drawn to a decision of the Madras High Court in Shanmugathammal vs Gomathi Ammal(l) In that case the plaintiff, a member of the dasi community, claimed to succeed to her deceased maternal aunt and pleaded that the three surviving sisters of the deceased who were impleded as defendants were not entitled to inherit because one of them (1) 122 946 had been adopted by another dancing girl and the other two had become married. The issue raised in the case was whether the custom set up by the plaintiff that among dancing women married women are excluded by a woman who continues to be ' a dasi is true, valid and enforceable. Certain dasis gave evidence in support of the custom. No evidence whatever was given to the contrary and the custom pleaded was held proved in the circumstances of that case. Emphasis was laid on the circumstance that there was no evi dence whatsoever against the plaintiff and defendants 2 and 3 who denied the existence of the custom in their written statements did not venture to deny it on oath in the witness box. The dasi community concerned in that case was a small one consisting originally of twenty houses of which only seven or eight were then in existence and in that situation it was said that the custom might well be one that was well recognized and so much a part of the consciousness of the community, that any dispute like the present dispute amongst so small a body of women would be an extremely rare occurrence and therefore impossible of proof and that the plaintiff could not reasonably be expected to search the presidency for witnesses to speak to some similar dispute in other places. In our opinion, that decision does not furnish a good judicial instance in respect of the custom pleaded in the present case. There is no evidence that the customs of that small community of dasis are applicable to the community of dasis in the present case which form a considerable community in this district. Moreover, the case was decided on the peculiar circumstances of that case on very meagre materials and did not lay down any general custom of dasis on this point. It is unnecessary to examine the plaintiff 's evidence in detail. Suffice it to say that it is more than sufficient to rebut the evidence led by the defendant and it neutralizes its effect, if any. In the absence of proof of existence of a custom governing succession the decision of the case has to rest on the rules of justice, equity and good conscience because admittedly no 947 clear text of Hindu law applies to such a case. The High Court thought that the just rule to apply was one of propinquity to the case, according to which the married and dasi daughters would take the mother 's property in equal shares. No exception can be taken to this finding given by the High Court. No other rule was suggested to us leading to a contrary result. It was argued that the dasis have a distinct status in Hindu society and, that a rule has been evolved by judicial decisions under which the state of degradation by itself furnishes a rule of preference in a competition between dasi daughters and married daughters. The juidicial decisions referred to concern the community of prostitutes and the rule evolved concerning them has been abrogated by later decisions. It was contended that though the said rule had been abrogated and was no, longer applicable to that community concerning which it was evolved, it should by analogy be applied to cases of succession to dasis. Narasanna vs Oangu(1) was the first case cited. There, an adopted niece of a prostitute dancing girl was preferred to a brother remaining in caste. It was said that the legal relation between a prostitute dancing girl and her undegraded relations remaining in caste becomes severed and they are therefore not entitled to inherit the estate. In Subbaratna Mudali vs Balakrishnaswami Naidu(2), the next, case cited, the facts were that a deceased woman Palani inherited the property in dispute from her mother Nagu, who inherited it from her mother Mottai who again inherited it from her father Arunachalam. Arunachalam had two brothers Ramaswami and Mathurbutham and the question in that case was whether Mathurbutham 's daughter Seethai or Ramaswami 's daughter 's son Marudamuthu Mudali was the heir of Palani. The learned judges held that Mathurbutham 's daughter was preferential heir to Ramaswami 's daughter 's son. It was pointed out that the rule of preference based on degradation was no longer good law. It was, however, (1) I.L.R. (2) 33 M.L.J. 207. 948 added that in cases of dancing girls the law remained as it was before. Our attention was also drawn to certain observations in Subbaraya Pillai vs Ramaswami Pillai(1) at page 177, and to the decision in Balasundaram vs Kamakshi Ammal(2). In the former case the learned Judges rejected the broad proposition that Degradation of a woman in consequence of her unchastity entails in the eye of the law cessation of the tie of kindred between her and the members of her natural family and also between her and the members of her husband 's family. We think that decision on this point is sound in law. Degradation of a woman does not and cannot sever the ties of blood and succession is more often than not determined by ties of blood than by the moral character of the heir. In Balasundaram vs Kamakshi Ammal(2) it was held that the property acquired by the mother had been acquired by her as a married woman and notwithstanding her lapse into unchastity, it devolved on her daughters clothed with the ordinary character of property acquired by a Hindu female, that is to say, the daughters took a life estate in it. The learned counsel attempted to persuade us to hold the custom pleaded proved by the assistance of decisions given in analogous cases and by applying the principles of the rules said to have been, enunciated in some of them. Those cases were decided on their own facts and in some of them a rule was enunciated that degraded people are a class by themselves and their degraded relations are preferential heirs to the undegraded ones. As already said, we cannot subscribe to the view that any such rule can be evolved merely on logical grounds. Its existence can only be justified on the basis of established custom. No trustworthy evidence has been led in this case to establish that the daughters of a dasi by marriage lose their right of inheritance and form a separate community. The correct approach to a case where a party seeks to prove a custom is the one pointed out by their Lordships of the (1) I.L.R. (2) 949 Privy Council in Abdul Hussein Khan vs Soma Dero(1). It was there said that it is incumbent on a party setting up a custom to allege and prove the custom on which he relies and it is not any theory of custom or deductions from other customs which can be made a rule of decision but only any custom applicable to the parties concerned that can be the rule of decision in a particular case. It is well settled that custom cannot be extended by analogy. It must be estabished inductively, not deductively and it cannot be established by a priori methods. Theory and custom are antitheses, custom cannot be a matter of mere theory but must always be a matter of fact and one custom cannot be deduced from another. A community living in one particular district may have evolved a particular custom but from that it does not follow that the community living in another district is necessarily following the same custom. The last point taken by the learned counsel was that under Hindu law the 1st defendant as a maiden was entitled to preference over her married sisters. Defendant No. I was admittedly married to the idol and she has been on her own show. living a life of prostitution. The text of the Mitakshara dealing with the case of a virgin can. not be applied to her case. [Vide Tara vs Krishna(1)]. It is inconceivable that when the sages laid down the principle of preference concerning unmarried daughters they would have intended to include a prostitute within the ambit of that text. For the reasons given above we see no force in this appeal and it is dismissed with costs. Appeal dismissed, Agent for appellant: section Subramaniam. Agent for respondent No. I : M. section K. Aiyangar.

The evidence on record did not establish the custom which had been pleaded, namely that among the community of dasis 940 (dancing girls) in South India a dasi daughter succeeded to her mother in preference to the married daughters; and in the absence of such custom, succession to a dasi must be governed by the rule of propinquity of Hindu law as a rule of justice, equity and good conscience and dasi daughters and married daughters would succeed to their mother 's property in equal shares. A rule that degraded relations are preferential heirs to undegraded ones cannot be evolved merely on logical grounds the existence of such a rule can only be justified on the basis of established custom. Custom cannot be extended by analogy. It must be establish ed inductively, not deductively, and it cannot be established by a priori methods. It cannot be a matter of mere theory but must always be a matter of fact and one custom cannot be deduced from another. Shanmugathammal vs Gomathi Ammal , distin guished. Narasanna vs Gangu (I.L.R. , Subbaratna Madali vs Balakrishna Naidu (33 M.L.J. 207), Subbaraya Pillai vs Ramaswami Pillai (I.L.R. , Balasundaram V. Kamakshi Ammal , and Abdul Husein Khan vs Soma Dero (I.L.R. P.C.) referred to. The rule of Hindu law by which a maiden is a preferential heir to her married sisters does not apply to daughters who are admittedly married to an idol and lead a life of prostitution. Tara vs Krishna (I.L.R. referred to.

ivil Appeal No. 161 of 1952. Appeal from the Judgment and Order dated the 18th May, 1951, of the High Court of Judicature at Calcutta (Chakravartti and Das Gupta JJ.) in its Special Jurisdiction (Income tax) in Income tax Reference No. 63 of 1950. N. C. Chatterjee (section N. Mukherjee, with him) for the appellant. C. K. Daphtary, Solicitor General for India (O. N. Joshi, with him) for the respondent. October 8. The Judgment of the Court was delivered by BHAGWATI J. This is an appeal from the judgment and order of the High Court of Judicature at Calcutta on a reference made by the Income tax Appellate Tribunal under Section 66(1) of the Indian Incometax Act (XI of 1922). 197 The appellant is a banking company carrying on business at, among other places, Calcutta and Allahabad. On the 15th March, 1946, the appellant executed a deed by which it purported to create a trust for the payment of pensions to the members of its staff. The deed declared that a pension fund had been constituted and established. It then recited that a sum of Rs. 2,00,000 had already been made over to three persons who were referred to as the "present trustees" and proceeded to state that the fund would consist in the first instance of the said sum of Rs. 2,00,000, and that there would be added to it such further contributions that the bank might make from time to time, though it would not be bound to make such contributions. In the course of the accounting year 1946 47, the bank made a further payment of Rs. 2,00,000 to this fund. In its assessment for the assessment year 1947 48 the appellant claimed deduction of that sum of Rs. 2,00,000 under section 10 (2) (xv) of the Act on the ground that it was an item of expenditure laid out or expended wholly and exclusively for the purposes of its business. The Income tax Officer, the Appellate Assistant commissioner and the Income tax Appellate Tribunal rejected this claim of the appellant and the Income tax Appellate Tribunal at the instance of the appellant stated a case and referred for the consideration of the High Court the following question : "Whether in the facts and circumstances of this case, the Income tax Appellate Tribunal was right in disallowing Rs. 2,00,000 as a deduction under section 10 (2) (xv) of the Indian Income tax Act. " The High Court answered the question in the affirmative and hence this appeal. Though several contentions were sought to be raised by the appellant as well as the Income tax authorities before the High Court as arising from the question, the only contention which was canvassed before the High Court and was held to be determinative of the enquiry before it was whether the deed of trust dated 27 198 the 15th March, 1946, was valid. On the construction of the several provisions of the deed of trust the High Court held : "I am of opinion that in view of these provisions of the trust deed coupled with the uncertainty as regards the beneficiaries and the absence of any obligation to grant any pension, no legal and effective trust was created, and the so called trust must be held to be void," It further held that even if the ownership of the money had passed over to the trustees, still the further provision regarding the application of the money to the payment of pensions being entirely ineffective and void, the money cannot be said to have been expended for the purpose of the business, and that therefore was not an expenditure or an expenditure for the purposes of the business within the meaning of section 10(2)(xv) of the Act. This was also the only contention urged before us by Shri N. C. Chatterjee appearing on behalf of the appellant. Section 3 of the Indian Trusts Act (II of 1882) defines a trust as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. The person for whose benefit the confidence is accepted is called the "beneficiary". Section 5 in so far as it is material for the purpose of this appeal says that no trust in relation to movable property is valid unless declared as aforesaid (i.e., by a non testamentary instrument in writing signed by the author of the trust or the trustee and registered, or by the will of the author of the trust or of the trustee) or unless the ownership of the property is transferred to the trustee. Section 6 of the Act provides that subject to the provisions of section 5, a trust is created when the author of the trust indicates with reasonable certainty by any words or acts. . . (c) the beneficiary. . The validity or otherwise of the trust in question has got to be determined with reference to the above sections of the Indian Trusts Act, 199 The deed of trust provided in clause 5 that the income of the fund if sufficient and if the income of the fund shall not be sufficient then the capital of the fund shall be applied in paying or if insufficient in contributing towards the payment of such pensions and in such manner as the bank or such officers thereof as shall be duly authorised by the bank in that behalf shall direct to be paid out of the fund. Clause 7 stated that the fund was established for the benefit of retiring employees on the European and Indian staff of the bank to whom pensions shall have been granted by the bank. Clause 8 provided that any officer on the European staff of the bank who had been in the service of the bank for at least twenty five years and any officer or other employee on the Indian staff of the bank who had been in the service of the bank for at least thirty years might apply to the bank for a pension, and that in special circumstances the bank might grant pensions to employees who had not completed the respective periods of service above mentioned. Clause 9 provided for the withdrawal, modification or determination by the bank of any pension payable thereunder when in its opinion the conduct of the recipient or the circumstances of the case justified it in so doing and the trustees were bound forthwith to act upon any directions of the bank or of any officers thereof duly authorised by the bank in that behalf. Clause 11 invested the bank with discretion in fixing the amount of each pension and in making any modification therein but without prejudice to such discretion declared what were the pensions which it was contemplating would be payable to recipients qualified under the provisions of clause 8 of the deed. Clause 18 authorised the bank from time to time by instrument in writing under its common seal with the assent in writing of the trustees to alter all or any of the regulations contained in the deed for the time being relating to the fund and make new regulations to the exclusion of or in addition to all or any of the regulations for the time being relating to the fund and for the purposes of that clause all the provisions contained in the deed were deemed to be the regulations in relation to the fund. ' 200 On a consideration of the provisions of the deed of trust above set out it is clear that the bank or its officers duly authorised in that behalf were constituted the sole authorities to determine what pensions and in what manner the same should be paid out of the income of the fund. The fund was declared to have been established for the benefit of the retiring employees to whom pensions shall have been granted by the bank. Officers of the staff who were qualified under clause 8 were declared entitled to apply to the bank for a pension. But there was nothing in the terms of the deed which imposed any obligation on the bank or its officers duly authorised in that behalf to grant any pension to any such applicant. The pension if granted could also be withdrawn, modified or determined under the directions of the bank or any officer of the bank duly authorised in that behalf and such directions were binding on the trustees. The regulations in relation to the fund could also be altered and new regulations could be made to the exclusion of or in addition to all or any of the regulations contained in the deed of trust. It was open under the above provisions for the bank or its officers duly authorised in that behalf to grant no pension at all to any officer of the staff who made an application to them for a pension and also to withdraw, modify or determine any pension payable to such officer if in their opinion the conduct of the recipient or the circumstances of the case should justify them in so doing. The whole scheme of the deed invested the bank or its officers duly authorised in that behalf with the sole discretion of granting or of withdrawing, modifying or determining the pension and it was not at all obligatory on them at any time to grant any pension or to continue the same for any period whatever. The beneficiaries therefore could not be said to have been indicated with reasonable certainty. What is more it could also be validly urged that there being no obligation imposed upon the trustees no trust in fact was created, even though the moneys had been trans ferred to the trustees. Shri N. C. Chatterjee however urged that the power conferred upon the bank or its officers duly authorised 201 in that behalf was a power in the nature of a trust, that there was a general intention in favour of a class and a particular intention in favour of individuals of a class to be selected by them and even though the particular intention failed from the selection not being made the court could carry into effect the general intention in favour of the class and that therefore the trust was valid. He relied in support of this contention on Brown vs Higgs(1) and Burrough vs Philcox(2). The position in law as it emerges from these authorities is thus summarised by Lewin on Trusts, Fifteenth fxEdition, page 324 : "Powers, in the sense in which the term is commonly used, may be distributed into mere powers, and powers in the nature of a trust. The former are powers in the proper sense of the word that is not imperative, but purely discretionary; powers which the trustee cannot be compelled to execute, and which, on failure of the trustee, cannot be executed vicariously by the court. The latter, on the other hand, are not discretionary, but imperative, have all the nature and substance of a trust, and ought rather, as Lord Hardwicke observed, to be designated by the name of trusts. 'It is perfectly clear, ' said Lord Eldon, 'that where there is a mere power, and that power is not executed, the court cannot execute it. It is equally clear, that wherever a trust is created, and the execution of the trust fails by the death of the trustee or by accident, this court will execute the trust. But there are not only a mere trust and a mere power, but there is also known to this court a power which the party to whom it is given is intrusted with and required to execute; and with regard to that species of power, the court considers it as partaking so much of the nature and qualities of a trust, that if the person who has the duty imposed upon him does not discharge it, the court will, to a certain extent, discharge the duty in his room and place '. Thus, if there is a power to appoint among certain objects but no gift to those objects and no gift over in default of appointment, the court implies a trust for or gift to (1) 8 ves. Junior 561 ; (2) 5 Mylne & Graig 72; 41 E.R. 299. 202 those objects equally if the power be not exercised. But for the principle to operate there must be a clear indication that the settlor intended the power to be regarded in the nature of a trust. " This position however does not avail the appellant. As already stated there is no clear indication in the deed of trust that the bank intended the power to be regarded in the nature of a trust, inasmuch as there was no obligation imposed on the bank or its officers duly authorised in that behalf to grant any pension to any applicant. There was no duty to grant any pension at all and the pension, if granted, could be withdrawn, modified or determined by the bank or its officers duly authorised in that behalf as therein mentioned. Under the circumstances it could not be said that there was a power in the nature of a trust which could be exercised by the court if the donee of the power for some reason or other did not exercise the same. It will be appropriate at this stage to consider whether any beneficiary claiming to be entitled to a pension under the terms of the deed could approach the court for the enforcement of any provision purporting to have been made for his benefit Even though he may be qualified under clause 8 to apply for the grant of a pension he could not certainly enforce that provision because there was no obligation imposed at all on the bank or its officers duly authorised in that behalf to grant any pension to him and in the absence of any such obligation imposed upon anybody it would be futile to urge that a valid trust was created in the manner contended on behalf of the appellant. In our opinion therefore the High Court was right in the conclusion to which it came that there was uncertainty as regards the beneficiaries and there was an absence of any obligation to grant any pension with the result that no legal and effective trust could be said to have been created and further that the provision of Rs. 2,00,000 in the accounting year 1946 47 was not an expenditure or an expenditure for the purposes of the business within the meaning of section 10 (2) (xv) of the Indian Income tax Act. 203 In view of the above we do not think it necessary to into the interesting questions which were sought to toe raised by the appellant, viz., what was the scope of the reference, and by the respondent, viz., whether the expenditure was a capital expenditure or revenue expenditure and if the latter whether the deduction could still not be allowed in view of the provisions of section 10 (4) (c) of the Act. The result therefore is that the appeal fails and must be dismissed with costs. Appeal dismissed.

A banking company executed a deed whereby it purported to create a trust for the payment of pensions to the retiring members of its staff. A certain sum of money was made over to three persons who were called trustees and the deed provided that the company may make further contributions to the fund. Under the terms of the deed, however, the company was not bound to pay any pension to any of the members of the staff, the payment itself and the amount payable being entirely at the discretion of the company, and the company had also the power to withdraw or modify any pension and to alter the rules relating to the granting of the pension at its will. In the accounting year the company paid a further contribution of Rs. 2 lacs to the fund and claimed deduction of this amount under section 10 (2) (xv) of the Income tax Act as expenditure laid out wholly and exclusively for the purposes of the business: Held, that, as the deed did not impose any obligation on the bank or the trustees to grant any pension to any employee, and the pension, even if granted, could be withdrawn and even the rules could be completely altered at will by the company, no valid trust was created even though moneys had been transferred to the trustees, and the sum in question could not be said to have been spent for the purposes of the business and allowed as a deduction under section 10 (2) (xv). Brown vs Higgs and Burrough vs Philcox (41 E.R. 299) distinguished.

Civil Appeal Nos. 33763382 of 1988. From the Judgment and Order dated 26.11.1987 of the Central Administrative Tribunal. Delhi in T. Nos. 950, 961, 972, 986, 1049, 94 1198 of 1985 and T. No. 383 of 1986. B.B. Barua, Aruneshwar Gupta and Ms. A. Subhashini for the Appellants. Juse P. Verghese, K.N. Rai and N.N Sharma for the Re spondents. These appeals arose out of the judgment and order dated November 26, 1987 passed by the Central Adminis trative Tribunal, Principal Bench, Delhi directing that the petitioners (respondents in these appeals) will be entitled to the same relief as was granted to the petitioners by Anand, J. in the writ petitions CWP Nos. 278 of 1978 and 937 of 1978. The matrix of the case, in short, is that the services of the respondents who were appointed as constables in Delhi Police in the years 1964 66 were terminated because of their participation in the agitation along with other police constables in April 1967. In view of the public controversy and in deference to the views expressed in Parliament, a large number of agitating constables were taken back in service as fresh entrants. Later, in view of the assurance given in the Parliament by the then Home Minister, prosecu tions were withdrawn and the dismissed constables were reinducted into service. Some of the dismissed constables filed Civil Writ Petition Nos. 26/69 and 106/70 in the High Court of Delhi and the High Court by its judgment dated October 1, 1975 quashed the order of termination and the petitioners in that case were declared to be throughout in service. The Police Administration preferred separate ap peals being LPA Nos. 24 and 25 of 1976. Both these appeals were dismissed as barred by time and the judgment of the High Court dated October 1, 1975 became final. Subsequently, some other constables whose services were similarly terminated but were not reinstated in service even as fresh entrants, filed writ petitions in the High Court of Delhi being CWP Nos. 270 and 937 of 1978. These writ peti tions were heard by Anand, J. who rejected the contention raised by the respondents in the writ petitions regarding the delay and latches in moving the writ petitions, allowed the writ petitions quashing the impugned order of termina tion declaring that the petitioners will be deemed to have been in service and would be treated as such subject to certain conditions. The Police 95 Administration filed LPA against this judgment which was dismissed on August 29, 1983. Thereafter the respondents herein filed the writ petitions in the High Court against the order of termination of their services praying for quashing of the orders of termination and for reinstating them in service with effect from the respective dates of their termination of services and to treat them as being in service throughout and to award them all consequential benefits. These writ petitions were subsequently transferred to the Central Administrative Tribunal, Delhi. The Tribunal while rejecting the plea of the respondents that the peti tioners should be denied any relief because of delay and latches held that the claims of the petitioners (respondents in these appeals) was identical to the claim of the peti tioners in CWP Nos. 270 and 937 of 1978 whose petitions were allowed by the High Court of Delhi. The Tribunal further held that the petitioners were entitled to the same relief as was granted to the petitioners by Anand, J. in C W P Nos. 270 and 937 of 1978. Against this judgment and order the instant appeals on leave have been filed before this Court. We have heard learned counsel for the parties. Consider ing facts and circumstances as well as the judgment rendered by Anand J. in CWP Nos. 270 and 937 of 1978, we dismiss the appeals and confirm the judgment and order dated November 26, 1987 of the Tribunal with the modification that the respondents, excepting respondent No. 24, Kanwal Singh who is dead, will file affidavits stating whether they had been gainfully employed or not during the period of the termina tion of service and if so employed, they will state further in the affidavits the period of such employment. The appel lants may verify the same and will be at liberty to deduct the pay and allowances during the period such gainful em ployment while determining the arrears of salary and allow ances for the period of termination. We, however, make it clear that for the purposes of seniority, promotion and retiral benefits, the entire period between termination and reinstatement shall be taken into account. It has been stated by the learned counsel for the appel lants that all the respondents have already been reinstated in service and they are now working. The respondent No. 24, however, has expired and the back wages have already been paid to his widow. In the facts circumstances of the case there will be no order as to costs. N.P.V. Appeals dis missed.

The respondents, who were working as Constables in Delhi Police and whose services were terminated for participating in an agitation, filed writ petitions before the High Court, praying for quashing the order of termination, and for reinstatement, deeming them to have been in service through out, and awarding consequential benefits. Relying on the decision of the High Court, as affirmed by the Supreme Court, in the case of some Constables, whose services were similarly terminated, the Central Administrative Tribunal, to whom the cases were transferred, held that the respond ents were entitled to be deemed to have been in service. Dismissing the appeals, by the Administration, this Court, HELD: All the respondents should be deemed to be in service. All of them, except respondent No. 24 who has expired and whose widow has already been paid back wages, should file affidavits, stating whether they had been gain fully employed or not during the period of the termination of service and if so employed, they will state further in the affidavits the period of such employment. The appellants may verify the same and will be at liberty to deduct the pay and allowances during the period of such gainful employment while determining the arrears of salary and allowances for the period of termination. However, for the purposes of seniority, promotion and retiral benefits, the entire period between termination and reinstatement shall be taken into account. [95E F]

Appeal Nos. 2640 41 of 1991. From the Judgment and Order dated 3.6.1991 of the Himachal Pradesh High Court in Election Petition Nos. 1 & 2 of 1990. A.K. Ganguli, B.T. Kaul, Sarvesh Bisaria and S.K. Bisaria for the Appellant. B. Dutta and R. Sasiprabhu for the Respondents. 253 The Judgment of the Court was delivered by S.C. AGRAWAL, J. These appeals have been filed under section 116 A of the Representation of the People Act, 1951. They relate to election to the Himachal Pradesh Legislative Assembly from 60 Chachiot Assembly constituency held during February, 1990. The appellant was declared elected to the Legislative Assembly from the said constituency. His election was challenged by the respondents in these appeals by filing election petitions in the High Court of Himachal Pradesh. By its judgment dated June 3, 1991, the High Court has allowed the election petitions and has set aside the election of the appellant on the ground that the nomination of one of the candidates, Shri Karam Singh was improperly rejected by the returning officer. The last date for filing the nomination papers was February 2, 1990 and the scrutiny of the nomination papers was fixed for February 5, 1990. Fifteen persons, including the appellant and Shri Karam Singh had filed nomination papers. At the time of scrutiny, an objection was raised on behalf of one of the candidates against the nomination of Shri Karam Singh on the ground that he was holding the office of Chairman, Himachal Pradesh Khadi and Village Industries Board, which is an office of profit within the meaning of Article 191(1)(a) of the Constitution and was, therefore, disqualified for being chosen as a member of the Legislative Assembly. By order dated February 7, 1990, the Returning Officer upheld the said objection and rejected the nomination of Shri Karam Singh. The High Court has, however, found that the said rejection of nomination of Shri Karam Singh was improper because on the date of scrutiny Shri Karam Singh was not holding an office of profit and has, for that reason, set aside the election of the appellant. Before we proceed to deal with the appeals on merits, it may be mentioned that during the pendency of these appeals before this court, the Himachal Pradesh Legislative Assembly has been dissolved. This raises the question whether the matters in issue in these appeals have ceased to be living issues and have become wholly academic. The effect of dissolution of the legislature on a pending election appeal has been considered by this court in Loknath Padhan vs Birendra Kumar Sahu; , In that case, the election of the returned candidate was challenged before the High Court on the ground that there was a subsisting contract entered into 254 by the respondent in the course of his trade and business with the State Government for the execution of works undertaken by the Government and he was, therefore, disqualified under section 9A of the Representation of the People Act, 1951. The election petition was, however, dismissed by the High Court and while the appeal against the said decision was pending in this Court, the Legislative Assembly was dissolved. A preliminary objection was raised on behalf of the respondent to the appeal that in view of the dissolution of the assembly it was academic to decide whether or not the respondent was disqualified under section 9A. Upholding the said preliminary objection, this court has held that the court should not undertake to decide an issue unless it is a living issue between the parties and if an issue is purely academic, in that its decision one way or the other would have no impact on the position of the parties, it would be waste of public time and indeed not proper exercise of authority for the court to engage itself in deciding it. In that case, this court drew a distinction between a case where the challenge to the election is on a ground confined to the validity of that election only and having no consequences operating in future and a case involving challenge to the election on a ground which would entail electoral disqualification for the future, such as, charge of corrupt practice. It was held that if the election is challenged on the ground of commission of a corrupt practice the dissolution of the legislature would not have any effect on the pendency of an election petition or an appeal arising therefrom and the said petition will have to be considered on its merits whereas a challenge to the election on any other ground which does not entail future disqualification would raise academic issue only and in view of the dissolution of the legislature the election petition or the appeal arising therefrom would not survive because it would be futile and meaningless for the court to decide an academic question the answer to which would not affect the position of one party or the other. Although in the instant case the election is not challenged on the ground of commission of any corrupt practice and a finding would not result in electoral disqualification in future but the present case differs from the case of Loknath Padhan vs Birendra Kumar Sahu (supra) in the sense that in Loknath 's case the election petition was dismissed whereas in the present case the election petitions against the election of the appellant have been allowed and the election has been set aside. It has been submitted by Shri A.K. Ganguli, the learned Senior counsel appearing on behalf of the appellant, that in view of the fact that the decision of the High 255 Court setting aside his election, the appellant may be required to refund the various allowances that he has received while he was functioning as a member of the Legislative Assembly after his election till the decision of the High Court. It would thus appear that invalidation of the election of the appellant may give rise to the liability to refund the allowances received by the appellant as a member of the Legislative Assembly. It cannot, therefore, be said that the question a rising for consideration in this appeal are purely academic in nature. In these circumstances, it becomes necessary to go into the merits of these appeals. The relevant facts relating to the rejection of the nomination of Shri Karam Singh are as under. The Himachal Pradesh Khadi and Village Industries Board (hereinafter referred to as 'the Board '). has been established by the Government of Himachal Pradesh under Section 3 of H.P. Khadi and Village Industries Board Act, 1966 (hereinafter referred to as 'the Act '). Section 4 provides for the constitution of the Board and in sub section (1), it is laid down that the Board shall consist of not less than three and not more than nine members appointed by the Government of Himachal Pradesh after consultation with the Khadi and Village Industries Commission from amongst non officials who in the opinion of Government of Himachal Pradesh have shown active interest in the protection and development of khadi and village industries and officials. In sub section (2) of Section 4 it is provided that the Government of Himachal Pradesh shall after consultation with the Khadi and Village Industries Commission, nominate one of the members of the Board to be the Chairman thereof, Section 7 makes provision for resignation of office by members. Section 11 provides that the term of office and terms and conditions of service of the Chairman, Vice Chairman, Secretary and other members shall be such as may be prescribed. In exercise of the powers conferred by Section 35 of the Act, the Government of Himachal Pradesh has made the Himachal Pradesh Khadi and Village Industries Board Rules, 1966 (hereinafter referred to as 'the Rules '). Rule 3 of the Rules prescribes that a member of the Board shall hold office for such period not exceeding three years as may be prescribed in the notification of his appointment which shall be notified in the Official Gazette and shall be eligible for re appointment. Rule 7 provides for salary or honorarium and allowance payable to members. Sub rule (1) of Rule 7 provides that the Chairman, the Vice Chairman, the Secretary and other 256 members of the Board shall be paid such salary or honorarium and allowances from the funds of the Board as the Government may from time to time fix. In sub rule (2) of Rule 7, it is laid down that the Chairman, the Vice Chairman, the secretary and other members of the Board shall also be entitled to draw travelling and daily allowances for journeys performed for attending the meetings of the Board or for the purpose of discharging such duties as may be assigned to them by the Board in accordance with the rules and orders issued by the Government from time to time at the highest rate admissible to Government servants of Grade 1. By notification dated September 2, 1982, issued in exercise of the powers conferred by Rule 7 of the Rules, the Governor of the Himachal Pradesh, ordered that the Chairman of the Board shall be entitled to pay and other allowances from the Funds of the Board at the following rates: (1) Pay/remuneration/honorarium of Rs. 1500 p.m. (consolidated). (2) Free electricity and water charges upto Rs. 1500 per year. (3) Use of a car or in lieu thereof a conveyance allowance of Rs. 300 per month. (4) Telephone facilities in office and at residence. (5) TA and medical expenses admissible to the officers of Highest First Grade category. By notification dated December 27, 1986, the Governor of Himachal Pradesh constituted the Board with immediate effect. Under the said order, the Board consisted of nine members including Shri Karam Singh Thakur. By the said order the Governor of Himachal Pradesh also nominated Shri Karam Singh Thakur as Chairman of the said Board. By notification dated December 20, 1989, the term of the Board was extended upto December 26, 1990. On October 18, 1989, Shri Karam Singh Thakur wrote a letter to the Financial Commissioner cum Secterary (Industries) to the Government of Himachal Pradesh wherein it was stated that consequent upon amendment to Second Proviso to section (1) of section 6B of the Himachal Pradesh Legislative Assembly (Allowances and Pension of members) Act, 1971, his pension had been revised to Rs. 2400 per month with effect from February 4, 1989 and that on the basis of the said orders, 257 he was authorised by the Senior DAG(A&E), Himachal Pradesh, Shimla, by letter dated 6th July, 1989, to draw from Shimla Treasury the balance pension of Rs. 900 p.m. after adjusting the remuneration of Rs. 1500 which he had been drawing as remuneration from the Board and the pension of Rs. 900 p.m. plus relief due thereon from the Punjab National Bank through Treasury Officer, Shimla. By aforesaid letter, Shri Karam Singh intimated that he now intended not to draw the monthly remuneration of Rs. 1500 p.m. from the Board and that instead he would be drawing the gross pension of Rs. 2400 p.m. from the Treasury/Bank and he requested that no objection of the State Government to the said proposal may be conveyed to him at an early date. The said proposal made by Karam Singh was accepted by the Government of Himachal Pradesh and by notification dated January 8, 1990 issued under Rule 7(1) of the Rules, the Governor of Himachal Pradesh ordered that the remuneration of Rs. 1500 p.m. (consolidated) which was payable to the Chairman of the Board shall cease as per the request of the Chairman made vide his letter dated October 18, 1989. On January 31, 1990, Shri Karam Singh addressed a Letter to the Financial Commissioner cum Secretary (Industries) to the Governor of Himachal Pradesh in the following terms : "I hereby resign from the membership and Chairmanship of the Himachal Pradesh Khadi and Village Industries Board. The resignation may kindly be accepted with effect from today Le. 31st January, 1990". On the basis of the letter of January 31, 1990, which was received on the same day, the matter was processed in the office of Financial Commissioner cum Secretary (industries) and it was placed before the Chief Minister for his approval with the recommendation that the resignation of Shri Karam Singh, Chairman, may be accepted. The Chief Minister gave his approval on February 4, 1990. On February 12, 1990, a notification was issued in the following terms : "In exercise of the powers vested in him under section 7 of the Himachal Pradesh Khadi and Village Industries Board Act, 1966, the Governor, Himachal Pradesh is pleased to accept the resignation of Shri Karam Singh Thakur, Chairman, H.P. Khadi and Village Industries Board, Shimla with immediate effect". 258 In the meanwhile, Shri Karam Singh filed his nomination papers for election to the Himachal Pradesh Legislative Assembly from the 60 Chachiot Assembly constituency. The scrutiny of the nomination papers was held on February 5, 1990. An objection was raised against the nomination of Shri Karam Singh on behalf of one of the candidates, viz., Vir Singh, on the ground that Shri Karam Singh was holding an office of profit and was disqualified for being chosen as a member of the Legislative Assembly. Shri Karam Singh was not present at the time of scrutiny but his proposer, Shri Mani Ram, Advocate, was present and he was requested to ensure the appearance of Shri Karam Singh before the Returning Officer on February 6, 1990 at 11.00 a.m. for hearing him in connection with the objection. The Returning Officer also directed Tehsildar (Elections) to enquire from the Secretary of the Board about the remuneration and other allowances being drawn by Shri Karam Singh in his capacity as chairman of the Board. The report of the Tehsildar was placed before the Returning Officer. Shri Mani Ram, Advocate, as proposer of Shri Karam Singh also submitted a reply to the Returning Officer on February 6, 1990 wherein it was stated that Karam Singh had resigned from the chairmanship on 29th or 30th of January 1990 and that the acceptance of the resignation was not kwown to Shri Karam Singh. By order dated February 7, 1990, the Returning Officer rejected the nomination of Shri Karam Singh on the view that were submission of the resignation unless it was accepted, could not be taken as deemed to have been accepted and that Shri Karam Singh was holding an office of profit as his resignation had not been accepted upto February 5, 1990 which was the date for scrutiny, and that he was not eligible to seek election as a candiate for the Himachal Pradesh Legislative Assembly. Before the High Court, it was submitted on behalf of the petitioners in the election petitions (respondents herein) that Shri Karam Singh had resigned with effect from January 31, 1990 vide his resignation letter of the said date and the said letter takes effect from January 31, 1990 itself. The High Court accepted the said contention and held that the Act is silent and contains no provision as to how and in what manner the resignation of the Chairman of the Board is to be accepted and therefore the holder thereof could bring his appointment to an end by resigning with effect from a particular date and he would then be deemed to have ceased to be Chairman from the date itself notwithstanding its acceptance on a later date. The High Court was, therefore, of the view that Shri Karam Singh 259 held no office of profit whatsoever in the Board on the date of scrutiny, i.e., February 5, 1990 since he had tendered his resignation on January 31, 1990. The High Court, further, found that in view of the letter dated October 18. 1989 sent by Shri Karam Singh conveying his request of giving up the remuneration of Rs. 1500 per month (consolidated) which request was accepted by the State Government as pet notification dated January 8, 1990, pursuant to which Shri Karam Singh ceased to be entitled to draw the abovementioned remuneration with effect from January 8, 1990, Shri Karam Singh was not entitled to remuneration which could be classified as `profit ' for the office of Chairman of the Board held by him and after January 8, 1990, it could not be said that Shri Karam Singh was holding an office of profit and therefore the disqualification for membership of the Legislative Assembly of Himachal Pradesh could not attach to him. For the reasons aforesaid, the High Court held that the nomination of Shri Karam Singh was wrongly rejected by the Returning Officer. Shri Ganguli has assailed the findings recorded by the High Court on both the questions whereas Shri B. Datta, the learned senior counsel appearing for the respondents has supported the said findings. It is not disputed that in view of the amendment introduced in clause (a) of sub section (2) of Section 36 of the Representation of the People Act, 1951 by Act 40 of 1961, the relevant date for determining whether a candidate was qualified or disqualified for being chosen to fill the seat under the various provisions of Constitution mentioned therein, including Article 191, is the date fixed for scrutiny of nominations. In the instant case the said date was February 5, 1990. It is, therefore, necessary to determine whether Shri Karam Singh was holding an office of profit on February 1990. In view of the findings recorded by the High Court, the following questions arise for consideration. (1) Did Shri Karam Singh cease to hold the office of Chairman of the Board on January 31. 1990 the date on which he submitted his resignation from the said office or on February 12, 1990 when the notification about acceptance of his resignation with immediate effect was issued by the Government of Himachal Pradesh? (2) Did the office of Chairman of the Board held by Shri Karam 260 . Singh cease to be an office of profit with effect from January 8, 1990 in view of the notification of the said date whereby the remuneration of Rs. 1500 p.m. (consolidated) payable to the Chairman of the Board had ceased to be payable to Shri Karam Singh? Shri Ganguli has urged that the resignation of Shri Karam Singh from the office of Chairman of the Board could be effective only after it was accepted by the Governor of Himachal Pradesh who had nominated him to the said office and till the acceptance of the said resignation, Shri Karam Singh continued to hold the office of the Chairman of the Board. The submission of Shri Ganguli is that acceptance of a resignation is necessary before it can be effective and since in the present case the resignation was accepted only by notification dated February 12, 1990, Shri Karam Singh continued as Chairman of the Board till that date and he was holding that office on the date of scrutiny, i.e., February, 5, 1990. In support of this submission Shri Ganguli has placed reliance on the decisions of this Court in Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Anr., ; and J.K Cotton Spinning and Weaving Mills Company Ltd. vs State of U.P. & Others. , (19901 3 SCR 523 as well as the decision of the Allahabad High Court in Lala Rain vs Gauri Shanker, 1981 All. Law 1982. Having carefully considered the said contention of Shri Ganguli we find it difficult to accede to it. As pointed out by this court, 'resignation ' means the spontaneous relinquishment of one 's own right and in relation to an office, it connotes the act of giving up or relinquishing the office. It has been held that in the general juristic sense, in order to constitute a complete and operative resignation there must be the intention to give up or relinquish the office and the concomitant act of its relinquishment. It has also been observed that the act of relinquishment may take different forms or assume a unilateral or bilateral character, depending on the nature of the office and the conditions governing it. (See : Union of India vs Shri Gopal Chandra Misra & Ors., ; at p. 21). If the act of relinquishment is of unilateral character, it comes into effect when such act indicating the intention to relinquish the office is communicated to the competent authority. The authority to whom the act of relinquishment is communicated is not required to take any action and the relinquishment takes effect from the date of such communication where the resignation is intended to operate in prasenti. A resignation may also be prospective to be operative 261 from a future date and in that event it would take effect from the date indicated therein and not from the date of communication. In cases where the act of relinquishment is of a bilateral character, the communication of the intention to relinquish, by itself, would not be sufficient to result in relinquishment of the office and some action is required to be taken on such communication of the intention to relinquish, e.g., acceptance of the said request to relinquish the office, and in such a case the relinquishment does not become effective or operative till such action is taken. As to whether the act of relinquishment of anoffice is unilateral or ' bilateral in character would depend upon the nature of the office and conditions governing it. Under the Constitution of India there are various offices which can be relinquished by unilateral act of the holder of the office and acceptance of resignation is not required, e.g., President [Article 56(a)]. Vice President [Article 67(a)], Deputy Chairman of Rajya Sabha [Article 90(b)], Speaker and Deputy Speaker of Lok Sabha [Article 94(b)], Judge of the Supreme Court [Article 124(2)(a)], Judge of a High Court [Article 217 (1)(a)]. As regards member of either House of Parliament or a member of a House of Legislature of a State, originally, the position was that he could resign his office by unilateral act and the acceptance of resignation was not required. The requirement of acceptance of such resignation was introduced in Articles 101(3)(b) and 190(3)(b) by the Constitution (ThirtyThird Amendment) Act, 1974. Similarly in company law, a director of a company is entitled to relinquish his office at any time he pleases by proper notice to the company and acceptance of the resignation is not required. [See: Glossop vs Glossop, , Halsbury 's Law of England, 4th Ed., Vol. 7, p. 316, para 536]. A contract of employment, however, stands on a different footing wherein the act of relinquishment is of bilateral character and resignation of an employee is effective only on acceptance of the same by the employer. Insofar as Government employees are concerned, there are specific provisions in the Service rules which require acceptance of the resignation before it becomes effective. In Raj Kumar vs Union of India, , it has been held "But when a public servant has invited by his letter of resignation determination of his employment, his services 262 normally stand terminated from the date on which the letter of resignation is accepted by the appropriate authority, and in the absence of any law or rule governing the conditions of his service to the contrary, it will not be (,pen to the public servant to withdraw his resignation after it is accepted by the appropriate authority. Till the resignation is accepted by the appropriate authority in consonance with the rules governing the acceptance, the public servant concerned has locus paenitentiae but not thereafter". (p.860) Similarly, in Central Inland Water Transport Corporation Ltd. and Anr. vs Brojo Nath Ganguly and Anr. (supra) which related to an employee of a Government company jointly and wholly owned by the Central Government and two State Governments, it was observed "A resignation by an employee would, however, normally require to be accepted by the employer in order to be effective. It can be that in certain circumstances an employer would be justified in refusing to accept the employee 's resignation as, for instance, when an employee wants to leave in the middle of a work which is urgent or .important and for the completion of which his presence and participation a necessary. An employer can also refuse to accept the resignation when there is a disciplinary inquiry pending against the employee. In such a case, to permit an employee to resign would be to allow him to go away from the service and escape the consequences of an adverse finding against him in such an inquiry. There be justified in not accepting the resignation of an employee". (p.386) The same view was reiterated in J.K. Cotton Spinning and Weaving Mills Company Ltd. vs State of U.P. & Ors. (Supra) which also relates to a contract of employment. The question whether the resignation of Shri Karam Singh from the office of Chairman of the Board was required to be accepted before it became effective involves the question whether the act of relinquishment 263 of the office of Chairman is unilateral or bilateral in character. In order to answer this question it is necessary to consider the relevant provisions of the Act. The Act does not contain any provision for resignation of the office of Chairman of the Board but in Section 7, the following provision has been made with regard to the resignation of office by members "7. Resignation of office by members Any member may resign, his office by giving notice in writing to the Government of Himachal Pradesh and, on such resignation being notified in the Official Gazette by the Government of Himachal Pradesh, shall be deemed to have vacated his office". In the aforesaid provision, there is no requirement that the resignation of a member should be accepted by any authority. What is required is that a member who wishes to resign his office as member should give notice in writing to the Government of Himachal Pradesh and such resignation takes effect when it is notified in the official gazette by the Government of Himachal Pradesh. This indicates that the act of relinquishment of the office of a member of the Board is bilateral in character in as much as the resignation takes effect only when such resignation is notified in the Official Gazette by the Government of Himachal Pradesh. There is no such requirement for relinquishing the office of Chairman of the Board. Section 4(2), however, provides that the Chairman of the Board has to be nominated from amongst the members of the Board. This means that the Chairman of the Board holds office so long as he is a member of the Board and if he ceases to be a member of the Board he also ceases to be the chairman of the Board. But the converse is not true. A Chairman of the Board may resign his office as Chairman but may continue as member of the Board. If he resigns only from the office of Chairman of the Board, there is no requirement that such resignation should be accepted by any authority or that any other action is required to be taken for the said resignation to be effective. It would, therefore, appear that the act of relinquishment of the office of Chairman of the Board is unilateral in character and the resignation from the said office takes effect when it is communicated without any further action being required to be taken on the same. Since the Chairman of the Board is nominated by the Government of Himachal Pradesh under Section 4(2) of the Act, resignation has 264 also to be communicated to the Government of Himachal Pradesh i.e., the Head of the Department dealing with the Board, and once it is so communicated it takes effect from the date of such communication if the resignation is in presenti or from the date indicated therein if it is prospective in nature to be operative from a future date. This means that the act of relinquishment of the office of Chairman of the Board differs from the act of relinquishment from the office of a Member of the Board in the sense that while the act of relinquishment of office of a Member is bilateral in character requiring certain action, namely, resignation being notified in the Official Gazette by the Government of Himachal Pradesh before it comes into effect, the act of relinquishment of the office of Chairman of the Board is unilateral in character. The decisions on which reliance has been placed by Shri Ganguli relating to contracts of employment where the act of relinquishment has been held to be bilateral in character requiring acceptance of the resignation, can, therefore, have no application to the present case where the act of relinquishment of the office of Chairman of the Board is unilateral in character. Three possible situations involving resignation by a person holding the office of Chairman of the Board can be envisaged : (i) He may resign only from the office of the Chairman of the Board. In such a case if the resignation is in presenti it would take effect from the date of communication of the resignation to the Head of the Department in the Government of Himachal Pradesh it would take effect from the date as indicated in the said resignation if the resignation is prospective to be operative from a future date. (ii)He may resign only from the office of the member of the Board. This resignation would take effect from the date the resignation is notified in the Official Gazette by the Government of Himachal Pradesh and with effect from the said date the Chairman would cease to be a member of the Board. Since a person cannot continue as Chairman of the Board after he has ceased to be a member of the Board, he would also cease to be the Chairman of the Board from the date of his resignation as member of the Board is notified in the Official Gazette by the Government of Himachal Pradesh. (iii)He may resign both from the office of Chairman of the Board 265 as well as from the office of member of the Board. In such a case, his resignation from the office of Chairman of the Board would take effect from the date of communication to the Head of the Department in the Government of Himachal pradesh if it is it? praesenti or from the date indicated therein if it is prospective to be operative from a future date. He would, however, continue to be a member of the Board till his resignation from the office of member is notified in the Official Gazette by the Government of Himachal Pradesh under Section 7 of the Act. The instant case falls in the third category because Shri Karam Singh, by his letter dated January 31, 1990, resigned from the office of member as well as the office of Chairman of the Board and wanted the resignation to be accepted with effect from the same day, i.e., January 31, 1990. By notification dated February 12, 1990, it was notified that the resignation of Shri Karam Singh Thakur, as Chairman of the Board has been accepted by the Governor of Himachal Pradesh with immediate effect. In our opinion, the said notification dated February 12, 1990, proceeds under a misconception of the correct legal position. The resignation of Shri Karam Singh as Chairman of the Board was not required to be accepted by the Government of Himachal Pradesh. It became effective on January 31, 1990 when the letter of resignation was received by the Financial Commissioner cum Secretary (Industries) to the Government of Himachal Pradesh who was the Head of the Department dealing with the Board and to whom it was addressed. Since there is no requirement in the Act that the resignation of the Chairman of the Bord should be notified in the Official Gazette as in the case of a member of the Board, it cannot be said that the resignation of Shri Karam Singh did not take effect till it was notified in the official gazette vide notification dated February 12, 1990. The High Court was, therefore, right in taking the view that Shri Karam Singh had ceased to hold the office of the Chairman of the Board having resigned from the said office on January 31, 1990, and the said resignation became effective from that date itself and that on the date of scrutiny, i.e., February 5, 1990, he was not holding an office of profit. For that reason, it has been rightly held that the nomination of Shri Karam Singh was improperly rejected by the Returning Officer. Since we are in agreement with the view of the High Court that the nomination of Shri Karam Singh had been improperly rejected for the 266 reason that he was not holding the office of the Chairman of the Board on the date of scrutiny, we do not consider it necessary to go into the question whether the office of Chairman of the Board held by Shri Karam Singh had ceased to be an office of profit after January 8, 1990. The appeals, therefore, fail and are, accordingly, dismissed: But in the circumstances with no orders to costs. B.V.B.D. Appeals dismissed.

For election to the Himachal Pradesh Legislative Assembly from 60 Chachiot Assembly Constituency held during February, 1990, fifteen persons, including the appellant and one Karam Singh, filed nomination papers. At the time of scrutiny, an objection was raised against the nomination of Karam Singh on the ground that he was holding the office of Chairman, Himachal Pradesh Khadi and village Industries Board, which is an office of porfit within the meaning of Article 191 (1) (a) of the Constitution and was, therefore, disqualified for being chosen as a member of the legislative Assembly. The Returning Officer upheld the objection and rejected the nomination of Karam Singh. The appellant was declared elected to the Legislative Assembly from the said Constituency. His election was challenged by the Respondents by filing election petitions in the High Court of Himachal Pradesh. The High Court found that the said rejection of nomination of Karam Singh was improper because on the date of scrutiny Karam Singh was not holding an office of profit and for that reason, the election of the appellant was set aside. The appellant herein filed the present appeals under section 116 A of the Representation of the People Act, challenging the judgment of the High Court of Himachal Pradesh. 251 During the pendency of the appeals the Himachal Pradesh Legislative Assembly was dissolved. After considering the appeals on merits the Court, which dismissing the appeals, HELD : 1. Inspite of the dissolution of the Himachal Pradesh Legislative Assembly the question arising for consideration cannot be said to have become academic because the invalidation of the election of the appellant may give rise to the liability to refund the allowances received by the Appellant. [253G, 255 B] Loknath Padhan vs Birendra Kumar Sahu, ; , distinguished. [253G] 2.01. 'Resignation ' means the spontaneous relinquishment of one 's own right and in relation to an office, it cannotes the act of giving up or relinquishing the office. The act of relinquishment may be unilateral or bilateral depending on the return of the office and the conditions governing it. [260F] 2.02.If the act of relinquishment is of unilateral character, it comes into effect when such act indicating the intention to relinquish the office is communicated to competent authority. The authority to whom the act of relinquishment is communicated is not required to take any action and the relinquishment takes effect from the date of such communication where the resignation is intended to operate in praesenti. [260G] 2.03.In cases where the act of relinquishment is of a bilateral character, the communication of the intention to relinquish, by itself, would not be sufficient to result in relinquishment of the office and some action is required to be taken on such communication of the intention to relinquish, e.g., acceptance of the said request to relinquish the office, and in such a case the relinquishment does not become effective or operative till such action is taken. [260H,,261A B] 301. From the provision of Section 7 of the H.P. Khadi and Village Industries Board Act, 1966, (the 'Act ') it would appear that the act of relinquishment of the office of Chairman of the H.P. Khadi and Village Industries Board (the Board) is unilateral in character and the resignation from the said office takes effect when it is communicated without any 252 further action being required to be taken on the same. Since the Chairman of the Board is nominated by the Government of Himachal Pradesh under Section 4(2) of the Act, resignation has also to be communicated to the Government of Himachal Pradesh i.e. the Head of the Department dealing with the Board, and once it is so communicated it takes effect from the date of such communication if the resignation is in praesenti or from the date indicated therein if it is prospective in nature to be operative from a future date. [263G H, 264A B] 3.02.The resignation of Karam Singh as Chairman of the Board was not required to be accepted by the Government of Himachal Pradesh. It became effective on January 31, 1990 when the letter of resignation was received by the Financial Commissioner cum Secretary (Industries) to the Government of Himachal Pradesh who was the Head of the Department dealing with the Board and to whom it was addressed. [265D] 3.03.Since there is no requirement in the Act that the resignation of the Chairman of the Board should be notified in the Official Gazette as in the case of a member of the Board, it cannot be said that the resignation of Karam Singh did not take effect till it was notified in the Official Gazette vide notification dated February 12, 1990. [265E] Central Inland Water Transport Corporation Limited and Another vs Brojo Nath Ganguly and Anr., ; J.K Cotton Spinning and Weaving Mills Company Ltd. vs State of U.P. & Others, ; ; Lala Ram vs Gauri Shanker, 1981 All. Law 1982; Raj Kumar vs Union of India, [1968] SCR 857; Union of India vs Shri Gopal Chandra Misra & Ors., ; at p. 21 and Glossop vs Glossop, , Halsburys Law of England 4th Ed., Vol. 7, p. 316, para 536, relied on. [260D G, 261G, 262G]

Appeal No. 1622 of 1985 From the Judgment and Order dated 26.9.1984 of the Allahabad High Court in Writ Petition No. 5892 of 1983. R.B. Mehrotra for the Appellant. Raja Ram Agarwal, D.N. Mukharjee and M.M. Kashtriya for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. In the administration of justice process often makes a mockery of the purpose. This appeal is an example of the same. This appeal by special leave arises out of the judgment and order of the High Court of Allahabad dated 26th Septem ber, 1984. The question involved in this appeal is whether the appellant is entitled to take advantage of the procedure under section 24 C of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction), Act, 1972 as amended from time to time (hereinafter called the said Act) in respect of the First floor of House No. 217 218 415 Machhli Bazar, Sadar, Meerut Cantonment, of which the appel lant is the owner and the landlord. The first floor of the said building was in the tenancy of respondent No. 1 on a monthly rent of Rs. 60. The appellant was at the relevant time posted as Superintendent, Military Farm, Meerut Canton ment. In that capacity he was allotted Government quarter No. 47 belonging to the Union of India. On 8th November, 1979 he was given a notice to vacate the Government quarter by the Deputy Assistant Director intimating that since the appellant had his own house at Meerut Cantonment, he should vacate the government quarter allotted to him by the order dated 8th August, 1979. In view of that the appellant moved an application under section 24 C of the said Act. It is the case of the appellant that he owns no other house except the one involved in the present appeal. Section 24 B(1) of the said Act which gives the right to move under section 24 C of the said Act provides as follows: "S.24 B(1) Where a landlord who, being a person in occupation of any residential public building is required, by, or in pursuance of, any general or special order made by the Government or other authority concerned, to vacate such building, or in default, to incur certain obligations, on the ground that he owns, in the same city, municipality, notified area or town area, a residential building either in his own name or in the name of any member of his family, there shall accrue, on and from the date of such order. to such landlord, a right to recover immediately possession of any building let out by him: Provided that nothing in this section shall be construed as conferring a right on a landlord owning, in the same city, municipality, notified area or town area, two or more dwelling houses, whether in his own name or in the name of any member of his family, to recover the possession of more than one dwelling house and it shall be lawful for such landlord to indicate the dwelling house, possession of which he intends to recover." In this appeal we are not concerned with other sub sections and other provisos of the said section. The said application was contested by the tenant on number of grounds including the ground that the accommoda tion in the possession of the appellant was sufficient to accommodate his family members. By an order dated 17th August, 1981, the application of the appellant was allowed by the Delegated Authority. He held that the appellant was in the government service and he was due to retire on 30th June, 1980 and he had moved an application under the 416 provisions of section 24 B for getting his house vacated and getting possession of the same. It was further held by him that in this house there was a joint latrine which created difficulty for the appellant. Therefore the appellant had prayed that the possession of the first floor of the house in dispute should be delivered to him at an early date. On this, notice having been given to the respondent, he stated in his counter that the application was not maintainable and had further contended that the present proceedings under section 24 C of the Act could not be taken, according to him, because the appellant did not need any residential accommodation whereas the tenant objector and respondent in this case was a poor man and had no other house. It was contended before the Delegated Authority that the applicant landlord had two residential houses one in which the appellant landlord was living and the other in which the respondent/tenant objector was living. It was the submission of the respondent tenant that the appellant landlord was in possession of residential accommodation and as such he had no right to get another residential accommodation vacated from the tenant. The Delegated Authority observed as fol lows: "It is admitted by both the parties that the entire house is one and in its first floor tenant is living and the ground floor is in possession of the landlord. Both the portions of the house are parts of one house and there fore there is no question of accepting it as a separate residential unit particularly when the tenant objector has himself in his own affidavit and objections stated that the bath room and the latrine is on the ground floor i.e it is situated in the portion of the landlord. " It may be stated that respondent tenant had filed an affidavit showing his need. The Delegated Authority who was the Addl. District Magistrate held by his order dated 17th August, 1981 that the application of the appellant should be allowed and there should be an order for eviction. There was an appeal from the said order before the Additional District Judge. He, in his order, set out the facts referred to hereinbefore. He also referred to a report dated 11th Decem ber, 1979 by the Inspector who supported the appellant 's case. Before the appellate authority two points were urged namely, that the application was not maintainable under section 24 B or under section 24 C of the said Act, and secondly that the accommodation in the occupation of the landlord was sufficient for his need. The tenant respondent contended before the learned District Judge that as the landlord was already in occupation of the ground floor of the house in question, he was not entitled to move an appli cation under the relevant sections. Reliance was placed on the definition of 'building ' and the interpretation of the 'dwelling house '. It was contended on behalf of the 417 landlord that the building as a whole had to be considered and not in part. The Delegated Authority was unable to accept the contention urged on behalf of the tenant and held that the building meant a single structure and might be in occupation of more than one person. It has also been held that the house having a common courtyard and a common en trance would be a single house and a landlord should not be forced to live with an outsider or with a person with whom he had no happy relations. The Appellate Authority held that the building in question was just on the head of the portion of the ground floor in occupation of the landlord. The tenant had to pass daily from the courtyard on the ground floor in order to attend the call of nature. It was contended that no eviction of the landlord from the premises in his occupation had taken place but merely action had been indicated. Therefore, recourse to section 24 B and section 24 C of the Act was unwarranted. The learned District Judge was unable to accept those conten tions. He accordingly dismissed the revision application. An application was moved under Article 226 of the Con stitution before the High Court and the High Court by the impugned judgment and order has set aside the order of eviction. It held that the building was situated within the Cantonment of Meerut. The U.P. Act No. 28 of 1976 added Chapter IV A as to the question whether this Act would apply to buildings constructed and situated within the cantonment limit, it was observed that by the notification issued in exercise of the powers conferred by section 3 of the Canton ments, (Extension of Rent Control Laws) Act, 1957, the Central Government had extended to all the cantonments in Uttar Pradesh the provisions of the present Act in question as in force on the date of notification, and as a result of the issuance of the said notification Chapter IV A, became applicable to the building in question, according to the High Court. It was, however, urged before the High Court on behalf of the respondent that Chapter IV A had been applied to the Cantonment areas on a subsequent date, i.e. 27th February, 1982, the Act being not applicable to the accommo dation in question in November, 1979 when the application under section 24 B of the Act was filed by the respondent and as such the same was liable to be dismissed. It was, however, conceded by respondent that the revision order had been passed by the Additional District Judge on 27th April, 1983. It was therefore submitted that the proper course in the circumstances of the instant case would have been to send back the case for fresh decision. Reliance had been placed by the appellant on the decision in the case of Jai Singh Jairam Tyagi etc. vs Mamanchand Ratilal/Igarwal and Ors., ; However, as the learned judge felt that on the second point the respondent was entitled to succeed, he did not decide this point taken in the writ petition by the respondent. The second point urged before the learned judge was that as the appellant landlord was living in 418 the ground floor of the said house, section 24 B was not maintainable. The learned judge found 'that the central idea of conferring the power on such a landlord to recover imme diately possession was that he was being evicted from his government quarter for residence. The learned judge observed that the legislature did not want to leave such a person at the mercy of the laws delay. Such a landlord was a class by himself and was entitled to take summary proceedings. His case had to be urgently dealt with. But, according to the High Court, if he had any house in the same, building then he would not come within the purview of section 24 B of the Act. He was, however, not without a remedy. He can take recourse to section 21(1A) of the said Act. It was noted while chapter IV A which incorporated section 24 B and 24 C provided summary trial, the object of the two provisions namely section 21 on the one hand and section 24 B and 24 C of the said Act on the other differ from each other. In this connection reliance was placed on certain decisions of this Court. After referring to certain decisions, it was held that the expression "to recover immediately" indicated the ground where section 24 B could be applied there, there was consequential urgency to recover the possession of the building. According to the learned judge, there would be no consequential urgency to recover if he was already in pos session of a dwelling house or where it could be made avail able to him at his choice. The High Court accordingly al lowed the application under article 226 and set aside the orders of the delegated authority and the appellate authori ty. Aggrieved by the said decision, the appellant has come up to this Court. Two questions, therefore, arise in this appeal namely, firstly, whether the building with which we are concerned and which is situated in Cantonment of Meerut would be governed by the provisions of section 24 B and section 24 C of the Act, and secondly, whether in view of the facts and circumstances found, have the grounds been made out under section 24~B of the Act for eviction of the respondent from the premises in question in summary manner? It is not dis puted that the building in question is within the cantonment limits. In the Act of 1972 (Act No. 13 of 1972), there was an amendment in 1976 and Chapter IVA was added by the U.P. Act. No. 28 of 1976 with effect from 1976. Section 24A, section 24 B and section 24 C are contained in the said chapter. The said Amendment Act No. 28 of 1976 did not state whether the said chapter would be applicable to buildings constructed and situated within the cantonment limit. The first question posed before the High Court but not answered by it was whether in view of the answer given to the second question, the provisions of those sections would be applica ble to the building in question. By notification issued in the exercise of section 3 of the , the Central Government had 419 extended to all the Cantonments in Uttar Pradesh the provi sions of the Act in question, as in force on the date of that notification, in the State of U.P. The said notifica tion being Notification No. S.R.O. 259 was issued in exer cise of the powers conferred by section 3 of the said Act and in supersession of the notification of the Government of India in the Ministry of Defence. The said Notification extended to all the Cantonments in the State of Uttar Pra desh the Act (U.P. Act. No. 13 of 1972), as in force on the date of the notification with certain modifications with which we are not concerned. It was, therefore, contended that it could not have by virtue of that notification intro duced the provisions of Chapter IV A of the said Act to the Cantonment area which themselves were introduced by Amend ment Act No. 28 of 1976. There was another notification dated 17th February, 1982 being Notification No. S.R.O. 47. The said notification was also issued under section 3 of the aforesaid Act of 1957, mentioned hereinbefore and it stated that in supression of the previous notification, the Govern ment extended to all the cantonments in the State of Uttar Pradesh the provisions of the Act, with certain modifica tions with which we are not concerned in this case. The 1957 Act authorises the Government to issue the notification as contemplated therein. In the instant case, as noted hereinbefore, the appel lant had moved an application under section 24 C of the Act on 14th December, 1979 in respect of the premises in ques tion on receipt of notice to quit the government premises in his occupation. The delegated authority made the order of release on 17th August, 1981. There was a revision applica tion and it was disposed of by the Additional District Judge dismissing the revision on 27th April, 1983. Therefore when the order was made in this case and the application was filed the building in the cantonment area did not come within the ambit of the Act in question. When, however, the revisional order was passed by the Additional District Judge, the Act had come into operation and the building. in question was within the purview of the operation of the Act. In view of the ratio of Jai Singh Jairam Tvagi Etc. vs Mamanchand Ratilal Agarwal and Ors. (supra) it must be held that the provisions of Chapter IVA of the Act would be applicable. The amending Act was passed for the express purpose of saving decrees which had already been passed. Therefore action under section 24 C of the Act in this case was justified. The High Court did not decide this point because it was of the opinion that the second point which we shall note presently, the High Court was in favour of the respondent. We are, however, of the opinion that the first point urged on behalf of the respondent cannot be accepted in view of the position in law as discussed hereinbefore. It was submitted on behalf of the respondent that section 24 B gave substantive rights to the appellant and section 24 C was the procedure for enforcing those substantive rights. Therefore, these were not only procedural 420 rights. Therefore, there was no question of retrospective operation to take away vested fight. We are, however, of the opinion that it would be an exercise in futility if the application is dismissed on this ground it can be fried again and in view of the subsequent legislation as noted hereinbefore it was bound to succeed on this point. In exercise of our discretionary power under article 136 of the Constitution it would not be proper to interfere in the facts and circumstances of the case on this ground. In the premises in view of the ratio of the decision of this Court in Jai Singh 's case (supra) and reason mentioned hereinbe fore this contention urged on behalf of the respondent must be rejected. The second question which is the substantial question in this appeal is, whether in view of the fact that respondent No. 3 was in occupation of the ground floor of premises No. 217 218 Machhli Bazar, Sadar, Meerut Cantt. the first floor of which was in the tenancy of the appellant, the applica tion under section 24 B of the Act was maintainable? We have noted the provisions of section 24 B of the Act. It may be mentioned that section 24 A of the Act indicated that the provisions of Chapter IV A or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained elsewhere in the Act or in any other law for the time being in force or in any contract (whether express or implied), custom or usage to the contrary. The whole purpose behind section 24 A or section 14 A of the Delhi Rent Con trol, 1958 which are in pari materia is that when a landlord or a person is in occupation of a government accommodation and has to leave that accommodation and yet he has residen tial building in the area in his own name or in the name of any member of his family, then such a person or landlord will have a right accrued to him to recover immediate pos session of the building let out by him. The rationale behind these provisions or similar provisions is that when a gov ernment servant lets out his house and is without residen tial premises then if he is the owner of any residential building either in his name or in the name of any member of his family then he has a fight to ask for immediate recovery of the said residential building. It is an urgency provision to help the government servant to have residential accommo dation vacated if he is obliged to vacate his governmental residential accommodation. The proviso to section 24 B deals with the situation where the landlord has more than one dwelling house, he will exercise a choice in respect of one. This is not the situation in the instant case. But it may be noted that sub section (1) of section 24 B uses the expres sion 'if the landlord owns residential building ' and the proviso uses the expression 'dwelling houses '. Our attention was drawn to the definition of 'building ' and 'dwelling house ' appearing in some Acts. In the Act in question, however, there is no definition provided, except that 'building ' is defined in clause (i) to section 3 which is not relevant for our present purpose. It is therefore necessary to 421 determine what kind of a residential building or dwelling house must a landlord possess to be entitled to the urgency procedure of section 24 A to 24 C of the Act to recover immediate possession. In this connection it will be neces sary to examine the type of 'building ' in question in this case. Counsel for the appellant drew our attention to sec tion 3(i) and he further drew our attention to section 12(4), section 16(1)(b), section 21(1), section 21(1 A) of the Act in aid of the submission that whenever the legisla ture intended to mean part of the building the legislature has said so expressly. Sarwan Singh & Anr. vs Kasturi Lal, ; was dealing with the . Dealing with section 14A of the Delhi Rent Act, this Court observed that section 14A provided that where the landlord who, being in occupation of residential premises allotted to him by the Central Government, was required to vacate such residential accommodation on the ground that he owns residential accommodation within the Union Territory, there shall accrue to such a landlord notwithstanding any thing contained in any other law for the time being in force fight to recover immediately possession of the premises. In view of the facts in the case involved before us, where the landlord, the appellant was in possession of a par1 of the building in question which could be considered in certain circumstances to be a residential unit by itself, the obser vations made in that decision are not relevant for the present purpose. In this case we are concerned with the question whether the type of accommodation which was in the possession of the landlord would constitute residential building or dwelling unit in order to disentitle him to seek recourse to the urgency procedure of section 24 A of the Act. In Busching Schmitz Private Ltd. vs P.T. Menghani and Anr., ; section 14A of Delhi. Rent Control Act,, 1958 came up for consideration. This Court held in the said decision that section 2(i) of the Delhi Act covered any building or part of the building leased for use, residen tial, commercial or other. To attract section 14A of that Act the landlord must be in occupation of residential prem ises allotted to him by the Central Government. He must be required by order of that Government to vacate the said residential accommodation. Residential premises are not only plots which are let out for residential purposes not do all kinds of structures where humans may manage to dwell are residential. Use or purpose of the letting is no conclusive test. Whatever is suitable or adaptable for residential use, even by making some changes. can be designated residential premises. We are of the opinion that law should take pragmatic view of the matter and respond to the purpose for which it was made and also take cognizance of the current capabili ties of technology and life style of the community. It is well settled that the purpose of law provides a good guide to the interpretation of the 422 meaning of the Act. We agree with the views of Justice Krishna Iyer in Busching Schmitz Private Ltd 's case (supra) that legislative futility is to be ruled out so long as interpretative possibility permits. Residentiality depends for its sense on the context and purpose of the statute of the project promoted. Our attention was drawn to the decision of the learned single judge of the Delhi High Court in Smt. V.L. Kashyap vs R.P. Puri (Delhi), 1977 (1) Rent Control Reporter Vol. 9 page 449. The decision was dealing with section 14A of the Delhi Rent Control Act, 1958 which is more or less similar to section 24 A to 24 C of the Act under consideration. The learned judge observed that in respect of exercise of fight under section 14A of the Delhi Act, an important proviso had been inserted. It was with the effect that fight of eviction under section 14A of the Delhi Act was confined only to one dwelling house and the landlord has no right to recover possession of more than one dwelling house in exercise of section 14A of the Delhi Act. Reference has to be made to another decision under the Delhi Rent Control Act by a learned single judge of the Delhi High Court in S.S. Makhij ani vs V.K. dotwani, 1977 Rajdhani Law Reporter 207. There the learned judge referred to another decision and expressed concurrence with the said decision where it was held that in order to determine whether two pans of a building consist of one or more dwelling houses, the tests to be applied were thus: (1)consider the building and see whether it constitut ed a whole house or a part of the house; (2)if one part was reasonably needed for convenient and comfortable occupation and enjoyment of the other part of the building then both the parts of the building constituted one dwelling house within the meaning of proviso to section 14A of Delhi Act. To arrive at this finding, the learned judge observed that the relevant factors to be taken into consideration were (a)the situation; (b)entrance; (c)the Municipal Number; (d) the nature of the construction; (e) inter communication between the two parts; (f)completeness and independence of each unit; and (g) other relevant material circumstances. None of these taken singly was decisive but the cumulative effect should be considered. We are of the opinion that the tests indicated above provide workable guide. Stroud in his "Judicial Dictionary" Vol. 2 at page 858 (4th Edition) noted that 'dwelling house ' is obviously a house with the super added requirement that it is dwelt in or the dwellers in which are absent only temporarily, having animus revertendi. In this connection reference may be made to the meaning of 'dwelling house ' in Corpus Juris Secundum Vol, 28 pages 604 605 where dwelling place is mentioned. See also in this connection 'dwelling ' or 'dwelling house ' where it was mentioned that the term was not free from ambiguity, multi ple meanings and many definitions have been given. The meaning must suit the purpose and 423 the idea behind the statute in question in a particular case. For the meaning of 'dwelling house ' it may be instruc tive to refer to the Words and Phrases Legally Defined Second Edition, Volume2 page 127 wherein it has been men tioned, inter alia, that 'dwelling House ' meant a building used or constructed or adapted to be used wholly or princi pally for human habitation and 'dwelling house ' included any part of a house where that part was occupied separately as a dwelling house. Black 's Law Dictionary 1979 Edn. (Fifth Edition) page 454 defines 'Dwelling ' as the house or other structure in which a person or persons live. Narain Khamman vs Parduman Kumar Jain, ; , was dealing with section 14A of the Delhi Rent Control Act, 1958 which is more or less similar to the section involved in the present appeal. At page 1032 of the report the position has been discussed. There it was observed that if a person had, however, other premises which he owned either in his own name or in the name of his wife or depend ent child, which were available to him for residential accommodation or into which he had already moved in, he could not maintain an application under section 14A of the Delhi Rent Control Act. We have considered the maps at Annexure 4 as well as at page 108 of the Paper Book. It appears that there is a staircase in the front which leads to the first floor and one need not go to the ground floor. There are two latrines in ground floor. There is,; however, a common passage and in Order to come down to that passage, one has to use another staircase which is a common staircase. In this context the question is whether the premises in question could be sepa rately used. In our opinion, the High Court in the facts of this case was not in error in holding that the two pans could be separately enjoyed. After 1962 the mother of the appellant resided in the portion in the occupation of the landlord now used separate ly and independently and the same is in occupation of the appellant and at that time when the mother of the appellant was alive the appellant used to occupy the said portion. In our opinion the conduct of the parties is relevant in con sidering whether parts or portions of a building could be a dwelling house. It may also be mentioned that after the death of the mother of the appellant the portion was sepa rately let out and a tenant used to occupy the said portion separately. Here in the instant case, Shri Melhrotra, coun sel for the appellant however, stressed that in order to be a dwelling house or residential accommodation, it must be capable of being separately enjoyed and separately locked up. , is true that without that facility, the concept of safe and separate dwelling gets hampered. Yet in view of the fact that premises can be enjoyed with common facilities for dwelling purposes would constitute a separate and independ ent dwelling houses. It has to be borne 424 in mind that in this case the issue is not whether the premises is sufficiently comfortable or whether the portion in question was sufficiently comfortable for dwelling or residence of the appellant or a party but the question is whether the house or the portion can be separately consid ered to be dwelling. If the portion in the occupation of the appellant could not be separately dwelled in by the appel lant, it was only then that the extra ordinary provisions of section 24A, 24 B and 24 C could be resorted to. Otherwise the owner or the landlord is entitled to take recourse to other provisions of Rent Act contending that the premises in question is reasonably required bona fide for the landlord 's use but in the situation like the present the landlord was not entitled to take recourse to the urgency provisions in section 24 A, 24 B and 24 C of the Act. In our opinion to be the dwelling house or residential accommodation it must be capable of being separately enjoyed and whether or not the premises in question can be so enjoyed does not depend merely because that a portion cannot be locked up independ ently or separately. In that view of the matter, having regard to the nature of the user, we are of the opinion that the High Court was right. Therefore while we affirm the decision of the High Court, in terms of the observations made by this Court in Busching Schmitz Private Ltd. vs P.T. Menghani and Anr., (supra), we direct that the appellant if he so wants or desires can make arrangements for separation of the two units and to this the respondent tenant would not be enti tled to take any objection. This, however, will not prevent the appellant to seek eviction by other provisions of the Act or by any other appropriate legal proceeding if he is otherwise entitled to. In the premises this appeal fails with the aforesaid observations. In the facts and in the circumstances of this case, the parties will pay and bear their own costs. M.L.A. Appeal dismissed.

The U.P. Urban Buildings (Regulation of Letting, Rent & Eviction) Act of 1972 was amended in 1976 and Chapter IV A was added. Section 24A, section 24B and section 24C are contained in the said Chapter. They provide for summary trim of eviction petitions in certain circumstances. By a Notification dated 17th February, ' 1982 issued under s.3 of the Cantonments (Extension of Rent Control Laws) Act of 1957, the Government extended to all the cantonments in the State of Uttar Pra desh the provisions of the Rent Act. The appellant a government servant, was in occupation of the government accommodation at Meerut. He was also owner of a house situated in the cantonment area in Meerut. The house had a ground floor and a first floor with common bathroom and latrine situated on the ground floor. It had also a common courtyard and a common entrance. The ground floor of the house was in his possession while the first floor had been let out to the respondent tenant. Pursuant to a notice received by the appellant landlord to vacate the government quarter, he filed an eviction petition against the respondent tenant in respect of the first floor of the premises under section 24 C of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 on 14th December, 1979. The respondent tenant contested the application on the ground that the appellant landlord had two residential houses one in which he was living and the other in which the respondent tenant was living and since the appellant landlord was in possession of a resi dential accommodation, he had no right to get another resi dential accommodation vacated from the tenant under the provisions of section 24B or 24C of the said Act. The Delegated Authority 412 allowed the petition by its order dated 17th August, 1981 and its order was confirmed in revision by the Additional District Judge. Aggrieved by the order of the Additional District Judge, the respondent tenant moved the High Court under Article 226 of the Constitution. It was contended by the respondent tenant before the High Court that (i) Chapter IV A had been applied to the Cantonment areas on a subsequent date, i.e. 27th February, 1982, the Act being not applicable to the accommodation in question in November, 1979 when the appli cation under s.24B of the Act was filed by the respondent and as such the same was liable to be dismissed; and (ii) that as the appellant landlord was living in the ground floor of the said house, petition under s.24B was not main tainable. The High Court upheld the second contention of the respondent tenant and set aside the order of eviction with out deciding the question as to whether the Act would apply to buildings constructed and situated within the cantonment limit. Dismissing the appeal, this Court, HELD: 1(i) The whole purpose behind s.24A or s.14A of the Delhi Rent Control Act, 1958 which are in pari materia is that when a landlord or a person who is in occupation of a government accommodation and has to leave that accommoda tion and yet he has residential building in the area in his own name or in the name of any member of his family, then such a person or landlord will have a right accrued to him to recover immediate possession of the building let out by him. The rationale behind these provisions or similar provi sions is that when a government servant lets out his house and is without residential premises then if he is the owner of any residential building either in his name or in the name of any member of his family then he has a right to ask for immediate recovery of the said residential building. It is an urgency provision to help the government servant to have residential accommodation vacated if he is obliged to vacate his governmental residential accommodation. The proviso to s.24B deals with the situation where the landlord has more than one dwelling house, he will exercise a choice in respect of one. [420 E F] 1(ii) Subs. (1) of s.24B uses the expression "if the landlord owns residential building" and the proviso uses the expression "dwelling houses". In the Act in question, howev er, there is no definition provided except that 'building ' is defined in clause (i) to section 3 which is not relevant for the present purpose. It is therefore necessary to determine what kind of a residential building or dwelling house must a landlord possess to be entitled to the urgency procedure of section 24A to 24C of the Act to recover immediate possession. [420 G, H 421 A] 2(i) Law should take pragmatic view of the matter and re spond to the 413 purpose for which it was made and also take cognizance of the current capabilities of technology and life style of the community. The purpose of law provides a good guide to the interpretation of the meaning of the Act. The legislative futility is to be ruled out so long as interpretative possi bility permits. [421 H 422 A] 2(ii) A dwelling house means a building used or con structed or adapted to be used wholly or principally for human habitation and dwelling house includes any part of a house where that part is occupied separately as a dwelling house. Therefore, to be a dwelling house or residential accommodation it must be capable of being separately enjoyed and whether or not the premises in question can be so en joyed does not depend merely because that a portion cannot be locked up independently or separately. Busching Schmitz Private Ltd. vs P.T. Menghani and Anr., ; , relied upon. Stroud 's "Judicial Dictionary. " Vol. 2 at page 858 (4th Edition); Corpus Juris Secundum Vol. 28 pages 604 605, Words and Phrases legally defined, 2nd Edition, Vol. 2 page 127 and Black 's Law Dictionary 1979, 5th Edition page 454, referred to. In order to determine whether two parts of a building consist of one or more dwelling houses, the tests to be applied are; (i) consider the building and see whether it constitutes a whole house or a part of the house; (ii) if one part is reasonably needed for convenient and comfortable occupation and enjoyment of the other part of the building then both the parts of the building constitute one dwelling house and to arrive at this finding the relevant factors to be taken in consideration are: (a) the situation; (b) en trance; (c) the Municipal Number; (d) the nature of the construction; (e) inter communication between the two parts; (f) completeness and independence of each unit; and (g) other relevant material circumstances. None of these taken singly is decisive but the cumulative effect should be considered. [422 D F] In the instant case, after the death of the mother of the appellant the portion was separately let out and a tenant used to occupy the said portion separately. There fore, in view of the fact that the premises can be enjoyed with common facilities for dwelling purposes, it would constitute a separate and independent dwelling houses and the High Court in the facts of the case was not in error in holding that the two parts could be separately enjoyed. If the portion in the occupation of the appellant could not separately dwelled in by the appellant, it was only then that the extraordinary provisions of section 24A, 24B and 24C could be resorted to. Otherwise the owner or the landlord is entitled.to take recourse to other provisions of the Rent Act contending that the premises in 414 question is reasonably required bona fide for the landlord 's use but in the situation like the present, the landlord was not entitled to take recourse to the urgency provisions in section 24A, 24B and 24C of the Act. [423 F 424 C] Jai Singh Jairam Tvagi etc '. vs Mamanchand Ratilal Agarwal and Ors., ; , relied upon. Sarwan Singh & Anr. vs Kasturi Lal, ; , inap plicable. V.L. Kashyap vs R.P. (Delhi), 1977 (1 ) Rent Con trol Reporter Vol. 9 page 449, S.S. Makhijaniv. V.K. Jotwa ni, 1977 Rajdhani Law Reporter 207, and Narain Khamman vs Parduman Kumar Jain; , , referred to. The provisions of Chapter IV A of the Act would be applicable. When the order was, made in this case and the application was filed the building in the cantonment area did not come within the ambit of the Act in question. When, however, the revisional order was passed by the Additional District Judge, the Act had come into operation and the building in question was within the purview of the operation of the Act. [419 D F]