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Criminal Appeal No. 94 Of 1987. From the Judgment and Order dated 8.2.1985 of the Cal cutta High Court in Crl. A.No. 112 of 1984. Parijat Sinha and B.D. Ahmed for the Appellant. K.C. Aggarwala and P.K. Chakravarthy for the Respondents. The Order of the Court was delivered: ORDER Special ' leave granted. Arguments heard. The short question involved in this appeal is whether the High Court was justified in allowing the appeal pre ferred by the accused persons against their conviction under section 148 and s.302 reads with section 149 of the Indian Penal Code, 1860 without having the records of the Court of Sessions before it and without perusal of the evidence adduced by the prosecution. Normally, this Court, as a matter of practice, is reluc tant to interfere with an order of acquittal recorded by the High Court at the instance of a private complainant, but the circumstances of the case 307 are such that there is no other alternative for us but to interfere. We wish to mention that earlier the Court had in Special Leave Petition (Crl.) No. 2025/84 dated 15.10.1984 allowed the petitioner complainant to withdraw the petition to move the High Court for review. The petitioner on 5.12. 1984 filed an application for review but the High Court dismissed the same by its order dated 8.2.1985 on the ground that it had no power to review its judgment under the Code of Criminal Procedure, 1973. The complainant has accordingly applied for special leave. The application is much belated but we have no other alternative but to interfere. The facts. Aggrieved by their conviction and sentence under section 148 and s.302 read with section 149 of the Indian Penal Code by the Additional Sessions Judge, 1st Court, Burdwan by his judgment and sentence dated 19.3.1984, the respondents preferred an appeal to the Calcutta High Court. On 22.3.1984 a Division Bench of the High Court (P.C. Barooah and section Chakravarty, JJ) admitted the appeal but did not grant bail to the respondents on that date and reserved them liberty to apply for bail later. It directed that the records be requi sitioned from the Court of Sessions. Within a fortnight thereafter i.e. on 12.4.1984, the application for bail moved by the respondents came up for consideration. On that day the appeal was not listed for heating. The records which had been requisitioned from the Court of the Additional Sessions Judge had not been received and notices of the bail had not been issued. Instead of dealing with the application for bail, the learned Judges appeared to have acted on an al leged concession made by the learned Public Prosecutor and acquitted the respondents. The learned Judges during the course of their order observed that the contention on behalf of the respondents in support of their bail application was that the alleged dying declaration made by the deceased Jagannath Ghose having been disbelieved by the learned Additional Sessions Judge, no reliance could be placed on the testimony of the eye wit nesses as the place of incident was not visible from where they are alleged to have seen the occurrence and also that about 100 persons had surrounded the victim and as such it was not possible to definitely state that only the 8 accused i.e. the respondents were involved. After stating this, the learned Judge observed: "The learned Public Prosecutor in his usual fairness has pointed out that although the witnesses spoke of 4/5 in juries, the deceased had actually 27." 308 and added that this was a fit case where benefit of doubt should be given to the accused and accordingly said that no useful purpose would be served in having a paper book pre pared and keeping the accused in further agony. In that view, the learned Judges allowed the appeal, set aside the conviction and sentence passed on the respondents on their conviction under section 148 and s.302 read section 149 of the Indian Penal Code. We are constrained to observe that the procedure adopted by the High Court was no in consonance with the procedure established by law. Under s.385 of the Code of Criminal Procedure, it was obligatory for the High Court to fix a date for the hearing of the appeal and then send for the records of the Court of Sessions and hear the parties on merits. There was no warrant for the procedure adopted by the learned Judges in disposing of the appeal in this cha valler manner. It does no credit to any branch of adminis tration of justice that an appeal against conviction should be allowed without the Appellate Court having the records before it and without perusing the evidence adduced by the prosecution. To say the least, there has been a flagrant carriage of justice. It may be, as the High Court records in order, that the learned Public Prosecutor conceded that there was no evidence but then the High Court had to satisfy itself upon perusal of the records that there was no reli able and credible evidence to warrant the conviction of the accused under section 148 and s.302 read with section 149 of the Indian Penal Code. The result therefore is that the appeal succeeds and is allowed. The order of acquittal recorded by the High Court is set aside and we direct the High Court to admit the appeal to its file and dispose of it afresh notice to the parties and after the records requisitioned are received by it. After the respondents nos. 2 9 are taken into custody, they may apply to the High Court for being enlarged on bail. The High Court will deal with the application on its merits. S.R. Appeal allowed.

Respondents 2 to 9 preferred an appeal to the Calcutta High Court against their conviction and sentence dated 19.3. On 22.3. 1984 a Division Bench of the High Court admitted the appeal but did not grant bail on that date. Within a fortnight thereafter, i.e. on 12.4. 1984, the application for bail moved by the Respondents came up before the Bench for consideration. The appeal was not set for hearing on that day. The records which had been requisi tioned from the Court of the Additional Sessions Judge had not been received and notices of the bail had not been issued. Acting on an alleged concession made by the Public Prosecutor, the Bench allowed the appeal itself and acquit ted the respondents. The appellant complainant 's Special Leave Petition No. 2025/84 dated 15.10. 1984 against the said orders of acquittal was allowed to be withdrawn to move the High Court for review. The appellants ' review petition dated 5.12. 1984 having been dismissed on the ground that the High Court had no power to review its judgment under the Code of Criminal Procedure, 1973, the appellant has now come in appeal by special leave. Allowing the appeal, the Court, HELD: 1. Normally, the Supreme Court, as a matter of practice, is reluctant to interfere with an order of acquit tal recorded by the High Court at the instance of a private complainant, but the circumstances of the case are such that there is no other alternative but to interfere in this 306 case. The procedure adopted by the High Court was not in consonance with the procedure established by law and has resulted in flagrant miscarriage of justice. [306H; 307A] Under Section 385 of the Code of Criminal Procedure, 1973 it was obligatory for the High Court to have fixed a date for the hearing of the appeal and sent for the records of the Court of Sessions and thereafter hear the parties on merits. It does no credit to any branch of administration of justice that an appeal against conviction or acquittal should be allowed without the Appellate Court having the records before it and without pursuing the evidence adduced by the prosecution. Assuming that the learned Public Prose cutor conceded that there was no evidence, the High Court had time to satisfy itself upon perusal of the record that there was no reliable and credible evidence to warrant the conviction of the accused under section 148 and s.302 read with section 149 of the Indian Penal Code. [308B E]

ivil Appeal No. 2446 of 1991. From the Judgement and Order dated 11.10.1990 of the Bombay High Court in F.A. No. 649 of 1990. Mrs. C.M. Chopra for the Appellant. Respondent in person. The Judgment of the Court was delivered by KULDIP SINGH, J. His parents advertised for " homely non medico" bride. Her parents responded. Marriage took place on January 24, 1988 at Noida near Delhi. They hardly lived as husband and wife at Pune for about seven months when on August 16, 1988 the husband filed a petition under Section 13 of the Hindu Marriage Act for dissolution of Marriage on the ground of cruelty. He alleged "she had a habit of smoking" and "it was found that she was in the habit of drinking and even once came drunk to the applicant 's house and abused everybody". He further alleged " it was found by the applicant that she was working as a model prior to marriage and he found few pictures of the respondent in bikini and semi nude clothes in magazines". She vehemently denied the allegations and claimed that the she was a homely, vegetarian, non smoking, teetotaller and faithful house wife. The Family Court at Pune proceeded ex parte and granted divorce decree by the order dated November 30, 1989. Wife 's application for setting aside the ex parte decree was dismissed by the Family Court on June 24, 1990. The High Court by its judgment dated October 10/11, 1990 unheld the findings of the Family Court with the modification that in place of decree for dissolution of marriage it granted a decree for judicial separation. This appeal by way of special leave is by the wife against the judgments of the courts below. 85 During the pendency of the divorce proceedings before Family Court, Pune, the wife filed a petition, on May 1, 1989, before this Court seeking transfer of the case from the Family Court, Pune to Delhi. This Court granted ad interim stay of the proceedings before the Family Court, Pune. The stay remained operative till September 11, 1989 when this Court dismissed the transfer petition and vacated the stay. Thereafter the husband appeared before the Family Court on September 15, 1989 whereas the appellant wife remained absent. Notices were sent by registered post to the wife on her address at Noida and also at her Delhi address given by her in the proceedings before this Court. The notice came back with the remarks "not found". The Family Court ordered substituted service and a notice was published in the "Times of India" New Delhi of dated October 24.1989 asking the wife to appear before the Family Court on November 16, 1989 or the proceedings would be taken ex parte. On November 16, 1989 the Family Court ordered ex parte proceedings. The issues were framed on November 21, 1989, the evidence of the husband was recorded on November 25, 1989 and the judgment was pronounced on November 30, 1989. The appellant filed an application dated December 18, 1989 for setting aside the ex parte divorce decree wherein she stated that after she was forced to leave her matrimonial home at Pune, she was residing with her parents at Noida. She further stated that in October/November, 1989 she had gone to reside with her brother at Delhi. According to her she applied to the Army Authorities claiming maintenance out of her husband 's salary. Respondent husband is an Army officer. The Army Authorities sent a letter dated December 14, 1989 to her father wherein it was mentioned that his daughter 's application for maintenance allowance could not be entertained because the husband had already obtained a divorce decree from the court. A copy of the Family Court Judgment granting divorce decree to the husband was also annexed to the letter. The appellant claims that for the first time, on or about December 14, 1989, She came to know through her father that the respondent had already been granted an ex parte divorce decree by the Family Court. The appellant in her application inter alia stated as under: "The applicant submits that the applicant did not receive any notice/letter/summons or communication from this Hon 'ble Court 's office. Even there was no intimation given by postal 86 authorities and the applicant honestly states that till the receipt of the letter from the Army H.Q. New Delhi, she was not aware of the date of proceeding. The applicant submits, the applicant was under bona fide belief that she will receive a notice from this Hon 'ble Court. As such and being far from Pune, either in Noida ( U.P.) or at New Delhi, it was not possible for her to approach this Hon 'ble Court for any enquiry since she was also not permitted to appear through the lawyer. .At any rate and in any event, the applicant also did not come across the public notice published in Times of India, New Delhi on 24th October 1989 as stated in the decree. The applicant submits, the applicant had every intention to resist the marriage petition filed by the opponent since the same was absolutely false, frivolous and out and out false, and has been resisted by the applicant by filing written statement, preliminary objection including to approach the Supreme Court of India. The intention of the applicant was clear. The applicant submits, the applicant was also advised by her Advocate that she will receive a fresh notice in due course of time after the stay was vacated by the Hon 'ble Supreme Court of India from this Hon 'ble Court. The applicant states, she resides at a far long distance from Pune. She was also refused any assistance of lawyer. The applicant has no relation or any representative who can look after her in the present proceeding in Pune. It was in these circumstances, the applicant was prevented by sufficient cause from appearing in the marriage petition proceeding No.561/89 and as such the said decree is required to be set aside . . The applicant states, the applicant is unable to maintain herself, she has no source of income . . The applicant submits because of the passing of ex parte decree, she has been refused maintenance allowance. The applicant also prays for granting of maintenance allowance pending final disposal of this application." The Family Court dismissed the application for setting aside ex parte divorce decree on the following reasoning: "But where the party itself knows that stay obtained by it has been vacated, there appears no warrant for the proposition that again a notice is required to be given to the said party. I do 87 not think that such advice was really given to the applicant. The applicant has not produced any evidence to the effect that she received such advice from a lawyer. It is her own statement. It is a self serving statement and can hardly be believed. I think that if the applicant was really keen and desirous to contest matrimonial petition, she would have at once made enquiries to find out as to when the next date for hearing in this court was fixed after her application for transfer of the case was dismissed by the Supreme Court and the stay obtained by her was vacated. The order of vacating the stay was passed on 11th September 1989 by the Hon 'ble Supreme Court and the applicant knew fully well about it. The opponent who had also appeared in the Supreme Court in connection of that matter did appear in this Court on 15.9.1989. The record of P.A. No. 561/89 shows that opponent applied for issuing of notice to the present applicant. The notice was issued by registered post on two separate addresses. One of the address was the one shown by applicant herself in Supreme Court petition and the other address was the one which was admitted to be her address in the matrimonial petition (which was address of her father at Delhi). Both these notices were sent by registered post in due course. The court waited till return of this notice. On both these envelops postal authorities have endorsed that the present applicant was not found on these addresses. The opponent had, therefore, made application that the applicant was avoiding to take notice and hence substituted service by publishing in Times of India be made. Accordingly, a notice was published as per order of the Court on opponent 's application. Thus the contention of the respondent that she had no notice of the further proceeding in marriage petition does not appear convincing. As stated already in the first instance, there was no necessity for her to wait for receipt of the notice in the circumstances of the present case. The notices sent to her were obviously evaded, otherwise there was no reason why the applicant was found on either of the addresses which she admits to be the correct addresses. Even if she was not present, there was no reason why other major members of the family did not accept these notices. And lastly the publication of the notice 88 in one of the most widely circulated newspaper at Delhi was sufficient notice to the applicant. " The High Court upheld the reasoning and the conclusions reached by the Family Court and dismissed the appeals filed by the wife. The respondent appeared before us in person and himself argued his case. The learned counsel for the appellant raised the following points for our consideration: (a) That the Family Court and the High Court grossly erred in dismissing the application filed by the appellant for setting aside the ex parte proceedings; (b) That the divorce petition was filed hardly seven months after the marriage. Section 14 of the Hindu Marriage Act provides "it shall not be competent for any court to entertain any petition for dissolution of a marriage by a decree of divorce, unless at the date of the presentation of the petition one year has elapsed since the date of the marriage". The divorce petition should have been dismissed as not competent in terms of Section 14 of the Hindu Marriage Act; (c) that even on merits the divorce decree is based on no evidence. The allegations in the divorce petition are wholly vague. In any case the evidence of Major Ved Prakash being wholly interested and contrary to the record the courts below fell into grave error in accepting serious allegations against the appellant on the basis of his evidence; (d) that the High Court acted illegally in substituting the decree of divorce to that of a decree for judicial separation. The High Court should have dismissed the divorce petition. We may take up the Fist Point. The appellant filed written statement before the Family Court, Pune vehemently denying the allegations made against her by the respondent. She also raised preliminary objections regarding the maintainability of the divorce petition. She filed a transfer petition before this Court which was dismissed in September, 1989. She filed another transfer petition which was dismissed by this Court on April 12,1990 with the following observations: 89 "It is open to the petitioner to move the High Court under Section 24, Code of Civil Procedure for consideration of her prayer that the case be transferred to another Judge. On the merits of this prayer, we decline to make any observation. It would appear that the case is now listed before the Family Judge at Pune on 13.4.90. It will be appropriate that having regard to the apprehension expressed by the petitioner the Court should not proceed with the matter until her prayer for transfer is considered by the High Court. We accordingly direct the Family Court, Pune to stay further proceeding in the case, a period of 60 days from today to enable the petitioner to approach the High Court. " It is no doubt correct that the appellant did not approach the High Court for the transfer of the case but the fact remains that she was been seriously contesting the divorce proceedings and it would not be fair to assume that she deliberately choose to abstain from the Family Court and was intentionally avoiding the summons. The Family Court and the High Court have held that after the dismissal of the transfer petition and vacation of stay by this Court the appellant wife should have, on her own, joined the proceeding before the Family Court. According to the courts below no notice for appearance was required to be sent to the parties after the stay was vacated. It is not necessary for us to go into the question as to whether a fresh notice to the parties is necessary where the superior Court vacates the stay order and as a consequence the proceeding recommence before the court below. We are of the view that in the fact and circumstances of this case the interest of justice required the issue of such a notice. The admitted facts in this case are as under: (i) While dismissing the transfer petition and vacating the stay order this Court did not fix any date for the appearance of the parties before the Family Court, Pune (ii) The Family Court had permitted the assistance of a lawyer to the appellant wife in the following terms: "As applicant is from Delhi and it would cause hardship, permission is granted 90 for engaging an Advocate for pleading her case only for the purpose of presenting applications or serving notices and noting the orders of the Court. " (iii) The appellant did not engage a lawyer to represent her before the Family Court, Pune. (iv) The appellant wife was residing with her parents at Noida (Delhi). Even the distance between Noida and Pune was a big hassle for the appellant especially when she had no counsel to look after the proceedings before the Family Court, Pune. We are of the view that in the facts and circumstances of this case she was justified in her assumption that the proceedings before the Family Court would be resumed after fresh notice to the parties. The applicability of the Rules of natural justice depends upon the facts and circumstances of each case. We are of the view that in the facts and circumstances of this case she was justified in her assumption that the proceedings before the Family Court would be resumed after fresh notice to the parties. The applicability of the Rules of natural justice depends upon the facts and circumstances of each case. We are of the view that in this case fair play and the interest of justice required the issuance of a fresh notice to the parties after the stay order was vacated by this Court. We do not, therefore, agree with the findings of the Courts below to the contrary. In any case realising the requirements of natural justice the Family Court, sent two registered notices to the appellant at her Noida address and also at the address given by her in the proceedings before this Court. Unfortunately, both the notices came back with the endorsements that the appellant could not be found on the given addresses. There is no material on the record to reach a conclusion that the appellant refused to receive the notices. There is also nothing on the record to show as to whether the postal authorities made any efforts to deliver the registered letters to any of the appellant 's relations at the given addresses. The courts below are wholly unjustified in holding that the appellant refused to receive the notices and further that the said notices could have been received by any of her relations on the given addresses. After the notices sent by registered post were received back, the Family Court did not make any attempt to serve the appellant through the process of the Court. The appellant was no stranger to the respondent. She was his wife. It could not have been difficult for him to find out the address where she was staying. Under the circumstances, resort to the substitute service by way of publication in the newspaper was not justified. 91 We are, therefore, of the view that there was sufficient cause for the non appearance of the appellant in the matrimonial petition before the Family Court. The view we have taken on the first point, it is not necessary to deal, with the other points raised by the learned counsel for the appellant. We, therefore, set aside the order of the Family Court dated June 24, 1990 and allow the appellant 's application dated December 18, 1989 and set aside the ex parte decree passed against the appellant in Marriage petition No. A 561/89. As a consequence the judgment of the Family Court, Pune dated November 30, 1989 and the judgment of the High Court in First Appeal No. 649/90 dated October 10/11, 1990 are also set aside. The appellant had asked for transfer of her case from the Principal Judge, Family Court, Pune to some other court and this Court gave liberty to the appellant to move the High Court for the said purpose. We are satisfied that the reason given by the appellant for such transfer and the apprehensions entertained by her are wholly unjustified. We ar, however, of the view that the Principal Judge, Family Court Pune, has taken the grievances made by the appellant before this Court rather seriously and has commented adversely about the same. With a view to do complete justice between the parties we direct that this case be transferred from the file of Principal Judge, Family Court, Pune to the Principal Judge, Family Court, Bombay. The parties are directed to appear before the Principal Judge, Family Court, Bombay on June 22, 1992. Before concluding we wish to place on record that we tried to persuade the parties to live together and in the alternative to settle their dispute amicably but with no result. We allow the appeal in the above terms with no order as to costs. N.V.K. Appeal allowed.

The parties to the appeal were married on January 24, 1988 at Noida near Delhi. They hardly lived as husband and wife at Pune for about seven months when on August 16, 1988 the husband Respondent filed a petition under Section 13 of the Hindu Marriage Act, 1956 for dissolution of the marriage on the ground of cruelty. He alleged that the wife had a habit of smoking and drinking and even once came drunk to the house and abused everybody. The wife vehemently denied the allegations and claimed that she was a homely, vegetarian, non smoking, teetotaler and faithful house wife. During the pendency of the aforesaid divorce proceeding before the Family Court,Pune, the wife filed a petition, on May 1, 1989, before this Court seeking transfer of the case from the Family Court, Pune to Delhi. This Court granted ad interim stay of the proceedings which remained operative till September 11, 1989 when the Transfer Petition was dismissed 82 and the stay become vacated. Thereafter, the husband appeared before the Family Court on September 15, 1989 whereas the wife remained absent. Notice were sent by registered post to the wife on her address at Noida and also at her Delhi address given in the proceedings before this Court. The notices having come back with the remarks "not found", the Family Court ordered sub stituted service, and a notice was published in a Delhi daily newspaper asking the wife to appear before the Family Court on November 16, 1989. The wife not having appeared on the said date the Family Court ordered ex parte proceedings. The issues were framed on November 21, 1989, evidence of the husband was recorded on November 25,1989 and the judgment was pronounced on November 30, 1989, granting the husband a divorce decree. The wife filed an application dated December 18, 1989 for setting aside the ex parte divorce decree. She contended that she was forced to leave the matrimonial home at Pune and was residing with her parents at Noida, and that in October/November, 1989 she had gone to reside with her brother at Delhi, that she applied to the Army Authorities claiming maintenance out of her husband 's salary, and that the Army Authorities sent a letter dated December 14, 1989 to her father informing that the application for maintenance could not be entertained as the husband had already obtained a divorce decree from the Court. She further contended that for the first time on or about December 14, 1989 she came to know from her father that her husband had been granted an ex parte divorce decree by the Family Court. The Family Court dismissed the application for setting aside ex parte divorce decree, and the High Court upheld the reasoning and conclusions reached by the Family Court and dismissed the appeals filed by the wife. In the appeal to this Court by the wife it was contended that: (1) The Family Court and the High Court grossly erred in dismissing the application filed by the appellant for setting aside the ex parte proceedings; (2) the divorce petition should have been dismissed as not competent in terms of Section 14 of the Hindu Marriage Act as the Statutory period of one year had not lapsed since the date of marriage, (3) even on merits the divorce decree is based on no evidence, the allegations in the divorce petition 83 being wholly vague, and (4) the High Court acted illegally in substituting the decree of divorce to that of a decree for judicial separation. Allowing the Appeal, this court, HELD: 1. The appellant filed written statement before the Family Court,Pune denying the allegations made against her by the respondent. She also raised preliminary objections regarding the maintainability of the divorce petition. Though her transfer petitions before this Court were dismissed in September, 1989 and on April 12, 1990 and that she did not approach the High Court for transfer of her case, the fact remains that she has been seriously contesting the divorce proceedings and it would not be fair to assume that she deliberately chose to abstain from the Family Court, and was intentionally avoiding the summons. In the facts and circumstances of this case, the appellant was justified in her assumption that the proceedings before the Family Court would be resumed after fresh notice to the parties. The applicability of the Rules of natural justice depends upon the facts and circumstances of each case. Fair play and the interest of justice in this case required the issuance of a fresh notice to the parties after the stay order was vacated by this Court. The Family Court, sent two Registered notice to the appellant at her Noida address and also at the address given by her in the proceedings before this Court. Unfortunately, both the notices came back with the endorsements that the appellant could not be found on the given addresses. On the record there is no material to reach a conclusion that the appellant refused to receive the notices, or to show whether the postal authorities made any efforts to deliver the registered letters to any of the appellants ' relations at the given addresses. The Courts below are therefore wholly unjustified in holding that the appellant refused to receive the notices and further that the said notices could have been received by any of her relations on the given addresses. After the notices sent by registered post were received back, the Family Court did not make any attempt to serve the appellant through the process of the Court. The appellant was not stranger to the respondent. She was his wife. It could not have been difficult for him to find out the address where she was staying . Under the circumstances resort to the 84 substitute service by way of publication in the newspaper was not justified. There was, therefore,sufficient cause for the non appearance of the appellant in the matrimonial petition before the Family Court. With a view to do complete justice between the parties it is directed that this case be transferred from the file of the Principal Judge, Family Court, Pune to the Principal Judge, Family Court, Bombay, and the parties are directed to appear before the Principal Judge, Family Court Bombay.

Appeals Nos. 668, 669, 670 and 672 of 1957. Appeal by special leave from the judgment and order dated August 6, 1957, of the Assam High Court in Civil Rule No. 65 of 1957. A. V. Viswanatha Sastri and Dipak Datta Choudhury, for the appellants in C. As. Nos. 668 and 669 of 1957 and respondent No. 2 in C.A. No. 670 of 1957. section M. Lahiri, Advocate General for the State of Assam and Naunit Lai, for the appellants in C.A. No. 670 of 1957 and respondent No. 2 in C.A. No. 669 of 1957. February 7. The following Judgment of the Court was delivered by 1342 SINHA J. These appeals by special leave are directed against the judgments and orders of the Assam High Court, exercising its powers under articles 226 and 227 of the Constitution, in respect of orders passed by the Revenue Authorities under the provisions of the Eastern Bengal and Assam Excise Act, 1910 (E. B. and Assam Act I of 1910) (hereinafter referred to as the Act). They raise certain common questions of constitutional law, and have, therefore, been heard together, and will be disposed of by this Judgment. Though there are certain common features in the pattern of the proceedings relating to the settlement of certain country spirit shops, when they passed through the hierarchy of the authorities under the Act, the facts of each case are different, and have to be stated separately in so far as it is necessary to state them. (1) Civil Appeal No. 668 of 1957. The two appellants Nagendra Nath Bora and Ridananda Dutt are partners, the partnership having been formed in view of the Government notification dated November 30, 1956, amending rule 232 of the Assam Excise Rules, to the effect that the settlement of the country spirit shops which may be declared by the Government to be 'big shops ', shall be made with two or more partners who shall not belong to the same family nor should be related to one another (vide correction slip at p. 106 of the Assam Excise Manual, 1946). In accordance with the rules framed under the Act, tenders were invited by the Deputy Commissioner of Sibsagar, for the settlement of Jorhat country spirit shop for the financial year 1957 58, in December, 1956. The appellants as members of the partnership aforesaid, submitted a tender in the prescribed form. Respondents 3 and 4, Dharmeshwar Kalita and Someswar Neog, respectively, also were amongst the tenderors. The Commissioner of Hills Division and Appeals,, Assam, and the Commissioner of Excise, Assam, are the first and the second respondents in this case It is necessary to state at this stage that in respect of the financial year 1956 57, the shop in 1243 question was ordered by the first respondent as the Excise Appellate Authority to be settled with the first appellant Nagendra Nath as an individual, setting aside the orders of the Deputy Commissioner and the Excise Commissioner. The other competitors for the settlement of the said shop being dissatisfied with the orders of the first respondent, moved the Assam High, Court and challenged the validity of the settlement made in the first appellant 's favour. Similar writ cases challenging orders of settlement by the first respondent as the Excise Appellate Authority, had been instituted in the High Court. All those cases were heard together, and the High Court, by its judgment dated May 22, 1956, quashed the orders passed by the first respondent, chiefly on the ground that the Appellate Authority had been illegally constituted. The matter was brought by way of special leave to this Court, and was heard by the Constitution Bench which, by its judgment dated January 31, 1957, decided that the constitution of the Commissioner of Hills Division and Appeals as the ultimate appellate Authority under the Act, was not unconstitutional. The judgment of this Court is reported in the case of The State of Assam vs A. N. Kidwai (1). It will be necessary, in the course of this judgment, to make several references to that decision which, for the sake of brevity, we shall call the ruling of this Court '. The result of the ruling of this Court, was that the determination by the Assam High Court that the orders passed by the first respondent, were void, was set aside, and the settlement made by that Authority, consequently, stood restored. But in the meantime, as the orders of the first respondent stood quashed as a result of the judgment of the High Court, the direction of the Excise Commissioner that the shop in question be resettled, was carried out, and the settlement was made with the third respondent aforesaid as an individual. He continued in possession of the shop until February 26, 1957, on which date, the first appellant was put in possession as a result of the ruling (1) [1957] S.C.R. 295. 158 1244 of this Court. Even so, the first appellant could exercise his rights as a lessee of the shop only for a few months during the financial year ending March 31, 1957. For the financial year 1957 58, the Deputy Commissioner, in consultation with the local Advisory Committee, settled the shop in question with the third and the, fourth respondents aforesaid. The tender submitted by the appellants, was not considered by the licensing authority on the erroneous ground that the orders passed by the first respondent as the ultimate Revenue Authority in the matter of settlement of excise shops, had been rendered null and void as a result of the decision of the High Court, referred to above. The appellants, as also others who were competitors for the settlement aforesaid, preferred appeals to the Excise Commissioner who set aside the settlement made in favour of the respondents 3 and 4, and ordered settlement of the shop with the appellants. The Excise Commissioner took into consideration the fact that the order of the High Court, nullifying the proceedings before the first respondent, had been set aside by the ruling of this Court. The consequence of the order of this Court, was, as the Commissioner of Excise pointed out, that a supposed disqualification of the appellants as competent tenderers, stood vacated as a result of the first respondent 's order. The third and the fourth respondents, as also other dissatisfied tenderers preferred appeals to the first respondent against the order of the second respondent (the Excise Commissioner). The first respondent dismissed those appeals and confirmed the order settling the shop with the appellants, by his order dated June 10, 1957. The respondents 3 and 4, then, moved the High Court under articles 226 and 227 of the Constitution, for an appropriate writ for quashing the order passed by the first respondent. The High Court, by its order dated August 6, 1957, quashed the aforesaid order of settlement in favour of the appellants by the first respondent. The High Court further directed that all the tenders be reconsidered in the light of the observation made by it. The main ground of decision in the 1245 High Court, was that the Excise Appellate Authority had acted in excess of its jurisdiction, and that its order was vitiated by errors apparent on the face of the record. The prayer for a certificate that the case was a fit one for appeal to this Court, having been refused by the High Court, the appellants obtained special leave to appeal. (11) Civil Appeal No. 669 of 1957. This appeal relates to the settlement of the Murmuria country spirit shop in the district of Sibsagar, for the financial year 1957 58. The appellant Lakhiram Kalita and the first respondent Bhanurani Pegu, amongst others, had submitted their tenders for the settlement of the shop. The Deputy Commissioner, after consulting the Advisory Committee, settled the shop with the first respondent aforesaid. The appeals filed by the appellant and other disappointed tenderers, were dismissed by the Excise Commissioner by his order dated March 25, 1957. Against the said order, the appellant and another party filed further appeals to the Commissioner of Hills Division and Appeals, who, by his order dated May 30, 1957, set aside the settlement in favour of the first respondent, and ordered settlement with the appellant. In pursuance of that order, the appellant took possession of the shop with effect from June 5, 1957. The first respondent 's application for review of the order aforesaid, stood dismissed on June 11, 1957. Against the aforesaid orders of the Commissioner of Hills Division and Appeals, the first respondent moved the High Court under articles 226 and 227 of the Constitution, for a proper writ for quashing them. On June 17, 1957, the writ petition was heard ex parte, and the High Court issued a rule to show cause why a writ as prayed for, should not be issued. The rule was made returnable within three weeks. The High Court also made the further order in these terms: "Meanwhile, the status quo ante will be maintained. " This last order was misinterpreted by the first respondent and his advisers as entitling them to be put in 1246 possession of the shop, and it is stated that the first respondent threatened the appellant to oust him from the shop on the basis of the order of the High Court quoted above. The appellant moved the High Court for a clarification of its order aforesaid. The High Court naturally observed that by I maintaining status quo ante ', the High Court meant that whoever was in possession of the shop on June 17, 1957, will continue to be in possession during the pendency of the case in the High Court. But, curiously enough, the Deputy Commissioner, by an ex parte order, on June 21, 1957, directed that the first respondent be put in charge of the shop forthwith, and the order was carried out. When the Deputy Commissioner was approached by the appellant to restore him to possession in view of the observation of the High Court, he asked the appellant to obtain further order from the High Court. Thereafter, the appellant again moved the High Court on June 28, 1957, stating all the facts leading to his wrongful dispossession, and seeking relief in the High Court. No order was passed on that petition. Ultimatey, the High Court, by its order dated July 31, 1957, set aside the order of the Commissioner of Hills Division and Appeals. The appellant 's prayer for a certificate that the case was a fit one for appeal to this Court, having been refused by the High Court, he moved this Court and obtained special leave to appeal. (III) Civil Appeal No. 670 of 1957. This appeal is on behalf of the Commissioner of Hills Division and Appeals, Assam, against the judgment and order of the High Court relating to the Murmuria shop which is the subject matter of Civil Appeal No. 669 referred to in the previous paragraph. The first respondent to this appeal is Bhanuram Pegu who is also the first respondent in Civil Appeal No. 669 of 1957. The second respondent is Lakhiram Kalita who is the appellant in Civil Appeal No. 669 of 1957. Both these respondents, as already indicated, are the competing tenderers for the shop in question. The facts of this case have already been stated in relation 1247 to Civil Appeal No. 669 of 1957. This appeal has been brought with a view to getting the legal position clarified in view of the frequent appeals made to the appellant in the matter of settlement of excise shops. (IV) Civil Appeal No. 672 of 1957. This appeal relates to the Tinsukia country spirit shop in the district of Lakhimpur. The appellants, Rafiulla Khan and Mahibuddin Ahmad, are partners, and as such, are interested in the settlement of the shop for the financial year 1957 58. This shop had been jointly settled with the first appellant and his father for a number of years. For the year 1956 57 also, the lease had been granted to them by the Deputy Commissioner, after consultation with the Advisory Committee. A number of unsuccessful tenderers filed appeals before the Commissioner of Excise questining the settlement with the first appellant and his father in respect of the year 1956 57. The Excise Commissioner set aside the settlement, and ordered a resettlement. The first appellant and his father filed an appeal before the Excise Appellate Authority, against the order of the Commissioner of Excise. The Appellate Authority allowed the appeal, and set aside the orders of the Commissioner and the Deputy Commissioner. One Rafiqul Hussain, one of the competitors for the shop, filed a writ petition before the High Court under articles 226 and 227 of the Constitution. This writ application, along with other similar applications, was heard and decided by the High Court, as afore. said, by its judgment dated May 23, 1956. Against the judgment of the High Court, the first appellant and his father appealed to this Court by special leave, with the result indicated above. During the pendency of the appeal in this Court in the absence of a stay order, the direction of the Commissioner for a resettlement, was carried out. The Deputy Commissioner, with the unanimous advice of the Advisory Committee settled the shop with the first appellant on July 25, 1956. The first respondent and some others preferred appeals before the Commissioner of Excise, against the order aforesaid of the Deputy Commissioner. As the 1248 special leave appeals to this Court were pending at that time, the Excise Commissioner, under a misapprehension of the effect of this Court 's order refusing interim stay, set aside the Deputy Commissioner 's order, and directed the settlement to be made with the first respondent. As there was no Excise Appellate Authority functioning at the time as a result of the decision, aforesaid, of the High Court, declaring the constitution of such an Authority to be void, the first appellant moved the High Court under articles 226 and 227 of the Constitution, on the ground that the order of the Excise Commissioner was vitiated by an error apparent on the face of the record in so far as he had misunderstood the order of the Supreme Court passed on the stay petition. The High Court admitted the application but rejected the prayer for maintenance of status quo in the sense that the first appellant 's possession be maintained. On the stay petition being rejected by the High Court, the first respondent took possession of the shop from the first appellant as a result of the Excise Commissioner 's order in his favour. The High Court ultimately dismissed the writ application by its order dated December 6, 1.956. The appeal filed by the appellant and his father, already pending in this Court, was heard and determined as aforesaid, in January, 1957. This Court reversed the decision of the High Court, and restored the status of the Excise Appellate Authority. As a result of the ruling of this Court, the Excise Appellate Authority, by its order dated February 25, 1957, directed delivery of possession back to the first appellant and his father, holding that the order of resettlement and the resettlement, itself, in pursuance of that order, were all wiped out. Against the said order, the first respondent moved the High Court under articles 226 and 227 of the Constitution for quashing the order for delivery of possession, on the ground of want of jurisdiction, and for ad interim stay. The High Court issued a rule and passed an order for interim stay on February 26, 1957. The High Court made the rule absolute by its order dated March 26, 1957, taking the view that the attention of this Court had not been drawn to the interim 1249 settlement of the shop in the absence of an order of stay. It appears further that during the pendency of the appeal in this Court, fresh settlement for the financial year 1957 58, took place towards the end of 1956, and the beginning of 1957. The Tinsukia shop was settled with respondents I and 2 though the appellants also had jointly submitted a tender for the same. The appellants and other parties preferred appeals against the said order of settlement made by the Deputy Commissioner. The Excise Commissioner set aside the settlement by the Deputy Commissioner, and directed settlement in favour of the appellants by his order dated April 16, 1957. Against that order, respondents I and 2 and others preferred appeals before the Excise Appellate Authority who, by an order dated June 3, 1957, dismissed the appeals. Accordingly, the appellants were given possession of the shop on June 7, 1957. The respondents I and 2 again moved the High Court for quashing the order of the Excise Appellate Authority, affirming that of the Excise Commissioner, and also prayed for the status quo being maintained. The High Court admitted the petition and ordered " meanwhile, status quo ante be maintained. " This took place on June 10, 1957. In pursuance of the aforesaid order of the High Court, the appellants were dispossessed of the shop even though they had been put in possession only three days earlier. This was done on a complete misapprehension of the true effect of the order of the High Court maintaining status quo ante. If the High Court had passed its order in a less sophisticated and more easily understood language in that part of the country, perhaps, the party in possession, would not have been dispossessed of the shop settled with it. The appellants moved the High Court against the Commissioner 's order directing possession to be given to the respondents 1 and 2. The High Court issued a rule but refused to grant stay of the operation of the order directing possession to be given. During the final hearing of the rule before the High Court, the appellants again moved a petition on July 5, 1957, for vacating the 1250 order of possession which was based on a misapprehension of the order of the High Court maintaining status quo ante, but apparently, no order was passed because possession had already been given to the respondents I and 2. During the hearing of the rule by the High Court, an unfortunate incident occurred, for which the appellants cannot altogether be absolved of some responsibility, as a result of which, one of the learned judges constituting the Bench, namely, Deka J. expressed his unwillingness to proceed with the hearing of the case. The hearing had, therefore, to be adjourned on July 15, 1957, until a new Bench could be constituted. The appellants renewed their application already made on July 5, as aforesaid, for undoing the unintended effect of the order of the High Court, that the status quo ante was to continue. But on July 30, the Chief Justice directed that the matter be placed before a Division Bench. As there was no third judge at the time, the disposal of the case, naturally had to stand over until the third judge was available. The matter of delivery of possession was again mentioned before the Division Bench of the Chief Justice and Deka J. The High Court rejected the application on grounds which cannot bear a close scrutiny. The petitioners also approached the Excise Appellate Authority, but it refused to reconsider the matter as the case was then pending before the High Court. Again on August 14, 1957, a fresh application was made to the High Court, along with a copy of the orders passed by the Excise Appellate Authority and the Deputy Commissioner, Lakhimpur, giving delivery of possession to respondents 1 and 2. But, this time, Deka J. refused to hear the matter, and naturally, the Chief Justice directed the matter to be placed before him, sitting singly. on August 19, 1957, the matter was placed before the Chief Justice sitting singly, and he directed a rule to issue on the opposite party cited before that Court, to show cause. Apparently, the learned Chief Justice treated the matter as a new case and not as an off shoot of the case already pending before the High Court. The High Court closed for the long vacation on September 2, and was to reopen on 1251 November 3, 1957. The vacancy of the third judge had not been filled till then, and as the appellants felt that they had been wrongfully deprived of their right to hold their shop, as a result of an erroneous interpretation of the order of the High Court, passed on June 10, as aforesaid, and as there was no prospect of the case being disposed of quickly, the appellants moved this Court and obtained special leave to appeal. As is evident from the statement of facts in connection with each one of the appeals, set out above, these cases have followed a common pattern. They come from the 'non prohibited areas in the State of Assam where sale of 'country spirit ' is regulated by licences issued by the authorities under the provisions of the Act. Settlement of shops for the sale of such liquor is made for one year April I to March 31. According to the present practice contained in Executive lnstructions, intending candidates for licences, have to submit tenders to the Deputy Commissioner for the Sadar Division and to Sub Divisional officers for Sub Divisions, in accordance with the terms of notices published for the purpose. Such tenders are treated as strictly confidential. Settlement is made by the Deputy Commissioner or the Sub Divisional Officer concerned, as the case may be, in consultation with an Advisory Committee consisting of 5 local members or less. The selection of a particular tenderer is more or less a matter of administrative discretion with the officer making the settlement. Under the Act, an appeal from an order of settlement made by a Deputy Commissioner or Sub Divisional officer, lies to the Commissioner of Excise, and from an order of the Commissioner of Excise to the Excise Appellate Authority whose decision becomes final. Section 9 of the Act, dealing with appeal and revision, has undergone a series of amendments, and the section as it has emerged out of the latest amendment by the Amending Act The Assam Act 23 of 1955 which received the assent of the Governor of Assam on December 22, 1955, and was published in the Assam Gazette dated 159 1252 December 28, 1955, is in these terms: "9. (1) Orders passed under this Act or under any rule made hereunder shall be appealable as follows in the manner prescribed by such rules as the State Government may make in this behalf (a) to the Excise Commissioner, any order passed by the District Collector or a Collector other than the District Collector, (b) to the Appellate Authority appointed by the State Government for the purpose, any order passed by the Excise Commissioner. (2) In cases not provided for by clauses (a) and (b) of sub section (1), orders passed under this Act or under any rules made hereunder shall be appealable to such authorities as the State Government may prescribe. (3) The Appellate Authority, the Excise Commissioner or the District Collector may call for the proceedings held by any officer or person subordinate to it or him or subject to its or his control and pass such orders thereon as it or he may think fit. " Rules 339, 340, 341 and 345 of the Assam Excise Manual, have, thus, become obsolete and have been deleted as a result of the latest amendment aforesaid. The power of hearing appeals and revisions under the Act, has been vested successively in the Board, the Assam Revenue Tribunal, the Commissioner for Hills Division and Appeals; and ultimately, under the amended section, in the Appellate Authority. The history of the legislation relating to the highest Revenue Authority under the Act, has been traced in the judgment of this Court in the State of Assam vs A.N. Kidwai (supra), and need not be repeated here. It is convenient, first, to deal with the general questions of public importance raised on behalf of the appellant in Civil Appeal No. 670 of 1957. At the forefront of the arguments advanced on behalf of the Appellate Authority, was the plea that the several authorities already indicated, concerned with the settlement of excise shops like those in question in these appeals, are merely administrative bodies, and, 1253 therefore, their orders whether passed in the first instance or on appeal, should not be amenable to the writ jurisdiction or supervisory jurisdiction of the High Court under articles 226 and 227 of the Constitution. If the matter had rested only with the provisions of the Act, apart from the rules made under section 36 of the Act, much could have been said in support ' of this contention. As observed by this Court in the case of Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer and others(1) there is no inherent right in a citizen to sell liquor. It has further been observed by this Court in the recent case of the State of Assam vs A. N. Kidwai, (supra), at page 301 as follows: " A perusal of the Act and rules will make it clear that DO person has any absolute right to sell liquor and that the purpose of the Act and the rules is to control and restrict the consumption of intoxicating liquors, such control and restriction being obviously necessary for the preservation of public health and morals, and to raise revenue. " It is true that no one has an inherent right to settlement of liquor shops, but when the State, by public notice, invites candidates for settlement to make their tenders, and in pursuance of such a notice, a number of persons make such tenders each one makes a claim for himself in opposition to the claims of the others, and the public authorities concerned with the settlement, have to choose from amongst them. If the choice had rested in the hands of only one authority like the District Collector on his subjective satisfaction as to the fitness of a particular candidate without his orders being amenable to an appeal or appeals or revision, the position may have been different. But section 9 of the Act has laid down a regular hierarchy of authorities, one above the other, with the right of hearing appeals or revisions. Though the Act and the rules do not, in express terms, require reasoned orders to be recorded, yet, in the context of the subject matter of the rules, it becomes necessary for the (I) ; , 880. 1254 several authorities to pass what are called I speaking orders '. Where there is a right vested in an authority created by statute, be it administrative or quasijudicial, to hear appeals and revisions, it becomes its duty to hear judicially, that is to say, in an objective manner, impartially and after giving reasonable opportunity to the parties concerned in the dispute, to place their respective cases before it. In this connection, the observations of Lord Haldane at p. 132, and of Lord Moulton at p. 150, in Local Government Board vs Arlidge (1), to the following effect are very apposite: appeal is imposed, those whose duty it is to decide it must act judicially. They must deal with the question referred to them without bias, and they must give to each of the parties the opportunity of adequately presenting the case made. The decision must be come to in the spirit and with the sense of responsibility of a tribunal whose duty it is to mete out justice. But it does not follow that the procedure of every such tribunal must be the same." Lord Moulton: " In the present case, however, the Legislature has provided an appeal, but it is an appeal to an administrative department of State and not to a judicial body. It is said, truthfully, that on such an appeal the Local Government Board must act judicially, but this, in my opinion, only means that it must preserve a judicial temper and perform its duties conscientiously, with a proper feeling of responsibility, in view of the fact that its acts affect the property and rights of individuals. Parliament has wisely laid down certain rules to be observed in the performance of its functions in these matters, and those rules must be observed because they are imposed by statute, and for no other reason, and whether they give much or little opportunity for what I may call quasi litigious procedure depends solely on what Parliament has thought right. These rules are beyond the criticism of the Courts, and it is not their business to add to or (1) 1255 take away from them, or even to discuss whether in the opinion of the individual members of the Court they are adequate or not. " The legal position has been very succinctly put in Halsbury 's Laws of England(1), as follows: "Moreover an administrative body, whose decision is actuated in whole or in part by questions of policy, may be under a duty to act judicially in the course of arriving at that decision. Thus, if in order to arrive at the decision, the body concerned had to consider proposals and objections and consider evidence, if at some stage of the proceedings leading up to the decision there was something in the nature of a lis before it, then in the course of such consideration and at that stage the body would be under a duty to act judicially. If, on the other hand, an administrative body in arriving at its decision has before it at no stage any form of lis and throughout has to consider the question from the point of view of policy and expediency, it cannot be said that it is under a duty at any time to act judicially. Even where the body is at some stage of the proceedings leading up to the decision under a duty to act judicially, the supervisory jurisdiction of the Court does not extend to considering the sufficiency of the grounds for, or otherwise challenging, the decision itself. " The provisions of the Act are intended to safeguard the interest of the State on the one band, by stopping, or at any rate, checking illicit distillation, and on the other band, by raising the maximum revenue consistently with the observance of the rules of temperance. The authorities under the Act, with Sub divisional Officers at the bottom and the Appellate Authority at the apex of the 'hierarchy, are charged with those duties. The rules under the Act and the executive instructions which have no statutory force but which are meant for the guidance of the officers concerned, enjoin upon those officers, the duty of seeing to it that shops are settled with persons of character and experience in the line, subject to certain reservations in (1) Vol. 3rd Edn., PP. 56 57. 1256 favour of tribal population. Except those general con siderations, there are no specific rules governing the grant of leases or licences in respect of liquor shops, and in a certain contingency, even drawing of lots, is provided for, vide Executive Instructions 110 at p. 174 of the Manual. The words of sub section (3) of section 9 as amended, set out above, vest complete discretion in the Appellate Authority, the Excise Commissioner or the District Collector, to 'pass such orders thereon as it or he may think fit. ' The sections of the Act do not make any reference to the recording of evidence or hearing of parties or even recording reasons for orders passed by the authorities aforesaid. But we have been informed at the bar that as a matter of practice, the authorities under the Act, hear counsel for the parties, and give reasoned judgments, so as to enable the higher authorities to know why a particular choice has been made. That is also apparent from the several orders passed by them in course of these few cases that are before us. But when we come to the rules relating to appeals and revisions, we find that the widest scope for going up in appeal or revision, has been given to persons interested, because r. 344 only lays down that no appeal shall lie against the orders of composition, thus, leaving all other kinds of orders open to appeal or revision. Rule 343 provides that every memorandum of appeal shall be presented within one month from the date of the order appealed against, subject to the requisite time for obtaining a certified copy of the order being excluded. Rule 344 requires the memorandum of appeal to be accompanied by a certified copy of the order appealed against. The memorandum of appeal has to be stamped with a requisite court fee stamp. Rule 343 was further amended by the Notification dated March 14, 1957, by adding the following proviso and explanations to that rule: " Provided further that the competent Appellate Authority shall have the power to admit the appeal after the prescribed period of limitation when the appellant satisfies the Appellate Authority that he had sufficient cause for not preferring the appeal 1257 within such period. Explanation (1). The fact that the appellant was misled by any order, practice or judgment of any Appellate Authority in ascertaining or computing the prescribed period of limitation may be sufficient cause within the meaning of this Rule. Explanation (2). The fact that the Appellate Authority was unable to function for any period by reason of any judicial pronouncement shall be sufficient cause within the meaning of this Rule. The amendment shall be deemed to have been made on 23rd May, 1956, and shall have retrospective effect since that date. " These rules, read along with the recent amendments, set out above, approximate the procedure to be followed by the Appellate Authorities, to the regular procedure observed by courts of justice in entertaining appeals. As would appear from the ruling of this Court at p. 304, where the provisions and effect of the Assam Revenue Tribunal (Transfer of Powers) Act, 1948, (Assam IV of 1948) have been set out, the ultimate jurisdiction to hear appeals and revisions, was divided between the Assam High Court and the Authority referred to in section 3(3) of that Act. Appeals and revisions arising out of cases covered by the provisions of the enactments specified in Schedule 'A ' to that Act, were to lie in and to be heard by the Assam High Court, and the jurisdiction to entertain appeals and revisions in matters arising under the provisions of the enactments specified in Schedule 'B ' to that Act, was vested in the Authority to be set up under section 3(3), that is to say, for the purposes of the present appeals before us, the Excise Appellate Authority. Thus, the Excise Appellate Authority, for the purposes of cases arising under the Act, was vested with the power of the highest appellate Tribunal, even as the High Court was, in respect of the other group of cases. That does not necessarily mean that the Excise Appellate Authority was a Tribunal of co ordinate jurisdiction with the High Court, or that that Authority was not amenable to the supervisory jurisdiction of the 1258 High Court under articles 226 and 227 of the Constitution. But the juxtaposition of the two parallel highest Tribunals, one in respect of predominantly civil cases, and the other, in respect of predominantly revenue cases (without attempting any clear cut line of demarcation), would show that the Excise Appellate Authority was not altogether an administrative body which had no judicial or quasi judicial functions. Neither the Act nor the rules made thereunder, indicate the grounds on which the first Appellate Authority, namely, the Excise Commissioner, or the second Appellate Authority (the Excise Appellate Authority), has to exercise his or its appellate or revisional powers. There is no indication that they make any distinction between the grounds of interference on appeal and in revision. That being so, the powers of the Appellate Authorities in the matter of settle ment, would be co extensive with the powers of the primary authority, namely, the District Collector or the Sub Divisional Officer. See in this connection, the observations of the Federal Court in Lachmeshwar Prasad Shukul and others vs Keshwar Lal Chaudhuri and others (1), and of this Court in Ebrahim Aboobakar and another vs Custodian General of Evacuee Property(2). In the latter case, this Court, dealing with the powers of the Tribunal (Custodian General of the Evacuee Property), under section 24 of Ordinance No. 27 of 1949, observed: " Like all courts of appeal exercising general jurisdiction in civil cases, the respondent has been constituted an appellate court in words of the widest amplitude and the legislature has not limited his jurisdiction by providing that such exercise will depend on the existence of any particular state of facts. Thus, on a review of the provisions of the Act and the rules framed thereunder, it cannot be said that the authorities mentioned in section 9 of the Act, pass purely administrative orders which are beyond the ambit of the High Court 's power of supervision and control. Whether or not an administrative body or (1) , 102. (2) ; , 704. 1259 authority functions as a purely administrative one or in a quasi judicial capacity, must be determined in each case, on an examination of the relevant statute and the rule,,; framed thereunder. The first contention raised on behalf of the appellant must, therefore, be overruled. Now, turning to the merits of the High Court 's order, it was contended on behalf of the appellant that the High Court had misdirected itself in holding that the Appellate Authority had exceeded its jurisdiction in passing the order it did. There is no doubt that if the Appellate Authority whose duty it is to determine questions affecting the right to settlement of a liquor shop, in a judicial or quasi judicial manner, acts in excess of its authority vested by law, that is to say, the Act and the rules thereunder, its order is subject to the controlling authority of the High Court. The question, therefore, is whether the High Court was right in holding that the Appellate Authority had exceeded its legal power. In this connection, it is best to reproduce, in the words of the High Court itself, what it conceived to be the limits of the appellate jurisdiction: "In other words, it is not for the Appellate Authority to make the choice, since the choice has already been made by the officers below; and it is not only where the choice is perverse or illegal and not in accordance with the Rules that the Appellate Authority can interfere with the order and make its own selected (sic.) out of the persons offering tenders. If the Appellate bodies chose to act differently and consider themselves free to make their own choice of the person to be offered settlement irrespective of the recommendations of the Deputy Commissioner or the Officer conducting the settlement, the Appellate bodies will be obviously exceeding the jurisdiction, which they possess under the law or going beyond the scope of their authority as contemplated by the Rules. " In our opinion, in so circumscribing the powers of the Appellate Authority, the High Court has erred. See in this connection, the decision of this Court in Raman 160 1260 and Raman Ltd. vs The State of Madras(1). In that case, this Court dealt with the powers of the State Government, which had been vested with the final authority in the matter of grant of stage carriage permits. This Court held that as the State Government had been constituted the final authority under the "Motor Vehicles Act, to decide as between the rival claimants for permits, its decision could not be interfered with under article 226 of the Constitution, merely because the Government 's view may have been erro neous. In the instant cases, the Appellate Authority is contemplated by section 9 of the Act, to be the highest authority for deciding questions of settlement of liquor shops, as between rival claimants. The appeal or revision being undefined and unlimited in its scope, the highest authority under the Act, could not be deprived of the plenitude of its powers by introducing considerations which are not within the Act or the rules. It is true that the Appellate Authority should not lightly set aside the selection made by the primary Authority, that is to say, a selection made by a Subdivisions Officer or by a District Collector, should be given due weight in view of the fact that they have much greater opportunity to know local conditions and local business people than the Appellate Authority, even as the appeal courts are enjoined not to interfere lightly with findings of fact recorded by the original courts which had the opportunity of seeing witnesses depose in court, and their demeanour while deposing in court. But it is not correct to hold that because the Appellate Authority, in the opinion of the High Court, has not observed that caution, the choice made by it, is in excess of its power or without jurisdiction. The next ground of attack against the order of the High Court, under appeal, was that the High Court had erred in coming to the conclusion that there had been a failure of natural justice. In this connection, the High Court has made reference to the several affidavits filed on either side, and the order in which they (1) ; 1261 had been filed, and the use made of those affidavits or counter affidavits. As already indicated, the rules make no provisions for the reception of evidence oral or documentary, or the hearing of oral arguments, or even for the issue of notice of the hearing to the parties concerned. The entire proceedings are marked by a complete lack of formality. The several authorities have been left to their own resources to make the best selection. In this connection, reference may be made to the observations of this Court in the case of New Prakash Transport Co., Ltd. vs New Suwarna Transport Co., Ltd. (1). In that case, this Court has laid down that the rules of natural justice vary with the varying constitutions of statutory bodies and the rules prescribed by the Act under which they function ; and the question whether or not any rules of natural justice had been contravened, should be decided not under any pre conceived notions, but in the light of the statutory rules and provisions. In the instant case, no such rules have been brought to our notice, which could be said to have been contravened by the Appellate Authority. Simply because it viewed a case in a particular light which may not be acceptable to another independent tribunal, is no ground for interference either under article 226 or article 227 of the Constitution. It remains to consider the last contention raised on behalf of the appellants in these cases, namely, whether there has been any error apparent on the face of the record, in the order of the Appellate Authority, which would attract the supervisory jurisdiction of the High Court. In this connection, the following observations of the High Court are relevant: " But the most glaring error on face of the order of the Appellate Authority is that it does not even refer to the report of the Deputy Commissioner on which the Excise Commissioner had so strongly relied. In my opinion, it was under the Rules obligatory on the Appellate Authority to consider that report before disposing of the appeal, and in failing to do so, the officer (1) 1262 acted arbitrarily and in excess of his powers as an Appellate Authority. " It may be that durinly the prolonged hearing of these cases before the High Court where, counsel for the different parties placed their respective view points after making copious references to the documents, the ', High Court was greatly impressed that the order of settlement in one case (Murmuria shop), made by the Deputy Commissioner, as confirmed by the Excise Commissioner, was the right one and that the choice made by the Appellate Authority did not commend itself to the High Court. It may further be that the conclusions of fact of the High Court were more in consonance with the entire record of the proceedings, and that the choice made by the ultimate Revenue Authority, was wrong. But, under the law as it stands, the High Court exceeded its powers in pronouncing upon the merits of a controversy which the Legislature has left to the discretion of the Appellate Authority. But is that a mistake apparent on the face of the record, as understood in the context of article 226 of the Constitution ? That leads us to a consideration of the nature of the error which can be said to be an error apparent on the face of the record which would be one of the grounds to attract the supervisory jurisdiction of the High Court under article 226 of the Constitution. The ancient writ of certiorari which now in England is known as the order of certiorari, could be issued on very limited grounds. These grounds have been discussed by this Court in the cases of: Parry & Co. vs Commercial Employee 's Association, Madras (1), Veerappa Pillai vs Raman and Raman Ltd., and others (2), Ibrahim Aboobaker vs Custodian General of Evacuee Property (3), T. C. Basappa vs T. Nagappa All these cases have been considered by this Court in (1) ; (2) ; (3) ; (4) ; 1263 the case of Hari Vishnu Kamath vs Syed Ahmad Ishaque and others (1). Venkatarama Ayyar J., speaking for the full Court, laid down four propositions bearing on the character and scope of the writ of certiorari as established upon the authorities. The third proposition out of those four, may be stated in the words of that learned Judge, as follows: " The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous. " While considering the fourth proposition whether the writ can be issued in the case of a decision which was erroneous in law, after considering the recent Authorities, the same learned Judge, in the course of his judgment, at p. 1123, has observed as follows: " It may therefore be taken as settled that a writ of certiorari could be issued to correct an error of law. But it is essential that it should be something more than a mere error: it must be one which must be manifest on the face of the record. " The High Court appears to have been under the impression that the expression "error apparent on the face of the record" may also be in respect of findings of fact. For example, in Civil Appeal No. 668 of 1957, relating to Jorhat shop, the High Court has observed as follows: " The Appellate Authority further reinforced its suspicion by mentioning that Dharmeswar, his father and brother are summoned in connection with some complaint, but that was a matter purely extraneous, ,to speak the least and it could have found that the complaint was filed after the settlement. The complaint had no reference to any offence of smuggling or the like as has been conceded. These were errors ap. parent on the face of the record. " Later, in the course of the same judgment, it has been observed as follows: " This is another instance where I find that the Excise Appellate Authority has misconceived its (1) ; , 1121. 1264 powers as such and purported to decide the appeal either on errors of record, speculations or on irrelevant considerations, irrespective of all that happened in the earlier stages of the matter. It starts with an apparent error of record when it says that in the judgment of the Excise Commissioner it finds 'a clear admission that Shri Garela Kalita, father of Shri Dharmeswar Kalita, is a suspected smuggler. ' In fact, there was no such admission. It was held by the Commissioner on the contrary that 'the learned Deputy Commissioner and members of the Advisory Committee thought that the major son who bears an excellent character should not be punished for the alleged sin of his father '. " These excerpts from the judgment of the High Court are not exhaustive, but only illustrative of the observation that the High Court appears to have treated an error of fact on the same footing as an error of law apparent on the face of the record. The question, naturally, arises whether an error of fact can be invoked in aid of the power of the High Court to quash an order of a subordinate court or Tribunal. The High Court would appear to have approximated it to an 'error apparent on the face of the record ' as used in r. 1 of 0. 47 of the Civil Procedure Code, as one of the grounds for review of a judgment or order; but that is clearly not the correct position. Ordinarily, a mistake of law in a judgment or an order of a court, would not be a ground for review. It is a mistake or an error of fact apparent on the face of the record, which may attract the power of review as contemplated by r. I of 0. But is the power of a High Court under article 226 of the Constitution, to interfere on certiorari, attracted by such a mistake, and not the reverse of it, in the sense that it is only an error of law apparent on the face of the record, which can attract the supervisory jurisdiction of a High Court ? This question, so far as we know, has not been raised in this form in this Court in any one of the previous decisions bearing on the scope and character of the writ of certiorari. It is, therefore, necessary to examine this question directly raised in this batch of appeals, 1265 because, in each case, the High Court has been invited to exercise its powers under article 226, to issue a writ of certiorari on the specific ground that the orders impugned before it, had been vitiated by errors apparent on the face of the record errors not of law but of fact. The ancient case of the Queen vs James Bolton(1), is treated as a landmark on the question of the power to issue a writ or order of certiorari. That was a case in which an order of justices for delivering up a house to parish officers, under a statute, was called up on certiorari. Lord Denman C. J. while discharging the rule, made the following observations in the course of his judgment, which have been treated as authoritative and good law even now: " The first of these is a point of much importance, because of very general application ; but the principle upon which it turns is very simple: the difficulty is always found in applying it. The case to be supposed is one like the present, in which the Legislature has trusted the original, it may be (as here) the final, jurisdiction on the merits to the magistrates below; in which this Court has no jurisdiction as to the merits either originally or on appeal. All that we can then do, when their decision is complained of, is to see that the case was one within their jurisdiction, and that their proceedings on the face of them are regular and according to law. Even if their decision should upon the merits be unwise or unjust, on these grounds we cannot reverse it. " While dealing with the argument at the Bar, complaining of the unsoundness of the conclusions reached by the magistrates and the hardships to be caused by their erroneous order, the Court made the following observations which are very apposite to the facts and circumstances disclosed in the instant appeals, and which all courts entrusted with the duty of administering law, should bear in mind, so that they may not be deflected from the straight path of enforcing the law, by considerations based on hardship or on vague (1) [1841] (I) Queen 's Bench p. 66, 72, 76; 113 English Reports I054,1057,1058. 1266 ideas of what is sometimes described as justice of the cause: " Beyond this we cannot go. The affidavits, being before us, were used OD the argument; and much was said of the unreasonableness of the conclusion drawn by the magistrates, and of the hardship on the defendant if we would not review it, there being no appeal to the sessions. We forbear to express any opinion on that which is not before us, the propriety of the conclusion drawn from the evidence by the magistrates: they and they alone were the competent authority to draw it; and we must not constitute ourselves into a Court of Appeal where the statute does not make us such, because it has constituted no other. It is of much more importance to hold the rule of law straight than, from a feeling of the supposed hardship of any particular decision, to. interpose relief at the expense of introducing a precedent full of inconvenience and uncertainty in the decision of future cases" The case of Reg vs Bolton (supra) was approved and followed by the Privy Council in the case of the King vs Nat B 11 Liqutors, Limited (1). In that case their Lordships of the Judicial Committee held that a conviction by a magistrate for a non indictable offence, cannot be quashed on certiorari on the ground that the record showed that there was no evidence to support the conviction, or that the magistrate had misdirected himself in considering the evidence. It was further laid down that the absence of evidence did not affect the jurisdiction of the magistrate to try the charge. In the course of their judgment, their Lord. ships further observed that the law laid down in Reg vs Bolton (supra) has never been seriously questioned in England, and that the same rules were Applicable to other parts of the Commonwealth, except in so far as they may have been modified by statute. They also observed that the decision in Reg vs Bolton (supra) undoubtedly is a landmark in the history of certiorari, for it summarises in an impeccable form the principles of its application. . But latterly, the rule (1) 1267 laid down in Bolton 's case, appears to have been slurred over in some decided cases, in England, which purported to lay down that a writ or order of certiorari could be obtained only if the order impugned disclosed an error of jurisdiction, that is to say, complete lack of jurisdiction or excess of jurisdiction or the refusal to exercise jurisdiction, and not to correct an error of law, even though apparent on the face of the record. The question was brought to a head in the case of Rex vs Northumberland Compensation Appeal Tribunal (1). It arose out of an application for an order of certiorari for quashing a decision reached by the respondent Northumberland Compensation Appeal Tribunal. Lord Goddard C. J. began his judgment by observing that the point involved in the case was " of the very greatest importance " which had " necessitated the examination of a large number of cases and consideration of the principles which apply to the doctrine of certiorari ". He further observed that certiorari is a remedy of a very special character. He, then, discussed the object and scope of the writ of certiorari and the history of the jurisdiction as exercised in the English courts. He then dealt with the contention directly raised for the determination of the court that an order of certiorari, can issue only to remove a defect of jurisdiction and that it does not extend to removing an order out of the way of the parties on account of a mistake of law apparent on the face of the record. The court then considered the relevant authorities, and came to the conclusion that it was wrong to hold that the ground of interference on certiorari, was only an error or excess of jurisdiction, and that it did not extend to correction of an error of law apparent on the face of the record. The Lord Chief Justice then pointed out that the examination of the authorities bearing on the exercise of the power of certiorari, yielded the result that it was open to the High Court to examine the record and to see whether or not there was an error of law apparent on the face of the record. The Lord Chief Justice concluded his observations with these remarks: (1) 161 1268 " The tribunal have told us what they have taken into account, what they have disregarded, and the contentions which they accepted. They have told us their view of the law, and we are of opinion that the construction which they placed on this very complicated set of regulations was wrong. " This decision was challenged, and on appeal, the Court of Appeal dealt with this point in Rex vs Northumberland, Compensation Appeal Tribunal(1). The Court of Appeal affirmed the proposition laid down by the High Court that an order for certiorari, can be granted and the decision of an inferior court such as a statutory tribunal, quashed on the ground of an error of law apparent on the face of the record. Singleton L. J. in the course of his judgment, observed that an error on the face of the proceedings, which in that case was an error of law, has always been re. cognized as one of the grounds for the issue of an order of certiorari. Denning L. J. also, in the course of his judgment, examined the question whether the High Court could intervene to correct the decision of a statutory tribunal which is erroneous in point of law. On an examination of the authorities from ancient times, the Lord Justice made the following observations: " Of recent years the scope of certiorari seems to have been somewhat forgotten. It has been supposed to be confined to the correction of excess of jurisdiction, and not to extend to the correction of errors of law ; and several judges have said as much. But the Lord Chief Justice has, in the present case, restored certiorari to its rightful position and shown that it can be used to correct errors of law which appear on the face of the record even though they do not go to jurisdiction. I have looked into the history of the matter, and find that the old cases fully support all that the Lord Chief Justice said. Until about 100 years ago, certiorari was regularly used to correct errors of law on the face of the record. It is only within the last century that it has fallen into disuse, and that is only because there has, until recently, been little occasion for its exercise. (I) ; 1269 Now, with the advent of many new tribunals, and the plain need for supervision over them, recourse must once again be had to this well tried means of control. " The other Lord Justice who took part in the hearing of the appeal, Morris L. J. also examined that question and concluded as follows: " It is plain that certiorari will not issue as the, cloak of an appeal in disguise. It does not lie in order to bring up an order or decision for rehearing of the issue raised in the proceedings. It exists to correct error of law where revealed on the face of an order or decision, or irregularity, or absence of, or excess of, jurisdiction where shown. " I It is clear from an examination of the authorities of this Court as also of the courts in England, that one of the grounds on which the jurisdiction of the High Court on certiorari may be invoked, is an error of law apparent on the face of the record and not every error either of law or fact, which can be corrected by a superior court, in exercise of its statutory powers as a court of appeal or revision. So far as we know, it has never been contended be. fore this Court that an error of fact, even though apparent on the face of the record, could be a ground for interference by the court exercising its writ jurisdiction. No ruling was brought to our notice in support ,of the proposition that the court exercising its powers under article 226 of the Constitution, could quash an order of an inferior tribunal, on the ground of a mistake of fact apparent on the face of the record. But the question still remains as to what is the legal import of the expression 'error of law apparent on the face of the record. ' Is it every error of law that can attract the supervisory jurisdiction of the High Court, to quash the order impugned ? This court, as observed above, has settled the law in this respect by laying down that in order to attract such jurisdiction, it is essential that the error should be something more than a mere error of law; that it must be one which is manifest on the face of the record. In this respect, the law in India and the law in England, are, therefore, the same. It is also clear, on an examination of all 1270 the authorities of this Court and of those in England, referred to above, as also those considered in the several judgments of this Court, that the Common Law writ, now called order of certiorari, which was also adopted by our Constitution, is not meant to take the place of an appeal where the statute does not confer a right of appeal. Its purpose is only to determine, on an examination of the record, whether the inferior tribunal has exceeded its jurisdiction or has not proceeded in accordance with the essential requirements of the law which it was meant to administer. ,Mere formal or technical errors, even though of law, will not be sufficient to attract this extraordinary jurisdiction. The principle underlying the jurisdiction to issue a writ or order of certiorari, is no more in doubt, but the real difficulty arises, as it often does, in applying the principle to the particular facts of a given case. In the judgments and orders impugned in these appeals, the High Court has exercised its supervisory jurisdic note in respect of errors which cannot be said to be errors of law apparent on the face of the record. If at all they are errors, they are errors in appreciation of documentary evidence or affidavits, errors in drawing inferences or omission to draw inferences. In other words, those are errors which a court sitting as a court of appeal only, could have examined and, if necessary, corrected. As already indicated, the Appellate Authority had unlimited jurisdiction to examine and appreciate the evidence in the exercise of its appellate or revisional jurisdiction. Section 9(3) of the Act, gives it the power to pass such orders as it thought fit. These are words of very great amplitude. The jurisdiction of the Appellate Authority, to entertain the appeals, has never been in doubt or dispute. Only the manner of the exercise of its appellate jurisdiction was in controversy, It has not been shown that in exercising its powers, the Appellate Authority disregarded any mandatory provisions of the law. The utmost that has been suggested, is that it has not carried out certain Executive Instructions. For example, it has been said that the Appellate Authority did not observe the 1271 instructions that tribal people have to be given certain preferences, or, that persons on the debarred list, like ,smugglers, should be kept out (see p. 175 of the Manual). But all these are only Executive Instructions which have no statutory force. Hence, even assuming, though it is by no means clear, that those instructions have been disregarded, the non observance of those instructions cannot affect the power of the Appellate Authority to make its own selection, or affect the validity of the order passed by it. The High Court, in its several judgments and orders, has scrutinized, in great detail, the orders passed by the Excise Authorities under the Act. We have not thought it fit to examine the record or the orders below in any detail, because, in our opinion, it is not the function of the High Court or of this Court to do so. The jurisdiction under article 226 of the Constitution is limited to seeing that the judicial or quasi judicial tribunals or administrative bodies exercising quasijudicial powers, do not exercise their powers in excess of their statutory jurisdiction, but correctly administer the law within the ambit of the statute creating them or entrusting those functions to them. The Act has created its own hierarchy of officers and Appellate authorities, as indicated above, to administer the law. So long as those Authorities function within the letter and spirit of the law, the High Court has no concern with the manner in which those powers have been exercised. In the instant cases, the High Court appears to have gone beyond the limits of its powers under articles 226 and 227 of the Constitution. In one of the cases, the High Court has observed that though it could have interfered by issuing a writ under article 226 of the Constitution, they would be content to utilize their powers of judicial superintendence under article 227 of the Constitution vide its judgment dated July 31, 1957, in appeals relating to Murmuria shop (Civil Appeals Nos. 669 and 670 of 1957). In exercise of that power, the High Court set aside the order of the Appellate Authority, and directed it to re hear the appeal 'according to law in the light of the principles indicated in this judgment '. 1272 A Constitution Bench of this Court examined the scope of article 227 of the Constitution in the case of Waryam Singh and another vs Amarnath a rid another (1). This Court, in the course of its judgment, made the following observations at p. 571 : " This power of superintendence conferred by article 227 is, as pointed out by Harries C. J. in Dalmia Jain Airways Ltd. vs Sukumar Mukherjee (2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors. " It is, thus, clear that the powers of judicial interference under article 227 of the Constitution with orders of judicial or quasi judicial nature, are not greater than the powers under article 226 of the Constitution. Under article 226, the power of interference may extend to quashing an impugned order on the ground of a mistake apparent on the face of the record. But under article 227 of the Constitution, the power of interference is limited to seeing that the tribunal functions within the limits of its authority. Hence, interference by the High Court, in these cases, either under article 226 or 227 of the Constitution, was not justified. After having dealt with the common arguments more or less applicable to all the cases, it remains to consider the special points raised on behalf of the respondents in Civil Appeal No. 672 of 1957, relating to the Tinsukia country spirit shop. It was strenuously argued that the appeal was incompetent in view of the fact that the rule issued by the High Court, was still pending, and that this Court does not ordinarily, entertain an appeal against an interlocutory order. It is true that this Court does not interfere in cases which have not been decided by the High Court, but this case has some extraordinary features which attracted the notice of this Court when special leave to appeal was granted. As already stated, the shop in question was settled with the appellants by the Excise Commissioner, and his order was upheld by the Appellate Authority. Accordingly, the appellants, (1) ; (2) A.I. R. (195i) Cal. 1273 had been put in possession of the shop on June 7, 1957. The High Court, while issuing the rule, passed an order on the stay application, which, as already indicated, had been misunderstood by the District Excise authorities, and the appellants were dispossessed and the respondents I and 2 put back in possession, without any authority of law. This was a flagrant interference with the appellants ' rights arising out of the settlement made in their favour by the highest revenue authorities. The High Court had not and could not have authorized the dispossession of the persons rightfully in possession of the shop. The appellants brought this flagrant abuse of power to the notice of the High Court several times, but the High Court felt unduly constrained to permit the wrong to continue. We heard the learned counsel for the respondents at great length as to whether he could justify the continuance of this undesirable and unfortunate state of affairs. It has to be remembered that the appellants, as a result of fortuitous circumstances, had been deprived of the possession of the shop during the best part of the financial year 1956 57 The appellants had been deprived of the fruits of their hard won victory in the revenue courts, without any authority of law, and the High Court failed to right the wrong in time, though moved several times. In these circumstances, we found it necessary to hear both the parties on the merits of the orders passed by the Commissioner of Excise and the Appellate Authority, in favour of the appellants, against which, the respondents had obtained a rule. After having heard both sides, we have come to the conclusion that no grounds have been made out for interference by the High Court, under its powers under articles 226 and 227 of the Constitution. This case shares the common fate of the other cases before us, of having run through the entire gamut of the hierarchy created under the Act, read along with the amending Act and the rules thereunder. We do not find any grounds in the orders of the Excise Authorities which could attract the supervisory jurisdiction of the High Court, there being no error of law apparent on the face of the record, 1274 or a defect of jurisdiction in the Authorities whose orders have been impugned in the High Court. We would, however, like to make it clear that we are interfering with the interlocutory order passed by the High Court in this case because of its unusual and exceptional features. It is clear that our decision on the main points urged in the other appeals necessarily leads to the inference that, even if all the allegations made by the respondents in their petition before the Assam High Court are accepted as true, there would be no case whatever for issuing a rule. Indeed, the respondent found it difficult to resist the appellant 's argument that, if the other appeals were allowed on the general contentions raised by the appellants, the dismissal of his petition before the Assam High Court would be a foregone conclusion. It is because of these special circumstances that we have decided to interfere with the interlocutory order in this case in the interests of justice. As a result of these considerations, the appeals must be allowed and the orders passed by the High Court in the several cases, set aside. On the question of costs, we direct that the appellants in each case, should get their costs here and in the High Court, except the appellant in Civil Appeal No. 670, who has failed on the main point raised on his behalf, and who, therefore, must bear his own costs. Appeals allowed.

The High Court has no power under article 226 of the Constitu tion to issue a writ of certiorari in order to quash an error of fact, even though it may be apparent on the face of the record. It can do so only where the error is one of law and that is apparent on the face of the record. Any error of law or fact which it can correct as a court of appeal or revision cannot be a ground for the exercise of its power under that Article. Hari Vishnu Kamath vs Syed Ahmed Ishaque and others, [1955] I S.C.R. 1104, relied on. Queen vs James Bolton, (1841) (1) Queen 's Bench 66, King vs Nat Bell Liquors, Limited, , Rex vs Northumberland Compensation Appeal Tribunal, (1951) 1 K.B. 711 and Rex vs Northumberland Compensation Appeal Tribunal, ; , referred to. The jurisdiction of the High Court under article 226 of the Constitution is limited to seeing that the judicial or quasi judicial tribunals or administrative bodies exercising quasi judicial powers, do not exceed their statutory jurisdiction and correctly administer the law laid down by the statute under which they act. So long as the hierarchy of officers and Appellate authorities created by a statute function within their ambit, the manner in which they do so can be no ground for interference. The powers of judicial supervision of the High Court under article 227 Of the Constitution are not greater than those under article 226 and must be limited to seeing that the tribunal functions within the limits of its authority. Waryam Singh and another vs Amarnath and another; , , referred to. Consequently, where the High Court in exercise of its powers under articles 226 and 227 Of the Constitution interfered with 1241 certain orders made by the Excise Appellate Authority under the Assam Excise Act as being in excess of its jurisdiction on the ground that they were vitiated by errors of fact apparent on the face of the record, such interference was without jurisdiction and the orders passed by the High Court must be set aside. Held further, that where an appellate Authority, as in the instant case, is constituted the highest authority by the statute for deciding as between the claims of rival parties, its powers cannot be circumscribed nor can it be held to have acted in excess of its powers or without jurisdiction on considerations foreign to the statute or the rules. Raman and Raman Ltd. vs The State of Madyas, [1956] S.C.R. 256, referred to. In the absence of anything to show that the appellate Authority had contravened any rules of natural justice, which must be understood in the context of the ' rules laid down by the statute itself, it would be wrong to say that there has been a failure of natural justice simply because the view it took of the matter might not be acceptable to another tribunal. New Prakask Transport Co. Ltd. vs New Suwarna Transport Co. Ltd., , relied on. The question whether an administrative authority functions merely in an administrative or quasi judicial capacity must be determined on an examination of the statute and its rules under which it acts, and there can be no doubt on such examination that the Authorities mentioned in section 9 of the Eastern Bengal and Assam Excise Act, 1910, as amended by Assam Act 23 Of 1953, are no mere administrative bodies and their orders are, therefore, amenable to the powers of control and supervision vested in the High Court by articles 226 and 227 Of the Constitution.

Civil Appeal No. 897 of 1968. Appeal by Special Leave from the Judgment & order dated the 24th July, 1967 of the Delhi High Court in L.P.A. No. 54 of 1967. G. L. Sanghi and Girish Chandra for the Appellants. section section Javali (Amicas Cariae) for the Respondent. The Judgment of the Court was delivered by KRISHNA IYER, J. The respondent imported Auto Cycle Pedals under the guise of motor vehicle parts for which he had secured the relevant licence. These two articles are different from the point of view or the law controlling imports. As laid down in Ganga Setty 's case(1) by the Court, it is primarily for the Import Control Authority to determine the head or entry under which any particular commodity falls. Or course, if a construction adopted by the authority regarding the concerned entry were perverse, or grossly irrational, then the court could and would undoubtedly interfere. In the present case the High Court has held that the view of the Customs officials could not be considered perverse and has declined to set aside the impugned order on that score. Even at this stage it is appropriate to quote the order under challenge which runs: "M/s. The Security and Finance Ltd., Delhi imported from U.K. the above mentioned goods for which they did not possess a valid Import licence issued under Serial No. 301/Pt. IV of Import Trade Control Schedule. The importation was therefore considered as unauthorised. The importers were therefore in this Custom Memo No. S24C 1276/55A dated 30 9 55 called upon to show cause why the goods should not be confiscated and penal action take under section 167(8) Sea Customs Act read with Section 3(2) of the Import & Exports (Control) Act. In reply to the said show cause Memo, the Clearing Agents of the importers produced a licence for Motor Vehicles parts, and claimed release of the goods against the said licence. They further stated that similar consignment has been released in the past against similar licence. Furthermore, no public Notice has been issued to the effect that Auto Cycle Pedals will not be allowed clearance against Motor Vehicle Parts licence. The arguments so advanced are not accept able. The importers did no, avail of the personal hearing offered to them in the said show cause memo. ORDER The importation of the above goods without proper licence is prohibited under sections 3(2) and 4 of the Import & Export (Control) Act of 1947 and Notification issued thereunder. I accordingly confiscate the goods (1) A.I.R. 1863 S.C. 1319 89 under section 167(8) Sea Customs Act. In lieu of confiscation I gave an option under section 183 ibid to the importers to clear the goods on payment of a fine of Rs. 22,600/ (rupees twenty two thousand six hundred only). Customs duty and other charges as leviable on the goods will have to be paid in addition before these could be cleared out of customs control. Dated 14 11 55. Sd/ Dy. Collector of Customs" Even so, the Court quashed the latter limit of the order under challenge which had imposed penalty in lieu of confiscation and, on top or it, directed payment of the import duty ordinarily leviable for the auto cycle pedals imported. The only ground which led to this fatal consequence was that the authorities, acting under s 183 of the (Act VIII of 1878) (for short, the Act), had no further power to direct the importer petitioner i.e., the respondent, to pay excess duty which represents the difference between what is leviable for motor vehicles spares and auto cycle pedals Aggrieved by this view of the limitation on the powers of the Collector of Customs the appellant i.e, the Union of India, has come up this Court, after securing special leave to appeal. The respondent was not represented by counsel and since the point involved was one of law and the amount involved not inconsiderable, we requested Shri Javali, Advocate, to serve as amicus curiae. He has argued the case with ability and we record our appreciation of his services to the Court. Indeed, but for his close scrutiny of the order of the Deputy Collector of Customs we would not have perceived the mix up and other defects he highlighted in his submissions. We have already stated that a fine, in lieu of confiscation, had been imposed by the Collector of Customs. This he did, under section 183 of the Act, but not content with that imposition he also directed the payment of the full duty on the goods imported as condition precedent to the clearing of the goods out of the 'customs control '. Does the order under section 183 preclude him from levying duty under section 20? This is the short issue before us. A close study of the scheme of the relevant provisions, powers and levies discloses a clear dichotomy which has escaped the attention of the High Court. Import/export duty is an obligation cast by section 20 of the Act. It is a tax, not a penalty; it is an innocent levy once the exigible event occurs. it is not a punitive impost for a contravention of the law. Confiscation. penalty and fine provided for under sections 167 (item 8) and 183 are of the species of punishment for violation of the scheme of prohibition and control. Once this distinction and duality are remembered, the interpretative process simplifies itself. Admittedly, the respondent imported pedals uncovered by any licence. Two legal consequences followed. The importation attracted duty which any importer, licit or illicit, had to pay the moment 90 customs barrier was crossed. Secondly, the commission of the offence of importing pedals without a licence caught the offender in the coils of section 167, entry 8, inviting the jurisdiction of the authority prescribed under section 182 to confiscate the goods or, alternatively, to impose a fine in lieu of confiscation, under section 183, of course, if confiscation is resorted to, the title vests in the State, as provided in section 184. Import duty has to be paid inevitably in these cases, by the importer. Confiscation or fine in lieu thereof is an infliction on the offender or circle of offenders falling within section 167, Entry 8. Some times, the burden in both the cases, falls on the same person. At other times, they may fall on different persons. In some cases the importer as well as the confiscate may be identified and so the duty and the penalty may be imposed validly. In other cases it may be difficult to get at the actual person who imported or was concerned in the offence of importation contrary to the prohibition or restriction clamped down by the law. In that event, only confiscation and, alternatively, fine, may be imposed. Viewed in this perspective, the answer to the question that arises for decision is simple. In the present case, as held by the High Court, the respondent did import auto cycle pedals outside the permit or licence. He is therefore liable to pay import duty normally leviable from pedal importers. He his admittedly transgressed the provisions of Entry 8 of section 167 by importing goods not covered by the licence and therefore comes within the penal complex set out in sections 182, 183 ; and 184. In the present case, the Deputy Collector, the competent authority, has chosen to give the owner of the goods, the respondent, option to pay, in lieu of confiscation, a fine. He has not confiscated the goods and, therefore, section 184 is not operational in this context. In short, the obligation under section 20 is independent of the liability under section 183. The order, dual in character, although clubbed together in a single document, is therefore valid in entirety. Even so, the confusion has been caused by the Deputy Collector failing to keep distinct the two powers and the two liabilities and thereby leading to avoidable jumbling. Shri Javali rightly exposed the order impugned to the actinic light of criticism by pointing out that this rolled up order suffers from several infirmities, apart from its unspeaking brevity. The Deputy Collector does not state that he is levying duty on the importer qua importer under section 20. He does grievously err in the first breath confiscating the goods (in which case the title vests in Government under section 184) and in the very next directing payment of fine in lieu of confiscation. Both cannot co exist. Moreover, he forgets that section 167, entry 8, empowers, apart from confiscation of the offending goods, a penalty also which is independent of the fine in section 183, in lieu of confiscation. This confused and laconic order only highlights the need for some orientation course in law for officers who are called upon to exercise judicial powers and write reasoned orders. 91 However, we are prepared to gather from the order under attack two levies imposed in exercise of two distinct powers, as earlier explained. The import duty has been made a condition for the clearance of the goods. This is right and it is impossible to say that the said payment is not justified by section 20. Likewise, the authority, when it imposed a fine, was exercising its power under section 183. We can readily see that he did not mean to confiscate the goods. He only proposed to confiscate and proceeded to fix a fine in lieu thereof. Non felicitous and inept expressions used in the order are perhaps apt lo mislead, but the intendment is clear that what was done was not confiscation but giving an option to pay a quantified fine in place of confiscation. The order was a composite one, when read in the sense we have explained, and is quite legal. Therefore we reach the conclusion that the appellant is entitled to win and the High Court was in error. The line of reasoning which has appealed to us is echoed in a decision of the Madras High Court reported as Collector of Customs vs section Mehra(1). Ramachandra Iyer, C.J., speaking for the Bench, has explained the legal position clearly and we agree with it. Two decisions of this Court were referred to before the High Court and, indeed, the decision of the High Court proceeded on the footing that those two decisions concluded the matter. The Madras decision distinguishes and for right reasons, if we may say so with respect those two rulings of this Court. They do not apply to the facts of the situation before us. On the other hand, both those cases deal with quantities of gold seized from persons as smuggled goods. How they were imported, who were involved in the import, and who could, therefore, be made liable for import duty, were left blank in those two cases. Therefore, the conditions imposed by the customs authorities for payment of import duty could not be supported. We will go into a little more detail to explain those two decisions and their non applicability to the point we are discussing. We may state that neither of them decides that once a find in lieu of confiscation is imposed, the power to levy duty under section 20 is deprived if. It is not as if the authorities could not exercise both`the powers, where the facts attracted both section 20 and sections 182 to 184. In Shewpujanrai Indrasanrai Ltd. vs The Collector of Customs(2) this Court had to consider an order passed by the Collector under the in respect of smuggled gold. An option to pay a fine of Rs. 10,00,000/ was ordered but the Collector tied it up with ` two conditions for the release of the 'confiscated gold '. One was the production of a permit from the Reserve Bank of India in respect of the gold and the other was the payment of proper customs duties in respect of the gold. Both the conditions were held to be illegal by this Court. It was conceded in that case by the learned Solicitor General that there was no provision in the Foreign Exchange Regulation Act or the under which the Reserve Bank could give permission in respect of smuggled gold with retrospective effect. What (1) A.I.R. 1964 Mad, 504. (2) ; 92 is more, if it could, there would be no offence under section 167, entry 8, and the order of confiscation itself would be bad. As to the second condition of payment of customs duty, there was no finding by what. means the gold was smuggled by sea or by land and therefore ii was difficult to see how section 88 which was sought to be pressed into service could be of any help. Indeed, the decision of the Bombay High Court in Hormasji Elavia vs The Union of India(1) had been brought to the notice of the learned Judges, where customs duty was held payable under section 88 of the , but it was distinguished on the score that in that case the goods had been tracked down as smuggled through the port of Kantiajal without payment of any duty and, in those circumstances, it was held that section 88 applied. the manner of import, once identified the power to levy duty could be exercised under the appropriate Act. Therefore, Shewpujanrai (supra) is no authority for the proposition that import duty cannot be levied once fine in lieu of confiscation is imposed. The later decision in Amba Lal vs Union of India(1) also is of No. assistance. That also related to smuggled gold. The Collector of Customs imposed conditions for the release, in that case, of the confiscated gold. Though the order was struck down on a concession by the learned Additional Solicitor General, on the facts as disclosed in that case, the contraband goods. were recovered by search from the appellant 's house, but the authorities could not establish by any evidence that the seized articles were imported into India after the customs barrier was put up for the first time between India and Pakistan. It is obvious, therefore, that import duty could not be levied from tale person from whom the seizure was effected. The case before us stands clearly on a different footing and the order imposing fine in lieu of confiscation and also levying import duly is good. We allow the appeal but. in the circumstances of the case. there will be no order as to costs S.R. Appeal allowed. (1) Cr. 1296 of 1953 decided on 18 8 1953.

The respondent company imported auto cycle parts under the guise of motor vehicle parts, for which only he had a valid license under the Import laws. In respect of certain consignments of imports from U.K the customs authorities by a single order dt. 14 11 1955 passed the following: (i) acting under section 167(8) of the Customs Act it gave an option to the respondent to pay fine in lieu of confiscation of the goods under section 182 and (ii) acting under sections 183 and 20 of the Customs Act to pay the differential duty between auto parts and the motor parts. The respondent challenged this order before the High Court on the ground that once the power under section 183 has been exercised the authorities had no further power to levy the differential duty. The High Court while quashing the order imposing penalty in lieu of confiscation directed payment of the import duty ordinarily livable for the auto cycle pedals imported. Against this view of the limitation on the powers of the Collector, the Union came by way of special leave, while allowing the appeal the Court, ^ HELD: (1) It is primarily for the Import Control Authority to determine the head or entry under which any particular commodity falls. Of course if a construction adopted by the authority regarding the concerned entry were per verse, or grossly irrational, then the Court could or would undoubtedly interfere. [88 D]. "Ganga Setty 's case; , followed". (ii) The scheme of the Sea Customs Act reveals that Import/export duty is an obligation/cast by section 20 of the Act. It is a tax, not a penalty; it is an innocent levy once the eligible event occurs: it is not a punitive import for a contravention of the law. Confiscation, penalty and fine provided for under sections 167 (Item 8) and 183 are of the species of punishment for violation of the scheme of prohibition and control [89 G]. (iii) Two legal consequences followed the importation of pedals, uncovered by any license viz. (1) the importation attracted duty which any importer licit or illicit had to pay the moment customs barrier was crossed and (ii) the commission of the offence of importing pedals without a licence trapping the respondent in the coils of section 167, entry 8 inviting the jurisdiction of the authorities to exercise their powers under sections 182 or 183. [89 H, 90 A]. (iv) The order dual in character, although clubbed together in a single document is valid and it does not preclude the authorities levying duty under section 20, since obligation under section 20 is independent of the liability u/s 183. Non felicitous and inept expressions used in the order are perhaps apt to mislaid, but the intendment is clear that what was done, was not confiscation, but giving an option to pay a quantified fine in a places of confiscation The order was a composite one, and is quite legal. [90 D, 91 B D]. 7 L 1276SCI/75 88 Collector of customs vs H. section Mehra A.I.R. 1964 Mad. 504: Shewpujanrai Indrasanrai Ltd. vs The Collector of Customs, ; referred to

Civil Appeal No. 1763 of 1968. (From the Judgment and Decree dated the 28th July, 1964 of the Kerala High Court in Appeal Suit No. 843 of 1960). T.C. Raghavan, Sardar Bahadur Saharya and V.B. Saharya, for the appellant. T.S. Krishnamoorthy Iyer and M.R. Pillai,. for Respondent No. 1. T.S. Krishnamoorthy, P.K. Pillai and N. Sudhakaran, for Respondent No. 2. 638 The Judgment of the Court was delivered by BEG, J. This is a defendent 's appeal by Certificate granted by the Kerala High Court under Article 133(1)(a) of the Constitution as a matter of course before its amendment because the High Court had modified a decree in a partition suit and the subject matter satisfied the requirements of the unamended Article 133. The parties to the partition suit are descendants of Narayana Prabhu (hereinafter referred to as 'Narayana '). Krishna, the plaintiff (now dead) was the 3rd son of Nara yana. The defendant appellant, Venkateswara, was the eldest of the four sons of Narayana. The partition suit related to 72 items mentioned in schedule 'A ' to the plaint claimed by the plaintiff to be joint family property. It appears that there was no dispute with regard to certain items, but, the defendant appellant claimed other items as his exclusive property on the ground that they had been purchased from his personal income. due to his own enter prise and exertions and ability in carrying on business. The Trial Court had accepted the case of the defendant appellant that all items, except No. 35 and a part of item No. 52 which belonged, to the 3rd defendant, were the self acquired properties of the defendant appellant. The High Court re versed this finding on the ground that there was "little reliable: evidence on record as to. the exact source of the. fund with which the first defendant started the trade". The High Court rejected the submission of the defendant appel lant that, when the Tobacco business under consideration was started, Narayana being the Karta of the family, the fact that the eldest son, Venkateswara, the defendant appel lant, was carrying on the business, raised a presumption that it was the separate or self acquired business of Venka teswara. The High Court relying on certain documentary evidence, including the letter heads showing the business as that of "P. N. Venkateswara Prabhu & Brothers" held that the business was joint family business. The partition suit was filed originally in another Court but was sent to the Court of the Second Additional Sub Judge of Alleppey in 1957, and the preliminary decree was passed on 5th August, 1960. The High Court allowed the appeal, modifying the decree to the extent that 3/4th share of items 4 to 72 of the schedule, except item 35 and part of 52 standing in the name of the 3rd defendant, were held to, be partible properties as part of Joint family business, but it excluded assets which came into. existence after the filing of the. partition suit which operated as a clear unequivocal expression of intention to separate. It also, left the extent of mesne profits of landed properties to be decided in proceedings for the passing of the final decree. It appeals that the defendant appellant had also filed a money suit in the Court of the Munsif only against defendant No. 3, one of the four brother 's, but all of them were impleaded in the partition suit. The money suit was, howev er, transferred to the file of the Additional Sub Judge and tried together with the partition suit and was also de creed by the Additional Sub Judge of Alleppey on the same date as the partition suit. The plaintiff respondent had appealed against both the decrees in the High Court. The two appeals were heard and decided together by the High Court. The High Court, after pro 639 nouncing judgment in the partition suit, proceeded to give judgment, under a new heading and number of the appeal in the money suit. It said, in this separate judgment: "The suit that gave rise to. this appeal has been instituted by the respondent against the appellant for money due on 14 10 1123 on account of tobacco delivered to the latter 's shop. The defence was that the trades run by both the brothers were parts of the joint family trade, and not separate to foster such a claim by the respondent on the appellant. The court below, having found in the other suit the shops run by the parties to belong to the concerned individuals, has decreed the suit. As we have reversed that finding in A.S. No. 843 of 1960 and found the shop stand ing in the name of each brother to be a branch of the joint family trade. in tobacco and directed ascertainment of the assets and liabilities of the entire trade to be settled as on 2 3 1124, the date of that partition suit, this suit has to be dismissed". The judgments were, therefore, two. separate ones given in one continuation but under ' separate headings. Separate decrees were prepared in each appeal relating to a separate case. As the defendant appellant did not seek leave to file any appeal against the High Court 's judgment and decree in the money suit and there is no appeal before us against the decree in the money suit, a preliminary objection is taken on the ground that the defendant 's appeal now before us is barred by res judicata. Learned Counsel for the defendant appellant urges that the two suits were different in nature and were filed in different Courts originally so that the Court trying the partition suit and the Court in which the money suit was triable were not Courts of coordinate jurisdiction. It was also. objected that the partition suit was earlier and the money suit having been filed sixteen days later could not be deemed to be a suit decided earlier. Furthermore, it was pointed out that the judgment was common. It was also urged that. all the four brothers were parties to the parti tion suit but the money suit was only between two brothers. It is true that the appeals against both the decrees of the Trial Court were heard together in the High Court, and, although, the appeal in the money suit is decided under a separate. heading and the short judgment in it appears to be practically consequential on the judgment in the partition suit, yet, the judgments in the two appeals decide a common issue and resulted in two decrees. It is urged that, whereas the defendant appellant had. filed an appeal on the strength of a certificate granted to him as a matter of right, following upon the modification of the decree of the Trial Court by the High Court, the defend ant appellant had no such right of appeal in this Court. Hence, it was submitted that neither in law nor in equity could the. defendant appellant be. barred from putting forward his objections to the decree in the partition suit. 640 Certain decisions were relied upon by learned Counsel for, the defendant appellant Venkateswara in support of the contention that the plea of res Judicata is not available as a preliminary objection to the respondent to the hearing of the appeal before us in the circumstances of this case. We proceed to consider these cases. Narhari & Ors. vs Shankar & Ors. ,(1) is no doubt the judgment of the Supreme Court of India, although it was, if one may so put it, "the Hyderabad Wing" of it in a transi tional period when a learned Judge of this Court, Mr. Jus tice Mehr Chand Mahajan, presided over a bench of which the other two Members were formerly Members of His Exalted Highness the Nizam 's Judicial Committee. Technically, however, it was this Court 's judgment. In that case, Naik, J. had followed a decision of the Judicial Committee of the Hyderabad State and held that, when there was only one suit and the appeals had been disposed of by the same judgment, it was not necessary to file two separate appeals. It elaborated the ratio of the decision as follows (at p. 757 758): "It is now well settled that where there has been one trial, one finding, and one decision, there need not be two appeals even though two decrees may have been drawn up. As has been observed by Tek Chand J. in his learned judgment in Mst. Lachmi vs Mst. Bhuli (AIR mentioned above, the determining factor is not the decree but the matter in controversy. As he puts it later in his judgment, the estoppel is not created by the decree but it can only be created by the judgment. The question of resjudicata arises only when there are two suits. Even when there are two suits, it has been held that a decision given simultaneously cannot be a decision in the former suit. When there is only one suit, the question of res Judicata does not arise at all and in the present case, both the decrees are in the same case and based on the same judgment, and the matter decided concerns the entire suit. As such, there is no question of the application of the principle of res judicata. The same judgment cannot remain effective just because it was appealed against with a different number or a copy of it was attached to a different appeal. The two decrees in substance are one". It seems to us that to be fair to confine the ratio deci dendi of the Hyderabad case to cases where there is only one suit. In the case now before us, not only were the decrees different but the suits were different. The mere fact that the judgments in the two suits were given togeth er or in continuation did not matter. In fact, even in form. the judgment in the appeal relating to the money suit was separate from the rest of the judgment. And, in any case, there were two separate decrees. (1) ; 641 We think that Section 11 Civil Procedure Code enables the party to raise the statutory plea of res judicata if the conditions given therein are fulfilled. The principle embodied in the statute is not so much the principle of "estoppel by record", which the British Courts apply, as one of public policy, based on two maxims derived from Roman jurisprudence: firstly, interest reipublicoe ut sit finis litium it concerns the State that there be an end to law suits; and, secondly, "nemo debet bis vexari pro una et eadem cause" no man should be vexed twice over for the same cause. Sir Lawrence Jenkings pointed out, in Sheoparsan Singh vs Ramnandan Prasad Singh(1), that the rule of res judicata "while rounded on ancient precedent, is dictated by a wisdom which is for all time". Litigation which has no end or finality defeats its very object. This object is decision of disputes or an end to each litigation. But, if there is no finality to it, the dispute cannot be said to be really decided at all. It is the duty of the State to see that disputes brought before its judicial organs by citizens are decided finally as early as possible. Hence, Section 11 of our Civil Procedure Code contains in statutory form, with illuminating explanations, a very salutary principle of public policy. An "estoppel", even if it be "by record", rests on somewhat different grounds. Even such an estoppel savours of an equity or justice created by actions of par ties the results of which have become recorded formally behind which they are not allowed to go. Reliance was also placed on Govind Bin Lakshmanshet Anjorlekar vs Dhondba 'Ra 'V Bin Ganba ' Ra 'F 'Ta 'Mbye(2), on behalf of the appellant. Here, it was held that decisions in previous suits of the nature of small cause suits in which there was no right of second appeal could not oper ate as res judicata in suits before Courts in which ques tions were elaborately litigated and decided in cases which could go to the High Court in second appeal. We were also referred to a Full Bench decision of the Madras High Court in Avanasi Gounden & Ors. vs Nachamal(3), where it was similarly held that: "A decision in a previous suit of a small cause nature, in which no second appeal is allowed by law, is no bar to a subsequent suit, in the same Court, which, not being of a small cause nature, is open to second appeal". We have to remember that Small Cause juris diction is a limited one exercisable only in specified matters. Decisions given beyond Jurisdiction to try an issue cannot operate as res ]udicata. Our attention was drawn to explanation II of section 11, on behalf of the respondents. It reads: "Explanation II. For the purposes of this Section, the competence of a Court shall be determined irrespective of any provision as to a right of appeal from the decision of such Court". (1) A.I.R. 1961 P.C. 78=43 I.A. 91. (2) I.L.R. Vol. XV Bombay 104. (3) I.L.R. 29 Madras 195. 642 It seems to us that section 11 itself refers to. a Court which actually tries the, two suits. We think that, in the circumstances of the case before us, the incompetence of the Court, in which the money suit was initially filed, to try the partition suit did not matter when the actual hearing of both the cases took place in the same Court. That Court was, obviously, competent to try both the suits. After the money suit had been transferred from the Court of the Munsif, the Second Additional Sub Judge actually tried and decided both of them. This was enough to make the differ ence in the jurisdictions of the Courts, in which the suits were initially filed, quite immaterial. Similarly, the High Court was competent to hear appeals from judgments in both. It heard and decided the two appeals together. So far as the question of appeal to this Court is con cerned, it is true that no appeal lay as a matter of right against the judgment in the appeal in the money suit, but, we think that the learned counsel for the respondents is correct in submitting that the question Whether there is a bar of res judicata does not depend on the existence of a right of appeal of the same nature against each of the two decisions but on the question whether the same issue, under the circumstances given in section 11, has been heard and finally decided. That was certainly purported to be done by the High Court in both the appeals before it subject, of course, to the rights of parties to appeal. The mere fact that the defendant appellant could come up to this Court in appeal as of right by means of a certificate of fitness of the case under the unamended Article 133(1)(c) in the parti tion suit, could not take away the finality of the decision so far as the High Court had determined the money suit and no attempt of any sort was made to question the correctness or finality of that decision even by means of an application for Special Leave to appeal. Learned counsel for the respondents appears to us to have rightly relied upon Bhugwanbutti Chowdhrani vs A.H. Forbes(1), where it was held that "in order to make a matter res judicata it is not necessary that the two suits must be open to appeal in the same way". He also relied on Lonan kutty vs Thomman & Anr.(2), a recent decision of three Judges of this Court, where Chandrachud, J., observed (at p. 1650): "Respondents did not file any further appeal against the decree passed by the Dis trict Court in the appeals arising out of their suit. They filed a second appeal in the High Court only as against the decree passed by the District Court in A.S. 66 of 1958 which arose out of the decree passed by the trial ' Court in the appellant 's suit. Thus, the decision of the District Court rendered in the appeal arising out of the respondent 's suit became final and conclusive". It was also observed there: "The decision of the District Court was given in an appeal arising out of a suit which, though instituted subse (1) I.L.R. (2) ; Supp. S.C.R. 74. 643 quently, stood finally decided before the High Court disposed of the second appeal. The decision was, therefore, one in a 'former suit ' within the meaning of section 11, Explanation I, Civil Procedure Code". The expression "former suit" according to explanation I of section 11, Civil Procedure Code, makes it clear that, if a decision is given before the institution of the pro ceeding which is sought to be barred by res judicata, and that decision is allowed to become final by operation of law, a bar of res judicata would emerge. This as learned counsel for the respondents rightly submits, follows from the decision of this Court in Lonankutty 's case (supra). The only other point which we need consider is whether the fact that the money suit was only between the defendant appellant and one of his brothers, who was also a respondent in the partition suit, makes any difference to the applicability of the principle of res judicata in this case. Learned Counsel for the appellant submits that the defendant appellant could not come within the ambit of Explanation VI of section 11, Civil Procedure Code which provides as follows: "Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigat ing". On the other hand, learned counsel for the respondent sub mits that the case of the respondents fully covered by this explanation and relies on Kumaravelu Chettiar & Ors. T.P. Ramaswamy Ayyar & Ors. C) where it was held: "Explanation 6 is not confined to cases covered by O. 1, R. 8 but extends to include any litigation in which apart from the Rule altogether, parties are entitled to represent interested persons other than themselves". We think that the submission made by the learned counsel for the respondents is sound. In a partition suit each party claiming that the property is joint, asserts a right and litigates under a title which is common to others who make identical claims. If that very issue is litigated in another suit and decided we do not see why the others making the same claim cannot be held to be claiming a right "in common for themselves and others". Each of them can be deemed, by reason of Explanation VI, to represent all those the nature of whose claims and interests are common or identical. If we were to hold otherwise, it would neces sarily mean that there would be two inconsistent decrees. One of the tests in deciding whether the doctrine of res judicata applies to a particular case or not is to determine whether two inconsistent decrees will come into existence if it is not applied. We think this will be the case here. (1) A.I.R. 1933 P.C. 183. 7 112SCI/77 644 We need not deal with other cases of this Court cited, including Sheodan Singh vs Smt. Daryao Kunwar(1), which supports the respondents ' submissions, and Raj Lakshmi Bai & Ors. vs Banamali Sen & Ors.( ), which is not directly ap plicable inasmuch as that was a case in which the general principles of res judicata, and not section 11 Civil Proce dure Code, were applied. The preliminary objection in the case before us is fully supported, for the reasons given above, by section 11, Civil Procedure Code read in the light of the Explanation mentioned above. Consequently, the preliminary objection must prevail. Learned counsel for the appellant, conscious of the difficulties in his way, filed after the hearing of the appeal was begun before us, an application for condonation of delay in applying for leave to appeal against the judg ment of the High Court in the money suit. He submits that, in view of the uncertain position in law, we should try to extend equities as much as possible in his client 's favour. On the other hand, learned counsel for the respond ents points out that the objection based on the bar of res judicata was taken as long ago as 1968 by the respondents. It seems to us that the delay in waking up to the existence of the bar on the part of the appellant is much too long to be condoned. Moreover, we also find that the judgment of the High Court, based on the admissions of the appellant, does not disclose any error of law so as to deserve grant of special leave to appeal. Indeed, in so far as we could express any opinion at all upon the merits of the judgment of the High Court, based as it is upon documents containing admissions of the defendant appellant, it seems to us that the appellant would have a very uphill task indeed in argu ing his appeal even in the partition suit. We may mention here that the partition suit was instituted as long ago as 1947 and was only given a new number in 1957. If there is a case in which the principle that litigation should have an end ought to be applied, it is this on the face of facts of the case apparent to us. We, therefore, reject the Civil Miscellaneous Petition No. 8585 of 1976, the application for condonation of delay in the filing the Special Leave Peti tion. We dismiss the Civil Miscellaneous Petition No. 8586 of 1976 as well as the over delayed special leave petition No. 2816 of 1976. The result is that this appeal must be and is hereby dismissed, but, in the circumstances of the case, the par ties will bear their own costs. P.B.R. Appeal dismissed.

Explanation II to section 11 C.P.C. provides that for the purposes of the section, the competence of a Court shall be determined irrespective of any provision as to a right of appeal from the decision of such Court. Explanation VI provides that where persons litigate bona fide in respect of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section be deemed to claim under the per sons so litigating. The respondents and the appellant were brothers. The respondents filed a suit for partition of the family proper ties in the Court of Additional Sub Judge of competent jurisdiction. The appellant on the other hand filed a money suit against one of the brothers in the Court of a Munsiff in which he impleaded his other brothers. Ultimately, the money suit was transferred to the Court of the Additional Sub Judge, where the partition suit was Rending and both the suits were tried together. In appeal, the High Court heard and decided both the appeals together and pronounced sepa rate judgments in continuation but under separate headings and a separate decree was prepared in each appeal. The appellant filed an appeal in this Court under article 133(1)(a) of the Constitution before its amendment, as a matter of right, against the judgment of the High Court in the parti tion suit. A preliminary objection was taken by the respondents in this Court that the appeal was barred by res judicata in that the appellant did not file an appeal against the judgment and decree in the money suit. The appellant on the other hand contended that neither in law nor in equity was he barred by res judicata because he filed the appeal in the partition suit as a matter of right, which was not available to him in the money suit. Dismissing the appeal, HELD: The preliminary objection is supported by section 11 of the Code of Civil Procedure read in the light of Explana tions II and VI. [644 B] 1(a) Section 11 enables a party to raise the statutory plea of res Judicata if the conditions given therein are fulfilled. Section 11 contains, in statutory form, with explanations, a very salutary principle of public policy. [641 C D] In the instant case, the incompetence of the Court, in which the money suit was initially filed, to try the parti tion suit did not matter when the actual hearing of both the cases took place in the same Court. That Court was compe tent to try both the suits. After the money suit had been transferred, the second Additional Sub Judge actually tried and decided both of them. That was enough to make the difference in the jurisdiction of the Court in which the suits were initially filed, quite immaterial. Similarly the High Court was competent to hear the appeals from judgments in both cases. It heard and decided the appeals together. [642 A C] Narhari & Ors. vs Shankar & Ors. ; distin guished. Lortankutty vs Thomman & Anr., ; Supp. S.C.R. 74 followed. 637 Sheoparsan Singh vs Ramnandan Prasad Singh, .AIR 1916 PC 78=43 I.A. 91, Govind Bin Lakshmanshet Anjorlekar vs Dhondba 'Ea ' V Bin Ganba ' RA '17 ' 'V ' Ta ' Mbve, ILR Vol. XV Bombay 104 and Avanasi Gounden & Ors. vs Nachammal, ILR 29 Madras 195 referred to. Bhugwanbutti Chowdhrani vs A.H. Forbes ILR ap proved. (b) The expression "former suit" in Explanation I of section 11 makes it clear that, if a decision is given before the institution of the proceeding which is sought to be barred by res judicata, and that decision is allowed to become final or becomes final by operation of law, a bar of res judicata would emerge. [643 B] (c) One of the tests in deciding whether the doctrine of res judicata applies to a particular case or not is to determine whether two inconsistent decrees will conap into existence if it is not applied. In a partition suit each party claiming that the property is joint asserts a right and litigates under a title which is common to others who make identical claims. If that very issue is litigated in another suit and decided, there is no reason why others making the same claim cannot be held to be claiming the right in common for themselves and others. Each of them can be deemed, by reason of Explanation VI, to represent all those the nature of whose claims and interests are common or identical. To hold otherwise would mean that there would be two inconsistent decrees. [643 G H] In the instant case, the fact that the other suit was a money suit between the appellant and one of his brothers, who was also the respondent in the partition suit, does not make any difference to the applicability of the principle of res judicata. [643 C] Kumaravelu Chettiar & Ors. T.P. Ramaswamy Ayyar & Ors, A/R followed. Sheodhan Singh vs Smt. Daryao Kunwar, [1966] 3 S.C R. 300 and Bai Lakshmi Rani & Ors. vs Banamali Sen & Ors., ; referred to. The question whether there is a bar of res judicata does not depend on the existence of a right of appeal of the same nature against each of the two decisions, but on the question whether the same ' issue, under the circumstances given in section 11, has been heard and finally decided. [642 C D] In the instant case, the High Court heard and finally decided both the appeals before it. The mere fact that the appellant could come up to this Court in appeal as of right by means of a certificate of fitness under the unaa mended article 133(1)(c) in the partition suit, could not take away the finality of the decision so far as the High Court had determined the money suit and no attempt was made to question the correctness or finality of that decision even by means of an application for special leave. [642 D E] 3. The appellant 's application for condonation of delay in applying for leave to appeal against the High Court 's judgment in the money suit must be dismissed. His delay in waking up to the existence of the bar of res judicata is much too long to be condoned. The judgment of the High Court based on the admissions of the appelant, does not disclose any error of law so as to deserve the grant of special leave to appeal. The partition suit was instituted as long ago as 1947. If there is a case in which the prin ciple that litigation should have an end ought 'to be applied, it is this. [644 C F]

Civil Appeal Nos. 912 to 916 of 1971. Appeals by Special Leave from the Judgment and Order dated the 2nd July 1969 of the Orissa High Court in Special Jurisdiction Cases Nos. 73, 74, 75 and 76 of 1964. V. C. Mahajan and R. N. Sachthey: for Appellants (In CAs. 912 13/71) R. N. Sachthey; for Appellant in CAs. 914 16/71. Gobind Das, amicus curiae for Respondent. The Judgment of the Court was delivered by GOSWAMI, J. Five quarters of assessment of sales tax are involved in these five appeals, by special leave, the period commencing from January 1, 1959 to March 31, 1960. This judgment will govern all these appeals involving a common question. The Assistant Sales Tax Officer, Cuttack, included in the turnover of the respondent the sale price of jeera, dhania (coriander), panmohuri, methi, postak and pipall and levied 5 per cent sales tax under the Orissa Sales Tax Act (briefly the State Act). On appeal the Assistant Commissioner of Sales Tax, Puri, allowed the claim of the respondent and held that the above items are oil seeds within the meaning of section 14(vi) of the and gave the respondent the benefit of a lower tax of 2 per cent on the sale turnover of those goods instead of 5 per cent under the State Act. On appeal by the State of Orissa to the Sales Tax Tribunal claiming 5 per cent on the sale turnover thereof under the provisions of the , the orders of the Assistant Commissioner were affirmed. On application by the State for each of the five quarters, the Tribunal referred the following two common questions under section 24 of the State Act: "(1) Whether in the facts and circumstances of the case, the Sales Tax Tribunal is right in holding that jeera, dhania, panmohuri, methi, postak and pipali are oil seeds within the meaning of section 14 of the Central Act and the tax payable under the State Law in respect of the sale or purchase of these goods inside the State, cannot exceed 2 per cent of the sale or purchase price thereof. (2) Whether the communication No. 4(8) ST/57 dated 31st January, 1958, issued by the Government of India which is only an official communication having no statutory sanction behind it can have any legal effect to hold the goods in question as oil seeds as understood in common parlance and whether such an official communication is binding on the State Government. " We are not concerned with 'pipali ' in these appeals. 968 When these appeals came before us for hearing the respondent was not represented. We, therefore, requested Mr. Gobind Das to act as amicus curiae in these appeals. Before we may proceed further, we may immediately turn to section 14(vi) of the (briefly the Central Act): "14. Certain goods to be special importance in inter State trade or commerce. It is hereby declared that the following goods are of special importance in inter State trade or commence: (vi) Oil seeds, that is to say, seeds yielding non volatile oils used for human consumption, or in industry, or in the manufacture of varnishes, soaps and the like, or in lubrication, and volatile oils used chiefly in medicines, perfumes, cosmetics and the like". The above definition is an explanatory one and uses mentioned therein cover a wide range. If the particular items which are assessed under the State Act can be brought under the definition of "oil seeds", as given in the above provision, the assessee will be entitled to a lower levy of sales tax. Mr. Mahajan appearing on behalf of the appellant sumbits that the Court should adopt the meaning given to these items in common parlance and by the people who use the articles. He chiefly relies upon a decision of the Andhra Pradesh High Court in The State of Andhra Pradesh vs Kajjam Ramchandraiah Gari Anantaiah. In that case the High Court was dealing, inter alia, with an identical item, viz., dhania (coriander) under item 3 of Schedule IV of the Andhra Pradesh General Sales Tax Act, 1957. Item 3 is identical with item (vi) of section 14 of the Central Act giving the definition of "oil seeds". The Andhra Pradesh High Court relied upon a letter from the Director of the National Chemical Laboratory, Poona, dated January 29, 1959, addressed to the Secretary, Council of Scientific and Industrial Research, New Delhi, as also upon another letter from the Central Food Technological Research Institute, Mysore, dated February 18, 1959, and came to the conclusion that, amongst other things, dhania (coriander) did not come "within the definition of oil seeds". The High Court also held that it was not difficult to envisage with the increase in scientific knowledge and technological development that oil could be extracted from any seed which might not be known as an oil seed in common parlance. That Court also observed that there was no evidence to show that any oil was extracted in this country or that the oil extracted from the seeds concerned was used commercially or industrially or could be bought in the market. In this view of the matter the Andhra Pradesh High Court held that dhania and other seeds which came up for consideration were not oil seeds under item 3 of Schedule IV of the Andhra Pradesh Sales Tax Act. It is interesting that on this finding of that Court coriander escaped altogether from assessment. 969 In Commissioner of Sales Tax, Madhya Pradesh, Indore, vs Bakhat Rai and Co., the Madhya Pradesh High Court also took the same view as that of the Andhra Pradesh High Court while dealing with item 3, Part II, Schedule 1 of the C.P. and Berar Sales Tax Act. In the Madhya Pradesh case, however, the term 'oil seed ' has not been defined under the Act. The Court, therefore, held that since it was an item of every day use it must be construed in its popular meaning, that is to say, in that sense which people conversant with the subject matter with which the statute was dealing would attribute to it. The Division Bench of the Kerala High Court has also held in The Deputy Commissioner of Agricultural Income tax and Sales Tax, Kozikode vs V. Sreedhara Shenoy that dhania (coriander) and methi are not oil seeds under section 14(vi) of the Central Act. Mr. Mahajan has strenuously submitted that the articles in question are spices to all indents and purposes and not "oil seeds". He further submits that even if they are oil seeds in the sense that these yield non volatile oil to a certain extent, no evidence has been produced by the assessee that these are used for human consumption or in industry or in the manufacture of varnishes, soaps and the like, or in lubrication, or in medicines, perfumes, cosmetics and the like as mentioned in the definition. Mr. Gobind Das, on the other hand, has drawn our attention to the fact that the High Court had before it the Condensed Chemical Dictionary (7th Edition) edited by Arther and Elizabeth Rose, from which the following informations regarding the seeds in question were available: "Dhania (coriander seed); botanical name coriandrum sativem. Coriander oil is distilled from the coriander sativum a colourless or slightly yellowish, liquid having aromatic odour. Jeera (cumin seed); Cumin oil is distilled from the cumin seed and is used for medicine, flavouring and perfumery. It is a colourless or yellowish, limpid liquid having characteristic odour of cumin. Postak (poppy seed); botanical name papover somniferum. Poppy oil is a very pale, golden yellow liquid with pleasant taste and odour extracted from the seeds and it is used as food oil, artist 's colours, varnishes & lubrication. Methi (Fenugreek); botanical name trigonella Foenumgraecum (vide p. 164, vol. 9 of the Encyclopaedia Britannica). It is stated inter alia therein that it bears a sickle shaped pod, containing from 10 to 20 seeds, from which 6% of a foetid, fatty, and bitter oil can be extracted by ether". Besides, the High Court also had before it the notification of the Ministry of Finance, Department of Economic Affairs, Government of India, dated January 3, 1959, wherein amongst other commodities 970 the following were stated to be included in the term "oil seeds" under item (vi) of section 14 of the Central Act: "(18)Poppy seed (Posta dana, Khaskhas); (37) Aniseed (saunf); (42) Coriander seeds (Dhania); (44) Cuminseed (Jeera, Safed Jeera); (49) Fenugreek seeds (Methi)". Mr. Gobind Das also drew our attention to the Webster 's Third International Dictionary where coriander seed is described as "the ripened dried fruit of coriander used for flavouring especially of pickels, curries, confectioneries, and liquors. " These appeals arise out of a decision in a reference under section 24 of the State Act under article 136 of the Constitution and we have to consider whether it is a fit case for interference with the order of the High Court when it held that the Sales Tax Tribunal was right in its conclusion. It is true the High Court has rightly observed that the aforesaid notification of the Government of India has no statutory force and as such is not binding on the Sales Tax Officer. It cannot, however, be denied that the Ministry of Finance, Department of Economic Affairs, is intimately conversant not only with the policy of legislation for the purpose of implementation of the provisions of the Central Act but is also familiar with the nature and quality of the commodities as also their use from time to time. If, therefore, such an authority issued a notification including certain commodities under the head of 'oil seeds ', as defined under the Central Act, it cannot be said that the Tribunal and the High Court were not right in preferring such an opinion of the Government as good evidence for its conclusion, to the opinions relied upon by the Andhra Pradesh High Court on which great reliance has been placed by the appellant. A persual of the contents of the letters referred to in the judgment of the Andhra Pradesh High Court would indicate that the opinions cannot be said to be very firm or even final. Apart from this, it is not known whether all the uses which are mentioned in the definition of "oil seeds" were brought to the notice of the National Chemical Laboratory, Poona and of the Central Food Technological Research Institute, Mysore, in rendering their opinions. If, therefore, the Tribunal in the facts and circumstances of the case held that the particular commodities came within the definition of clause (vi) of section 14 of the Central Act, it is not possible to hold that it was not right. The answer to the first question by the High Court is, therefore, rightly in the affirmative. We do not also see anything wrong in the High Court 's answering the second question in the way it did. The appeals, therefore, fail and are dismissed. There will be no order as to costs. We are thankful to Mr. Gobind Das for assisting the Court as amicus curaie. V.P.S. Appeals dismissed.

Under section 14(vi), , among goods declared to be of special importance in inter State trade and commerce are mentioned oil seeds, that is to say, seeds yielding non volatile oils used for human consumption, or in industry, etc., or volatile oils used chiefly in medicines etc. The Assistant Commissioner under the Orissa Sales Tax Act, the Tribunal, and the High Court on reference, held that jeera dhania, panmohuri, methi and postak are oil seeds within the meaning of section 14(vi) and liable to a lesser rate of tax. The High Court relied on ordinary and technical dictionaries and a notification of the Ministry of Finance, Department of Economic Affairs, Government of India, dated January 3, 1959 for its conclusion. In appeal to this Court under article 136, it was contended by the State, relying on State of Andhra Pradesh vs Kajjam Ramchandraiah Gari Anantaiah (1961) 12 STC 795, that the Court should adopt the meaning given to these articles in common parlance by people who use them, that so understood they are spices and not oil seeds, and that though they yield non volatile oil to a certain extent, there is no evidence that they fall within the description in section 14(vi). Dismissing the appeal, ^ HELD: It cannot be said that the Tribunal was not right, and so it is not a fit case for interference under article 136, when the High Court held that the Tribunal was right. [970C D, G] (a) Item 3, Schedule IV, A.P. General Sales Tax Act, 1957, is identical with section 14(vi) of the Central Act. In Kajjam Ramachandriah 's case, the Andhra Pradesh High Court held that dhania did not come within the definition of oil seeds relying on some letters from (i) Director, National Chemical Laboratory, Poona, and (ii) Central Food Technological Research Institute, Mysore. [968F] (b) The High Court was right in the present case in holding that the notification of the Government of India had no statutory force and was not binding on the Sales Tax Officer, but it cannot be said that the High Court and Tribunal were not right in preferring the opinion therein as good evidence for their conclusion to the opinions in the letters relied upon by the Andhra Pradesh High Court. The Ministry of Finance, which issued the notification, is intimately conversant not only with the policy of legislation for the purpose of implementation of the provisions of the Central Act, but is also familiar with the nature and quality of the commodities and also their use from time to time. [970D F] (c) Further, the letters of the Director, National Chemical Laboratory and the Central Food Technological Research Institute, do not indicate that the opinions expressed therein were firm or even final or whether all the uses mentioned in the definition of oil seeds were brought to their notice. [970F] Commissioner of Sales Tax, Madhya Pradesh, Indore vs Bakhat Rai and Co. (1966) 18 Sales Tax Cases 285 and The Deputy Commissioner of Agricultural Income tax and Sales Tax, Kozhikode vs Sreedhara Shenoy (1973) 32 Sales Tax Cases 181, referred to. 967

Appeals Nos. 2 and 4 of 1955. Appeal by Special Leave from the Order dated the 18th day of November 1954 of the Labour Appel 1243 late Tribunal of India, Bombay in Application (Misc.) Bombay No. 773 of 1954. H. M. Seervai, J. B. Dadachanji and Rajinder Narain, for the appellant in Civil Appeal No. 2 of 1955 and respondent in Civil Appeal No. 4 of 1955. D. H. Buch and I. N. Shroff, for the respondents in Civil Appeal No. 2 of 1955 and appellants in Civil Appeal No. 4 of 1955. M. C. Setalvad, Attorney General for India (G. N. Joshi and P. C. Gokhale with him), for the Intervener (Union of India). February 3. The Judgment of the Court was delivered by DAS J. This is an appeal by special leave from the order of the Labour Appellate Tribunal, Bombay Bench, dated the 18th November 1954 which was made on an application made by the appellant company on the 6th September 1954 under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 (Act XLVIII of 1950) which is hereinafter referred to as the 1950 Act. The appellant company carries on business as assemblers of motor vehicles from "completely knocked down" assemblies imported into India. There was some appeal pending before the Labour Appellate Tribunal arising out of disputes between the appellant company and its workmen. It is alleged that the name of the appellant company had been removed by the Government of India from the list of approved manufacturers maintained by them and that, in the result, it had been unable to secure further import licenses for the import of completely knocked down assemblies of motor vehicles and that consequently on and from the 1st November 1953 the company had to lay off a number of its workmen, for it had to operate the various departments of its factory at greatly reduced strength. As the appellant company saw no prospect of any increase in the scope of its present operation which would provide employment for the workmen who had been laid off, it had become necess 1244 sary to retrench the workmen named in Annexure A to the application. As those workmen were concerned with the appeal pending before the Labour Appellate Tribunal the company applied to the Appellate Tribunal under section 22 of the 1950 Act for permission to retrench them. The respondents through their Union, the Automobile Manufacturers ' Employees ' Association, Bombay, filed a written statement on the 1st November 1954 making diverse allegations against the company and contending that the company bad itself to blame for having brought about the lay off. It was contended that there was no immediate cause for making the application, that the company was motivated by ulterior motives to deprive the workmen of their dues which even according to the company would become due and payable to the workmen on the expiry of the one year of the said lay off period. It was further alleged that in or about April 1954 the company recalled some of the workmen out of those who had been laid off since November 1953 violating all principles on which a recall should have been made and that by such arbitrary and unscientific recall the company had imposed disproportionate work loads on the recalled workmen, thereby altering their conditions of service to their prejudice. The respondents maintained that the application was not maintainable in law, was mala fide and should be dismissed. In the penultimate paragraph of the written statement it was submitted that in the event of the Labour Appellate Tribunal granting the permission in whole or in part such permission should be granted subject to the following conditions: (1) Payment of full wages with dearness allowance for the entire period of lay off; (2) Payment of one month 's notice pay and retrenchment compensation at the rate of one month 's wages including dearness allowance for every completed year of service and part thereof in addition to the gratuity as per the scheme in force in the company; (3) Alternatively to (2) above and in cage the Labour Appellate Tribunal took the view that the 1245 lay off was governed by section 25 C of the , payment of compensation at 50 per cent. of their wages plus dearness allowance for the entire period of lay off to the date of discharge in addition to the notice pay and gratuity as claimed in (2) above; and (4)Payment of leave wages as per existing rules, taking the entire period of lay off as service. A number of documents were filed in support of the respective contentions. The Labour Appellate Tribunal at the very outset of its judgment under appeal states its finding on the merits of the action proposed to be taken by the company as follows: "There can be little doubt that the retrenchment has been occasioned by the failure of the concern to secure sufficient work owing to absence of licenses from Government and, therefore, retrenchment must be regarded as inevitable and the application before us bona fide. Permission to retrench cannot be refused but for the reasons that we shall state hereafter we make that permission conditional upon the fulfilment of certain terms by the concern". The company contended before the Labour Appellate Tribunal that its function, while dealing with an application under section 22 of the 1950 Act, was only to give or withhold permission. This contention was rejected by the Appellate Tribunal with the following observation: "That view is quite untenable as has been repeatedly held by this Tribunal. We are the authority to whom an application has to be made for permission to retrench, and when such an application is made we must of necessity exercise our judgment and discretion and satisfy ourselves that when the company retrenches it does justice by its employees". The Labour Appellate Tribunal was clearly influenced by the consideration which, stated in its own words, was as follows: "We do not think that we will be advancing the interest of the employees or of the concern by refusing 1246 retrenchment because the case for retrenchment has been established, and the sooner the workmen are allowed to leave and find for themselves other employment the better for them. But in order to assure ourselves that on retrenchment the employees receive what in justice they should have, we have decided to give permission to retrench subject to cer tain conditions which in our view are inherent under the Act. , and which apart from the Act we consider to be just and equitable in the particular circumstances of this case". In this view of the matter the Labour Appellate Tribunal definitely declined "to leave over the question of compensation for lay off as a legacy of the present troubles; the employees to be retrenched have enough to worry them without having to make claims and have them decided after contest before a Tribunal". In the result, the Labour Appellate Tribunal gave the appellant company permission to retrench "subject to the terms and conditions of Act XLIII of 1953, provided that each workman is paid at the rate of half basic wages and dearness allowance for the whole period from the date of lay off up to the date of retrenchment (less sums already received as lay off compensation)". Liberty was given to the company to set off the lay off compensation protanto against the retrenchment relief given by the Act. Aggrieved by this decision the appellant company applied for and obtained from this Court special leave to appeal against this order. The respondents subsequently filed an application for special leave to appeal against this decision in so far as the Labour Appellate Tribunal had not allowed their full claim as surmmarised above and in so far as the names of 17 persons had been struck off on the allegation of the company that they were not workmen. This application of the respondents was also acceded to and the two appeals have been heard together. The Union of India asked for leave to intervene as important questions of construction of the provisions of the (hereinafter referred to as the 1947 Act) and the 1950 Act were involved. Such 1247 leave was granted. and we have heard learned counsel for the Union of India along with learned counsel for the parties. The question as to the propriety of permitting the names of 17 workmen to be struck off from the application has not been seriously pressed before us. Only two questions have been canvassed at some length before us, namely . (1)Whether under section 22 of the 1950 Act the Tribunal has jurisdiction to impose conditions when granting the permission asked for; and (2)Whether the conditions imposed in this case are in conformity with law. It is plain, however, that in case the first question is answered in the negative, the second question will not call for any decision on the present occasion. In order to correctly answer the questions it will be necessary to bear in mind the general scheme of the two Acts. The purpose of the 1947 Act is, inter alia, to make provision for the investigation and settlement of industrial disputes. In order to achieve this avowed object different authorities have been constituted under this Act. Thus section 3 provides for the constitution of Works Committee whose duty is to promote measures for securing and preserving amity and good relations between the employers and workmen. The appropriate Government is authorised by section 4 to appoint conciliation officers charged with the duty of mediating in and promoting the settlement of industrial disputes and by section 5 to constitute a Board of Conciliation for promoting the settlement of industrial disputes. Section 6 empowers the appropriate Government to constitute a Court of Inquiry for enquiring into any matter appearing to be connected with or relevant to an industrial dispute. Finally, section 7 provides for the constitution of Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of the Act. Section 10 of this Act provides for reference of disputes to a Board, Court or Tribunal. It will be noticed that under this section it is the appropriate 160 1248 Government which alone can make the reference and set the authority in motion. The procedure, powers and duties of conciliation officers, Boards, Courts and Tribunals are elaborately prescribed and defined in sections I 1 to 15. It is to be noted that the conciliation officer, Board, and Court are required to make a report to the appropriate Government while the Tribunal is enjoined to submit its award to the appropriate Government. The report of a Board or Court and the award of a Tribunal are under section 17 to be published by the appropriate Government within a month from the date of their receipt. Section 17 A provides that the award of a Tribunal shall become enforceable on the expiry of 30 days from the date of its publication and, subject to the provisions of sub section (1) shall come into operation from such date as may be specified therein and if no date is so specified from the date when the award becomes enforceable as aforesaid. Section 19 prescribes the period of operation of settlements and awards. Chapter deals with strikes and lock outs. Sections 26 to 31 which are grouped together under the heading "Penalties" prescribe punishments. Section 31 (I) provides that any employer who contravenes the provisions of section 33 shall be punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to Rs. 1,000 or with both. Section 33, a contravention of which is made punishable by section 31, as it stood before 1950, forbade an employer, during the pendency of any conciliation proceedings or proceedings before a Tribunal, to alter, to the prejudice of the workmen concerned in the dispute, the conditions of service applicable to them immediately before such proceedings, nor, save with the express permission of the conciliation officer, Board or Tribunal, as the case may be, to discharge, dismiss or otherwise punish during the pendency of the proceedings any workman, except for misconduct not connected with the dispute. It may be noted that under this section the ban on the alteration of the conditions of service was absolute and that permission was necessary only in case of discharge or dismissal or 1249 punishment and even in such case no permission was necessary when the workman was guilty of misconduct not concerned with the pending dispute. The Only deterrent against a contravention by an employer of the provisions of section 33 was the prosecution of the employer under section 31. This was hardly any consolation for the workmen, for if an employer took the risk of a prosecution and acted in contra vention of section 33 the workmen could only raise an industrial dispute and ask the appropriate Government to refer the same to a Tribunal but if the Government declined to accede to their prayer the workmen were without any remedy. This was the position under the 1947 Act before it was amended in 1950. The 1950 Act was enacted for establishing an Appellate Tribunal in relation to industrial disputes. Chapter II of the Act deals with the constitution, composition and functions of the appellate tribunal. Section 7 formulates the jurisdiction of the appellate tribunal. Section 9 confers on the appellate tribunal all the powers which are vested in a Civil Court when hearing an appeal under the Code of Civil Procedure, 1908. Section 10 prescribes the period of limitation within which appeals are to be brought before the appellate tribunal. Under section 15 the decision of the appellate tribunal becomes enforceable on the expiry of 30 days from the date of its pronouncement, provided that where the appropriate Government is of opinion that it would be inexpedient, on public grounds, to give effect to the whole or any part of the decision the appropriate Government may, before the expiry of the said period of 30 days, by order in the Official Gazette either reject the decision or modify it. Section 22 of this Act provides: "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 sball (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 1250 (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 on which reliance is placed by learned counsel for the respondents and for the intervener, reads as follows: "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". ' Section 29 of this Act provides for penalty for con travention of the provisions of section 22, namely, imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. From what has been stated so far four things are to be noted, namely, (i) that the ordinary and primary jurisdiction of the appellate tribunal is appellate, (ii) that section 22 of this Act confers on the appellate tribunal a special jurisdiction which is in the nature of original jurisdiction, (iii) that section 23 also vests in the tribunal an additional jurisdiction to decide the complaint as if it were an appeal pending before it; and (iv) that section 23 confers on the workmen an additional remedy which they did not have under the 1947 Act. To fill up the lacuna in the 1947 Act section 34 of the 1950 Act provided for certain amendments of the 1947 Act. Amongst other things, it substituted a new section for the old section 33 of the 1947 Act. The new section 33 runs as follows "33. During the pendency of any conciliation proceedings or proceedings before a Tribunal in respect of any industrial dispute, no employer shall 1251 (a)alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceedings; or (b)discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute, save with the express permission in writing of the conciliation officer, Board or Tribunal, as the case may be". It will be noticed that this section has made several changes. Thus under this section provision is made for obtaining permission as a condition precedent both for altering the conditions of service and for discharging or punishing the workmen and no exception is made for a case of misconduct unconnected with the pending dispute. Besides this, the following new section was added to the 1947 Act as section 33 A: "33 A. Where an employer contravenes the provisions of section 33 during the pendency of proceedings before a Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Tribunal and on receipt of such complaint that Tribunal shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit its award to the appropriate Government and the provisions of this Act shall apply accordingly". It may be pointed out that the new sections 33 and 33 A thus inserted into the 1947 Act confer distinct benefits on the workmen and give some additional jurisdiction and power to the authorities mentioned therein. Section 33 A enjoins the Tribunal to decide the complaint "as if it were a dispute referred to or pending before it" and to submit its award to the appropriate Government and provides that the provisions of the Act shall apply to the award. It is quite clear that the provisions of these two new sections 33 and 33 A of the 1947 Act correspond to and are in pari materia with the provisions of sections 22 and 23 of the 1950 Act and are more or less in similar terms. The question for our conside 1252 ration is: What are the meaning, scope and effect of these sections. A cursory perusal of section 33 A of the 1947 Act as well as section 23 of the 1950 Act will at once show that it is the contravention by the employer of the provisions of section 33 in the first case and of section 22 in the second case that gives rise to a cause of action in favour of the workmen to approach and move the respective authority named in the section and this contravention is the condition precedent to the exercise by the authority concerned of the additional jurisdiction and powers conferred on it by the sections. The authority referred to in the sections is, as we have seen, a Court of limited jurisdiction and must accordingly be strictly confined to the exercise of the functions and powers actually conferred on it by the Act which constituted it. What, then, are the scope and ambit of the functions and powers with which it has been vested by these sections? When an employer contravenes the provisions of section 33 of the 1947 Act or of section 22 of the 1950 Act the workmen affected thereby obviously have a grievance. That grievance is two fold. In the first place it is that the employer has taken a prejudicial action against them without the express permission in writing of the authority concerned and thereby deprived them of the salutary safeguard which the legislature has provided for their protection against victimisation. In the second place, and apart from the first grievance which may be called the statutory grievance, the workmen may also have a grievance on merits which may be of much more seriousness and gravity for them, namely, that in point of fact they have been unfairly dealt with in that their interest has actually been prejudicially affected by the highhanded act of the employer. These sections give the workmen the right to move the authority by lodging a complaint before it. This is a distinct benefit given to them, for, as we have seen, apart from these sections, the workmen have no right to refer any dispute for adjudication. This complaint is required to be made in the prescribed manner. Form DD prescribed by rule 51 A of the Industrial 1253 Disputes (Central) Rules, 1947, framed under section 38 of the 1947 Act, like Form E prescribed under section 35 of the 1950 Act, requires the complaining workmen to show in their petition of complaint not only the manner in which the alleged contravention has taken place but also the grounds on which the order or the act of the management is challenged. This clearly indicates that the authority to whom the complaint is made is to decide both the issues, namely (1) the fact of contravention and (2) the merits of the act or order of the employer. It is also clear that under section 33 A of the 1947 Act the authority is to adjudicate upon the complaint "as if it were a dispute referred to or pending before it" and under section 23 of the 1950 Act the authority is to decide the complaint "as if it were an appeal pending before it". These provisions quite clearly indicate that the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to go into the merits of the complaint and grant appropriate reliefs. The extreme contention that under section 33 A of the 1947 Act, on a finding that there has been a contravention of the provisions of section 33, the Tribunal 's duty is only to make a declaration to that effect, leaving the workmen to take such steps under the Act as they may be advised to do, has been negatived by the Labour Appellate Tribunal in Serampore Belting Mazdoor Union vs Serampore Belting Co., Ltd.(1) and by the Bombay High Court in Batuk K. Vyas vs Surat Borough Municipality(1). The same principle has been accepted and applied by a Full Bench of the Labour Appellate Tribunal to a case under section 23 of the 1950 Act in Raj Narain vs Employers ' Association of Northern India(1). We find ourselves in agreement with the construction placed upon section 33 A of the 1947 Act and section 23 of the 1950 Act by these decisions. In our view the scope and ambit of the jurisdiction conferred on the authority named in those (1) (2) (3) , 1254 sections is wider than that conferred on the Criminal Court by section 31 of the 1947 Act and section 29 of the 1950 Act. The Criminal Court under the two last mentioned sections is only concerned with the first issue herein before mentioned, namely, yea or nay whether there has been a contravention of the respective provisions of the sections mentioned therein, but the authority exercising jurisdiction under section 33 A of the 1947 Act and section 23 of the 1950 Act is to adjudicate upon or decide the complaint "as if it were a dispute referred to or pending before it" in the first case or "as if it were an appeal pending before it" in the second case. The authority is, therefore, enjoined to go into the merits of the act complained of under section 33 A of the 1947 Act and section 23 of the 1950 Act. In this sense the jurisdiction of the authority named in these two sections is certainly wider than that of the Criminal Court exercising jurisdiction under the penal sections referred to above. Having regard to the scope of the enquiry under section 33 A of the 1947 Act and section 23 of the 1950 Act it must follow that the power of the authority to grant relief must be co extensive with its power to grant relief on a reference made to it or on an appeal brought before it, as the case may be. The provision that the authority concerned must submit its award to the appropriate Government and that the provisions of the respective Acts would be applicable thereto also support the view that the decision of the authority is to partake of the nature of a decision on the merits of an industrial dispute which when published by the appropriate Government will become enforceable under the respective Acts. It follows, therefore, that the authority referred to in these sections must have jurisdiction to do complete justice between the parties relating to the matters in dispute and must have power to give such relief as the nature of the case may require and as is also indicated by the prayer clause mentioned in the two Forms DD and E referred to above. In short, these two sections give to the workmen a direct right to approach the Tribunal or Appellate Tribunal for the 1255 redress of their grievance without the intervention of the appropriate Government which they did not possess before 1950 and they provide for speedy determination of disputes and avoid multiplicity of proceedings by giving complete relief to the workmen in relation to their grievances arising out of the action taken by the employer in contravention of the provisions of the relevant sections. It is significant that this jurisdiction or power has been vested in the Tribunal or Appellate Tribunal whose normal duty is to decide or adjudicate upon industrial disputes and not on any conciliation officer or Board who are normally charged with the duty of bringing about settlement of dis putes. it is submitted by learned counsel for the Respondents and of the intervener that the scope of section 33 of the 1947 Act and of section 22 of the 1950 Act is precisely the same as that of section 33 A of the 1947 Act and section 23 of the 1950 Act. The argument is that the two last mentioned sections were enacted only in order to afford an opportunity to the workmen to do what they had been prevented from doing at the earlier stage by reason of the employer taking the law into his own hands and taking action against them without previously obtaining the sanction of the appropriate authority to do so. If the law permits the workmen to ventilate their grievances at a later stage under section 33 A of the 1947 Act and section 23 of the 1950 Act there can be no logical reason why the law should not permit them to do so at the earlier stage under section 33 of the 1947 Act and section 22 of the 1950 Act. It is submitted that the purpose of labour legislation being to maintain industrial peace and restore amity and goodwill between the employer and his workmen, it should be the attempt of the Tribunal or the Appellate Tribunal at every stage to try to resolve all disputes which are connected with the matter which is brought before it. Finally, it is urged that whenever an authority is vested with the power to do or not to do an act it must be regarded as having a discretion and 161 1256 that in exercise of such discretion the authority must be presumed to be vested with power to impose suitable conditions. Reliance is placed on the decision in The Queen vs County Council of West Riding of Yorkshire(1). The argument is that the authority concerned may under section 33 of the 1947 Act and section 22 of the 1950 Act grant by way of imposing conditions the same relief which it can grant to the workmen under section 33 A of the 1947 Act and section 23 of the 1950 Act. We are unable to accept this contention as correct for reasons which we now proceed to state. The object of section 22 of the 1950 Act like that of section 33 of the 1947 Act as amended is to protect the workmen concerned in disputes which form the subject matter of pending proceedings against victimisation by the employer on account of their having raised industrial disputes or their continuing the pending proceedings. It is further the object of the two sections 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 those pro ceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relation between the employer and the workmen. To achieve this object a ban has been imposed upon the ordinary right which the employer has under the ordinary law governing a contract of employment. Section 22 of the 1950 Act and section 33 of the 1947 Act which impose the ban also provide for the removal of that ban by the granting of express permission in writing in appropriate cases by the authority mentioned therein. The purpose of these two sections being to determine whether the ban should be removed or not, all that is required of the authority exercising jurisdiction under these sections is to accord or withhold permission. And so it has been held we think rightly by the Labour Appellate Tribunal in Carlsbad Mineral Works Co. Ltd. vs Their (1) [1S96] 2, Q.B. 386. 1257 Workmen(1) which was a case under section 33 of the 1947 Act. Even a cursory persual of section 33 of the 1947 Act will make it clear that the purpose of that section was not to confer any general power of adjudication of disputes. It will be noticed that under section 33 of the 1947 Act the authority invested with the power of granting or withholding permission is the conciliation officer, Board or Tribunal. The conciliation officer or the Board normally has no power, under the 1947 Act, to decide any industrial dispute but is only charged with the duty of bringing about a settlement of dispute. It is only the Tribunal which can by its award decide a dispute referred to it. 'Section 33 by the same language confers jurisdiction and power on all the three authorities. Power being thus conferred by one and the same section, it cannot mean one thing in relation to the conciliation officer or the Board and a different and larger thing in relation to the Tribunal. There is no reason to think that the legislature, by a side wind as it were, vested in the conciliation officer and the Board the jurisdiction and power of adjudicating upon disputes which they normally do not possess and which they may not be competent or qualified to exercise. Further, if the purpose of the section was to invest all the authorities named therein with power to decide industrial disputes one would have expected some provision enabling them to make and submit an award to which the provisions of the Act would apply such as is provided in section 33 A of the 1947 Act or section 23 of the 1950 Act. There is no machinery provided in section 33 of the 1947 Act or section 23 of the 1950 Act for enforcing the decision of the authority named in those sections. This also indicates that those sections only impose a ban on the right of the employer and the only thing that the authority is called upon to do is to grant or withhold the permission, i.e. to lift or maintain the ban. And so it has been held by this Court in Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union(1) which was a case under clause 23 of the U. P. Government Notification quoted on p. 785. (1) (2) ; , 786 7, 1258 Section 22 of the 1950 Act is in pari materia with section 33 of the 1947 Act and the above clause 23 of the U. P. Government Notification and most of the considerations noted above in connection with these provisions apply mutatis mutandis to section 22 of the 1950 Act. Imposition of conditions is wholly collateral to this purpose and the authority cannot impose any condition. And it has been so held we think correctly in G. C. Bhattacharji vs Parry & Co., Ltd., Calcutta(1). In view of the scheme of these Act summarised above and the language of these sections the general principle laid down in the case of The Queen vs The County Council of West Riding supra can have no application to a case governed by these sections. In our judgment the Labour Appellate Tribunal was in error in holding that it had jurisdiction to impose conditions as a prerequisite for granting permission to the company to retrench its workmen and the first question must be answered in the negative. In the view we have taken on the first question we do not consider it necessary on this occasion to express any opinion on the other question canvassed before us. The result, therefore, is that this appeal is allowed and the decision of the Labour Appellate Tribunal is set aside and the matter is remanded to the Labour Appellate Tribunal to deal with the application of the company and make the appropriate order according to law. In the circumstances of this case we make no order as to costs. Appeal No. 4 of 1955 is dismissed also without costs.

Held, (i) that the ordinary and primary jurisdiction of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appellate Tribunal) Act, 1950 is appellate; (ii) that section 22 of the Act confers on the appellate tribunal a special jurisdiction which is in the nature of original jurisdiction; (iii) that section 23 also vests in the tribunal an additional jurisdiction to decide the complaint as if it were an appeal pending before it; and (iv) that section 23 confers on the 1242 workmen an additional remedy which they did not have under the . The two now sections 33 and 33 A inserted in the Industrial Di putes Act 1947 (XIV of 1947) by Act XLVIII of 1950 confer distinct benefits on the workmen and give some additional jurisdiction and power to the authorities mentioned therein. Section 33 A enjoins the Tribunal to decide the complaint "as if it were a dispute referred to or pending before it" and to submit its award to the appropriate Government and provides that the provisions of the Act shall apply to the award. The provisions of these two new sections 33 and 33 A of the 1947 Act correspond to and are in pari materia with the provisions of sections 22 and 23 of the 1950 Act and are more or less in similar terms. A ban has been put by section 22 of 1950 Act and section 33 of the 1947 Act upon the ordinary right, which the employer has under the ordinary law governing a contract of employment with a view to protect the workmen against victimisation by the employer and to ensure the termination.of the proceedings in connection with industrial disputes in a peaceful atmosphere and the only thing that the authority is called upon to do is to grant or withhold the permission i.e. to lift or maintain the ban. These sections do not confer any power on the authorities to adjudicate upon any other dispute. Under section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 (XLVIII of 1950) the Labour Appellate Tribunal has no jurisdiction to impose conditions as a pre requisite for granting permission to the employer to retrench its workmen. Under section 33 A of the and section 23 of the 1950 Act the jurisdiction of the authority is not only to decide whether there has been a failure on the part of the employer to obtain the permission of the authority before taking action but also to give a decision on the merits of an industrial dispute and grant appropriate relief which when published by the appropriate Government will become enforceable under the respective Acts. Serampore Belting Mazdoor Union vs Serampore Belting Co., Ltd. ([1951] , Batuk K. Vyas vs Surat Borough Municipality ([1952] , Raj Narain vs Employer s ' Association of Northern India ([1952] 1 Lab. L.J. 381), The Queen vs County Council of West Riding of Yorkshire ([1896] 1 Q.B. 386), Carlsbad Mineral Works Co., Ltd. vs Their Workmen ([1953] , Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union ([1953] S.C.R. 780) and Bhattacharji vs Parry & Co., Ltd., Calcutta ([1954] , referred to.

Appeals Nos. 5 and 6 of 1955. Appeals from the judgment and decree dated September 15, 1952, of the Madras High Court in Second Appeals Nos. 2256 of 1947and 2545 of 1948, 2 arising. out of the judgment and decree dated September 19, 1946, of the Court of Subordinate Judge of Kozhikode in Appeal Suit Nos. 336 and 180 of 1946, against the judgment and decree dated October 9, 1945, and June 29, 1946, respectively of the Court of Districts Munsif, Chowghat, in O. section Nos. 131 and 158 of 1945. B. K. B. Naidu, for the appellants. V. Karunakara Menon and M. R. Krishna Pillai, for the respondents. October 1. The Judgment of the Court was delivered by VENKATARAMA AIYAR J. The point for determination in these two appeals is whether one Kesavan Kaimal who was one of three executants of a will dated February 10, 1906, became entitled under that will to the properties, which are the subject matter of these appeals. The will is a short one, and is as follows: " Will executed on 28th Makaram 1081 M. E., corresponding to 10th February, 1906, jointly by Kunhan Kaimal, son of Karayamvattath Katbayakkal Kunhu Kutti Amma, Kesavan Kaimal, son of Theyi Amma and Theyi Amma, daughter of Nani Amma of Etathiruthi amsom and Etamuttan desom in Ponnani Taluk. We have hereby settled and agreed that all the movable and immovable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining shall be held by us in our possession and under our control and dealt with by us as we please till our death and that subsequent to our death, Kalliani Amma 's children, Kali and Kunhu Kutty, Thona Amma 's children, Parukutty, Kunhunni, Kochu Govindan and Ramar, and the children of the deceased Narayani Amma, namely, Kunhunniri, Kuttiparu and Lakshmikutty and their children and the children who may be born to them as also the children who may be born of them, shall as our heirs and legal representatives, hold the said properties in their 3 possession and enjoy them hereditarily in equal shares amongst themselves. Except after our death, the aforesaid persons shall not lay claim to any of the properties belonging to us. It is settled that in the event of our effecting any transfers or alienations of the said properties. either jointly or severally till our death, the aforesaid ' persons shall have the right and freedom only in respect of the remaining items of properties to the exclusion of those items of properties included in the above transactions. It is hereby further settled and agreed that subsequent to our death, save our legal representatives aforesaid and such of those as may be born hereafter, no other persons shall have the right to claim to or right of entry upon the entire properties moveable and immoveable found belonging to us. And we have signed herein in the presence of the undersigned witnesses (signed) Kunhan Kaimal. ( " " ) Kesavan Kaimal. (" " ) Theyi Amma. " of the three testators, Theyi Amma died first the exact date of her death does not appear and is not very material and Kunhan Kaimal died thereafter sometime in 1930. It is the case of Kesavan Kaimal that in the events which had happened, he had become entitled by survivorship to all the properties disposed of by the will, including those of Kunhan Kaimal, and on this footing he conveyed on October 14,1938, seven items of properties, of which three belonged to Kunhan Kaimal, to one Sankarankutti Kaimal and on October 16, 1944, another three items of properties which belonged to Kunhan Kaimal, to Kalyani and Vijayan. These transfers led to the two litigations; which have culminated in the present appeals. The legatees under the will dated February 10, 1906, instituted O. section No. 131 of 1945 in the Court of the District Munsif, Chowghat, then in the Province of Madras, for recovery of possession of three items of properties which had belonged to Kunhan Kaimal 4 after redeeming a mortgage for Rs. 100 created over those properties on February 3, 1901. The plaintiffs claimed that on the death of Kunhan Kaimal in 1930 they had become entitled to those properties as legatees under the will. Defendants 1 to 3 represented the mortgagees. Defendant 6 was Kesavan Kaimal, and defendants 4 and 5 were brought on record as persons claiming to be entitled to the suit properties under a deed of transfer by defendant 6, dated October 16, 1944. Defendants 4 to 6 contested the suit, and pleaded that on a proper construction of the will, the properties of Kunhan Kaimal survived to Kesavan Kaimal on the death of the former in 1930, and that the plaintiffs got no title to them. This contention was overruled by the District Munsif, and the suit was decreed. There were two appeals against this decree, A. section No. 179 of 1946 and A. section No. 180 of 1946 in the Court of the Subordinate Judge, Calicut, the former by defendants 4 and 5 and the latter, by defendant 6. The Subordinate Judge agreed with the construction put on the will by the District Munsif, and dismissed the appeals. Against that decree, defendant 6 preferred section A. No. 2256 of 1947 in the High Court of Madras. Basing himself on the deed of transfer dated October 14, 1938, Sankarankutti Kaimal instituted O. section No. 158 of 1945 in the Court of the District Munsif, Chowghat, for recovery of possession of three items of properties, of which one belonged to Kunhan Kaimal absolutely and the other two ' to him and others as co owners. In the plaint, he alleged that there was an oral lease of the properties to the first defendant and to one Kali Amma, whose legal representatives were defendants 2 and 3, that the defendants were in arrears in the payment of rent, and were disputing his title to the properties, and that he was therefore entitled to eject them. Defendant 4 is Kesavan Kaimal, the vendor of the plaintiff. The contesting defendants who were the same as the plaintiffs in O.S. No. 131 of 1945 pleaded that under the will they became entitled to all the properties of Kunhan Faimal, that the oral lease was untrue, and that the 5 suit was barred by limitation. The District Munsif found all the contentions in favour of defendants 1 to 3 and dismissed the suit. , Against this decree, there was an appeal, A. section No. 336 of 1946, in the Court of the Subordinate Judge of Ottapalam, and that was dismissed, the Subordinate Judge agreeing with the District Munsif on all the issues. Against his decree, the plaintiff preferred section A. No. 2545 of 1948 in the High Court of Madras. Both the second appeals came up for hearing before Raghava Rao J. who held that on its true construction the will operated to vest, in the three testators all the properties covered by it in joint ownership, that, in consequence, on the death successively of Theyi Amma and Kunhan Kaimal, their interest survived to Kesavan Kaimal, and that the transfers made by him on October 14, 1938, and October 16, 1944, were valid. In the result, both the second appeals were allowed, the suit for redemption, O. section No 131 of 1945, was dismissed, and the suit in ejectment, O. section No. 158 of 1945, was decreed. Against this judgment, the present appeals have been brought on a certificate granted by this court under article 136. The sole point for determination in these appeals is whether under the will all the three testators became joint owners of all the properties on which it operated. After hearing the question fully argued, we have come to the conclusion that that is not the effect of the will, and that the judgment of the High Court contra cannot be supported. There were three executants of the will. Each of them possessed properties, which were his or her self acquisitions. They also owned some properties which they had jointly acquired, but their title to such properties was as tenants in common and not as joint tenants. Each of them would have been entitled to execute a will of his or her properties, and if that had been done, the legatees named therein would undoubtedly have been entitled to those pro perties. In the present case, the legatees who were intended to take were the same persons, and it was for that reason that the three testators instead of each executing a separate will jointly executed it. It ist 6 nevertheless, a will by which each testator bequeathed properties belonging to him or to her, and therefore on the death of each testator, the legatees mentioned in the will would be entitled to the properties of the testator, who dies. The contention of the respondents which has found favour with the High Court is that the will must be construed as a transfer by the several testators of all their individual properties to themselves jointly as joint tenants. That would really be a transfer inter Vivos and not a will. The word "will" is widely known and used, and it has a well understood significance as meaning a disposition which is to take effect on the death of a person. The executants of the will could not have therefore intended that it should operate inter ViVOs. Moreover, if the document was intended to take effect as a present disposition, it should have to be stamped under the provisions of the Stamp Act, but the will is an unstamped document. Coming to the recitals in the will, there are no words by which the executants thereof divest themselves of their individual ownership and vest it in themselves jointly. It is said that that could be implied from the words " all the movable and immovable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining shall be held by us in our possession and under our control ". We are unable to read any such implication in those words. It is difficult to imagine how properties which were to be acquired in future could form the subject matter of a disposition in praesenti. On the other band, the true purpose of this clause would seem to be to emphasise that the execution of the will does not affect the rights of the testators over their properties, and that is an indication the it is to operate as a will. The matter appears to us to be concluded beyond all doubt by the terms of clause 3, which provides that the testators could alienate the properties jointly or severally. If the properties were intended to be impressed with the character of joint property, an alienation by any 7 one of them singly would be incompetent. In coming to the conclusion to which he did, the learned Judge in the Court below was very largely influenced by the fact that the will dealt with, not only the separate properties of the testators but also of their joint properties, and that there was one disposition as regards all of them. But this reasoning is based on a misconception of the recitals in the will. The will does not refer to any joint properties of the testators but to properties jointly acquired by them which is very different. They would hold these properties as tenants in common, and their share therein would devolve as their separate properties. It was further argued for the respondents that it could not have been the intention of Theyi Amma, one of the testators, to benefit the legatees under the will in preference to her own son, Kesavan Kaimal, and that, therefore, it must be held that she intended that her son who was the youngest of the testators should take all the properties. But if Kesavan Kaimal could himself agree to bequeath his properties to those legatees, we see nothing unnatural in his mother also agreeing to bequeath her properties to them they being the heirs of the testators under the Marumakkat tayam Law. Learned counsel for the respondents sought to rely on the subsequent conduct of the parties as showing that they understood the will as conferring a joint estate on the testators. It was said that it was in that belief that Kesavan Kaimal was dealing with the properties of the other testators as his own, after their death. It was also said that the conduct of the other members of the tarwad, including the plaintiffs, showed that they shared that belief. And this was sought to be made out by reference to the proceedings in E. A. No. 320 of 1938 in section C. No. 480 of 1933. The facts were that one Kunhunni Kaimal obtained a decree against Kesavan Kaimal in section C. No. 480 of 1933, and in execution of that decree, he brought some of the tarwad properties to sale, purchased them himself and got into possession. The members of the tarwad then filed an application, E. A. No. 320 of 1938, under 0. 21, r. 100, for redelivery of the 8 properties to them on the ground that the decree and the sale proceedings were not binding on them, and that was dismissed. In the order dismissing the application, the District Munsif observed that under the will dated February 10, 1906, Kesavan Kaimal had the power to transfer the properties. This order was relied on in these proceedings as operating as res judicata in favour of the respondents; but that contention was negatived by the Courts below, and has not been repeated before us. But these proceedings are now sought to be relied on as showing that the members of the tarwad did not dispute the title of Kesavan Kaimal to the properties which were dealt with by the will. As against this, the appellant referred us to a partition deed dated May 16, 1915, and a mortgage deed dated March 4, 1926, to both of which Kesavan Kaimal was a party, in which be and other members of the family had understood the will in question as meaning that the testators held the properties covered by the will in separate ' and exclusive ownership. Whatever value one might attach to the above considerations if there was any doubt or uncertainty as to the meaning of the will, when once it is held that the language thereof is clear and unambiguous, evidence of the subsequent conduct of the parties cannot be admitted for the purpose of limiting or controlling its meaning. In our view, the terms of the will are clear, and the subsequent conduct of the parties sought to be relied on must be disregarded as wholly inadmissible. We are accordingly of opinion that the will dated February 10, 1906, is what it purports to be a will, and nothing else. It does not confer any rights inter se on the testators; it only vests the title to the properties disposed of by it in the legatees on the death of the testators. In this view, the will must be held to be a testamentary disposition by the three testators of their properties operating on the death of each testator on his properties, and is, in effect, three wills combined in one. A joint will, though unusual, is not unknown to law. In Halsbury 's Laws of England, Hailsham 's Edition, Vol. 34, p. 17, para. 12, the law is thus stated: 9 " A joint will is a will made by two or more testators contained in a single document, duly executed by each testator, disposing either of their separate properties, or of their joint property. It is not, however, recognised in English law as a single will. It operates on the death of each testator as his will disposing of his own separate property, and is in effect two or more wills ". There is a similar statement of the law in Jarman on Wills, 8th Ed., p. 41. The following observations of Farewell J. in Duddell in re. Roundway V. Roundway (1) are apposite: ". in my judgment it is plain on the authorities that there may be a joint will in the sense that if two people make a bargain to make a joint will, effect may be given to that document. On the death of the first of those two persons the will is admitted to probate as a disposition of the property that be possesses. On the death of the second person, assuming that no fresh will has been made, the will is admitted to probate as the disposition of the second person 's property. . It was also argued for the respondents that the will might be construed as a mutual will, but that, in our opinion, is an impossible contention to urge on the recitals of the document. A will is mutual when two testators confer upon each other reciprocal benefits, as by either of them constituting the other his legatee; that is to say, when the executants fill the roles of both testator and legatee towards each other. But where the legatees are distinct from the testators, there can be no question of a mutual will. It cannot be argued that there is, in the present case, a bequest by the testators to themselves. There is nothing in the will to support such a contention, which would be inconsistent with the position taken by the respon dents that there was a settlement of the properties inter vivos converting separate properties into joint properties. In this view, on the death of Kunhan Kaimal his properties vested in the legatees under the will dated February 10, 1906, and therefore neither Kesavan Kaimal nor his transferees under the deeds could lay any claim to them. (1) , 592. 2 10 In the result, the appeals are allowed, the decrees passed by the High Court are set aside, and those of the Courts below are restored, with costs throughout. Appeals allowed.

A will executed jointly :by three persons contained, inter alia, the following recitals: " We have hereby settled and agreed that all the moveable and immoveable properties acquired jointly and separately by us till now, and those which we may be so acquiring in future and those which have devolved on us and those which we may yet be obtaining, shall be held by us in our possession and under our control and dealt with by us as we please till our death. " There were bequests in favour of certain persons and the will provided that in the event of the executants effecting any transfers or alienations of the said properties, either, jointly or severally till their death, the aforesaid persons shall have the right only in respect of the remaining items of the properties. Two of the testators having died the third claimed that he had become entitled by surviorship to all the properties disposed of by the document on the footing that it was in effect a transfer of all their individual properties to themselves jointly as joint tenants. Held, that the document was a testamentary disposition by the three testators of their properties operating on the death of each testator on his properties, and was, in effect three wills combined in one. The properties were held by the testators at, tenants in common and the legatees mentioned in the will would become entitled to the properties of the testator who dies.

Appeals Nos. 721 and 791 of 1963. Appeals by certificate and special leave from the judgment and order dated February 16, 1962 of the Madras High Court in Writ Appeals Nos. 16 and 15 ,of 1959 respectively. V. P. Ran an and R. Ganapathy Iyer, for the appellant in C.A. No. 721 of 1963). G. B. Pai, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the appellant (in C.A. No. 791/63). T. section Venkataraman, for the respondent No. 2 (in both the appeals). April 6, 1964. The Judgment of the Court was delivered by WANCHOO, J. These two appeals by special leave raise a common question and will be decided together. The appel lants are proprietors of two bidi concerns. A reference was made by the Government of Madras of dispute between the appellants and their workmen with respect to three matters. In the present appeals however we are concerned with only one matter, namely, whether reduction of annas two in the wages of workers employed under the agents of the appellants was justified and to what relief the workers were entitled. The contention of the appellants before the tribunal was that the workers in question were not their workmen and therefore there being no relation of employers and employees between them and the workmen, the reference itself was in competent and there could be no industrial dispute between them and the workmen concerned, their case being that the workmen concerned were the workmen of independent con tractors. It was found by the tribunal on the basis of evi dence led before it by both parties that the modus operandi with respect to manufacture of bidis in the appellants ' con cerns was that contractors took leaves and tobacco from the appellants and employed workmen for manufacturing bidis. After bidis were manufactured, the contractors took them back from the workmen and delivered them to the appellants. 648 The workmen took the leaves home and cut them there; however the process of actual rolling by filling the leaves with tobacco took place in what were called contractors ' factories. The contractors kept no attendance register for the workmen. There was also no condition that they should come and go at fixed hours. Nor were the workmen bound to come for work every day; sometimes the workmen informed the contractors if they wanted to be absent and sometimes they did not. The contractors however said that they could take no action if the workmen absented them, selves even without leave. The payment was made to the workmen at piece rates. After the bidis were delivered to the appellants payment was made therefor. The system was that the appellants fixed the price of tobacco and leaves supplied to the contractors who took them to the places where work of rolling was done and gave them to the workmen. Next day, the manufactured bidis were taken by the contractors to the appellants who paid a certain price for the manufactured bidis after deducting therefrom the cost of the tobacco and the leaves already fixed. The balance was paid to the contractors who in their turn paid to the workmen, who rolled bidis, their wages. Whatever remained after paying the workmen would be the contractors ' commission for the work done. It may also be mentioned that there were written agreements on the same pattern between the appellants and the contractors in that behalf, though no ,such agreement has been printed in the paper books. as if there was a sale of leaves and tobacco by the appellants to contractors and after the bidis were rolled there was a resale of the bidis to the appellants by the contractors. The; tribunal however held that it was clear that there was no sale either of the raw materials or of the finished products, for, according to the agreement, if bidis were not rolled, raw materials had to be returned to the appellants and the contractors were forbidden from selling the raw materials to any one else. Further after the bidis were manufactured they could only be delivered to the appellants who supplied raw materials and not to any one else. Further price of raw materials fixed by the appellant, as well as the price of the finished products always remained the same and never fluctuated according to market rates. The tribunal therefore concluded that there was no sale of raw materials followed by resale of the finished products and this system was evolved in order to avoid regulations under the Factories Act. The tribunal also found that the contractors generally got only annas two per thousand bidis for their trouble. The tribunal 649 also referred to a clause in the agreement that the appellants would have no concern with the workers who rolled bidis for whom only the contractors would be responsible. But it was of the view that these provisiors were deliberately put into the agreement by the appellants to escape such statutory duties and obligations, as may lie on them under the Factories Act or under the Madras Shops and Establishments Act. Finally on a review of the entire evidence, the tribunal found that this system of manufacture of bidis through the so called contractors was a mere camouflage devised by the appellants. The tribunal also found that the contractors were indigent persons and served no particular duties and discharged no special functions. Raw materials were supplied by the appellants to be manufactured into finished products by the workmen and the contractors had no other function except to take the raw materials to the workmen and gather the manufactured material. It therefore held that the so called contractors were not independent contractors and were mere employees or were functioning as branch managers of various factories, their remuneration being dependent upon the work turned out. It therefore came to the conclusion that the bidi workers were the employees of the appellants and not of the so called contractors who were themselves nothing more than employees or branch managers of the appellants. It finally held that reduction in the wages by two annas per thousand bidis was not justified and the workmen were entitled to the old rates. It therefore ordered the reduction in wages to be restored. Thereupon the appellants filed two writ petitions in the High Court, their contention being that the tribunal was wrong in holding that the contractors and the workmen em ployed by the contractors were the workmen of the appel lants. It seems that a sample agreement was produced before the High Court, which provided inter alia for the following terms: (1) That the proprietor should supply the tobacco and the bidi leaves; (2) that the intermediary should engage premises of his own and obtain the requisite license to carry on the work of having the bidis rolled there; (3) that at no time should more than nine bidi rollers work in the premises of that intermediary; (4) that the intermediary should meet all the incidental charges for rolling the bidis including the cost of thread and the remuneration paid to the bidi rollers; 650 (5) that for every unit of 1,000 bidis rolled and delivered by the intermediary to the proprietor, the latter should pay the stipulated amount, after deducting the cost of the tobacco and the bidi leaves supplied by the proprietor; (6) that the intermediary should not enter into similar engagement with any other industrial concern;, (7) that the price of the raw materials and price to be paid for every unit of 1,000 bidis rolled and delivered were to be fixed at the discretion of the proprietor. Besides these conditions, the contract also provided that it was liable to termination on breach of any of the conditions, and that the proprietors had no connection with and that they assumed no responsibility for the bidi workers who had to look to the intermediary for what was payable to them for rolling the bidis. The learned Single Judge on a review of the terms of the contract and the evidence on record held that neither the bidi roller nor the intermediary was an employee of the appellants. In consequence there could be no industrial dispute within the meaning of section 2 (k) of the Industrial Disputes Act between the appellants and the bidi rollers. The petitions were therefore allowed and the award of the tribunal was set aside. Thereupon there were two appeals by the workmen. The appeal court on a consideration of the terms of the contract and the findings of the tribunal came to the conclusion that the so called contractors were really the agents of the appel lants and that there was no utter lack of control by the appellants on the bidi workers who actually rolled the bidi. The appeal court also found that the intermediaries were im pecunious and according to the evidence could hardly afford to have factories of their own. It also found that the evi dence revealed that the appellants took the real hand in settling all matters relating to the workers, and the intermediary was a mere cipher and the real control over the workers was that of the appellants. The appeal court therefore held that the appellants were the real employers of the workmen and the so called intermediaries or so called independent contractors who were in some cases ex employees, were no more than agents of the appellants. In this view of the matter the appeal court held that the conclusion reached by the tribunal that the intermediaries were merely branch managers 651 appointed by the management and the relationship of employer and employees subsisted between the appellants and bidi rollers was correct. The appeals were therefore allowed, and the order of the tribunal was restored. The appellants have come before us on certificates granted by the High Court. The question whether relationship of master and servant subsists between an employer and employee has been the subject of consideration by this Court in a number of cases. In Dharangadhara Chemical Works Limited vs State of Saurashtra(1) it was held that the question whether a person was a workman depended on whether he had been employed by the employer and the relationship of employer and employee or master and servant subsisted between them. It was well settled that a prima facie test of such relationship was the existence of the right in the employer not merely to direct what work was to be done but also to control the manner in which it was to be done, the nature or extent of such con trol varying in different industries and being by its very nature incapable of being precisely defined. The correct approach therefore was to consider whether, having regard to the nature of the work there was due control and supervision by the employer. It was further held that the question whether the relation between the parties was one as between an employer and employee or master and servant was a pure question of fact, depending upon the circumstances of each case. In that case, the dispute was whether certain agarias who were a class of professional labourers, were workmen or independent contractors. The facts found in that case were that the agarias worked themselves with members of their families and were free to engage extra labour on their own account. No hours of work were prescribed. No muster rolls were maintained; nor were working hours controlled by the master. There were no rules as regards leave or holidays and the agarias were free to go out of the factory after making arrangements for the manufacture of salt. Even so, though certain features which were usually to be found in a contract of service were absent, the tribunal held that on the whole the status of agarias was that of workmen and not that of independent contractors, particularly as supervision and control was exercised by the master extending to all stages ,of manufacture from beginning to end. This Court upheld the view of the tribunal on a review of the facts found in that case. The next case to which reference has been made is Shri Chintaman Rao vs The State of Madhya Pradesh(2). (1) ; (2) ; 652 That was a case of bidi manufacture, and the question that arose for determination was whether certain persons known as sattedars and those who worked under the sattedars were workmen or not. It was found that the sattedars undertook to supply bidis by manufacturing them in their own factories or by entrusting the work to third parties at a price to be paid by the management after delivery and approval. Refer ence was made to the principles laid down in Dharangadhara Chemical Works Limited 's case(1) to determine whether the persons employed were workmen or not, and it was found that the sattedars were not under the control of the factory management and could manufacture the bidis wherever they pleased. It was therefore held that the coolies were neither employed by the management directly nor by the management through the sattedars. A special feature of that case was that none of the workmen under the sattedars worked in factories. The bidis could be manufactured anywhere and there was no obligation on the sattedars to work in the fac tory of the management. The sattedars were even entitled to distribute tobacco to the workers for making bidis in the workers ' respective homes. It was in these circumstances that this Court held that the sattedars were independent contractors and the workers employed by them were not the workers of the management. Then we come to the case of Shri Birdhichand Sharma vs First Civil Judge Nagpur(2). That was also a case of bidi manufacture. The facts found were that the workmen who rolled the bidis had to work at the factory and were not at liberty to work at their houses; their attendance was noted in the factory and they had to work within the factory hours, though they were not bound to work for the entire period and could come and go away when they liked; but if they came after midday they were not supplied with tobacco and thus not allowed to work even though the factory closed at 7 p.m. Further they could be removed from service if absent for eight days. Payment was made on piece rates according to the amount of work done, and the bidis which did not come upto the proper standard could be rejected. On these facts it was held that the workers were workmen under the Factories Act and were not independent contractors. This Court pointed out that the nature and extent of control varied in different industries and could not by its very nature be precisely defined. When the operation was of a simple nature and did not require supervision all the time, control could be exercised at the end of day by the method of rejecting bidis which did not come upto proper standard, (1)[1957] S.C.R. 152. (2)[1961] 3 S.C.R. 161. 653 such supervision by the employer was sufficient to make the workers, employees of the employer and not independent contractors. The nature of the control required to make a person a servant of the master would depend upon the facts of each case. The next case is Shankar Balaji Waje vs State of Maha rashtra(1). That was also a bidi manufacturing case. On the facts of that case the majority held that decision in Shri Birdhichand Shama 's case(2) was distinguishable and the appellant was not a worker within the meaning of the Fac tories Act. It may be noted however that that case also followed the line of decisions of this Court since the decision in the case Dharangadhara Chemical Works Limited(3) as to the criteria for coming to the conclusion whether a person was an employee or an independent contractor. The last case to which reference has been made is again a bidi manufacturing case, namely, Bhikusa Yamasa Kashtriya (P) Limited vs Union of India(4). In that case the main question raised was about the constitutionality of section 85 of the Factories Act and the notification issued by the State of Maharashtra thereunder. The Constitutionality of section 85 and the notification made thereunder was upheld. The question there involved was about the application of section 79 of the, Factories Act with reference to leave and the difficulty felt in Shankar Balaji Waje 's case(1) as to how leave could be calculated in the circumstances was explained with reference% to the decision in Shri Birdhichand Sharma 's case(2). It is in the light of these decisions that we have to decide whether the workmen who work under the so called independent contractors in these cases are the workmen of the appel lants. It has been found by the tribunal and this view has been confirmed by the appeal court that so called independent contractors were mere agents or branch managers of the appellants. We see no reason to disagree with this view taken by the tribunal and confirmed by the appeal court on the facts of these cases. We are not unmindful in this connection of the view taken by the learned Single Judge when he held that on the agreements and the facts found the so called intermediaries were independent contractors. We are however of opinion that the view taken by the appeal court in this connection is the right one. As the appeal court has rightly pointed out the (1)[1957] S.C.R. 152. (2) ; (3) (1962) Supp 1. I S.C.R. 249. (4) ; 654 so called independent contractors were indigent persons who were in all respects under the control of the appellants. There is in our opinion little doubt that this system has been evolved to avoid regulations under the Factories Act. Further there is also no doubt from whatever terms of agreement are available on the record that the so called independent contractors have really no independence at all. As the appeal court has pointed out they are impecunious persons who could hardly afford to have factories of their own. Some of them are even ex employees of the appellants. The contract is practically one sided in that the proprietor can at his choice supply the raw materials or refuse to do so, the so called contractor having no right to insist upon the supply of raw materials to him. The so called independent contractor is even bound not to employ more than nine persons in his so called factory. The sale of raw materials to the so called independent contractor and resale by him of the manufactured bidis is also a mere camouflage, the nature of which is apparent from the fact that the so called contractor never paid for the materials. All that happens is that when the manufactured bidis are delivered by him to the appellants, amounts due for the socalled sale of raw materials is deducted from the so called price fixed for the bidis. In effect all that happened is that the so called independent contractor is supplied with tobacco and leaves and is paid certain amount , for the wages of the workers employed and for his own trouble. We can therefore see no difficulty in holding that the so called contractor is merely an employee or an agent of the appellants as held by the appeal court and as such employee or agent he employs workers to roll bidis on behalf of the appellants. The work is distributed between a number of : so called independent contractors who are told not to employ more than nine persons at one place to avoid regulations under the Factories Act. We are not however concerned with that aspect of the matter in the present appeals. But there can be no doubt that the workers employed by the so called contractors are really the workmen of the appellants who are employed through their agents or servants whom they choose to call independent contractors. It is however urged that there is no control by even the agent over the bidi workers. Now the evidence shows that the bidi workers are permitted to take the leaves homes in order to cut them so that they might be in proper shape and size for next day 's work; but the real work of filling the leaves with tobacco (i.e. rolling the bidis) can only be done in the so called factory of the so called independent contractor. No tobacco is ever given to the workers to be taken home to be rolled into bidis as and when they liked. They have to 655 attend the so called factory of the so called independent contractor to do the real work of rolling bidis. As was pointed out by this Court in Shri Birdhichand Sharma 's case(1) the work is of such a simple nature that supervision all the time is not required. In Birdhichand Sharma 's case(1) supervision was made through a system of rejecting the defective bidis, at the end of day. In the present cases we have not got the full terms of the agreement and it is therefore not possible to say that there was no kind of supervision or control over the workers and that the so called independent contractors had to accept all kinds of bidis whether made upto standard 'or not. It is hardly likely that the so called independent contractor will accept bidis which are not upto the standard; for that is usually the system which prevails; in this trade as wilt be apparent from the facts of the many bidi manufacturing cases to which we have referred. We are therefore not prepared to hold in the absence of any evidence one way or the other that there is no supervision whatsoever of the work done by the workers. In the circumstances we are of opinion that the relationship of master and servant between the appellants and the workmen employed by the ;so called independent contractors is established. As the appeal court has ' pointed out whenever there was a dispute in connection with the manufacture of bidis the workers looked to the appel lants for redress. In one of the cases the manager of one of the appellants sent a letter to the labour officer that the factory was agreeable to increase the wages of the workers from, Rs. 1/14/ to Rs. 2/ per thousand bidis. In the other case also a similar letter was addressed showing that whenever there was increase or decrease in wages of the workers who, work under the so called independent contractors the real decision was taken by the appellants. This conduct on the part of the appellants is clearly inconsistent with their plea that the workers are not their employees and there is no privity between them and the said workers. We are therefore of opinion that on the facts found in these cases the appeal court was right in holding that the conclusion reached by the tribunal that the intermediaries were merely branch managers appointed by the management and the relationship of employers and employees subsisted between the appellants and the bidi rollers is correct. In this view the appeals fail and are hereby dismissed with costs one set of hearing costs. Appeal dismissed (1)[1961] 3 S.C.R. 161.

On a reference of industrial disputes between the appel lants, the proprietors of bidi concerns, and their workmen, the appellants contended before the Industrial Tribunal that the workers in question were not their workmen, but were the workmen of independent contractors. The Tribunal found on the basis of evidence led, that the modus operandi was that contractors took leaves and tobacco from the appellant and ' employed workmen for manufacturing bidis. After bidis were manufactured, the contractors took them back from the work men and delivered them to the appellants. The workmen took the leaves home and cut them there; however the process of actual rolling by filling the leaves with tobacco took place in what was called contractors ' factories. The contractors kept no attendance register for the workmen, there was no condition for their coming and going at fixed: hours, nor were they bound to come for work every day; sometimes they informed the contractors if they wanted to be absent and some times they did not. The contractors said that they could take no action if the workmen absented themselves even without leave. The payment was made to the workmen at piece rates after the bidis were delivered to the appellants. The system was that the appellant paid a certain sum for the manufactured bidis, after deduct ing therefrom the cost of tobacco and the leaves already fixed, to the contractors who in their turn paid to the workmen, who rolled bidis, their wages. Whatever remained after paying the workmen would be contractors ' commission for the work done, The Tribunal held that there was no sale either of the raw materials or of the finished products, for, according to the agreement, if the bidis were not rolled, raw materials had to, he returned to the appellants and the contractors were forbidden from selling the raw materials to anyone else. Further the manufactured bidis could only be delivered to the appellants who supplied the raw materials. Further price of raw materials and finished products fixed by the appellants always remained the same and never fluctuated according to market rate. The Tribunal concluded that the bidi workers were the employees of the appellants and not of the so called contractors who were themselves nothing more then employees or branch managers of the appellants. Thereupon, the appellants filed writ petitions in the High Court, which held that neither the bidi roller nor the intermediary was an employee of the appellants and allowed the writ petitions. On appeal by the workmen the appeal court allowed the appeal and restored the order and conclusion of the Tribunal. On appeal by certi ficate: Held: On the facts found the appeal court 'was right in holding that the conclusion reached by the Tribunal that the intermediaries were merely branch managers appointed ' by the 647 management and the relationship of employers and employees subsisted between the appellants and the bidi rollers was correct. Dharangadhara Chemical Works Ltd., vs State of Saurashtra, ; , Shri Chintsman Rao vs State of Madhya Pradesh, ; , Shri Birdhichand Sharma vs First Civil Judge Nagpur; , , Shankar Balaji Waje vs State of Maharashtra, [1962] Supp. 1 S.C.R. 249 and Bikusu Yamasa Kashtriya (P) Ltd. vs Union of India, ; , discussed.

minal Appeal No. 157 of 1965. Appeal by special leave from the judgment and order dated February 1, 1965 of the Punjab High Court in Criminal Misc. No. 8 of 1964 in Cr. Revision No. 1375 of 1963. Nishat Singh Grewal, Ravindra Bana and O. P. Rana, for the appellants. R. N. Sachthey, for the respondent No. 2. The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Punjab dismissing Criminal Miscellaneous Petition No. 8 of 1964. This petition arose out of the following facts. Bhagwant Rai and Chhota Ram were tried, under section 325, I.P.C., read with section 34, I.P.C., in the Court of Shri Harish Chander Gaur, Magistrate 1st Class, Patiala. Ajaib Singh, Sub Inspector, one of the appellants before us, had investigated the case. The Magistrate, by his order dated April 5. 1957, acquitted both the accused and, inter alia, observed that Bhagwant Rai had been falsely implicated in the case as he was not even present on the, day of the occurrence at Patiala. On the application of Bhagwant Rai, Shri Joginder Singh 'Karam garhia ', Magistrate 1st Class, Patiala, who succeeded Shri Harish Chander Gaur, filed a complaint under sections 193, 195, 211 and 120B, I.P.C., on October 31, 1958, against six persons including the appellants, Ajaib Singh and Malkiat Singh. Shri O. P. Gaur. Magistrate First Class, by his order dated June 1, 1959, discharged the accused, holding that the complaint was not competent as it was barred by sub section (6) of section 479A, Cr. P.C., because the, complaint had not been filed by or directed to be filed by Shri Harish Chander Gaur, who had disposed of the case ending in the acquittal of Bhagwant Rai. In the revision filed against this order the Additional Sessions Judge upheld this view. The High Court (Capoor, J.), on revision, found it unnecessary to consider the, scope of section 479A, Cr. P.C., vis a vis section 476, Cr. P.C., because two of the offences mentioned in the complaint, namely. s.211 and section 120B, I.P.C., did not fall within the purview of s.479A. Capoor, J., further held that section 42 of the Police Act.1861, had no application to a case in which a complaint was made by the Court under section 476, Cr. P.C. Capoor, J., also held that as the order of Shri Joginder Singh, Magistrate, directing the making of the complaint against the respondents was not appealed from and had become final, the competency of the Court to make the complaint under section 211, I.P.C., against Jaswant Singh, one of the accused, could not be considered at that stage. The High 147 Court accordingly set aside the order of the learned Additional Sessions Judge and directed that the respondents be proceeded against according to law. On the case going back fresh objections were filed before the Magistrate trying the case but these were overruled. Revision was filed before the Additional Sessions Judge who accepted the prayer of Kirpal Singh and recommended to the High Court that the criminal proceedings pending against him in the Court of Magistrate First Class, Patiala. might be quashed. He, however, declined to interfere with the proceedings pending against the appellants mainly on the ground that the objections now taken by them before the Trial Magistrate had been heard and finally disposed of by Capoor, J., in his order dated April 4, 1961. In the meantime, the appellants put in Criminal Miscellane ous Petition No. 8 of 1964, in criminal revision, in the High Court, praying that along with the recommendation made by the learned Additional Sessions Judge, Patiala, for quashing the criminal proceedings against Kirpal Singh, the grounds urged by them might also be taken into consideration. Capoor, J., accepted the recommendation made by the learned Additional Sessions Judge, Patiala, and quashed the criminal proceedings against Kirpal Singh. He, however, directed that Criminal Miscellaneous Petition No. 8 of 1964 should be placed before another Bench for disposal. The matter was then placed before Sharma, J., who held that all the points urged in Criminal Miscellaneous Petition had been taken into consideration and repelled by Capoor, J., in his order dated April 4, 1961. Sharma, J., observed : "The learned counsel, however, omitted to take note of the fact that the revision petition finally was accepted in the terms, 'As the order under revision is not legally sustainable, it must be set aside and the respondents must be proceeded with according to law. ' Therefore, what the order (said) was that the criminal case as a whole was to proceed against all the respondents and so the petitioners could not be heard now to say that the case was remanded to the trial court for trial of the respondents for offences punishable under sections 211 and 120 B of the Indian Penal Code. In the circumstances, the trial Court cannot be said to have misconstrued the order of Capoor, J., The other grounds urged by them in the Criminal Miscellaneous as already pointed out by me were taken into consideration by Capoor, J., and findings given against the petitioners and that being so, these cannot be agitated again at this stage. " 148 He accordingly dismissed the Criminal Miscellaneous Petition. The appellants having obtained special leave, the appeal is now before us. The learned counsel for the appellants contends that on the facts prosecution for offences under sections 193 and 195, I.P.C., was barred under section 479A(6), Cr. In our opinion, this contention must be accepted in view of the ruling of this Court in Shabir Hussain Bholu vs State of Maharashtra(1) and Baban Singh vs Jagdish Singh(2). The learned counsel next contends that the complaint could only be filed by the Magistrate before whom the original proceedings were taken. He says that according to section 195 (1) (b), Cr. P.C., a complaint in respect of sections 193, 195 and 211 I.P.C., can only be made by the Court in which the proceedings out of which the offences arose took place. We see no force in this contention. Section 559 enables a successor in office of a Magistrate to file a complaint. The relevant portion of section 559 reads as follows : "559. (1) Subject to the other provisions of this Code, the powers and duties of a Judge or Magistrate may be exercised or performed by his successor in office. (2) When there is any doubt as to who is the successor in office of any Magistrate, the Chief Presidency Magistrate in a Presidency town, and the District Magistrate outside such towns, shall determine by order in writing the Magistrate who shall, for the purposes of this Code or of any. proceedings or order thereunder, be deemed to be the successor in office of such Magistrate." This section was substituted for the original section 559 by the Code of Criminal Procedure (Amendment) Act (XVIII of 1923). Since the amendment it has been held, and we think rightly, that a successor in office of a Magistrate can file a complaint under section 476, Cr. P.C., in respect of an offence under section 195, I.P.C., committed before his predecessor. (See Behram vs Emperor(3) Bara Bapen Manjhi vs Gopi Manjhi(4) and In re: Subramaniam Chettiar(5). This section applies to all Magistrates and there is no reason why the plain terms of the section should be cut down to limit it, as suggested by the learned counsel for the appellant, to Magistrates whose courts are permanent. It seems to us further clear that sub s.(2) has not the effect of limiting s.559(1).Section 559(2) applies when there is a doubt as (1) [1963] Supp. 1 S.C.R. 501. (3) 108. (2) A.I. R. (4) A. 1. R. 1927 Pat. (5) A. 1. R. 149 to who the successor is, and that doubt can be resolved in the manner laid down in sub section The sub section does not mean, as contended by the learned counsel, that until a successor is determined under sub section (2) there is no successor for the purposes of sub section If there is no doubt about who the successor is, then that person can exercise the powers under sub section We accordingly hold that the complaint was properly filed by Shri Joginder Singh 'Karamgarhia ', Magistrate. There is equally no force in the third point raised by ,,he learned counsel that section 42, Police Act, creates a bar and the prosecution is time barred under this section. This Court held in Mulud Ahmed, vs State of U.P. (1) that section 42, Police Act, does_not apply to prosecutions under the Indian Penal Code or other Acts. Subba Rao, J., as he then was, observed "The period of three months prescribed for commencing a prosecution under this section is only with respect to prosecution of a person for something done or intended to be done by him under the provisions of the Police Act or under general Police powers given by the Act. Section 42 does not apply to prosecution against any person for anything done under the provisions of any other Act. A combined reading of these provisions leads to the conclusion that section 42 only applies to a prosecution against a person for an offence committed under the Police Act. but the prosecution in the present case was for an offence under section 212 of the Indian Penal Code which is an offence under a different act and for which a much higher punishment is pres cribed. By reason of section 36 of the Police Act, section 42 thereof cannot apply to such a prosecution. " The fourth point which the learned counsel urges is that the complaint only discloses two offences under section 193 and section 195, I.P.C., and no other, and it was an abuse of the process of the Court. There is no force in this contention as the complaint on its face mentions sections 193, 195, 211 and 120B. The learned counsel finally urges that the complaint had been filed because of a private feud and it is not in the interest of justice that the complainant should be allowed to proceed with the complaint. This point was not taken in the High Court at any stage and we do not allow it to be raised at this stage. In the result the appeal fails and is dismissed. Y.P. Appeal dismissed. (1) [1963] Supp. 2 S.C.R. 38, 44 45.

A magistrate acquitted Bhagwant Rai of the charge under sections 325/34 I.P.C. and observed that he had been falsely implicated. The magistrate 's successor in office the respondent filed a complaint under sections 193, 195, 211 and 120B I.P.C., against the appellants. The appellants con tended that (i) prosecution for offences under sections 193 and 195 I.P.C., was barred under section 479A(6) Cr. P.C.; (ii) according to section 195(1)(b) Cr. P.C., only the Magistrate before whom the original proceedings were taken could file the complaint in respect of sections 193, 195 and 211 IPC;(iii)s. 42 of the Police Act barred the prosecution as it was commenced after the period prescribed; and (iv) the complaint only disclosed two offences under sections 193 and 195 I.P.C. and no other. HELD:The appeal must be dismissed. (i) In view of the ruling of this Court in Shabir Husain Bholu vs State of Maharashtra and Baban Singh vs Jagdish Singh, the prosecution for offences under sections 1913 and 195 IPC was barred under section 479A(6) Cr. P.C. [148 B] (ii) The complaint was properly filed by the successor in office of the Magistrate. Section 559 Cr. P.C. enables a successor in office of a Magistrate do file, a complaint. This section applies to all Magistrates. and there is no reason to limit it to Magistrates whose courts are perma nent. Sub section (2) has not the effect of limiting section 559(1). Section 559(2) applies when there is a doubt as to who the successor is, and that doubt can be resolved in the manner laid down in sub s.(2). The subsection does not mean that until a successor is determined under sub s.(2) there is no successor for the purpose of sub section [148 F H;149 A] Behram vs Emperor, 108; Bara Bapen Manihi vs Gopi Manjhi, A.I.R. 1927 Pat. (In re: Subramanian Chettiar, A.I.R. 1957 Mad. 442, followed. (iii) Section 42 of the police Act does not apply to prosecutions under the Indian Penal Code or other Acts. [149 C] Mulad Ahmad vs State of U.P., [1963] Supp. 2 S.C.R. 38, 44 45 followed. (iv) As the complaint on the face of it mentioned sections 193, 195, 211 and 120B, so there was no force. in the contention that the complaint only disclosed two offences under sections 193 and 195 I.P.C. and no other F149 F] 146

tion (Civil) No. 339 of 1986. (Under Article 32 of the Constitution of India) S.P. Pandey and Mrs Rekha Pandey for the Petitioner. J.R Dass, D.K Sinha, D Goburdhan and R.K. Mehta for the Respondent. PG NO 308 The Judgment of the Court was delivered by RANGANATH MISRA, J. A letter addressed to the learned Chief Justice of this Court from two citizens of Patna in regard to the Mental Hospital at Kanke near Ranchi in Bihar State was considered as a public interest litigation and registered as an application under Article 32 of the Constitution. On 7.4.1986, this Court called upon the State of Bihar to file its counter affidavit and the Chief Judicial Magistrate of Ranchi or any other Judicial Magistrate nominated by him to visit the hospital and submit a report about the conditions prevailing in the Hospital. The Chief Judicial Magistrate visited the hospital on 8.6.1986, and on several other occasions thereafter and submitted a detailed report on 15th of July, 1986. He found that there were 1580 beds. The Hospital was in the sole management of the Health Department of the State of Bihar. The State received financial contributions from West Bengal and Orissa. There is a Managing Committee of the Hospital consisting of 14 members in all with the Commissioner of South Chotanagpur Division as its Chairman. The sanctioned strength of medical officers was 16 but only 9 had been filled up and there were 7 vacancies. In the Hospital the male patients wing had 10 blocks in all, apart from the Isolation Ward, the Medical Ward and the Infirmary Ward. These are in 10 double storied blocks and three single storied wards in charge of separate doctors. The female patients ' unit consisted of two double storied and two single storied blocks. Each block had the capacity of 120 patients. Some of the patients had to pay for their treatment while the treatment to the general category was intended to be free. All the three residential quarters within the complex meant for the medical officers were occupied by others, one by the suspended Superintendent, the other by the retired Superintendent and the third one was by the Acting Superintendent. Three doctors were residing in the quarters meant for non gazetted officers and the remaining doctors were staying in private houses at Ranchi about 11 kilometers away. The Chief Judicial Magistrate found that there was acute shortage of water in the Hospital. There was only one tubewell within the campus located in the male block. There were five ordinary wells but there was no motor pumps installed in any one of them. These wells were the only source of supply of water. Several representations had been made to the State Government for supplying water on permanent basis to the Hospital but there was no response from the Government. PG NO 309 The Chief Judicial Magistrate was surprised that none of the toilets within the hospital complex was in order. The sanitary fittings were not operating having got chocked. The patients were, therefor, forced to ease themselves in the adjacent open field. Consequently the environment had become polluted and unhygienic. Though there were fan points and even electric fans were hanging from the roof in some places, no fan excepting the one in the chamber of the Superintendent was in working condition. He also found that though there were electric connections with bulbs and tubes yet light was not available and, therefore, total darkness prevailed in the campus between dusk and dawn. The Superintendent explained to the Chief Judicial Magistrate that the Hospital had no electrician and the Institution had to depend upon the mercy of the State Electricity Board and despite correspondence there was no response. He found that old iron cots had been provided in the year 1925 and only 300 more had been added by purchase. The total number of patients were 1580. Most of the iron cots having been broken were out of use and, therefore, only 300 beds were actually available. None of the wards had doors and windows in working condition. The Superintendent pointed to him that he had made repeated requests to the Public Works Department of the State Government but no letter had even been acknowledged. In the absence of device to close the doors and windows there had been occasions when mentally ill patients had jumped through the windows or had run out from the rooms. To meet such situations, the broken cots were mostly used to block the passages. The Chief Judicial Magistrate further found that the mattresses and linen were in very bad shape, he noticed several patients to be lying on the bare floor; some of the patients were using a single blanket both as mattress and cover. Some patients were naked in the absence of clothing and others were found wearing torn shirts and pants. Mosquito nets were not available pillows were not provided and the patients were left to their fate. The Chief Judicial Magistrate noticed marks of buy bitings as also mosquito biting on the body of the patients. In the absence of clothing the patients were forced to wear the same shirt and pant for four to six weeks without a wash on account of unavailabiliy of water. The Superintendent told the Chief Judicial Magistrate that Government of Bihar had sanctioned Rs. 3 a day per patient for the two meals and breakfast and it was wholly inadequate. The Managing Committee had recommended for sanction of Rs. 10 per patient per day but PG NO 310 there had been no response. The diet as prescribed included an egg, 250 gms. of milk every day and meat and fish, once in a week, but in the absence of appropriate funds those had been discontinued for years. The Chief Judicial Magistrate having visited the place on several occasions noticed that there was no account of the stock of medicines; life saving drugs were not stored properly in the absence of a refrigerator. The instruments were not in working condition and the employees meant for working the instruments were idlying away their time. The patients were now referred to Medical College Hospital at Ranchi for X ray and E.C.G. as and when necessary. Many of the patients told the Chief Judicial Magistrate that they had not been getting any medicine for months together. The Chief Judicial Magistrate had noticed that several doctors were not available in the Hospital for days together. Some of the patients in the wards complaind to him that the doctor was not visiting the ward even for one hour in a week; he carne across a weak and emaciated patient who told him that he had not been given any food for two days on the plea that he was suffering from diarrhoea and he had not even been given any treatment. C)n the 11th of July, 1980, when he visited the Hospital along with the local Additional District Magistrate? he found not a single doctor on duty though that was the time when all the doctors, were supposed to be on duty within the campus. Though this was the actual position. the attendance register showed all the doctors to be present as required according to the duty chart . The Chief Judicial Magistrate collected the death rate from the Superintendent for the period between 1977 and 1986 which are as per the particulars given below: Year Male Female Total 1977 38 11 49 1978 72 12 84 1979 74 31 l05 1980 66 24 90 1981 39 33 172 PG NO 311 1982 173 50 231 1983 87 44 131 1984 152 94 246 1985 90 69 159 From 1 1 1986 30 6 1986 49 25 74 In Paragraph 28 of the Report the Chief Judicial Magistrate stated: "This chart clearly shows abrupt rise in the graph of death rate after 1980. 1984 was the most unfortunate year for Arogyashala, when maximum escapes and deaths took place. Mass scale escapes and deaths of patients in 1984 is said to be the result of internal politics in the Arogyashala campus, for which, the then Superintendent and Dr. Durga Bhagat and Deputy Superintendent. Dr. B.B. Singh are said to be largely responsible. " The Magistrate further reported that the present acting Superintendent had failed to improve the administration. He lacked adequate control over his colleagues and the staff. The out going Superintendent residing within the campus was inciting the people and the acting Superintendent was gradually losing his grip and control over the administration. The innocent, miserable and vioceless patients were the victims of the situation. The practice prevailing in the Hospital had been that the Superintendent alone was competent to admit patients and as such the guardians and attendants of the patients seeking admission into the Hospital had been exploited by a group of persons friendly with the Superintendent and those who did not come to terms with the Superintendent had been denied the benefits of the Hospital. This led to friction and unpleasant relationship. He recommended that a non medical man, if possible, a retired army officer or a District Judge could be posted as the head of the Hospital to take control and tone up the deteriorating situation. He found that a large garden was attached to the Hospital but on account of the all pervading mismanagement there was no return but one Dr. Buxy had recently been put in charge of the garden and had improved the same. Last of all in his report he adverted to the fact that some petients who had recovered and their number he found was about 300, being both men and women were not in a position either to return to their take to any employment in the absence of any facility. He found that these persons who PG NO 312 no more required treatment should be removed from the Hospital so that there would be room available for patients who required treatment; unnecessary expenditure on such large number of people could be avoided and the standard of discipline within the Institution could be improved and there could be a general toning up of the atmosphere. Along with the report he gave various relevant details in the annexures. Annexure 11 is a list of criminal patients who had come from different jails for treatment and had been declared fit for discharge. We may refer to the cue of one Rupa Santhal. This person was admitted to the Hospital on 28.9.1947 at the instance of the Superintendent of Chittagang Hill Tract Jail, where on being convicted by the Deputy Commissioner of Chittagang Hill Tract for an offence punishable under Section 326 IPC, he had been imprisoned for undergoing the sentence. Obviously he could not have been detained in jail for 41 years for the offence under Section 326 IPC. Several letters were sent from the Hospital but there was no response. We may also refer to the case of Madhu Mahanta who was admitted to the Hospital on 15.11.1950 at the instance of the Superintendent, District Jail, Keonjhar in the State of Orissa. He had been convicted under Section 302 IPC and was languishing in the Hospital for 36 years though he had been cured several years back. The Magistrate has given a list of 13 persons of this category. We are astonished that even when prisoners are transferred for treatment from jails where they were undergoing sentences of imprisonment, no follow up action has been taken from the jails on their own and even when the Hospital authorities had required the prisoners to be taken back no response has been made. This only exhibits total callousness. We have given sumptuous extracts from the report of the Chief Judicial Magistrate with a view to bringing out as clear a picture as possible of the shocking and savage conditions that prevail in the mental hospital. There can be no two opinion that the hospital was in a shape a shade worse than Oliver Twist 's Orphanage. From all accounts, perhaps. many of zoos housing animals have better conditions than those that prevail in this hospital. While the mentally ill require a soothing environment for treatment, as psychatrists say, the State of Bihar as converted what was once a prestigious mental hospital Into a den to house about sixteen hundred patients. The reports of the Chief Judicial Magistrate gives the reader the feeling of a medieval torture house. On 11.8.1986, the Court noticed the report and observed: PG NO 313 "The report makes a painful reading and shows how badly is this institution managed and in what in human condition the patients are made to live & work there. It is surprising that the State of Bihar has allowed this institution to de generate into the present condition. It is necessary that immediate steps should be taken to improve the functioning of this institution in all respects. We would therefore direct the Chief Secretary and Health Secretary to the Government of Bihar to file affidavit or affidavits putting forth a definite scheme for improving the working of the Institution and for remedying the drawbacks and deficien cies pointed out in the report, including the neglect of patients by the Medical Superintendent attached to the Institution. This matter must have urgent priority since it concerns the well being of the mentally handicapped. We would therefore direct that the affidavit be filed within three weeks from today setting out a time bound programme for improving the functioning of the Institution. We would like to observe that the Chief Judicial Magistrate has made an excellent job of the task assigned to him and we express our sense of appreciation for the work done by him. These observations may be sent to the High Court of Patna and the Chief Judicial Magistrate". On 1.9.1986, the Health Secretary filed a short affidavit together with a scheme for the improvement of the Hospital. The opening words of the scheme have to be quoted to be believed: "The Government of Bihar are aware of the conditions prevailing in the Mansik Arogyashala, Kanke, and the Government for sometime in past have been discussing measures to be taken for improvement of the same. The subject was discussed by the representatives of the State of Bihar with the members of the Planning Commission at a meeting held at New Delhi in the month of january, 1986, and accordingly it is contemplated to develop the Mansik Arogyashala, Ranchi on the lines of NIMHANS in Bangalore The scheme indicated that a letter had been written to the Director, NIMHANS at Bangalore for information on 17th of April, 1986, i.e. 4 1/2 months before the scheme was filed PG NO 314 in this Court. There is no indication as to what was received from the Director or as to what further follow up action was taken during the 4 1/2 months. The scheme indicated that out of 16 sanctioned posts three posts were earmarked for West Bengal Government and were vacant; out of 13 posts, 9 had been filled up and 4 were vacant and were to be filled up by October, 1986. The scheme admitted with reference to the water supply system that the internal system was choked and was not functioning. In the year 1985 86, Rs.10 lakhs had been sanctioned for renovation of water supply system and the Public Health Engineering Department could utilise only Rs.61,000 during the financial year; therefore, the balance amount of Rs.9,39,000 was again to be sanctioned in the year 1986 87. The lavatories and bathrooms were not in working condition as accepted and the scheme proposed that the Superintendent of the Hospital is to supervise the sanitary system. In regard to electricity it was indicated that the electric fittings, fixtures and other equipments would be replaced by March, 1987 which meant six months beyond the date when the scheme was framed. It was proposed that a 100 KV Generator set was to be installed. In regard to cots and mattresses it was stated that 400 of them would be acquired in the year 1986 87 and the remainder in the year 1987 88. It was stated that the doors and windows required total replacement and it was indicated that Rupees six lakhs were sanetioned during the financial year for repair work. In regard to diet it was indicated in the scheme: "In the State of Bihar, the rate of the diet per patient for the hospital is Rs.3.00 per day except the T.B. patient to whom the rate of diet is Rs.4.15 per day. In the year 1986 87, rate of diet per patient has been increased to Rs.3.55. The Superintendent of Kanke hospital has been directed to improve dietary management". It was admitted that E.C.G. machine was out of order and efforts would be made to instal the machine in the financial year. It was also proposed in the scheme that there would be a regular Superintendent posted soon. In regard to supply of medicines it was stated that the prescribed rate was Rs.1.00 per patient per day and it has been increased to Rs.1.90 per patient per day from 1986. PG NO 315 On 20th of October, 1986, this Court made the following order: "1. In respect of each patient in the Ranchi Mansik Arogayashala the daily allocation for diet will be increased from the existing inadequate articles of that value shall be supplied to each patient. Arrangements should be made forthwith to supply adequate quantity of pure drinking water to the hospital, if necessary, by engaging water tankers to transport potable water from outside. Immediate arrangements should be made for the restoration of proper sanitary conditions in the lavoratories and bathrooms of the hospital. All patients in the hospital who are not at present having mattresses and blankets should be immediately supplied the same within 15 days from today. Such of the patients who have not been given cots should also be provided cots within six weeks from today so that no patient shall be thereafter without a cot. The ceiling limit at present invogue in respect of cost of medicines allowable for each patient will stand removed, with immediate effect and the patients will be supplied medecines according to the prescription made by the doctors irrespective of the costs. The State Government shall forthwith take steps to appoint a qualified Psychiatrist and a Medical Superintendent for the hospital and they should be posted and takecharge in the Institution within six weeks from today. The Chief Judicial Magistrate, Ranchi to whom a copy of this order will be forwarded by the Registry shall visit the hospital once in 3 weeks and submit quarterly reports to this Court as to whether the aforesaid directions given by us are being complied with. " On 20th of November, 1986, the Health Secretary gave a report as to programme relating to aspects covered by the scheme. It indicated that no reply had been received from NIMHANS and therefore, an officer had been sent from Bihar PG NO 316 to obtain the information. The medical officers against the vacant posts had been posted; water supply and electricity were yet to be attended to. The repair to the building was in progress and other aspects were yet to be attended. A Superintendent in the rank of Civil Surgeon had been posted. The Chief Judicial Magistrate furnished a further report in December, 1986. While he noticed certain improvements, he pointed out that there were 400 female patients and there was only one lady doctor in the Hospital. There was no lady Psychiatrist or Psychologist. The Superintendent had written to the Government about it but there has been no response. On 14th of September, 1987, the Court noticed the fact that the State of West Bengal was in huge arrears in the matter of payment of contribution to the running of the Hospital. Counsel for State of Bihar had agreed to send details of the arrears to the State of West Bengal within a fortnight and the Court directed the West Bengal Government to pay the same. The State of West Bengal filed its affidavit through the Joint Secretary in the Department of Health and Family Welfare. The affidavit while accepting the fact that 38% of the seats in the hospital were reserved for West Bengal alleged that in the absence of furnishing of proper accounts by the State of Bihar, the payment of contribution had not been made in time by the State of West Bengal after 1979 80. It agreed to pay Rs.20 lakhs during the year and the balance in suitable instalments in future. The State of Orissa has pointed out in its affidavit that it has been regularly paying its contribution of Rs.3 lakhs and was not in arrears. The Deputy Director (Medical) Health Services, Government of Bihar filed an affidavit claiming that the rate of diet had been enhanced with effect from 1.12.1986 and in diet all the patients were provided rice, bread, dal, vegetable, egg, milk, loaf, biscutt, tea, fruit . Fish, meat and chicken were being provided alternatively thrice a week. Old Pipe lines had been replaced and the flow of water was increased; storage facility for water had been arranged. Medicine as per requirement is being provided without refering to any ceiling limit. new X ray machine has been purchased; the old E.C.G. machine has been condemned and a new one has been purchased. One of the petitioners filed an affidavit denying many of the aforesaid claims. On 14th of March, 1988, this Court made the following order: PG NO 317 "We have perused the affidavit filed by Shri Subodh Chandhra Naryayan, one of the petitioners, wherein several allegations of mismanagement have been made. It has also been alleged that in spite of the direction of this Court that the daily diet expenses should be Rs.10 per patient actually Rs.7 is being spent and though this Court had directed that there should be no ceiling of expenses for medicines beyond Rs.2 per patient is not being issued. We are of the view that copy of the affidavit should be sent to the Chief Secretary, State of Bihar with a direction that he would personally look into the matter and should send a report within four weeks. " A report, beyond the time indicated in the order dated 14th of March, 1988, was furished by the Chief Secretary and the same was covered by an affidavit of the Joint Secretary of Department of Health and Family Welfare of the State Government. The Chief Secretary reported: "The entirc hospital complex is spread over a sprawling area. The buildings are old. but they have been extensively repaired and white washed. Many old cots. matresses linen etc. have been replaced by new ones. Government has spent several lakhs of rupees on improvements in the running of the Agrogyashala during the last two years. In course of my visit, l did not find that patients were being given inadequate food or medicine. ' ' He also found that the toilets had not been attended to, the position of water supply was not satisfactory, the automatic boiler had not yet been repaired or replaced. The Court 's Order of 14th of March, 1988, indicated that the affidavit filed by Subodh Chandra Narayan containing several allegations of mismanagement was to be forwarded to the Chief Secretary and with reference to the allegations therein, he was to send his report. We do not find that the report of the Chief Secretary covers all the aspects. The hospital authorities would not, in their own interests, be too ready to expose their own deficiencies during the visit of the Chief Secretary. Therefore, to have been satisfied and to report that during his visit he did not find any patient being given inadequate food or medicine is no appraisal of the situation. The fact that lakhs of rupees had been spent on improvement is indeed of no consequence PG NO 318 until the Agorgyashala is restored to acceptable hospital standards. The report gives us a feeling that the Chief Secretary was more conscious about the expenditure made by the State Government than assessing the actual situation. From his report, however, it is clear that inspite of several orders made by this Court and assurances held out by the State Government of Bihar, the defects were not being remedied. The awareness of the governmental authorities of the sordid situation prevailing in the hospital, as admitted in the scheme furnished to this Court, the non compliance in an effective way with the directions made from time to time by this Court and the general lethargy shown in rising from slumber leaves a clear impression in our mind that the institution cannot be run as a mental hospital of that magnitude unless there be change in the administrative set up, the control is altered and a total new service to patient oriented thrust given to the institution. In a welfare State and we take it that the State of Bihar considers itself to be one such it is the obligation of the State to provide medical attention to every citizen. Running of the mental hospital, therefore, is in the discharge of the State 's obligation to the citizens and the fact that lakhs of rupees have been spent from the public exchequer (perhaps without or inadequate return) is not of any consequence. The State has to realise its obligation and the Government of the day has got to perform its duties by running the hospital in a perfect standard and serving the petients in an appropriate way. The reports and affidavits of the Government of Bihar and its officers (not the reports furnished to the Court by the judicial officers) have not given us the satisfaction of the touch of appropriate sincerity in action. The scheme which was furnished to the Court was a half hearted one and no attempt therein was made to bring about any improvement except attending to certain obvious deficiencies and shortfalls. The hospital has been in existence from pre independence period. There have been epoch making breaks through in the field of psychiatry and treatment of psychiatric patients. The approach to mental health and the techniques of psychiatry have changed. Psychologists have developed their art and their tools. The method of care ar d attention for the mentally ill has also undergone a sea change. When we had called upon the State of Bihar to give a scheme for improving the conditions of the hospital, this Court had not intended a scheme for removing the deficiencies in the old hospital; we had really intended to look forward to a scheme of re orientation which the scheme did not even remotely touch except to say that NIMHANS at Bangalore has contacted. PG NO 319 The state Government authorities have not been able to assess the priorities. Provision of beds, though the scheme indicated had to be fully made by end of March, 1988, the report of the Chief Secretary and the accommpanying affidavit have not cleared that position. Provision for electricity and water has taken too long, though both are basic necessities of life. The fact that the existing lavatories have taken more than two years to repair is a slur on the administration. There does not seem to be the slightest interest on the part of the persons handling the matter, to improve the environment. In these cir cumstances, it becomes difficult for the Court with any sense of confidence to leave the management to the Health Department of the State of Bihar if the institution has to run as a good and useful hospital. We are cognizant of the position that it is difficult for the Court to monitor the management of a hospital particularly when it is located a thousand kilometres away; but since there have been some improvements with the Court 's intervention, to get out of the picture at this stage would only mean that the situation will again deteriorate no sooner the Court 's attention is withdrawn. As we have already pointed out mere restoration of the hospital to its old position would only bring into existence an archaic institution sans modernism. In our opinion, it will be much better if a Committee of Management is appointed with full powers to look after all aspects of the institution. It is appropriate to take note of the position that this institution receives contribution from two other States. 38 % of these beds, being about 600, are reserved for the State of West Bengal and the Government of West Bengal is to pay for the same. Similarly 75 beds are reserved for the State of Orissa and a sum of Rs. 3 lakhs is payable by the Orissa Government. There is no reason why the management of the hospital should be left exclusively to the Health Department of State of Bihar and the participating Governments should not be associated in such management. Taking note of the performances of the State administration of Bihar in regard to the hospital we are of the view that association of the States of West Bengal and Orissa in the management is likely to bring about some positive result. We would, accordingly, constitute a Committee of Management for the Mental Hospital in the manner indicated below. Chairman A consenting sitting Judge of the Patna High Court, Ranchi Bench, to be nominated by the Chief Justice of Patna High Court. PG NO 320 Members (1) Commissioner of Ranchi Division. (2) Station Commander, Ramgarh area, Ranchi. (3) Secretary of Health, Bihar Government. (4) Secretary of Health, West Bengal Government. (5) Secretary of Health, Orissa Government. (6) Deputy Commission of Ranchi. (7) Principal of the Ranchi Medical College. (8) District Judge, Ranchi. (9) Superintendent of the Hospital. The Commissioner of Ranchi Division and the Station Commander shall be Vice Chairmen and in the absence of the Chairman, shall in the order indicated act as Chairman when any of them too is absent. The Superintendent shall act as the Secretary. We hope and expect that the concerned Governments and authorities would accord the necessary consent/permission to the nominated officers to act on the Committee and the Committee would be able to have its first meeting in the first half of November, 1988. The Committee should meet every month in the first six months with a view to removing the defects and deficiencies within a time frame say of six months at the most and for reviewing the improvements in the conditions of the hospital. If it is satisfied that the situation has improved, the meetings thereafter may be quarterly. The Commissioner of the Ranchi Division shall make a monthly report with in 2 weeks of the end of every month about the state of the hospital during the first year and such reports as and when received by the Registry should be placed before the Court. The State of West Bengal is in arrears in regard to its contribution for several years. Though counsel for the State of Bihar had undertaken to furnish accounts, the same has not yet been done. The Committee shall ensure that the accounts are furnished to the State of West Bengal by the 15th of December, 1988. In its affidavit, the State of West Bengal has indicated that it would pay Rs.20 lakhs out of the dues during the current financial year and would pay the balance in suitable instalments. As the improvement to the hospital would involve huge expenditure, we direct the State PG NO 321 of West Bengal to pay Rs.50 lakhs out of its dues by 31st of March, 1989 and the balance amount shall be paid in two six monthly instalments, one by 30th of September, 1989, and the other by 31st of March, 1990. The Government of West Bengal and the Committee shall ensure that this time frame is adhered to. The entire arrears collected from the West Bengal Government shall be earmarked for development of the hospital to be expended in the manner approved by the Committee and no portion thereof would be otherwise spent. We are of the view that if the hospital is transformed into a better one, just as the hospital run by NIMHANS at Bangalore, the quality of the hospital would improve and the patients would have the benefit of modern scientific treatment. The Committee shall, therefore, take expeditious steps to explore the possibility of transforming the Mental Hospital at Ranchi into the pattern obtaining in the hospital run by NIMHANS at Bangalore by taking such steps as are necessary and furnish a report to this Court by the end of February, 1989 when that question will have to be considered by this Court after hearing the concerned State Governments and the parties. The State of Bihar shall provide a basic fund of Rs.50 lakhs in the year ending 31st of March, 1989, to be spent for improvement of the Hospital in the manner approved by the Committee and in case the Committee is of the view that further funds are necessary, it would be open to the Committee to make a report to this Court whereupon appropriate directions shall be given. There have been repeated allegations that the lady patients who have already been cured are not being released from the hospital. At one stage the explanation offered by the hospital authorities and the State administration was that the relations, even though notified, are not taking them back. The hospital is not a place where cured people should be allowed to stay. It is, therefore, necessary that there should be a rehabilitation centre for those who after being cured are not in a position to return to their families or on their own seek useful employment. The Committee shall, therefore, take immediate steps to have a rehabilitation centre at a convenient place around Ranchi where appropriate rehabilitation schemes may be operated and the patients after being cured, irrespective of being male or female, if they are not being taken back by the members of their families could be rehabilitated. The funds made available to the Committee may be utilised for such purpose. PG NO 322 We must reiterate that Court monitoring of an institution like the present one is indeed difficult but we cannot close the proceedings at this stage for the reasons we have already indicated. Parties including the Committee shall have liberty to move this Court from time to time. We make it clear that the directions regarding payment of the funds are pre emptory in nature and no application for modification thereof shall be entertained. This matter shall be deemed to be pending to deal with the various reports from the Committee and for purposes of giving other directions.

A letter petition in regard to the Mental Hospital at Ranchi was considered as a public interest application under Article 32 of the Constitution, and the Court called upon the State of Bihar to file its counter affidavit. At the same time, the Court directed the Chief Judicial Magistrate to visit the hospital and submit a report about the conditions prevailing there. The hospital was in the sole management of the Health Department of the State of Bihar. The State of Bihar received financial contributions from the States of West Bengal and Orissa on the basis of the number of beds reserved for each State. The report submitted by the Chief Judicial Magistrate made a painful reading. In the affidavit submitted by the State of Bihar it was stated that the Government was aware of the conditions and had since taken some steps to improve the working of the hospital, and had also drawn up a scheme to develop the hospital on the lines of NIMHANS in Bangalore. From time to time, the Court had issued directions and made specific orders regarding provision of better food. clothing, medical treatment, housing and improvement of sanitation, etc. While keeping the matter pending, the Court, HELD: (1) In a welfare State it is the obligation of the State to provide medical attention to every citizen. The State has to realise its obligation and the Government of the day has got to perform its duties by running the hospital in a perfect standard and serving the patients in an appropriate way. [318D E] (2) It is clear that inspite of several orders made by this Court and assurances held out by the State Government of Bihar. the defects were not being remedied. The awareness PG NO 307 of the governmental authorities of the sordid situation prevailing in the hospital, as admitted in the scheme furnished to the Court, the non compliance in an effective way with the directions made from time to time by the Court and the general lethargy shown in rising from slumber leaves a clear impression that the institution cannot be run as a mental hospital of that magnitude unless there be change in the administrative set up, the control is altered and a new service to patient oriented thrust given to the institution. [3I8 C] (3) The scheme which was furnished to the Court was a halfhearted one and no attempt therein was made to bring about any improvement except attending to certain obvious deficiencies and short falls. The Court had looked forward to a scheme of re orientation which the scheme did not even remotely touch. [318F G] (4) The State Government authorities have not been able to assess the priorities. There does not seem to be the slightest interest on the part of the persons handling the matter, to improve the environment. In these circumstances, it is difficult to leave the management exclusively to the Health Department of the State of Bihar if the institution has to run as a good and useful hospital. Association of the States of West Bengal and Orissa in the management is likely to bring about some positive result. It would, therefore, be much better if a Committee of Management is appointed with full powers to look after all aspects of the institution. [319A; B D] (5) The Court accordingly constituted a Committee of Management for the Mental Hospital and gave directions regarding the financial contribution from the participating States, and also laid down guidelines regarding the functioning and management of the hospital. The Court further directed that the Committee shall take expeditious steps to explore the possibility of transforming the hospital into the pattern obtaining in the hospital run by NIMHANS at Bangalore. [321C D]

appeal No. 1923 of 1966. Appeal by special leave from the order dated February 14, 1966 of the Central Govt. Labour Court, Rajasthan, Jaipur in Misc. Application No. CLC 4 of 1964. G. L. Sanghi and P.M. Tiwari for the appellant. 111 M. K Ramamurthi, J. Ramamurthi and Vineet Kumar, for the respondent. The Judgment of the Court was delivered by Mitter, J. This appeal by special leave is from an order of the Central Government Labour Court, Rajasthan passed on February 14, 1966 on an application under section 33 C (2) of the filed by the respondent, Hari Har Nath Bhargava, holding that the latter was entitled to supervisory allowance under paragraph 164 (b) (9) of the Sastry Award even for the period when the latter was not actually performing supervisory duties. The facts in this case may be shortly stated. The respondent was appointed a clerk by the State Bank of Jaipur in 1949. He was transferred to Kota in the year 1952. He was entrusted with supervisory work from 6th April, 1954. The bank executed a power of attorney in his favour on May 31, 1954 in pursuance of a resolution of its Board of Directors passed on 20th May, 1954. He was transferred from Kota to Jaipur on July 12, 1955. On December 27, 1955 he was posted at Sikar where he had to perform supervisory duties. On January 1, 1956 he was promoted to the cadre of junior officers of the bank. On March 31, 1964 the respondent filed an application before the Central Government Labour Court, Rajasthan under section 33 C (2) praying for computation of special allowance under what is known as the Sastry Award on the ground that he had been discharging supervisory duties from 6th April, 1954 to 1st January, 1956. By this time the Bank of Jaipur had amalgamated with the Bank of Bikaner and the amalgamated bank, the appellant before us, came to be known as the State Bank of Bikaner and Jaipur. The execution of the power of attorney dated 29th May, 1954 was admitted but the appellant denied "that the duties entrusted to the respondent constituted performance by him of any supervisory nature of work". A point was also taken that although no period of limitation is laid down by any statute with regard to applications under section 33 C of the Act the respondent 's claim being a stale one should not be entertained. 112 The appellant amended its written statement in 1965 wherein it was stated that the respondent was only required to perform the functions enumerated in the power of attorney as and when so directed by the bank. As a matter of fact, he had been entrusted with supervisory duties from 6th April, 1954 to 12th July, 1955 and thereafter from 27th December, 1955 to 6th January, 1956. The respondent was examined before the Labour Court where he said that he was "the second signatory at Kota during the period, April 1954 to middle of July 1955". At the Jaipur branch where he was transferred, there were many signatories above him, while at Sikar there was only another such signatory and he was the second officer. Obviously what he meant by the word "signatory" was a person authorised by the bank to discharge the functions covered by the power of attorney. The relevant portion of the said power of attorney read "The Bank do here by nominate constitute and appoint Shree Hari Har Nath Bhargava in the service of the said bank at Kota to be the true and lawful attorney of the said bank at its registered office at Jaipur aforesaid or at any other place or places in India where the said bank may have or establish branches or agencies and to which he may from time to time or at any time be appointed by the said bank as Branch Manager, Agent, Sub Agent, Accountant, or in any capacity whatever for and in the name of and on behalf of the said bank to do, transact jointly with Secretary, Manager, Sub Manager etc. the matters and things mentioned thereafter. " The matters mentioned included the endorsement of "hundies, drafts, cheques, warrants, railway receipts, pension bills and other negotiable and mercantile instruments and to commence, prosecute, enforce, defend, answer and oppose any suit or other legal proceedings and demands touching any matters in which the bank was or may thereafter be interested or concerned. " 113 It is worthy of note that after the execution of the power of attorney the respondent was empowered to, discharge functions which could only be described as. supervisory in nature and unless there was a command or direction that he should not act thereon or unless the power of attorney was cancelled his authority, to act in a supervisory capacity would continue in force. The Sastry Award is not on record in extenso but paragraph 164 thereof quoted by the Labour Court shows; that certain categories of employees were to be considered as fit for special allowances. These included inter alia stenographers, cashiers (other than routine clerks), supervisors, clerks in charge, departmental in charges and head clerks. The award noted that although scales of basic pay and dearness allowance for clerical and subordinate staffs had been laid down for doing ordinary duties, there were certain posts even in these grades for which an incumbent required special qualifications or skill for the efficient discharge of the duties assigned and an extra payment in such cases was necessary by way of, recognition of and compensation for the skill or responsibility. The award further noted that : "Having regard to the numerous banks of varying sizes and resources, it is not possible to have one general pattern of allowances for such special types of work. . It is neither easy nor desirable to bring them all into one fairly general rule regardless of the bank 's past practice or present capacity." Paragraph 162 of the award shows that there were three, ways in which this extra payment might be provided for (1) The employee might be given additional increments in the same scale. (2) He might be paid a lump sum allowance in addition to his other emoluments. This was said to have the advantage of carrying a man even beyond the usual maximum limit. (3) He might be given a higher scale leading up to a higher maximum. 114 According to the award it was on the whole better to adopt either the first or the second method or sometimes even a combination of both. According to the Labour Court the underlying idea behind the said award was that when one general scale for clerical service had been provided in the award, it was thought just and proper that persons with special qualifications or skill required for discharging work carrying with it greater responsibility than the usual work should definitely get higher emoluments than the ordinary workmen. The Labour Court said that "this did not mean that the person of the same qualifications and skill who had been granted the powers of attorney by the bank should be allowed special allowance only for any particular period unless a man was temporarily appointed to do supervisory work". In the result, the Labour Court allowed the respondent supervisory allowance at Rs. 40 p.m. with ,effect from 6th April, 1954 to 31st December, 1955 with, consequential benefits. It is to be noted however that although a point had been taken in the written statement of the bank about the delay in the filling of the application under section 33 C it had not been pressed before the Labour Court. Mr. Sanghi appearing for the appellant was prepared to concede that so far as the periods 6th April, 1954 to 12th July, 1955 and 27th December, 1955 to 31st December, 1955 were concerned he was not contesting the claim. But in so far as the period 13th July, 1955 to 27th December, 1955 was concerned, his client was pressing the appeal as a matter of principle as this would constitute a test case by which other similar cases might fall to be decided. This Court had to deal with a case where an identical question arose. In State Bank of Hyderabad vs V. A. Bhide (1) this Court had to consider the claims of the respondents in that appeal for payment of special allowance granted to supervisors under what were known as the Sastry and Desai awards. It was there contended on behalf ,of the appellant bank that in order to claim the supervisory allowance the parties must establish that the main or essential duties entrusted to them and actually discharged by (1)[1969] them were duties and functions of a supervisory nature. This Court considered the Sastry and Desai awards and observed (at p. 727) : ". before a person can claim the supervisory special allowance, he must establish that he has discharged the duties and functions which are similar to 0r the same as the duties or functions assigned to supervisors coming under category 9. This decision [Lloyds Bank Ltd. vs Panna Lal Gupta and others (1)] also makes it clear that in deciding the status of an employee claiming the special allowance, the designation of the employee is not decisive and what determines the status is a consideration of the nature of the duties and functions assigned to the employee concerned. " In our view the payment of a special allowance is called for when an employee discharges duties of a supervisory nature or is accorded the status of a person competent to discharge functions of a supervisory character. If no power of attorney is execute& as in this case but in fact the employee is asked to render services of a supervisory character and the employee does such work at the request of the bank, he becomes entailed to the allowance. Once however a power of attorney giving the wide powers of agency as was done in this case is executed, it should be held that the management had placed him in a category of persons with responsibility and the employee was to discharge the responsibility without any further request in that behalf. It may be that the initial giving of power of attorney was necessitated by the fact that at Kota there was only one officer besides the respondent who could discharge duties like endorsing hundies, drafts etc. and it became necessary for the bank to have a second officer who could carry on this kind of work. But the power of attorney does not show that the bank thought it necessary to clothe the respondent with the said powers only for discharging his duties when he was at Kota. The power of attorney was operative at any branch of the bank irrespective of the capacity which might be occupied by the respondent at a particular point of time. It may be (1) 116 that at Jaipur there was a number of officers superior to the respondent who were empowered to discharge duties mentioned in the power of attorney but this does not necessarily lead to the inference that the respondent lost his responsibility or was denuded of the powers while he was at Jaipur. If he discharged any of the duties men tioned in the power of attorney the same would be lawful and would be binding on the bank. The fact that he was not actually called upon to discharge such functions did not take away from his responsibility or status of a person ,competent to discharge functions of a supervisory character and we see no reason why he should be deprived of supervisory allowance unless the bank gave him notice that he was not to act on the power of attorney while at Jaipur. We therefore hold that the Labour Court had come to the correct conclusion. Mr. Sanghi tried to urge the point that the Labour ,Court should not have entertained the application as being inordinately belated and that even though the Labour Court did not adjudicate on this point it was open to the bank to urge it before us. We made it clear that we were not going to entertain this plea in view of the fact that although the point had been taken in the written statement of the bank, it was not agitated before the Labour Court and further was not taken even in the special leave petition. In the result, the appeal is dismissed. The order for costs made at the time of the grant of the special leave will stand. S.C. Appeal dismissed.

The respondent, a clerk of the appellant bank, was entrusted with supervisory work and a general power of Attorney was executed in his favour to endorse Hundies cheques, warranty, Railway receipts, pension bills and other negotiable and mercantile instruments and to prosecute, defend, answer and oppose any suit etc. on behalf of the appellant bank. The respondent filed an application before the Labour Court, Rajasthan under section 33C (2) of the , praying for computation of special allowance under the Sastri Award, on the ground that he was discharging supervisory duties. The Labour Court, allowed supervisory allowance of Rs. 40 p.m. with consequential benefits. In appeal to this Court the appellant bank ,contended that since the respondent was not called upon to perform the functions enumerated in the power of attorney, he is not entitled to any special allowance. Dismissing the appeal. HELD : (i) The payment of a special allowance was called for when an employee discharged duties of a supervisory nature or was accorded the status of a person competent to discharge functions of a supervisory character. [115d] (ii) Since the Management by the power of Attorney, had placed the respondent in a category of persons with responsibility and entrusted him with functions of a supervisory character and the employee was to discharge that responsibility, he was entitled to supervisory allowance no matter, whether he was actually called upon to discharge such functions or not for a certain period of time. [1 15F, 11 6B] State Bank of ' Hyderabad vs V. A. Bhinde, [1969] 2 L. L. J. 713, referred to.

Appeals Nos. 11 5 & 116 of 1963. Appeals by special leave from the judgment and orders dated July 9, 1958, September 24, 1958 of the Union of India (Ministry of Steel, Mines and Fuel, New Delhi) and the Punjab High Court (Circuit Bench) at Delhi respectively. G.S. Pathak, Rameshwar Nath and section N. Andley, for the. appellant (in both the appeals). section G. Patwardhan and B. R. K. G. Achar, for respondent No. 1 (in both the appeals). I. N. Shroff, for respondent No. 2 (in C.A. No. 116/1963). March 10, 1964. The Judgment of the Court was delivered by AYYANGAR, J. Civil Appeal No. 115 is by special leave granted by this Court under article 136 of the Constitution and is against an order of the Union of India (Ministry of Steel, Mines and Fuel) dated July 9, 1958 rejecting an application filed by the appellants under rule 57 of the Mineral Concession Rules, 1949 to review an order passed by the Government of Madhya Pradesh rejecting their application for the renewal of the Certificate of Approval granted to them. The appellants filed a petition to the High Court Punjab under article 226 of the Constitution praying for a writ of certiorari to quash the above order of the Union of India. This petition was dismissed by the High Court in limine and Civil Appeal No. 116 of 1963 is by special leave of this Court against this order of the High Court, Punjab. It would thus be seen that both the appeals are directed to challenge the validity of the same order and we shall therefore deal with them together. The appellants, who constitute a partnership, are engaged inter alia in the business of mining and they held a prospecting licence in the State of Madhya Pradesh. They hold concessions in regard to prospecting and working minerals in several areas of the State to the details of which it is not necessary to refer. Under the scheme of the Mines and Minerals (Regulation and Development) Act, 1948 (Act No. XLIII of 1948) and the Mineral Concession Rules, 1949 framed thereunder, in order that a prospecting licence may be granted to a person he has 99 to hold a certificate of approval from the State Government concerned and similarly the rules provide that no mining lease shall be granted to any person unless he held a similar certificate of approval. To enable them to do the prospecting in lands in which they had obtained mineral concessions, the appellants applied for and obtained from the Government of Madhya Pradesh a certificate of approval under the Mineral Concession Rules from 1952 onwards. The duration of the certificate is one calendar year and the same has to be renewed every year, if it is to be in force. The original certificate granted to the appellants for the year 1952 was being renewed from year to year and as a result they held a valid certificate of approval up to the period ending on December 31, 1955. Being desirous of having the same renewed for the following calendar year 1956 they made an application to the Government of Madhya Pradesh on November 22, 1955. The information required by the form of application prescribed by the rules was furnished and the necessary documents were filed and this application was recommended by the District Officer, Bhandara. The State Government, however, by an order dated September 21, 1956 rejected the application, the reason given being that the partners composing the firm had changed. This order was communicated to the appellants on October 6, 1956 and thereupon the appellants made an application on November 15, 1956 to the Union Government for a review of the order of the State Government under rule 57 of the Mineral Concession Rules. Rule 57(2) which was invoked by the appellants provides: "Where a State Government has failed to dispose of an application for grant of renewal of a certificate of approval or prospecting licence or a mining lease within the period prescribed therefor in these Rules, such failure shall, for the purpose of these rules, be deemed to be a refusal to grant or renew such certificate, licence or lease, as the case may be, and any person aggrieved by such failure may, within two months of the expiry of the period aforesaid, apply to the Central Government for reviewing the case. " The procedure for review is laid down by rule 59 which ,reads: ,,Review Upon receipt of such application, the Central Government may, if it thinks fit, call for the relevant records and other information from the State Government, and after considering any explanation that may be offered by the State Government cancel or revise the order of the State Government, or pass such order as the Central Government may deem just and proper. " L/P(D)1SCI 4(a) 100 Thereafter correspondence seems to have ensued between the Central Government and the Government of Madhya Pradesh in regard to the propriety of granting the application for review. The appellants having come to know from a letter addressed to them by the Government of India that the State Government had been required to send a report of their remarks in connection with their application for review made enquiries as to what had happened and also requested that they might be informed as to the progress of their application and that they might be given an opportunity of a personal hearing at which they would be able to satisfy the Government about the genuineness of their case. Some portions of this correspondence between the Government of India. and the Government of the State as to the merits of the appellants ' application are now on record but it is common ground that the appellants were not informed of these documents prior to the order now impugned rejecting the application for review was passed. On July 9, 1958 the application of the appellants was rejected by the Union Government, the order stating: "The Central Government have come to the conclusion that there is no valid ground for interfering with the decision of the Government of Madhya Pradesh rejecting your application for renewal of a certificate of approval for the year 1956. " The appellants thereafter applied to the Government of India requesting for a copy of the report of the State Government on the basis of which the application was rejected. The reply that the appellants received was that the Government of India regretted their inability to accede to their request. It is the validity of this order dated July 9, 1958 that is challenged in appeal No. 115 of 1963. Mr. Pathak, learned Counsel for the appellants, submitted that the Union Government when disposing of an application under section 57(2) in terms of rule 59 is acting as a quasi judicial authority and the order which was passed taking into consideration the report of the State Government and without their knowing the contents of the report and without affording them a reasonable opportunity of presenting their case was contrary to natural justice and was therefore void. In this connection learned Counsel relied on the decision of this Court: Shivji Nathubhai vs The Union of India(1). Mr. Pathak is well founded in his submission as to the nature of the jurisdiction exercised by the Union Government when disposing of an application for review under Rule 59 and the decision referred to does (1) ; 101 support him that the Central Government acting under the rule referred to is functioning as a quasi judicial authority. It does follow therefore that they could not act on the basis of material as regards which the appellants had no opportunity to make their representation. No doubt, the decision in Shivji Nathubhai v The Union of India and Ors.(1) was concerned with a case where an order had been passed prejudicial to the respondents before the Central Government without affording them an opportunity to meet the case of an applicant for review but the same principle would, in our opinion, apply even where a petition for review is rejected based on materials which were not made available to the applicant for review. As we have already indicated, the State Government had refused renewal of the certificate of approval because they considered that there had been a change in the composition of the firm which destroyed its identity. On the other hand, the case of the appellants was that the terms of the partnership deed made express provisions for the continuance of the identity of the firm, notwithstanding changes in the persons composing the firm by death, retirement or because of the accession of new members to replace deceased or retiring partners or even otherwise. If the report of the State Government made any points against the representations made by the appellants, and these were being taken into consideration by the Union Government, in common fairness, the appellants were entitled to be informed as to what these were and an opportunity to point out how far they militated against the contentions raised by them. Learned Counsel for the respondent Union of India, did not seek to support the position taken by the Central Government that they were justified in refusing to disclose the con tents of the report they obtained from the State Government which afforded them the factual basis on which they rejected the application for review. We have therefore no hesitation in holding that the order of the Central Government now under appeal is vitiated as being contrary to the principles of natural justice, in that the decision was rendered without affording to the appellants a reasonable opportunity of being heard which is a sine qua non of a fair hearing. The learned Judges of the Punjab High Court dismissed the petition filed before them under article 226, apparently be cause they proceeded on the view that the exercise of jurisdiction of the Central Government under rules 57 and 59 of the Mineral Concession Rules was really administrative in character so that the reasonable opportunity that is an essential requisite of quasi judicial procedure was not attracted to the (1) ; 102 case. That was the view taken by that Court in the Shivji Nathubhai vs The Union of India and Ors.(1) which decision was reversed by this Court. It might be mentioned that the decision of this Court was rendered subsequent to their judgment now under appeal and therefore the learned Judges had not the advantage of the pronouncement of this Court. The result is that the appeals are allowed and order of the Central Government dated July 9, 1958 and of the High Court dated September 24, 1958 are set aside. The Central Govern ment will consider the review application afresh and dispose of the same in accordance with law and in the light of the observations contained in this judgment. The appellants are entitled to their costs in this Court (Hearing fee one set). Appeals allowed.

The appellants constitute a partnership engaged in mining and they held a prospecting license as well as a certificate of approval from the State Government under the Mineral Concessions Rules, 1949 framed under the Mines and Minerals (Regulation and Development) Act, 1948. The approval certificate was granted for one year and until December 1955 it had been renewed from year to year when the State Government refused to renew it on the ground that the partners composing the firm had changed. Thereupon the appellants applied under r. 57 of the Minerals Concession Rules to the Union Government for the review of the order of the State Government refusing to renew the certificate of approval. While this application Was pending the Union Government corresponded with the State Government and gathered information and received the latter 's remarks regarding the merits of the matter behind the appellants ' back. The request made by the appellants for copies of the correspondence and for an opportunity to be heard was refused by the Union Government. Ultimately the Union Government refused the review application on the ground that there was no valid ground to interfere with the decision of the State Government. The present appeal was filed on special leave granted by this 'Court. On behalf of the appellants it was contended that the Union Government while disposing of an application under r. 57(2) in terms of r. 59 acts as a quasi judicial authority and the ,order which was passed taking into consideration the report of the State Government behind the appellants ' back and without affording a reasonable opportunity for presenting their case was contrary to natural justice and was therefore void. Held:(i) The Union Government when disposing of an ap plication for review under r. 59 is functioning as a quasi judicial authority. Shivji Nathubhai vs Union of India, , relied ,on. (ii)Though Shivji Nathubhai 's case was concerned with a case where an order had been passed prejudicial to the respon dents before the Central Government without affording them L/P(D)1 SCI 4. 98 an opportunity to meet the case of an applicant for review the same principle would apply even where a petition for review is rejected based on materials which were not made available to the applicant for review. (iii) Applying the above principle to the present case the order of the Central Government is vitiated as being contrary to the principles of natural justice in that the decision was rendered without affording to the appellants a reasonable opportunity of being heard which is a sine qua non of a fair hearing.

Appeal No. 279 of 1959. Appeal by special leave from the judgment and order dated November 18, 1957, of the Kerala High Court in O. P. No. 87 of 1956. A. V. Sayed Muhammad, for the appellants. The respondents did not appear. 182 1960. December 12. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal with the special leave of this Court against the judgment of the High Court of Kerala dated November 18, 1957, passed in a petition for writ of prohibition under article 226 of the Constitution. The State of Kerala and the Tahsildars of Kottayam and Kanjirappally Taluks are the appellants, and C.M. Francis & Co., a partnership firm, is the first respondent, and the partners of the firm are the remaining respondents. The respondents were doing business in hill produce like pepper, ginger, betelnuts etc., and were assessed to sales tax under the Travancore Cochin General Sales Tax Act XI of 1125 (referred to as the Act), for the years 1950 to 1954. The respondents have to pay a sum of Rs. 1,01,716 4 3 as tax. In 1954, proceedings were started against them under section 13 of the Act, which provides that if the tax is not paid as laid down in that section, the whole of the amount or such part thereof as remains due, may be recovered as if it were an arrears of land revenue. It appears that the pro ceedings were not fruitful, and a prosecution under section 19 of the Act was instituted against the partners in the Court of the First Class Magistrate, Ponkunnam. Respondents 2 to 5 pleaded guilty, and the Magistrate passed an order on October 18, 1955 as follows: "The sentence or other final order: A 1 to 4 sentenced to pay a fine of Rs. 50/ each and in default to undergo section 1. for one month each. A 1 to 4 admit that they failed to pay on demand by the competent authority, a sum of Rs. 1,01,716 4 3 due from them as sales tax for the years 1950 to 1954. This amount will be realised from A 1 to 4, jointly or severally, individually or collectively under the provisions of the Cr. P.C. for realisation of criminal fines, as if it were a fine imposed by this court on each accused individually and all of them together. Take steps for the realisation. " Warrants under section 386 (1) (b) of the Code of Criminal Procedure were issued to the Collector of Kottayam District for recovery of the arrears of sales tax. 183 The authorities, however, started proceedings again under section 13 of the Act read with the provisions of the Travancore Cochin Revenue Recovery Act, 1951 (VII of 1951), to recover the amount as arrears of land revenue, and attached some properties belonging to the respondents within the jurisdiction of the second and third appellants, the Tahsildars of Kottayam and Kanjirappally Taluks. The firm thereupon filed the petition under article 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed. In the petition, the respondents urged that inasmuch as they were prosecuted under section 19 of the Act and the Magistrate had issued warrants, the procedure for recovery under section 13 was not available. They contended that under section 386 of the Code of Criminal Procedure the warrant is to be deemed to be a decree and has to be executed according to civil process applicable to the execution of decrees under the Code of Civil Procedure. They, therefore, submitted that the procedure under section 19 of the Act was no longer open, and could not be proceeded with. Section 19 of the Act, so far as it is material, reads as follows: "Any person who. . . . (b) fails to pay within the time allowed, any tax assessed on him under this Act, or (d)fraudulently evades the payment of any tax assessed on him. . shall on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under clause (b), (d) the Magistrate shall specify in the order the tax which the person convicted has failed or evaded to pay and the tax so specified shall be recoverable as if it were a fine under the Code of Criminal Procedure for the timebeing in force. " In dealing with the question, the learned Judges of the High Court felt that section 13 of the Act was in the 184 nature of a general law, over which the special procedure prescribed by section 19 of the Act read with section 386 of the Code of Criminal Procedure was to prevail. They, however, thought that, since all the processes available under section 19 of the Act were also available under section 386 of the Code of Criminal Procedure, it was not necessary to decide what would happen if the proceedings under section 386 came to nothing. They observed that if the question arose, they would consider it. The writ of prohibition was granted by the High Court. The respondents did not appear in this Court. We have heard learned counsel for the appellants, who has drawn our attention to all the relevant provisions of the law. The question which arises is whether section 19 must be taken to prevail over section 13 of the Act. Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax evader. It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned. Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment. In our opinion, neither of the remedies for recovery is destructive of the other, because if two remedies are open, both can be resorted to, at the option of the authorities recovering the amount. It was observed by Mahmood, J. in Shankar Sahai vs Din Dial (1) that where the law provides two or more remedies, there is no reason to think that one debars the other and therefore both must be understood to remain open to him, who claims a remedy. Unless the statute in express words or by necessary implication laid down that one remedy was to the exclusion of the other, the observations of Mahmood, J. quoted above must apply. In our opinion, in the absence of any such provision in the (1) I.L.R. (1889) 12 All 409 (F.B.), 418. 185 Act,, both the remedies were open to the authorities, and they could resort to any one of them at their option. The appeal is allowed, and the judgment of the High Court set aside. Though the respondents did not appear, in the circumstances of the case we think we should make an order that the costs shall be paid by them both here and in the High Court. Appeal allowed.

The respondents were assessed to sales tax under the Travancore Cochin General Sales Tax Act and proceedings were started against them under section 13 of the Act for the recovery of the arrears of Sales Tax as if they were arrears of land revenue. The proceedings were not fruitful. Thereafter a prosecution under section 19 of the Act was instituted against the partners who pleaded guilty and the magistrate issued warrants under section 386(1)(b) of the Code of Criminal Procedure to the Collector of the District for the recovery of the arrears of sales tax as if they were a fine imposed by that court. The authorities again started proceedings under section 13 of the Act read with Travancore Cochin Revenue Recovery Act, 1951, and certain properties were attached. The respondents urged that in as much as they were prosecuted under section 19 of the Act and the magistrate had issued warrants, the procedure for recovery under section 13 of the Act was not available. The question was whether section 19 was to be taken to prevail over section 13 of the Act. Held, that neither of the remedies for recovery of arrears of tax as laid down by sections 13 and 19 of the Travancore Cochin General Sales Tax Act was destructive of each other and unless the statute laid down in express words or by necessary implication that one remedy was to the exclusion of the other, both the remedies were open to the authorities and they could resort to any one of them at their option. Shankar Sabai vs Din Dial, I.L.R. [1889] 12 All. 409 (F.B.), 418,approved.

Appeal No. 1997 of 1968. Appeal by Special Leave from the Judgment and Order dated the 13th February, 1968 of the Bombay High Court in Special Civil Application No. 643 of 1967. B.N. Lokur and A. G. Ratnaparkhi for the Appellant. S.V. Gupte, R.B. Datar and Sanjeev Kumar for Respondents. The Judgment of the Court was delivered by RAY, C.J. This appeal by special leave is from the judgment dated 13 February 1968of the High Court of Bombay. The appellant was owner of land covered by Survey No. 201/2, 194/13, 200/29 and 194/15. The appellant 's wife sold this land to respondent No. 1 on 14 June 1946. On 12 April 1962 the appellant made an application under ' section 70(b) of the Bombay Tenancy & Agricultural Lands Act (hereinafter referred to as the Bombay Act) for a declaration that he was a tenant of two of the four plots of land namely, Survey Nos. 194/15 and 200/29. This dispute between the appellant and the respondent in regard to alleged tenancy claim for these two survey numbers went up to the Maharashtra Revenue Tribunal. The Tribunal by order dated 19 March, 1954 rejected the claim of the appellant to tenancy in respect of the land covered by Survey Nos. 200/29 and 194/15. Thereafter the respondent filed an application on 24 January 1963 under section 70(b) of the Bombay Act for a declaration that the appellant was not tenant of the remain ing two Survey Nos.201/2 and 194/13. The respondent alleged that he never leased the land to the appellant. The re spondent further said that he came to know about entry in the record of rights for the years 1955 56 on the strength of mutation alleged to have been made on 30 January 1956 and sanctioned on 13 November 1956. This application of the respondent was resisted by the appellant on the ground that he was tenant of these two survey Nos. 201/2 and 194/13. The matter was heard by the Mamlatdar. By an order dated 31 July 1963 the Mamlatdar rejected the claim of the appellant to be. a tenant. Thereafter the matter was taken up to the District Deputy Collector. The Deputy Collector by his order dated 27 June 1966 upheld the Mamlatdar 's order. Before the Mamlatdar and the Deputy Collector the respondent examined himself. He was cross examined and his attention was drawn in cross examination towards an alleged admission about the appellant being his tenant in the depo sition. recorded by the Tenancy Aval Karkun in an earlier case on 10 September 1962. The respondent denied that he made.any admission. The previous deposition was not shown to him on that day. 673 On 9 July 1963 a certified copy of the deposition in the earlier proceedings was placed on record. On that very day the. appellant examined himself, saying that he was a tenant of the land and he had no other evidence to show in support of his case except the certified copy of the statement which was produced on that day. The appellant also relied on the extracts of the record of rights showing that the respondent was shown as 'Kabze dar ' of Survey Nos. 201/2 and the appellant was shown as tenant of the same. In regard to Survey No. 194/13 it also appeared from the record of rights that the respondent was shown as 'kabzedar ' and the appellant as a tenant. On this evidence the Mamlatdar held that the appellant was not Cultivating the lands as a tenant of the respondent and he declared that the appellant was not a tenant. The Deputy ColleCtor affirmed the order of the Mamlatdar. The Maharashtra ReVenue Tribunal however by its order dated 9 January 1967 held that the appellant was proved to be a tenant of the land. The respondent thereupon took the matter to the High Court under Article 227. The High Court set aside the order of the Revenue Tribunal. The appellant obtained special leave from this Court. On behalf of the appellant three contentions were advanced. First, that the respondent was bound by his admission that the appellant is a tenant. Second, there is a presumption of the correctness of the record of rights under section 135 J of the Bombay Land Revenue Code 1879. Third, the Maharashtra Revenue Tribunal was justified in setting aside the findings of fact of the Mamlatdar and the Deputy Collec tor because of error of law. The admission on which reliance has been placed by counsel for the appellant suffers from three infirmities. In the deposition of the respondent in Tenancy Case No. 6/61 62 dated 10 September 1962, the respondent gave evi dence in regard to dispute between the respondent and the appellant in relation to Survey Nos. 200/29 and 194/15 respondent said that he never kept the appellant as a tenant on the land. In cross examination it was suggested to the respondent that the land bearing Survey No. 201/2 belonged to the respondent and that the appellant is a tenant in the land. The respondent said as follows: "The land Survey No. '201/2 situate in Balkum belongs to me in Balkum. The applicant is a tenant in the said land. I do not take the rent in respect of the said land . . I have prior to 15 20 years purchased this land from Sita ram Bhau. Even the land bearing section No. 201/2 was purchased right from him. I have never cultivated the land bearings section No. 201/2. It was barren at that time. When this land was to be acquired I learnt whether Sitaram Bhau was culti vating this land . or whether his name has been entered as a tenant against this land(?) I cannot say as to whose land is around the land beating section No. 201/2 or other Land. " 674 This evidence read in its entirety is not an admission at all. A person who says that 'I have taken no rent ' obviously says that there is no relationship of landlord or tenant. The first infirmity in regard to this admission is that whatever was said by the respondent in regard to Survey No. 201/2 is irrelevant and inadmissible in the deposition of the respondent in that case. Section 17 of the Indian Evidence Act states that 'An admission is a statement, oral or documentary, which suggests any inference as to any fact in issue or relevant fact, and which is made by any of the persons, and under the circumstances, hereinafter men tioned '. In regard to dispute between the appellant and the respondent arising out of Survey No. 194/15 and 200/29, Survey Nos. 201/2 and 194/13 were neither issues in fact nor relevant fact. The second infirmity against this admission being used against the respondent is that as long as the respondent was under cross examination, it was not brought to his notice. It is said by counsel for the appellant relying on the decision of this Court in Bharat Singh and Anr. vs Bhagira thi reported in 1966(1) S.C.R. 606, that this admission was proved by the appellant and this admission on the ruling Of the decision of this Court (Supra) is substantive evidence and is therefore admissible against the respondent. The decision of this Court in Bharat Singh 's case (Supra) is that: "Admissions have to be clear if they are to be used against the person making them. Admissions are substantive evidence by them selves, in view of sections 17 & 22 of the Indian Evidence Act, though they are not conclusive proof of the matters admitted. " Admission proved are said in the decision to be "admissible evidence irrespective of whether the party making them appeared in the witness box or not and whether the party when appearing as witness was confronted with those statements in case it made a statement contrary to those admissions". Counsel for the appellant submitted that the respond ent even though not confronted with the admissions would be bound by his admissions and the appellant would be enti tled to rely on the admissions as admissible. There is the observation in the very next sentence in the aforesaid decision of this Court that "the purpose of contradicting the witness under section 145 of the Evidence. Act is very much different from the purpose of proving .the admission". It, therefore. , follows that admission is relevant and it has to be proved before it becomes evidence. If admission is proved and if it is thereafter to be used against the party who has made it the question comes within the provisions of Section 145 of the Evidence Act. The provisions in the Indian Evidence Act that 'admission is not conclusive proof ' are to be considered in regard ,to two features of evidence. First, what weight is to be attached to an admission ? In order to attach weight it has to 675 be found out whether the admission is clear, unambiguous and is a relevant piece of evidence. Second, even if the admis sion is proved in accordance with the provisions of the Evidence Act and if it is to be used against the party who has made it, "it is sound that if a witness is under cross examination on oath, he should be given an opportunity if the document are to be used against him, to tender his explanation and to clear up the point of ambiguity or dis pute. This is a general salutary and intelligible rule" (see Bal Gangadhar Tilak vs Shrinivas Pandit 42 Indian Appeals 135 at page 147). The Judicial Committee in that case said, "it has to be observed with regret and with surprise that the general principle and the specific statu tory provisions have not been followed". The general prin ciple is that before any person is to be faced with any statement he should be given an opportunity to see that statement and to answer the same. The specific statutory provision is contained in Section 145 of the Indian Evidence Act that "A witness may be cross examined as to previous statements made by him in writing or reduced into writing, and relevant matters in question, without such writing being shown to him or being proved; but if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him". The fore, a mere proof of admission, after the person whose admission is alleged to be has concluded his evidence, will be of no avail a cannot be utilised against him. The third infirmity with regard to this admission is whether this is a clear and unequivocal admission. The High Court said that"a certified copy of the deposition was placed on record on 9 July 1973, on which day against it does not appear that the contents of the deposition were read out to the respondent or that any attempt was made to obtain leave of the Court to further cross examine the witness." .The contents of the ' alleged admission .to which reference has been made are not unambiguous and cannot be accepted as an admission. The contents are that he was not receiving any rent and the land was fallow. Therefore, the High Court was right in rejecting the contentions advanced by the appellants that there was any admission and in set ting aside the decision of the Revenue Tribunal. The second ' contention on behalf of the appellant is that the certain record of rights relied on by the appellant would establish that the appellant was a tenant. The High Court ' rightly accepted the contention of the respondent that after a careful consideration of the evidence on record the fact finding courts, i.e. the Mamlatdar and the Special Deputy Collector recorded a finding that the appellant had not cultivated the land in dispute as the tenant of the respondent. Therefore the Revenue Tribunal had no jurisdic tion to interfere and set aside the finding of fact. As to the record of rights it appears that the High Court referred to two important features. It is true that the record of rights relate to Survey Nos. 201/2 and 194/13 and there is mention of the appellant as tenant. There is also a reference to the mutation proceedings. The name of the respondent is shown as Kabjedar. Two of the 9 112SC1/77 676 important heads in the record are 'Mode ' and 'Crops & fal lows '. The Mode is shown as "I" and under Crops and fallows entry 'Paddy ' is shown. The High Court referred to this feature of the record of rights Mode "I" means that the respondent cultivated as owner of the land that was never even case of the appellant. The High Court rightly said that the irresistible conclusion therefore is that the extracts from the record of rights contain entries which do not have any relation to true facts. If that is the posi tion with regard to these extracts, these cannot be relied on for inference that actually the land was cultivated and paddy crops were grown on the said land. With regard to the record of rights counsel for the appellant said that presumption arises with regard to its correctness. There is no abstract principle that whatever will appear in the record of rights will be presumed to be correct when it is shown by evidence that the entries are not correct. Apart from the intrinsic evidence in the record of rights that they refer to facts which are untrue it also appears that the record of rights have reference to the mutation entry that was made by the Circle Officer on 30 January 1956. Counsel for the respondent rightly contended that no presumption could arise for two principal reasons. First, the oral evidence in this case nullified the entries. in the record of rights as showing a state of affairs op posed to the real state of affairs and, second, no notice was ever given to the respondent with regard to mutation proceedings. Therefore the respondent is right in contend ing that no presumption can validly arise from the record of rights. The third contention on behalf of the appellant that the Tribunal was justified to interfere because of error of law is also unacceptable. The provisions contained in section 76 of the Bombay Act enumerate the grounds on which there can be revision by the Revenue Tribunal. One of the grounds is that there is 'error of law '. In the present case the manner in which the Maharashtra Revenue Tribunal entertained the revision was by holding, as follows: "There is evidence that the applicant (meaning thereby the appellant) has been in actual possession of land since 1956 57 onwards". However, the authorities below have rejected the entries as well as the opponents ' (meaning thereby the respondent) admission on the ground that the applicant did not support the entries by producing the rent receipts. According to the authorities below the burden was on the applicant to prove his case by producing evidence to corroborate the entries. The appellate authority has also observed that the alleged admission of the opponent, made in the other case was rejected by the Revenue Tribunal. The authorities below arrived at the conclusion that the applicant 's possession was otherwise than lawful. This concurrent finding of the authorities below is being challenged by the applicant in this revision application. " The Revenue Tribunal seemed to consider the approach of the a Mamlatdar and the Deputy Collector to be erroneous because according to the Revenue Tribunal the burden was shifted to the respondent 677 to rebut the entry in the record of rights and .that the respondent failed to discharge that burden. When the entire evidence is before the Court, it is well settled that the burden of proof becomes immaterial. Further the Revenue Tribunal fell into error of enter taining the Revision when there was no error of law on the face of the record. The presumption which was said to arise in the record of rights was before the Deputy Collector as well as the Mamlatdar. If the authority entrusted with adjudication goes into the question and assesses the same, the decision may be right or wrong but that will not go to show that there is any error of law on the fact of record. All the three contentions advanced by the appellant fail. The appeal is for the foregoing reasons dismissed with costs. P.H.P. Appeal dis missed.

The appellant was owner of the suit land. The appel lant 's wife sold this land to respondent No 1. Thereafter, the appellant made an application under section 70(b) of the Bombay Tenancy & Agricultural Lands Act, 1948, for a decla ration that he was a tenant of two of the 4 plots of the land. The dispute went up to the Maharashtra Revenue Tribu nal who rejected the claim of the appellant to tenancy. Thereafter, the respondent filed an application under sec tion 70(b) of the said Act praying for a declaration that the appellant was not a tenant in respect of the remaining two survey numbers also. The respondent alleged that he never leased the land to the appellant and that he came to know of the entry of the record of rights for the year 1955 56 on the strength of mutation alleged to have been made on 30.1.1966. The respondent was cross examined and it was suggested to him that he had made an admission in previ ous deposition although the said deposition was not shown to the respondent. After the cross examination of the respond ent was over, a certified copy of the said deposition was placed on record. Thereafter the appellant was examined and he relied on the extract of the record of rights. The Mamlatdar rejected the claim of the appellant to be a tenant which was confirmed by the Deputy Collector. The Maharash tra Revenue Tribunal held in exercise of its revisional powers that the appellant was proved to be a tenant of the land and set aside the concurrent findings of the two au thorities below. In a writ petition filed by the respondent under article 227 of the Constitution the High Courts set aside the order of the Revenue Tribunal. Dismissing the appeal by Special Leave, HELD : 1. Admission on which reliance has been placed by the appellant suffers from 3 infirmities: (i) Earlier deposition related to two different survey numbers. Whatever was stated about another survey number is irrelevant and inadmissible. Since under section 17 of the Indian Evidence Act an admission is a statement, oral or documentary, which suggests any inference as to any fact in issue or relevant fact. (ii) In fact there was no admission in the earlier proceed ings; and (iii) The deposition was not brought to the notice of re spondent when he was being cross examined. Privy Council has laid down in the case of Bal Gangadhar Tilak that before any person is to be faced with any statement he should be given an opportunity to see that statement and to answer the statement. [673 E, 674 A C, 675 A E] Bal Gangadhar Tilak vs Shrinivas Pandit 42 Indian Ap peals 135 at page 147, applied. There is a presumption about the correctness of the record of rights. However, there is no abstract principle that whatever will appear in the Record of Rights will be presumed to be correct. In the present case it is shown by evidence that the entries are not correct. [676 B D] 672 3. Under section 76 of the Act power of Tribunal to interfere is limited. There was no error of law on the face of the record. If the authority entrusted with adjudication goes into the question and assesses the same, the decision may 'be right or wrong but that will not go to show that there is any error of law on the face of record. [676 E, 677 A B]

ivil Appeal No. 2588 of 1966. Appeal from the judgment and decree dated January 14, 1964 of the Patna High Court in First Appeal No. 572 of 1958. D. Goburdhun and R. Goburdhun, for the appellants. A. N. Sinha and P. K. Mukherjee, for respondent No. 1. 640 The Judgment of the Court was delivered by Mitter, J. The only question involved in this appeal is, whether the direction of the High Court that the partition suit launched in 1943 should be allowed to proceed in view of the provisions of section 6 of the Bihar Land Reforms Act, 1950 which came into force on 25th September, 1950, is correct. The suit had a chequered career. It was instituted against a number of persons the main relief asked for being partition of four annas Milkiat interest in Touzi No. 702, Tappa Haveli, Pargana Maheshi, District Champaran, Bihar. The Subordinate Judge of Motihari made a preliminary decree for partition declaring the first respondent 's share in the property as claimed by him. The High Court in appeal modified the decree reducing the plaintiff 's share to Rs. 0 1 4 interest only. In further appeal to these Court the trial court 's preliminary decree was upheld on 5th ,October 1953. In the meanwhile the Bihar Land Reforms Act of 1950 effecting far reaching changes in the incidents of land tenure and land holdings had been passed. The first appellant made an application to the trial court in June 1958 prayina that the proceedings for final decree be treated as having abated in view of the vesting of all estates in land in the State of Bihar. This was accepted by the Subordinate Judge by an order dated July 12, 1958. The High Court allowed the appeal with the direction above mentioned which the appellants now seek to have set. aside. The bone of contention between the parties is the extensive "bakasht ' lands in the aforesaid Mouza. The appellants contend that under section 6 (1) of the Act all these lands vested in the State and came to be held by the persons in "khas possession" thereof as raiyats under the State. To appreciate the plea it is necessary to make a brief reference to some of the provisions of the Act. As is well known the object of the Act was to cause transference to the State of the interest of proprietors and tenure holders in land as also of the mortgagees and lessees of such interests including interests in trees, forests, fisheries, jalkars, ferries, hats, bazars, mines and minerals and to provide for certain consequences following there from and connected therewith. section 3 of the Act ,enabled the State Government to declare by notification that the estates or tenures of a proprietor or tenure holder specified therein 'would pass to and become vested in the State. The consequences ,of such vesting are set forth in section 4. Under cl. (a) : "Such estate or tenure including the interests of the proprietor or tenure holder in any building or part of a building comprised in such estate or tenure and used 641 primarily as office or cutchery for the collection of rent of such estate or tenure, and his interest in trees, forests, fisheries, jalkars, sairati interest as also his interest in all sub soil including any rights in mines and minerals whether discovered or undiscovered, or whether being worked or not, inclusive of such rights of a lessee of mines and minerals, comprised in such estate or tenure (other than the interests of raiyats or under raiyats) shall, with effect from the date of vesting, vest absolutely in the State free from all encumbrances and such proprietor or tenure holder shall cease to have any interest in such estate or tenure, other than the interests expressly saved by or under the provisions of the Act. " section 6 of the Act provides for such saving and the relevant portion thereof runs as follows "(1) On and from the date of vesting all lands used for agricultural or horticultural purposes, which were in khas possession of an intermediary on the date of such vesting, including (a) (i) proprietor 's private lands let out under a lease for a term of years or under a lease from year to year. . . (ii) landlords privileged lands let out under a registered lease for a term exceeding one year or under ,a lease, written or oral, for, a period of one year or less, referred to in section 43 of the Chota Nagpur Tenancy Act, 1908, (b) lands used for agricultural or horticultural purposes and held in the direct possession of a temporary lessee of an estate or tenure and cultivated by himself with his own stock or by his own servants or by hired labour or with hired stock, and (c) lands used for agricultural or horticultural purposes forming ' the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof; shall. . . be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold them as a raiyat under the State having occupying rights in respect of such lands subject to the payment of such fair and equit able rent as may be determined by the Collector in the prescribed manner. 642 The broad proposition which was advanced before the High Court and rejected by it and reiterated before us is that the consequence of section 6, was to put an end to the character of the possession of the bakasht lands to the malik by causing them to vest in the State and simultaneously creating a tenancy in favour of the person in khas possession thereof. There is no dispute that bakasht lands fall under categories (b) and (c). We are not here concerned with category (c) and have quoted it to appreciate some decisions relied on where there are references to that category. This question has engaged the attention of the Patna High Court more than once and it would appear that the views expressed in different cases have not been uniform. So far as the said High Court is concerned the point was settled by a decision of the Full Bench in Mahanth Sukhdeo Das. vs Kashi Prasad Tewari and Shrideo Misra vs Ramsewak Singh(1). The main questions before the Full Bench were whether on the vesting of an estate which was mortgaged at the material time the bakash lands therein which are deemed to be settled with the ex proprietor in khas possession would form substituted security for the purpose of the mortgage, and whether a co sharer proprietor not in actual possession of such lands had Any claim thereto on the basis of his constructive possession. The High Court answered both the above in the affirmative. One of the earliest cases in which this Court had to interpret section 6 of the Act was that of Surajnath Ahir vs Prithinath Singh (2 ) . There the question which engaged the attention of this Court was whether the appellants who had originally gone into possession on the strength of a mortgage lost their right to continue in possession even if they claimed to be trespassers after the redemption of their mortgage by reason of the estate vesting in the State on the passing of the Act. Although the case is not directly in point, it bears upon the identical provisions of law which have to be applied to the facts of the case before us. The facts in that case were that the appellants had entered into possession of kasht lands of the mortgagors on the strength of a mortgage deed. The mortgagors thereafter executed another mortgage with respect to their milkiat (proprietary) interest in favour of certain persons. The plaintiff respondents bought the milkiat rights together with "kasht" lands from the mortgagors and entered into possession of the milkiat property and subsequently redeemed the mortgage deeds in 1943. The appellants however did not make over possessions of the lands in dispute even after the redemption of the mortgage. It was held by this Court that the respondents could not take advantage of section 6 (1) (c) of the Act as no mortgage subsisted on the date of vesting and the mere fact that the proprietor had a subsisting (1) I.L.R. 37 Patna 918. (2) [1963] 3 S.C.R. 290 643 title to possession over certain land on the date of vesting could, ' not amount to that land being treated as under his "khas possession" for the purposes of the Act. Referring to the definition of "Khas possession" in section 2(k) of the Act as meaning "the possession of such proprietor or tenure holder by cultivating such land or carrying on horticultural operations thereon himself with his own stock or by his own servants or by hired labour or with hired stock". it was held that in order that the respondents could take advantage of the provision of section 6 (1 ) (c) of the Act they had to, establish a subsisting mortgage on the date of vesting which was inclusive, of the land subject to their right of redemption. On the question of possession of the lands it was observed "On the date of vesting, the appellants were not in possession as mortgagees. The mortgages had been redeemed in 1943. Thereafter, the possession of the appellants was not as mortgagees. It may be as trespassers or in any other capacity. The land in suit, therefore, did not come within cl.(c) of section 6 of the Act. " Rejecting the construction put on the expression 'khas possession by the High Court in Brijnandan Singh vs Jamuna Prasad(1) it was said : " The mere fact that a proprietor has a subsisting title to possession over certain land on the date of vesting would not make that land under his 'khas possession '. " The Full Bench decision of the Patna High Court, came up for consideration by this Court in Ram Ran Bijai Singh vs Behari Singh alias Bagandha Singh(2). There the appellants before this, Court were the plaintiffs who had filed a suit for a declaration that a certain plot of land was their zeraiti land and that the persons impleaded as the defendants 1st and 2nd parties had no right or title thereto and for recovery of possession of the said land by dispossessing them therefrom. It was argued that in view of the concurrent findings of the courts below that the lands were the zeraiti lands of the plaintiffs they would not vest in the State because of the saving in section 6 of the Act and the appellant should be deemed to have been in khas possession of the land under section 6 (1) (c). The respondents contended that it was not a case of a mortgagee remaining in possession after payment of the debt without anything more but of tenants who claimed to remain in possession by asserting a title which was as much against the mortgagors as against the mortgagees. Reference was made in the (1) A.I.P. 1958 Patna 580. (2) (3) I.L.R.37Pat. 644 course of arguments to the Full Bench decision in Sukhdeo Das 's case(3) and it was submitted that a mortgagee continuing in possession of the mortgaged property after payment of the :mortgage amount must hold the same on behalf of the mortgagor and in trust for him. Counsel further relied on certain observations in the judgment of the Full Bench in aid of his proposition and submitted on the basis thereof that even the possession of a trespasser who had not perfected his title by adverse possession for the requisite period of time under the Limitation Act should be considered as in khas possession of the true owner. Turning down this submission it was observed by this Court (p. 378) : "We consider that this equation of the right to possession with 'khas possession ' is not justified by principle or authority. Besides this is also inconsistent with the reasoning of the Full Bench by which constructive pos session is treated as within the concept of khas possession. " The Court went on to add that "The possession of the contesting defendants in the present case was in their own right and adverse to the plaintiffs, even on the case with which the appellants themselves came to court." Noting the statement of the plaintiffs in their plaint that the mortgagees had fulfilled their obligations and the obstruction to possession was put forward only 'by persons who claimed occupancy rights this Court concluded that, in the circumstances of the case, it was not possible for the appellants to contend that these tenants (defendants 1st and 2nd parties) were in possession of the property on behalf of the mortgagor or by virtue of any right through the mortgagor. The case is not therefore an authority for the proposition that a co sharer 's constructive possession is to be ignored under section 6 (1) (c) of the Act. Counsel for the appellants also referred us to a recent decision of this Court in section P. Shah vs B. N. Singh(1) in aid of his contention that the true effect of section 6 of the Act was to create a new right ,of tenancy in favour of the person in khas possession and consequently even if the plaintiff in the partition suit had a right to ask for demarcation of his Rs. 0 4 0 share of the bakasht lands before the passing of the Land Reforms Act, he could not pursue his claim by a prayer that he be considered a tenant along with those who were in actual khas possession. In our view the above decision is no authority for this broad proposition. In that case the appellants who were mortgagees of an estate including bakasht lands and other lands filed a suit on (1) ; 64 5 their mortgage and tried to follow up the preliminary decree which was obtained before the Act came into force by a petition for passing a final decree. One of the questions before this Court was whether the mortgage decree had become unexecutable in view of the provisions of the Act. It was held that the net effect of sections 3, 4 and 6 was that although on the vesting of the, lands in the State a settlement was deemed to be effected with the person in khas possession in law, there were two different transactions and the deemed settlement was in effect a separate transaction creating new rights. The Court came to the conclusion that the only remedy open to the decree holders wag that provided in Chapter IV of the Act i.e. a claim under section 14 before the Claims Officer for determining the amount of debt legally and justly payable to each creditor in respect of his claim. The Court was there dealing with the rights of the mortgage creditors after the Act had come into force. Chapter IV of the Act made special provisions for dealing with the rights of secured creditors and section 4 (1) (d) expressly provided for the abatement of all suits and proceedings for the recovery of any money through proceedings which might be pending on the date of vesting arising out of securities created by mortgage or a charge on an estate or tenure. Here however we are not dealing with the claims of mortgagees under Chapter IV. In this case we have to consider whether the appellants had laid a claim which a co sharer could not put forward except by pleading ouster or any other independent ground. Even if they were in actual khas possession within the meaning of section 2 (k) of the Act it must be held that the plaintiff who was a co sharer was in constructive possession through the appellants as "under the law possession of one co sharer is possession of all the co sharers". We see no reason to hold that the observations of this Court to the above effect in P. L. Reddy vs L. L. Reddy(1) are not applicable to the case before us. The appellants do not claim to be trespassers on the property neither did they claim any title to the lands adversely to the plaintiff respondent. The deeming provision of section 6 must therefore enure for the benefit of all who in the eye of law would be regarded as in actual possession. It follows that the plaintiff had not lost his share in the bakasht lands and had a right to them though not as tenure holder or proprietor but certainly as a raiyat under the provisions of the Land Reforms Act. ' The appeal must therefore be dismissed with costs. V.P.S. Appeal dismissed. (1) ; , 202.

In a suit for partition of bakash land a preliminary decree was passed. The defendants appellants, claiming to be in actual possession of the bakasht land, filed a petition contending that the consequence of section 6. of the Bihar Land Reforms Act, 1950 (which came into force in the meanwhile) was to put an end to the proprietor 's possession of the bakasht land by causing them to vest in the State and simultaneously creating a tenancy in favour of the person in khas possession thereof, and therefore, no final decree could be passed. The trial court accepted the contention and dismissed the plaintiff 's application for passing final decree. In appeal, the High Court set aside the order. In appeal to this Court, HELD : Even if the appellants were in actual khas possession within the meaning of section 2(k) of the Act, it must be held that the plaintiff respondent, who was a co sharer, was in constructive possession through the appellants, as, under the law, possession of one co sharer is possession of all co shares. The appellants did not claim to be trespassers on the property neither did they claim any title to the lands adversely to the respondent. The deeming provision of section 6 must, therefore, enure for the benefit of all, who in the eye of land) would be regarded as in actual possession. Therefore, the respondent had not lost his share in the bakasht lands and had a right to his share in them, though not as tenure holder or proprietor, but as a raiyat under the provisions of the Act. [645 E G] P. L. Reddy vs L. L. Reddy, ; , 202, followed. Surajnath Ahir vs Prithitnath Singh, , Ram Ran Baijal Singh vs Behari Singh alias Bagandha Singh, , section P. Shah vs, B. N. Singh; , and Mahant Sukhdeo Das vs Kashi Prasad, Tewari referred to.

N: Criminal Appeal No. 384 of 1974. Appeal by Special leave from the Judgment and Order dated the 24th October, 1973 of the Allahabad High Court in Crl. Appeal No. 710 of 1973. Dalveer Bhandari, H.M. Singh & Ranbir Singh for the Appellant. R.K. Garg, V.J. Francis & Nikhil Chandra for the Respondent. The Judgment of the Court was delivered by VENKATARAMIAH, J. It was about 5.30 P.M. on October 15, 1971. Bankey Lal son of Jang Bahadur Singh and his wife Chandra Kali were returning home from their 'Khalihan ' (threshing floor) which was situated towards the north of their village Kishunpur Chirai. As they came near the village they were met by Pussu alias Ram Kishore and his brother in law Sheo Rakhan. Pussu was armed with a licensed gun of his father Jia Lal and Sheo Rakhan with a country made pistol. They both fired at Bankey Lal causing him injuries. Chhatrapal and Gaya Prasad who were going that very way towards the village saw the occurrence and asked Pussu and Sheo Rakhan to desist from firing and also tried to stop them from continuing to fire. Pussu fired with the gun towards Chhatrapal who in spite of being fired at tried along with some others who were there to catch hold of Pussu and to snatch the gun from his hands. As Pussu could not reload the gun he assaulted those who tried to catch him with the butt of the gun. Gaya Prasad was, however, able to snatch the gun from the hands of Pussu after delivering few blows with his lathi on the head of Pussu. Pussu suddenly managed to escape from the hold of the witnesses and ran towards Sheo Rakhan who was standing near a mango tree with his country made pistol which he was not in a position to open and reload in spite of his attempts. In the meantime the witnesses were carrying the injured Bankey Lal towards the village and when they came near a pipal tree, Pussu ran towards them 297 with the country made pistol which he had reloaded by then and fired again at Bankey Lal and killed him instantaneously. This in brief is the prosecution case. The defence version appears to be that on the date and at the time of the occurrence Pussu and Sheo Rakhan were going towards the 'Bhagwa Talab ' near their village and on the way they came across Bankey Lal, his servant Nanhoon and Chhatrapal. These three persons surrounded both Pussu and Sheo Rakhan and began to assault them. On hearing their cries Jialal, the father of Pussu ran towards them with his licensed gun and fired in self defence at Chhatrapal and Bankey Lal causing injuries to Chhatrapal and killing Bankey Lal. On the basis of the allegations of the prosecution, Pussu was charged for an offence punishable under section 302 I.P.C. for having committed the murder of Bankey Lal and for an offence punishable under section 307 I.P.C. for having attempted to commit the murder of Chhatrapal. He was also charged under section 323 for having caused hurt to Gaya Prasad and under sections 25 and 27 of the Arms Act for having been found in illegal possession of and for having used a licensed gun for unlawful purposes. He was also charged separately under section 302/34 I.P.C. for having committed murder of Bankey Lal in furtherance of the common intention of himself and of Sheo Rakhan. Sheo Rakhan was charged under section 304/34 I.P.C. for the murder of Bankey Lal in furtherance of the common intention of himself and of Pussu. Jia Lal, father of Pussu, was charged under section 30 of the Arms Act for contravening the conditions of the licence issued in respect of his gun by allowing Pussu to take and use it as stated above. The learned Sessions Judge at Fatehpur in Sessions Trial No. 128/72 found Pussu guilty of the offence punishable under section 302 I.P.C. for having committed the murder of Bankey Lal and imposed the sentence of death on him subject to confirmation by the High Court. Pussu was also found guilty of offences punishable under sections 307 I.P.C. 323 I.P.C. and under section 27 of the Arms Act for which he was sentenced to undergo rigorous imprisonment for seven years, for one year and for one year respectively which were to run concurrently. Sheo Rakhan was found guilty of an offence punishable under section 302/34 I.P.C. and was sentenced to undergo imprisonment for life. Jia Lal, father of Pussu, was however acquitted of the charge against him. 298 On appeal by Pussu and Sheo Rakhan, in Criminal Appeal No. 710/73/Referred No. 34 of 1973 the High Court of Allahabad set aside the convictions and sentences imposed on them and acquitted them of the changes levelled against them. Against the judgment of the High Court the State Government applied to this Court for special leave to appeal against Pussu and Sheo Rakhan after a petition for a certificate under Article 134 (1) (c) of the Constitution had been dismissed by the High Court. By its order dated October 28, 1974, this Court granted special leave to appeal against Pussu alone and hence this appeal by special leave against Pussu only. In the present case many facts are not in dispute. That Bankey Lal was killed by injuries caused by a fire arm is not in dispute. The time, the date and place of the alleged occurrence are also not in dispute. The presence of Chhatrapal, Bankey Lal, Pussu and Sheo Rakhan at the scene of occurrence when the occurrence took place is not also disputed. That the licensed gun of Jia Lal, father of Pussu was used at the time of occurrence is also not in dispute. That Chhatrapal suffered injuries on account of shots fired from that gun is also not in dispute. That there was enmity between the family of Bankey Lal and the family of Pussu owning to some consolidation proceedings is not seriously questioned before us. The only points in dispute are (1) whether Bankey Lal was killed on account of firing by Pussu as stated by the prosecution or whether he was killed on account of the shots fired by Jia Lal, father of Pussu, (2) whether Chhatrapal suffered injuries on account of shots fired by Pussu with the said gun or whether he suffered these injuries on account of the firing by Jia Lal, (3) whether Gaya Prasad was assaulted by Pussu and (4) whether Pussu had committed any offence under the Arms Act. The report containing the first information about the occurrence, according to the prosecution, was written by Yashwant Singh (P.W.6), a young person of about 18 years who was a resident of Kishunpur Chirai to the dictation of Jang Bahadur Singh, the father of Bankey Lal. Yashwant Singh has stated that he was a student studying in the IXth class, that he had written the report to the dictation of Jang Bahadur Singh, that after writing it he had read it out to Jang Bahadur Singh who signed before him and that thereafter he had handed over the report to Jang Bahadur Singh. He has denied that he had written the report either to the dictation of 299 Lakhanlal and others or some time later to the dictation of the police. The report contains details which Jang Bahadur Singh (P.W.13) was able to collect from his daughter in law and others who were near by at the time of the incident. In that report there is no reference to Jia Lal, father of Pussu, at all, (one Jia Lal whose name is mentioned in it is a different person). The presence of Pussu and Sheo Rakhan at the scene is mentioned. The role played by each of them is stated to be as in the prosecution case set out above. The names of persons who were present there including Chhatrapal are also mentioned. The above report and the licensed gun of Jia Lal, the father of Pussu, which had been seized by the witnesses were received at about 8.30 P.M. on that very day at the Police Station at Khakhreru which was about four miles from Kishunpur Chirai where the occurrence had taken place. On the basis of the said report the First Information Report was prepared under section 154 Criminal Procedure Code. The learned Trial Judge has opined that the First Information Report has been promptly prepared and sent in this case. The only criticism made against it before the trial court on behalf of the accused was that it did not contain some details including the injuries said to be on the person of Pussu and Sheo Rakhan. The trial court has observed that the report was not one dictated by an eye witness but by Jang Bahdur Singh who collected information from people who were there, that Jang Bahadur Singh who had lost his only son could not be expected to furnish all details at the time when the report was prepared and that the report contained broadly all the particulars of the occurrence. The trial court also observed that no motive could be assigned to the omission to refer to the injuries on the person of the accused said to have been caused by lathi blows. The High Court has, however, considered this last aspect namely the omission to refer to Gaya Prasad (P.W.7) giving lathi blows to Pussu and to Chhatrapal catching hold of Pussu and preventing him from reloading the gun was a material omission. We shall advert to this aspect of the matter again at a later stage. One significant aspect of the First Information Report however is that even though there was enmity between the family of Jang Bahadur Singh and the family of Jia Lal, the father of Pussu, and although the defence theory is that the said Jia Lal had fired at Chhatrapal and Bankey Lal, there is no reference to the presence of Jia Lal the father of Pussu, at the scene of occurrence. 300 After the receipt of the information regarding the occurrence, the Sub Inspector of Police, Dharam Singh (P.W. 14) and the Station Officer Yamuna Prasad Pandey (P.W. 15) conducted the investigation. Pussu and Sheo Rakhan could not be arrested till October 23, 1971. They were absconding till then and they surrendered in the court of the Additional District Magistrate (J) on October 23, 1971. Pussu has admitted this fact in his examination under section 364 Criminal Procedure Code, 1898 by stating that on learning about the report they surrendered before the court. After the investigation was over a police report was filed in the court of the magistrate which ultimately led to the committal of Jia Lal, Sheo Rakhan and Pussu to take their trial before the Sessions Court. Exhibit Ka 35 is the post mortem certificate issued by Dr. S.C. Misra, who had conducted the post mortem examination on the body of Bankey Lal. He has stated therein that there were a number of gun shot injuries on the person of the deceased, and the death was due to shock and haemorrhage caused by gun shot injuries. There is no comment made by either side on this report. It is relevant to mention here that Dr. S.C. Misra has stated in his deposition (exhibit Ka 34) that on October 16, 1971 at about 2.30 p.m. he had also examined the injuries of Ram Kishore son of Jia Lal (Ram Kishore is the other name of Pussu) and had found three lacerated wounds, one abrasion, one contusion and one abraded contusion and had issued a certificate as per Exh. He also stated that the said injuries could be caused by lathi blows. Pussu has admitted that he was so examined in his statement under section 364 Criminal Procedure Code, 1898. P.W.2 Dr. V.P. Singh is the person who examined the injuries on the person of Chhatarpal Singh (P.W.5), on the person of Gaya Prasad (P.W.7) and on the person of Ram Gopal. He has stated that there were gun shot injuries on the person of Chhatrapal Singh and an abrasion and a lacerated wound which could have been caused by a blunt weapon on the person of Gaya Prasad. Ram Gopal is stated to have a small contusion and an abrasion on his person. P.W. 5 Chhatrapal Singh, P.W. 7 Gaya Prasad, P.W. 1 Lakhanlal and P.W. 10 Ramnath are the eye witnesses. Of them P.W. 5 Chhatrapal Singh and P.W. 7 Gaya Prasad are injured witnesses. The statement of Lakhanlal was recorded by the police on 301 October 15, 1971 itself when he handed over the report about the occurrence and the statements of Chhatrapal Singh, Gaya Prasad and Ramnath were recorded by the police on October 16, 1971. Before considering the evidence of these eye witnesses, it is necessary to refer to a curious experiment which was carried out by the High Court in the course of the hearing of the appeal. The experiment relates to the capacity of Chhatrapal to run when he was fired at by Pussu. One of the arguments addressed on behalf of the accused before the High Court was that Chhatrapal could not have been fired at from a short distance but he must have been shot from a long distance as the injuries on his person were superficial and hence he could not run and try to catch hold of Pussu by his waist before Pussu could reload his gun. Chhatrapal was about 60 years of age at the time of the incident. In support of its conclusion that Chhatrapal could not run towards Pussu in order to catch hold of him this is what the High Court says: "Chhatrapal appeared in the Court and we asked him to move briskly to a certain distance in order to demonstrate his ability. He did so. We also got one of the young lawyers present in Court unload and reload a single barrel gun of exactly the same make as the gun, material exhibit 1. Our assessment on the demonstration about the brisk movement of Chhatrapal and the time taken in reloading the gun by the young lawyer is that even if Chhatrapal aged 60 years after receiving the gun shots injuries had run from 8 to 10 paces, he could neither catch hold of Pussu, a young lad, nor prevent him from reloading his gun." This procedure of conducting an experiment which was carried out two years after the incident in court with the aid of an young lawyer (about whose proficiency in handling a gun we know nothing) who was asked to handle a different gun altogether and which had been used to reject the truth of the evidence of the eye witnesses appears to be highly irregular. The High Court has not addressed itself to the degree of efficiency, or shall we say, inefficiency of Pussu in handling a gun. The time taken by any person to reload a gun depends upon several factors including the condition of the gun and the surcharged atmosphere created by the firing bout which may have preceded the time of reloading the gun. We shall now refer to what Chhatrapal has stated in the course of his deposition. He has stated: 302 "At the time when I saw Pussu and Sheo Rakhan near the mango tree, I saw weapons in their hands. At the place where the firing took place for the first time, both the accused person were opening and loading the cartridges. They had loaded the cartridge near the mango tree. On the first occasion, at the time of loading of the cartridges, I was at a distance of 1 15 paces towards east behind Bankey. At the time of first firing, t e sounds of the gun fires made by the two accused person were separate. They had fired from some distance from each other. Both the accused persons were almost at equal distance. They were not one behind the other. I can not, however, rule out the difference of 1 or 2 paces. At the first gunfire, Bankey ran towards the village. He must have run upto a distance of 5 10 paces when the second fire was opened. Bankey Lal was hit by the Ist as well as the 2nd gunfire. At the time of firing, the accused persons were on the north eastern side of the passage. The third gun fire was made by the accused persons at that very place. Bankey could not go ahead. At the time of 3rd fire, the accused persons were on the western side of Bankey Lal. After this third fire, I rebuked the accused persons. Thereupon Pussu fired at me and then I caught hold of him from behind. The snatching of the gun took place at a distance of ten paces on the eastern side of the place where Bankey Lal had sat down. As soon as Pussu fired at me, I caught hold of him by his waist. After I had caught hold of his waist Pussu could not fire again so long as he did not get himself freed. To Court: At the time when Pussu fired at me and I caught him by his waist, the empty cartridge fired at me remained inside the gun. Pussu could not take it out or throw it away nor could he open the gun. To counsel: And in the meantime the gun was snatched. " 303 There is nothing elicited in the cross examination of this witness which could discredit his testimony. There was no ill will between Chhatrapal and the members of Pussu 's family. He denied a suggestion that there were some proceedings under section 107 Criminal Procedure Code against him. There was also no evidence in support of that suggestion. Chhatrapal had been in fact injured by gun shots and the gun used on that occasion had in fact been seized. Why he should exonerate Jia Lal the father of Pussu from the responsibility of injuring him if Jia Lal was in fact responsible for it but implicate Pussu is in comprehensible. Gaya Prasad (P.W. 7) who was also an injured eye witness stated in the course of his deposition thus: "When Bankey Lal and his wife reached near Har Sakri well, Pussu accused, who was armed with the gun of his father, and Sheo Rakhan accused who was armed with a country made pistol began to fire gunshots at Bankey Lal. Bankey Lal and his wife raised alarm and ran towards the village. Chhatrapal and I, following him were going towards the village by the same passage. Chhatrapal forbade him but Pussu said that he would not leave Bankey Lal alive. At this Chhatrapal ran to catch hold of Pussu whereupon Pussu aimed the gun at Chhatrapal. Chhatrapal turned and the gunshot hit him on his back. Even after being hit by the gunshot, Chhatrapal caught hold of Pussu by his waist. Ram Gopal, Lakhan Lal, Jia Lal Gadaria, and Ram Nath came running to the place of occurrence from the south. Ram Gopal and I went just close to Pussu, Ram Gopal and I advanced to snatch the gun, but Pussu gave one blow of the butt of the gun to each of us on the head. At this I gave 4 5 blows of lathis to Pussu and then we jointly snatched his gun. When we snatched his gun he went away towards the mango tree where his sala (brother in law) was present On receiving the injury, Bankey Lal had sat down in the way. Ram Nath and Jia Lal lifted him on their arm and started for the village. When they reached near the peepal tree, Pussu came with the pistol of his brother in law Sheo Rakhan struck it with the abdomen of Bankey Lal and fired, Bankey Lal 304 died just on receiving the pistol shot. Thereafter Pussu and Sheo Rakhan ran away towards Raeepur. " Jia Lal referred to in the above passage is Jia Lal Gadaria and not Jia Lal the father of Pussu. Even this witness is not shown to be interested in giving false testimony. Lakhan Lal (P.W. 1) and Ram Nath (P.W. 10) who were also eye witnesses have given substantially the same version as the evidence of Chhatrapal and Gaya Prasad and their evidence is not also shown to be unworthy of acceptance. As against the above evidence adduced by the prosecution, we have the evidence of Jagannath (D.W.1). He has stated that at the time when the occurrence took place he was in his plot near Bhagwa Talab which was close to the scene of occurrence, that he heard the cries of Pussu 'Run up, save me, Bankey Lal and Ghaseetey are killing me '. What took place thereafter may be narrated in his own words thus: Having gone there, I saw that Bankey Lal deceased and Ghaseetey were assaulting Pussu accused with lathis. Jia Lal challenged both of them and said "Do not beat him, otherwise I shall shoot you down". On Jia Lal 's saying so, Chhatrapal and Bankey stopped for a short time; but they again rushed to assault Pussu. In the meantime Pussu accused took shelter behind the mango tree. Then Jia fired 2 3 shots at Chhatrapal and Bankey. On receiving the gun shots injuries Chhatrapal fell down on the ground. Bankey Lal, too, received some injuries. In the meantime Bankey Lal 's servant Nanhua caught hold of Jialal accused from behind, as a result of which his arms also got bound. Nanhua shouted "Run up. I have caught hold of the sala". At this Shiva Rakhan accused reached there. He caught hold of Nanhua and felled him down and Jia Lal accused was released from his hold. Bankey Lal deceased rushed to snatch the gun of Jia Lal accused, but as soon as his hand fell on the barrel of the gun, it got discharged and the shot hit Bankey Lal on his right flank, as a result of which Bankey Lal fell down dead then and there. The accused persons ran away with their licensed gun towards their house. 305 This defence witness has not been believed by the trial court. Nor do we find that any reliance has been placed on his evidence by the High Court. The statement of this witness was recorded by the police on January 31, 1972 after P.W. 15 Yamuna Prasad Pandey came to know that the name of this witness had been mentioned in the report given by Pussu at the Kotwali Police Station. He has stated in his cross examination that "When I sighted for the first time, I saw that Jia Lal was firing shots at Ghaseetey alias Chhatrapal and Bankey". If that is so his version about what all had preceded that stage is manifestly his imagination. We have carefully gone through his evidence and it does not inspire confidence. The prosecution evidence cannot be rejected on the basis of the evidence of this defence witness, particularly because the minor injuries stated to be on the person of Pussu are not sufficient to hold that Pussu and Sheo Rakhan were the victims of the aggression on the part of Chhatrapal and Bankey Lal. This defence version is also contradicted by the conduct of Pussu immediately after the incident. If he was an innocent person and his father had fired the gun in defence of Pussu and Sheo Rakhan he would also have been an informant of the incident at the Khakhreru Police Station which was only about four miles from his village or he would have been available for interrogation by the police, if they came at the instance of somebody else. But he ran away from the village and he was found at 8 A.M. on the next day i.e. October 16. 1971 at the Kotwali Police Station, Fatehpur which was about forty five miles from his village. In order to reach that place he had to pass through at least three places where there were police stations. As the trial court has observed he must have gone there to have proper legal advice before gaving his version of the incident at a police station where he could find an officer who would oblige him by not arresting him. Ordinarily in a case of this nature a police officer would have contacted the concerned police station to ascertain facts and to seek instructions. Pussu, as mentioned earlier, was arrested on October 23, 1971 when he surrendered before court. The gist of the version in the F.I.R. (Exh. Ka. 10) given by Pussu at the Kotwali Police Station, Fatehpur is summarised by the trial court in its judgment and the relevant portion of that judgment reads thus: "When both these accused reached near "Bhagwa Talab" they found deceased Bankey Lal. Ghaseetey alias Chhatrapal and Bankey Lal 's servant Nanhoon coming from north side of the village towards them armed with lathis. On account of fear both these accused left that 306 passage but the aforesaid three persons rushed up at them and began to assault them with lathis. On hearing their cries his father accused Jia Lal who was having his licensed gun, Jagannath and Sheo Autar reached there and began to save them from the assault. The assailants namely Bankey Lal, Chhatrapal and Nanhoon threw down his father Jia Lal on the ground and began to snatch his gun. In the meantime he ran away from there but when he was running away he heard a gun shot sound. He did not go to his police station due to fear and, therefore, reached Police Station Kotwali, Fatehpur. He had also stated about injuries over his head, hand and back caused by lathi blows". This version, apart from the other infirmities pointed out by the trial court, contradicts the version of Jagannath (D W. 1) that when he first 'sighted ' Jialal the father of Pussu was already firing shots. The story contained in Exh. Ka 10 appears to be one spun out after a lot of deliberation. We have set out above in some detail the prosecution evidence and the defence version only to show how demonstrably the High Court was in error in rejecting the case of the prosecution. We have already referred to the experiment carried out by High Court at the hearing of the appeal by asking Chhatrapal to run about and an advocate to load a gun in their presence. Having been impressed by the result of that experiment the High Court first rejected the evidence of Chhatrapal that he had tried to catch hold of Pussu. The High Court then found that there was a material omission in the information given by Jang Bahadur Singh as "there was no mention about Gaya Prasad having inflicted four or five lathi blows on Pussu and it is only in the trial court that the eye witnesses have asserted that four or five lathi blows were inflicted on Pussu". Having regard to the several details about the incident given by Jang Bahadur Singh who was in fact not an eye witness, the omission referred to above appears to be a trivial one not affecting credibility of the prosecution version. The third ground on which the High Court found the prosecution case as not being worthy of acceptance is again a strange one. The relevant part of the judgment of the High Court reads thus: "The eye witnesses have asserted that after the gun had been snatched away, Pussu freed himself and 307 taking the pistol from appellant Sheo Rakhan fired a fatal shot at Bankey Lal from point blank range. It is highly improbable that after Pussu had been arrested and disarmed he could be allowed to free himself from the hands of young men like Lakhan Lal, Gaya Prasad and Ram Pal. The normal conduct of Pussu after he had freed and rearmed himself with pistol would have been to demand the return of his gun from Gaya Prasad on the point of his pistol rather than to pursue his injured victim Bankey Lal and to shoot him dead". What is improbable about the prosecution version, we fail to see. If Pussu 's object was to kill Bankey Lal, he would instead of demanding the return of the gun on the point of his pistol, run towards Bankey Lal and shoot at him, which in fact is what he is alleged to have done in this case. The High Court 's opinion that the normal conduct of a person in the position of Pussu would have been what the High Court has stated in the course of its judgment is a mere surmise. At any rate on such an imaginary ground the evidence of the eye witnesses could not be rejected. Another reason given by the High Court is again a supposition resting on no solid ground and that relates to the condition of the gun (Exh. Ka 1). The High Court has observed: "None of the eye witnesses has stated that any blow of lathi plied by Gaya Prasad fell on the butt of the gun. Gaya Prasad has stated that he inflicted four or five lathi blows on Pussu. The gun was deposited in the Mal Khana at the Police Station and a piece of the wooden part of the butt of the gun was found broken. This was noted in the recovery memo (Exh. Ka 1). The gun was examined by us and we found a wooden piece of the butt having chipped off and the opening lever of the gun had become inoperative. This could only happen if lathi blow fell on the butt of the gun. None of the eye witnesses has deposed that any blow from lathi plied by Gaya Prasad registered a hit on the gun. There is no explanation as to how the wooden butt of the gun (material Exh. 1) got broken and consequently the gun could not be opened. " In reaching the above conclusion, the High Court has overlooked the evidence of Gaya Prasad (P.W. 7) in his examination in 308 chief that when they were trying to snatch the gun Pussu gave one blow with the butt of the gun on his head and one blow on the head of Ram Gopal and the further statement in his cross examination that on account of its being snatched with jerks, the wood fixed at the lower part of the gun was left in the hands of Pussu himself and that the gun could have been damaged by being used as mentioned above. The High Court was wrong in holding that the gun could have been damaged only if a lathi blow had fallen on it. The explanation given by the prosecution is quite satisfactory indeed. We are not also impressed by the other ground relied on by the High Court that "in cases of emergency is repeated firing a shooter does not normally start collecting empty cartridges automatically ejected from the gun before reloading the gun" and "the non recovery of the fired cartridge either in the breach of the gun or from the spot is a suspicious circumstance" having regard to the overwhelming evidence in this case in support of the prosecution case. The rule governing the appreciation of evidence in a criminal case is laid down by this Court in State of Punjab vs Jagir Singh & Ors.(1) in which this Court set aside the judgment of acquittal passed by the High Court which had reversed the conviction and sentence imposed by the trial court thus: "A criminal trial is not like a fairy tale wherein one is free to give flight to one 's imagination and phantasy. It concerns itself with the question as to whether the accused arraigned at the trial is guilty of the crime with which he is charged. Crime is an event in real life and is the product of interplay of different human emotions. In arriving at the conclusion about the guilt of the accused charged with the commission of a crime, the court has to judge the evidence by the yardstick of probabilities, its intrinsic worth and the animus of witnesses. Every case in the final analysis would have to depend upon its own facts. Although the benefit of every reasonable doubt should be given to the accused, the courts should not at the same time reject evidence which is ex facie trustworthy on the grounds which are fanciful or in the nature of conjectures". 309 We have pointed out above the manifest errors committed by the High Court in the course of its judgment acquitting the accused Pussu. On a careful reading of the evidence in this case, we feel that Jia Lal had out of love and affection towards his son from the beginning tried to shield Pussu but has ultimately not been successful. From the evidence it is obvious that Pussu and Sheo Rakhan were armed with fire arms and they were the aggressors. The plea of self defence urged on behalf of Pussu cannot be accepted. A person who is an aggressor and who seeks an attack on himself by his own aggressive attack cannot rely upon the right of self defence if in the course of the transaction he deliberately kills another whom he had attacked earlier. In the instant case having regard to the nature of the weapon used it has to be held that the act by which the death of Bankey Lal was caused by Pussu was done with the intention of causing death, and we do not find any extenuating circumstances which would mitigate the offence committed by Pussu. The trial court was, therefore, right in convicting Pussu of an offence punishable under section 302 I.P.C. The acquittal of Sheo Rakhan does not affect the prosecution case against Pussu. There is no legal bar for convicting Pussu alone in this case on the facts and in the circumstances of the case. The principle of issue estoppel is inapplicable here. This is not a case in which it could be said that two views were reasonably possible. The only reasonable view to be taken is the one taken by the trial court. We are aware of the rule of practice that ordinarily this Court should not interfere with judgments of acquittal on a mere re appreciation of evidence. But if there are glaring infirmities in the judgment of the High Court resulting in a gross miscarriage of justice, it is the duty of this Court to interfere. In the instant case we find that the approach of the High Court is basically erroneous and its judgment is founded on false assumptions, conjectures and surmises. On a consideration of the entire mass of evidence adduced in this case we are satisfied that the prosecution has established beyond reasonable doubt that Pussu had committed the murder of Bankey Lal. In cases of this nature it is advisable to bear in mind the following observations of Krishna Iyer, J. in Shivaji Sahebrao & Anr. vs State of Maharashtra(1) at pages 492 493: 310 "Even at this stage we may remind ourselves of a necessary social perspective in criminal cases which suffers from insufficient forensic appreciation. The dangers of exaggerated devotion to the rule of benefit of doubt at the expense of social defence and to the soothing sentiment that all acquittals are always good regardless of justice to the victim and the community, demand especial emphasis in the contemporary context of escalating crime and escape. The judicial instrument has a public accountability. The cherished principles or golden thread of proof beyond reasonable doubt which runs thro ' the web of our law should not be stretched morbidly to embrace every hunch, hesitancy and degree of doubt. The excessive solicitude reflected in the attitude that a thousand guilty men may go but one innocent martyr should not suffer is a false dilemma. Only reasonable doubts belong to the accused. Otherwise any practical system of justice will then break down and lose credibility with the community. The evil of acquitting a guilty person lightheartedly as a learned author Glanville Williams in 'Proof of Guilt ' has sapiently observed, goes much beyond the simple fact that just one guilty person has gone unpunished If unmerited acquittals become general, they tend to lead to a cynical disregard of the law, and this in turn leads to a public demand for harsher legal presumptions against indicted 'persons ' and more severe punishment of those who are found guilty. Thus too frequent acquittals of the guilty may lead to a ferocious penal law, eventually eroding the judicial protection of the guiltless. For all these reasons it is true to say, with Viscount Simon, that "a miscarriage of justice may arise from the acquittal of the guilty no less than from the conviction of the innocent. " In short, our jurisprudential enthusiasm for presumed innocence must be moderated by the pragmatic need to make criminal justice potent and realistic. " In the result, we set aside the judgment of the High Court in so far as Pussu is concerned and restore his conviction for the offence punishable under section 302 I.P.C. as ordered by the trial court. As regards sentence we feel that ends of justice would be met if we impose the punishment of imprisonment for life on him. We 311 accordingly sentence Pussu to imprisonment for life. We also restore the conviction of Pussu for the offences punishable under sections 307 I.P.C., 323 I.P.C. and section 27 of the Arms Act and the sentences imposed on him on that account as ordered by the trial court. All the sentences shall run concurrently. The appeal is accordingly allowed. Pussu is on bail. He is directed to surrender in accordance with the terms of his bail and undergo the punishment imposed on him. P.B.R. Appeal allowed.

The prosecution case against the accused respondent was that when the deceased and his wife were returning home from their field, he and the co accused armed with a gun and a country made pistol fired at the deceased causing him injuries, that some passersby, including the two eye witnesses, overpowered the respondent but that he escaped from their hold and ran towards the co accused who then was standing at some distance, snatched the pistol from his hand and fired at the deceased while he was being carried towards the village. As a result of this shot the deceased was killed instantaneously and one of the witnesses sustained injuries. The defence version, on the other hand, was that on the date and time of the occurrence when the two accused were going out of the village the deceased, his servant and the injured witness assaulted them and on hearing their cries, the respondent 's father fired at the deceased in self defence and that this had resulted in the death of the deceased and injury to the witness. The trial court found him guilty of the offence punishable under section 302 I.P.C. and sentenced him to death and the co accused with imprisonment for life. Before the High Court the argument for the respondent was that since the injuries on the person of the witness were superficial, he could have been fired at only from a long distance and being an aged man of 60 years, he could not have run and caught hold of the respondent before the respondent could reload his gun. To test the capacity of the witness to run and to assess the time taken in reloading a gun, the High Court conducted an experiment by asking the witness, who was present in the court, to move briskly to a certain distance. A young lawyer present in the Court was asked to unload and reload a gun exactly of the same make as the gun used by the respondent. On the basis of this experiment the High Court came to the conclusion that 295 even if the witness, after receiving gun shot injuries had run some distance towards the respondent; he could neither have caught hold of him nor could he have prevented him from reloading his gun. Disbelieving the prosecution story, the High Court acquitted both the accused. The State 's Special Leave Petition against the judgment of the High Court was granted only with respect to the respondent. On the question whether the High Court was correct in conducting the experiment that it did and in coming to the conclusion that the respondent was not guilty of the offence of murder. Allowing the appeal, ^ HELD: The procedure of conducting an experiment in Court two years after the incident with the aid of a young lawyer (about whose proficiency in handling a gun there is no authentic evidence) who was asked to handle a different gun altogether and using the conclusion based on that experiment to reject the truth of the evidence of the eye witness, was highly irregular. The High Court has not addressed itself to the degree of efficiency or inefficiency of the respondent in handling a gun. The time taken by any person to reload a gun depends upon several factors, including the condition of the gun and the surcharged atmosphere created by the firing bout which may have preceded the time of reloading the gun. [301 F H] Ordinarily, this Court would not interfere with the judgment of acquittal on mere re appreciation of evidence. But if there are glaring infirmities in the judgment of the High Court resulting in miscarriage of justice it is the duty of this Court to interfere. [309 F G] In the instant case the High Court was wrong in conducting the experiment carried out by it at the hearing of the appeal. Having been impressed by its result it first rejected the evidence of the eye witness on trivial omissions which would not affect the credibility of the prosecution version on imaginary grounds. From the evidence it is obvious that the two accused were armed with fire arms and were the aggressors. On a careful reading of the evidence, it is clear that the father of the accused respondent, out of love and affection towards his son, tried to shield him. [306 F G] The plea of self defence cannot be accepted. A person who was an aggressor and who sought an attack on himself by his own aggressive attack cannot rely upon the right of self defence if in the course of the transaction he deliberately kills another whom he had attacked earlier. Having regard to the nature of the weapon used, the act by which death was caused by the respondent was done with the intention of causing death and there were no extenuating circumstances which would mitigate the offence committed by him. [309 C D] State of Punjab vs Jagir Singh & Ors. [1974] 1 S.C.R. 328; Shivaji Sahebrao Bobade & Anr. vs State of Maharashtra ; followed. 296 The trial court was right in convicting the respondent. The acquittal of the co accused did not effect the prosecution case against him. There is no legal bar for convicting the respondent alone in this case on the facts and circumstances of the case. The principle of issue estoppel is inapplicable here. [309 D E]

Appeal No. 39 of 1961. Appeal from the judgment and decree dated September, 1958 of the Bombay High Court in Appeal No. 13 of 1958. C.K. Daphtary, Solicitor General of India, S.N. Andley, Rameshwar Nath, P.L. Vohra and I. B. Dadachanji, for the appellant. M. C. Setalvad, Atul Setalvad, V.I. Merchant and G. Gopalkrishnan, for the respondent. 24 May 10, 1963. Subba Rao J., delivered a dissenting Opinion. The judgment of Dayal and Mudholkar JJ., was delivered by Mudholkar J. SUBBA RAO J. I regret my inability to agree with the judgment prepared by my learned brother Mudholkar J. This appeal by certificate raises the question of 'Jurisdiction of the Bombay High Court to entertain a suit on an award in respect whereof a judgment was made in a foreign court and other incidental questions. The facts that have given rise to the present appeal may be briefly stated. I shall only narrate such facts which are relevant to the question raised, for in the pleadings a wider field was covered, but it has gradually been narrowed down when the proceedings reached the present stage. The appellants are Badat & Co., a firm formerly carrying on business at Bombay. The respondents, East India Trading Co., are a private limited company incorporated under the laws of the State of New York in the United States of America and having their registered office in the State of New York. The respondents instituted Suit No. 71 of 1954 against the appellants in the High Court of judicature at Bombay, in its Ordinary Original Civil Jurisdiction, for the recovery of a sum of Rs. 92,884/4/10 with interest thereon. It was alleged in the plain that by correspondence, the details whereof were given in the plaint, the appellants agreed to do business with the respondents on the terms of the American Spice Trade Association contract. Thereafter, by subsequent correspondence the parties entered into two different contracts where under the appellants agreed to sell to the respondents different quantities of Allepey Turmeric Fingers on agreed terms. Though the respondents forwarded to the appellants in respect of the said transactions two contracts in duplicate on the standard form issued by the said Trade Association with a request to the appellants to send them after having duly signed, the ap pellants failed to do so. Under the terms and conditions of the said Trade Association Contract, all claims arising under the contract should be submitted to, and settled by, arbitration under the rules of the said Association. it was stated that pursuant to a relevant rule of the 25 said Association, the dispute was referred to arbitration and two awards were made in due course i.e., on July 12, 1949. Following the procedure prescribed for the enforcement of such awards in New York, the respondents initiated proceedings in the Supreme Court of the State of New York to have the said awards confirmed and a judgment entered thereon in the said Court. In due course, the said Court pronounced judgment confirming the said awards. On those allegations a suit was filed in the High Court of Bombay for recovery of the amounts payable under the said two awards by the appellants to the respondents. The suit was tried, in the first instance, by Mody J. The learned judge, inter alia, held that the suit on the foreign judgment would not lie in the Bombay High Court, as there was no obligation under the said judgment for the appellants to pay any amount to the respondents at any place within the jurisdiction of the Bombay High Court. Adverting to the claim based on the agreement resulting in the awards, the learned Judge observed that there was no proof of such agreement and that there were no admissions in the written statement in regard to the facts sustaining such an agreement. On those findings he held that the respondents had failed to prove that the Bombay High Court had jurisdiction to try the suit. As the suit was heard on merits also, he considered other issues and held that there was neither proof nor admissions in the written statement in regard to the alleged contracts. He found that the arbitrators and the umpire had jurisdiction to make the awards, but the said awards merged in the judgment and that the suit was not maintainable on the said two awards. It is not necessary to give the other findings of the learned judge, as nothing turns on them in the present appeal. In the result. the suit was dismissed with costs. On appeal, a division Bench of the said High Court, consisting of Chagla C.J. and section T. Desai J., disagreed with Mody J., on the material questions decided by him and allowed the appeal with costs. The learned judges held that the awards did not merge in the judgment, that the suit on the awards was maintainable and that the Bombay High Court had jurisdiction to entertain the suit as part of the cause of 3 2 section C. India/64 26 action arose within its limits. The learned Judges further held that all the facts necessary to sustain the respon dents ' suit on the awards had been proved either by public documents produced in the case or by the admissions made by the appellants in the written statement. The present appeal, as aforesaid, has been preferred by certificate against the judgment of the division Bench. The learned Solicitor General, appearing for the appellants, raised before us the following points : (1) The awards merged in the judgment made by the Supreme Court of the State of New York and, therefore, no suit would lie on the awards. (2) Even if the suit could be filed on the awards, it was not proved that any part of the cause of action accrued within the jurisdiction of the Bombay High Court. To state it differently, the respondents have not proved that the agreements resulting were entered into or concluded within of the Bombay High Court. And (3) failed to prove the three necessary enforcement of the awards namely, (i) an arbitration agreement, (ii) that the conducted in accordance with the agreement, and (iii) that the awards were made pursuant to the provisions of the agreement and, therefore, valid according to the lex fori of the place where the arbi tration was carried out and where the awards were made. Mr. Setalvad appearing for the respondents, sought to sustain the findings of the Division Bench of the High Court given in favour of the respondents on the said questions raised by the appellants. The first question is whether the awards merged in the judgment of the Supreme Court of the State of New York for all purposes; if so, the awards would lose their individuality or separate existence and no suit could, therefore, be filed to enforce them. In Halsbury 's Laws of England, Vol. 7, 3rd Edn., at p. 141, the relevant principle is stated under the heading "Foreign judgments" thus: " Since the foreign judgment constitutes a simple contract debt only, there is no merger of the original cause of action, and it is therefore open to the plain 27 tiff to sue either on the foreign judgment or on the original cause of action on which it is based, unless the foreign judgment has been satisfied. " The same idea is expressed in Dicey 's "Conflict of Laws", 7th edn., at p. 1059: "For historical and procedural reasons, a foreign judgment is treated in England as a contractual debt, and the fact that, in certain instances, it can be enforced by registration does not appear to alter the tra ditional view. " Though the learned author in the course of his commentary criticizes this view, the passage represents the accepted view on the subject. An interesting discussion of the evolution of the rule of non merger of the cause of action in the foreign judgment is found in Piggott 's "Foreign judgment", Part I at p. 17. The various steps in its evolution may be stated thus : (1) Action brought on a foreign judgment was an action brought to recover the judgment debt :. necessarily then, the judgment must be evidence of the debt. (2) It was not made clear which debt it evidenced, whether it was the judgment debt or the original debt. (3) As it was an action on a debt, an action on the judgment debt soon came to be confused with, and perhaps looked upon as, an action on the original debt. (4) Having come to that stage, the courts declared that the original debt or cause of action had not merged in the foreign judgment pronounced upon it. Whatever may be the origin, the doctrine of non merger of the original cause of action with the foreign judgment has now been well esta blished in spite of the fact that some text book writers are not able to discover a logical basis for the doctrine. In "Smith 's Leading Cases", the learned author says: "Foreign judgments certainly do not occasion a merger of the original ground of action." In Cheshire 's Private International Law, 5th Edn., the learned author says in Ch. XVII under the heading "Foreign Judgments", thus, at p. 598 : "It is a rule of domestic English law that a plaintiff who has obtained judgment in England against a defendant is barred from suing again on the original cause of action. The original cause of action is mer 28 ged in the judgment transit in rem judicatum and it would be vaxatious. to subject the defendant to another action for the purpose of obtaining the same result. It has been held, however, in a series of authorities, that this is not so in the case of foreign judgments. Such a judgment does not, in the view of English law, occasion a merger of the original cause of action, and therefore the plaintiff has his option, either to resort to the original ground of action or to sue oil the judgment recovered, provided of course, that the judgment has not been satisfied. " The learned author gives the following different reason for this distinction between a foreign and a domestic judgment, at p. 599 : "The most plausible justification for non merger, perhaps, is that a plaintiff suing in England on a foreign judgment, as contrasted with one who sues on an English, judgment possesses no higher remedy than he possessed before the foreign action. The effect of judgment in English proceedings is that "the cause of action is changed into matter of record, which is of a ' higher nature, and the inferior remedy is merged in the higher" ; but the view which English law takes of a foreign judgment is that it creates merely a simple contract debt between the parties. The doctrine of non merger has. however, been too often repeated by judges to justify any prospect of its abandonment. " This doctrine has been accepted and followed by Indian Courts: see Popat vs Damodar( '), Oppenheim and Company vs Mahomed HanEef(2) and Nil Ratan Mukhopadhyaya vs Cooch Behar Loan Office, Ltd.( '). If the contract does not merge in a judgment, by parity of reasoning, the award on which a foreign judgment is made cannot also merge in the judgment. While conceding the said legal position, the learned counsel for the appellant contends that the award to furnish a valid cause of action shall be one which is legally enforceable in the country in which it is made. An award made in (1) , 853. (2) Mad. (3) I.L.R. , 175. 29 New York, the argument proceeds, by its own force does not create rights or impose liabilities thereunder and there fore, such an inchoate document cannot afford a cause ,of action. This contention has not been raised for the first time, but has been noticed in "Russel On Arbitration", 16th Edn. and answered it p. 282. The learned author places the following two propositions in juxtaposition : (1) "An award made by foreign arbitrators, which requires an enforcement order to render it enforceable by the local law, is not a judgment of a foreign tribunal which can be enforced by action in English courts". (2) "But an award which is complete and could be enforced in the country where it was made is enforceable in England at Common Law quite apart from any rights given by Part 11 of the Act. " In Halsbury 's Laws of England, Vol. 11 3rd edn., the following note is given at p. 52 : "A foreign arbitration award which is complete and enforceable in the country in which it was made is enforceable in England at Common Law. " The learned Solicitor General seeks to (]raw a subtle distinction between an award made by foreign arbitrators which require an enforcement order to render it enforceable by the local law and an award which could not be enforced except by obtaining a judgment on its basis. On this distinction an argument is advanced, namely, that in the case of the former the award has been vitalized by, the enforcement order, while in the case of the latter the award qua the Judgment has not become enforceable, but it is the judgment that becomes enforceable. In support of this contention reliance is placed upon the following, observations found in Dicey 's Conflict of Laws, 17th edn., at p. 1059 : "If the foreign award is followed by judicial proceedings in the foreign country resultants in a judgment of the foreign court which it not merely a formal order giving leave to enforce the award, enforcement proceedings in England must be brought on the foreign judgment (or possibly on the original cause of action), but probably not on the award. " These observations are not supported by any direct decision, they represent only the author 's doubts on the 30 question. On principle 1 cannot see why a distinction should be made between the two categories of cases. An en forcement order as well as a judgment on an award serves the same purpose : they are two different procedures prescribed for enforcing an award. In the case of an enforcement order a party applies to a court for leave to enforce the award ; and on the granting of such leave, the award can be enforced as if it were a decree of a court. In the alternative procedure. an action either ill the shape of a suit or a petition will have to be filed on an award and a judgment obtained thereon. In that event, the award, vis a vis the country in which it is made, merges in the judgment and thereafter the judgment only becomes enforceable. But, as explained earlier, there is no merger in the context of its enforcement in another country. In both the cases the award in the country of its origin is complete and enforceable. If an award gets vitality by a mere enforcement order, it gets a higher sanctity by the court of its origin making a judgment on it. Both of them afford a guarantee of its vitality and enforceability in the country of its origin and, therefore, a different country can safely act upon it. In both the cases the award is complete in the country of its origin and if the doctrine of merger cannot be invoked in the case of foreign judgment, as I have held it cannot, there is no principle on which the distinction sought to be made can be sustained. To sanction the distinction in the context of a foreign judgment is to prefer the form to substance and to accept a lesser guarantee and reject a higher one. The decision in Merrifield, Ziegleis , and Co., vs Liverpool Cotton Association Limited(1) does not lay down any different proposition. There, the plaintiff brought an action in England against Liverpool Cotton Association for restraining the said Association from expelling them from membership of the Association. The Association filed a counter claim demanding a large amount from the plaintiffs payable by them under an award made in Germany. The claim was based on the award and in effect it was a claim to enforce the award. By German Law an enforcement order (1) , 106. 31 was necessary before an award can be enforced. But no such order was made there. The High Court rejected the counter claim. In doing so, it made the following observations : "The sole point, therefore, remains whether the award is a decision which the court here ought to recognise as a foreign judgment. In my opinion it is not, although as between the parties it is conclusive upon all matters thereby adjudicated upon, and is therefore in a different category to the "remate" judgment dealt with by the House of Lords in Nouvin vs Freeman(1) ; it has no further force or effect unless and until the court determines that it is an adjudication made in proceedings regularly conducted upon matters really submitted to the jurisdiction of the tribunal. It is not even as though the award were enforceable unless the court st ays its operation ; the contrary is really the case, and for all practical purposes it is stillborn until vitality is infused into it by the court. It is then, for the first time, endowed with one, at least, of the essential characteristics of a judgment the right to enforce obedience to it." This passage in clear terms brings out the principle underlying the proposition that an award cannot afford a cause of action till it is complete in the country of its origin. The reason of the rule is that unless and until tile appropriate court determines its regularity, it is in choate and it becomes enforceable only when an enforcement order or judgment puts its seal of approval on it. For the application of this principle the distinction between an enforcement order and a judgment on the award is not material. In either case, the Court approves it. Indeed, the Judicial Committee in Oppenheim & Co. vs Mahomed Hanef(2) sanctioned the maintainability of a suit to enforce an award which ended in a judgment. There, in respect of a mercantile dispute that arose between merchants carrying on business in London and a merchant at Madras, an award was obtained in England. The merchants in England filed a suit on (1) (2) Mad. 32 the award on the King 's Bench Division of the High Court in England for the amounts payable thereunder and obtained an ex parte judgment against the merchant at Madras. Thereafter, they brought a suit against the Madras merchant in the High Court of judicature at Madras claiming the sum due under the said judgment, or in the alternative, for the amount due under the award. Coutts Trotter J., who heard the case in the first instance, held that the suit was not maintainable on the judgment that was an ex parte one, and gave a decree on the award. But on appeal, a Division Bench. of that Court took a different view. On further appeal, the Privy Council restored the decree made by Coutts Trotter J. : but they concluded their judgment with the following caution : "In order to prevent misconception, it appears desirable to add that it was not pleaded or contended at any stage of the proceedings that the award had merged in the English judgment, and accordingly their Lordships do not deal with that point. " This decision is certainly an authority for the position that on the assumption that an award does not merge in a foreign judgment, it affords a cause of action in another country. I have already indicated earlier on the same reasoning applicable to the doctrine of non merger of a contract in a foreign judgment that an award also will not merge. For the reasons given by me, I hold that a suit would lie on the basis of an award in a foreign country,provided it is completed in the manner prescribed by the law of that country. I shall now take the third question, for the discussion thereon would also solve the problem raised by the second question. The learned Solicitor General contends that there is no proof of the facts to satisfy the aforesaid three conditions and the Division Bench of the High Court went wrong in holding to the contrary on the basis of the alleged admissions found in the pleadings. Mr. Setalvad, learned counsel for the respondents, on the other hand, while conceding that the said three conditions must be satisfied before a foreign award can be enforced, argues that the relevant facts were proved not only by the admissions made by the appellants in the written statement, ex 33 pressed or implied, but also by the production of the certi fied copy of the judgment of the foreign court. In Norake Atlas Insurance Co. Ltd. vs London General Insurance Company Limited(1), in award made in Norway was sought to be enforced in England. Action was brought not on the contract but on the award. MacKinnon J., laid down in that case that three things had to be proved for obtaining a decree thereon, namely, (1) the submission ; (2) the conduct of the arbitration in accordance with the submission ; and (3) the fact that the award was valid according to the law of the country where it was made. So too, in Halsbury 's Laws of England, 3rd edn., Vol. 11, in para 116, at p. 53, the said conditions of enforcement are given with further elaboration. I need not pursue this matter, as there is no dispute on this aspect of the question. Have the conditions been proved in the present case? I shall first take the arguments based on the pleadings. Be fore doing so, it would be convenient to read the relevant provisions of the Code of Civil Procedure on the subject, as the arguments turn upon the application of those provisions to the pleadings. Order VII of the Code of Civil Procedure prescribes, among others, that the plaintiff shall give in the plaint the facts constituting the cause of action and when it arose, and the facts showing the court has jurisdiction. The object is to enable the defendant to ascertain from the plaint the necessary facts so that be may admit or deny them. Order VIII provides for the filing of a written statement, the particulars to be contained therein and the manner of doing so ; rules 3, 4 and 5 thereof are relevant to the present enquiry and they read : Order VIII Rule 3. It shall not be sufficient for a defendant in his written statement to deny generally the grounds alleged by the plaintiff, but the defendant must deal specifically with each allegation of fact of which he does not admit the truth, except damages. r. 4 Where a defendant denies an allegation of fact in the plaint, he must not do so evasively, but answer the point of substance. Thus if it is alleged that he (1) 34 received a certain sum of money, it shall not be sufficient to deny that he received that particular amount, but he must deny that he received that sum or any part thereof, or else set out how much he received. And if an allegation is made with diverse circumstances, it shall not be sufficient to deny it along with those circumstances. Rule 5. Every allegation of fact in the plaint, if not denied specifically, or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability. Provided that the Court may in its discretion require any fact so admitted to be proved otherwise than by such admission. These three rules form an integrated code dealing with the manner in which allegations of fact in the plaint should be traversed and the legal consequences flowing from its non compliance. The written statement must deal specifically with each allegation of fact in the plaint and when a defendant denies any such fact, he must not do so evasively, but answer the point of substance. If his denial of a fact is not specific but evasive, the said fact shall be taken to be admitted. In such an event, the admission itself being proof, no other proof is necessary. The first paragraph of r. 5 is a re production of O.XIX, r. 13, of the English rules made under the Judicature Acts. But in mofussil Courts in India, where pleadings were not precisely drawn, it was found in practice that if they were strictly construed in terms of the said provisions, grave injustice would be done to parties with genuine claims. To do 'Justice between those parties, for which Courts are intended, the rigor of r. 5 has been modified by the introduction of the proviso thereto. Under that proviso the Court may, in its discretion, require any fact so admitted to be proved otherwise than by such admission. In the matter of mofussil pleadings, Courts, presumably relying upon the said proviso, tolerated more laxity in the pleadings in the interest of justice. But on the Original Side of the Bombay High Court, we are told, the pleadings are drafted by trained lawyers bestowing serious thought and with precision. In construing such pleadings the proviso can be invoked only in exceptional 35 circumstances to prevent obvious injustice to a party or to relieve him from the results of an accidental slip or omission, but not to help a party who designedly made vague denials and thereafter sought to rely upon them for non suitng the plaintiff. The discretion under the proviso must be exercised by a Court having regard to the Justice of a cause with particular reference to the nature of the parties, the standard of drafting obtaining in a locality, and the traditions and conventions of a Court wherein such pleadings are filed. In this context the decision in Tildestey vs Harper(1) will be useful. There. in an action against a lessee to set aside the lease granted under a power the statement of claim stated that the donee of the power had received from the lessee a certain sum as a bribe, and stated the circumstances; the statement of defence denied that sum had been given, and denied each circumstance, but contained no general denial of a bribe having been given. The Court held, under rules corresponding to the aforesaid rules of the Code of Civil Procedure, that the giving of the bribe was not sufficiently denied and therefore it must be deemed to have been admit ted. Fry J. posed the question thus : What is the point of substance in the allegations in the statement of claim ? and answered it as follows : "The point of substance is undoubtedly that a bribe was given by Anderson to Tildesley, and that point of substance is nowhere met. . no fair and substantial answer is, in my opinion, given to the allegation of substance, namely that there was a bribe. In my opinion it is of the highest importance that this rule of pleading should be adhered to strictly, and that the Court should require the Defendant, when putting in his statement of defence, and the Plaintiff, when replying to the allegations of the Defendant, to state the point of substance, and not to give formal denials of the allegations contained in the previous pleadings without stating the circumstances. As far as I am concerned, I mean to give the fullest effect to that rule. I am convinced that it is one of the highest benefit to suitors in the Court." (1) 36 It is true that in England the concerned rule is inflexible and that there is no proviso to it as is found in the Code of Civil Procedure. But there is no reason why in Bombay on the original side of the High Court the same precision in pleadings shall not be insisted upon except in exceptional circumstances. The Bombay High Court, in Laxminarayanan vs Chimniram Girdhai Lal(1), construed the said provisions and applied them to the pleadings in a suit filed in the court of the joint Subordinate Judge of Ahmednagar. There the plaintiffs sued to recover a sum of money on an account stated. For the purpose of saving limitation they relied in their plaint upon a letter sent by the defendant firm. The defendants in their written statement stated that the plaintiffs 's suit was not in time and that "the suit is not saved by the letter put in from the bar of limitation". The question was raised whether in that state of pleadings, the letter could be taken as admitted between the parties and, therefore, unnecessary to be proved. Batchelor, Ag. C. T., after noticing the said provisions, observed "It appears to us that on a fair reading of paragraph 6, its meaning is that though the letter put in by the plaintiff is not denied the defendants contend that for one reason or another its effect is not to save the suit from the bar of limitation. We think, there fore, that. the letter, Exhibit 33, must be accepted as admitted between the parties, and therefore, unnecessary to be proved." The written statement before the High Court in that case was one filed in a court in the mofussil ; yet, the Bombay High Court implied the rule and held that the letter need not be proved aliunde is it must be deemed to have been admitted in spite of the vague denial in the written statement. therefore, hold that the pleadings on the original side of the Bombay High Court should also be strictly construed, having regard to the provisions of rr. 3, 4 and 5 of Order VIII of the Code of Civil Procedure, unless there are circumstances wherein a Court thinks fit to exercise its discretion under the proviso to r. 5 of O.VII. The first condition for the enforceability of an award (1) Bom. 89, 93. 37 is the proof of submission to arbitration. A claim based on an award is in effect a claim to enforce the award on the footing that the submission implied a contract to give effect to the award. In the plaint the details of the preliminary contract between the parties containing an arbitration clause has been specifically and precisely stated in paras 2 and 3. As much of the argument turns upon the said allegations, it may conveniently be read here. By their letter dated 7th September 1948 the plaintiffs intimated to the defendants that they were prepared to do business with them on the terms of the American Spices Trade Association contract, net landed weights, less 1 1/2 per cent. discount, letter of credit to be opened for 95 per cent. of the amount of the transaction and the balance to be settled immediately after the goods were weighed and delivered and if there was any difference in the plaintiffs ' favour the same was to be remitted to them by the defendants by telegraph. By their letter dated 13th September, 1948 the defendants agreed to the said terms. Thereafter by their cable dated 3rd March, 1949 the defendants offered to sell to the plaintiffs 30 tons of Alleppey Turmeric Fingers at 221 cents per lb. C. & F. New York less 2 per cent March/April shipment. On the same day the plaintiffs cabled to the defendants their acceptance of the said offer. By their cable dated 7th March, 1949 the defendants offered to sell to the plaintiffs further 30 tons of Alleppey Turmeric Fingers at 22 cents per lb. C. & F. New York less 2 per cent March/April shipment. On the same day the plaintiffs cabled to the defendants their acceptance of the said offer. By their letter dated 8th March 1949 the defendants confirmed the said contract arrived at between the parties on 3rd March, 1949. By their letter dated 9th March, 1949 the plaintiffs confirmed both the said contracts and further intimated to the defendants that they had opened the necessary letters of credit. The plaintiffs forwarded to the defendants in respect of the said transactions two contracts in duplicate on the standard form issued by the said American Spice Trade Association with a request to the defendants to return to the plaintiffs a copy of each of them 38 after signing the same. The defendants, however, failed and neglected to do so. The plaintiffs crave leave to refer to and rely upon the cables and letters above referred to and standard form of contract issued by the said American Spice Trade Association, when produced." "3. The plaintiff say that the standard form of contract issued by the said American Spice Trade Association is known in the spice and herb market as "The American Spice Trade Association Contract" and contains terms and conditions on which the defendants had agreed to do business with the plaintiff as aforesaid. The plaintiff further say that the said standard form of contract is in common use with firms dealing in spices and herbs both in the New York market and elsewhere. The plaintiff further say that the defendants have been dealing in spices and herbs with American firms in the United States and also on the United States market and had previously entered into several American Spice Trade Association Contracts and were well aware ofand knew what the terms and conditions of the said American Spice Trade Association Contract were. One of the said terms was as follows : "All questions and controversies and all claims arising under this contract shall be submitted to and settled by Arbitration under the Rules of the American Spice Trade Association printed on the reverse side hereof. This contract is made as of in New York. " Then the plaint proceeds to give how the dispute should be referred to arbitration and how arbitrators and umpire should be appointed by the parties. From the said allega tions in the plaint it is clear that the plaintiffs have precisely and definitely given the particulars of the correspondence that passed between the parties on the basis of which they claimed the preliminary contract containing an agreement to submit their dispute to arbitration and the subsequent contracts in respect of the goods made and concluded between the parties. The defendants, adverting to the said allegations dealt with them in paragraphs 7 and 8 of their written state 39 ment. The said paragraphs read : "7. With reference to paragraph 2 of the plaint the defendants deny that they at any time entered into any contract with the plaintiff as alleged in the said paragraph or otherwise. The defendants deny that they at any time signed or were bound to sign a stan dard form of contract issued by the American Spice Trade Association. With reference to paragraph 3 of the plaint, the defendants deny that they at any time agreed to do any business or enter into any contract with the plaintiffs as alleged therein or otherwise. The defendants say that they did not at any time sign nor were they bound to sign the said American Spice Trade Association Contract and that they are not therefore bound by or concerned with the terms and/or conditions of the said contract. The defendants deny the rest of the statements contained in the said paragraph. " It will be seen from the said paragraphs that though the defendants denied that at any time they entered into a contract with the plaintiffs as alleged in the plaint or otherwise, they have not denied that the letters particularized in the plaint passed between the parties. Learned SolicitorGeneral relied upon the expression "as alleged" in paragraphs 7 and 8 of the written statement and contended that the said words implied necessarily that the defendants denied the passing of the correspondence. No such necessary implication can arise from the use of the said expression. That expression is consistent with the admission bv the defendants of the passing of the letters mentioned in paragraphs 2 and 3 of the plaint, coupled with a denial that such correspondence does not constitute a binding contract between them. Indeed, rr. 3 and 4 of 0. VIII are aimed at such general allegations in written statements. Rule 3 demands that each allegation of fact made in the plaint must specifically be denied and r. 4 emphasizes that such a denial shall be of the point of substance and shall not be vague. Here, in the plaint the contents of the letters dated September 7, 1948, September 13, 1948, March 8, 1949 and March 9, 1949 are given and it is specifically stated that they passed between the parties. Nowhere in the written statement there is a denial as regards the 40 passing of the letters or the contents of those letters. The general and vague allegations in the written statement cannot possibly be construed, expressly or by necessary implication, as a denial of the specific allegations in the plaint in regard to the said correspondence. On this aspect of the case, to some extent, there is unanimity between Mody J., and the learned Judges of the Division Bench of the Bombay High Court. Adverting to para 7 of the written statement, Mody, J., says "In my opinion, paragraph 7 of the written statement does not at all, directly or indirectly, specifically or by implication, deal with any of the said three statements of facts. A denial of a contract is not a denial of the receipt or of the contents of the said letter dated 7th September 1948 or the writing of the letter dated 13th September 1948. The defendants can conceivably admit the said three statements of fact but still deny that any contract resulted thereby. Therefore the said three statements of facts must be deemed to have been admitted. " Dealing with para 8 of the written statement, the learned judge says that these two statements of facts have not been pleaded to in the written statement and must, therefore, be deemed to have been admitted. But having gone so far, the learned Judge rules against their admissibility on the ground that there are no allegations that the defendants wrote the letters attributed to them and that there is no description of the contents of the letters. This, if I may say so, is rather hypercritical. The allegations in para 2 of the plaint in express terms say that the letters emanated from the defendants and also give their gist. The Division Bench of the High Court in the context of the said denials said: "Therefore, there is no denial of this correspondence. Indeed there could not be, because before the Written Statement was filed inspection was given by the plaintiffs of this correspondence and again the conscientious draftsman of the written statement could not possibly have controverted the statement that these letters passed between the parties. Therefore, in our opinion, these two letters of the 7th September, 1948 and 13th September, 1948 are admissible in evidence. 41 and we will formally admit them in evidence. " Then they proceeded to state : "Now, we read this denial to mean not a denial of the exchange of letters and telegrams, not a denial of the correctness of the copies of the documents of which the Defendants have taken inspection, but a submission in law that no contract emerges from the exchange of these letters and telegrams. For the reasons already given by me, I entirely agree with the view expressed by the Division Bench on the interpreta tion of the pleadings and hold that the said letters have been rightly admitted in evidence. If the said letters can go in as evidence, the first condition, namely, the factum of submission has been proved in this case. As regards the question whether the arbitration was conducted in accordance with the submission, the pleadings again afford the answer. In paras 3, 4 and 5 of the plaint it is specifically stated that the parties agreed to the arbitration clause and to the procedure prescribed for carrying out the arbitration. It is stated therein that pursuant to r. 5 and clauses B, C and E of r. 15 of the Rules of the said American Spice Trade Association, arbitrators and umpire were appointed, that the arbitrators and the umpire subscribed to their oaths of office and proceeded to hear the matter on 27th June, 1949, and 12th July, 1949, that the defendants, though duly notified of the hearings, did not attend the same, that on 12th July, 1949, the said arbitrators and umpire duly made, signed, acknowledged and published their awards and thereby they unanimously held that the defendants had committed a breach of the said two contracts and awarded that the defendants should pay to the plaintiffs specific amounts in respect of the said contracts as and by way of damages. Paragraph 7 of the plaint describes how the defendants did not meet the demand, how proceedings were taken before the Supreme Court of the State of New York, how notice of the said proceedings was duly served on the defendants and how the said Court pronounced its judgment confirming the said awards. Paragraphs 9, 10, 11 and 12 of the written statement deal with the said allegations. In the said paragraphs the defendants do not deny the factum of the appointment of arbitrators and the procedure followed by 4 2 S C India/64 42 them in making the awards. They are content to say that they are not bound by or concerned with the appointment of the arbitrators by the plaintiffs as alleged therein or other wise, that they are not bound by or concerned with any of the statements contained in para 7 of the plaint and that the awards passed by the arbitrators and the umpire are not binding on them. As regards the allegations in para 7 they only say that the arbitrators acted without jurisdiction and that the judgment of the Supreme Court of the State of New York made thereon is not binding on them. It will be seen from the said denials that neither the appointment of the arbitrators nor the steps taken by them are denied. If so it must be held, on the same reasoning which I have adopted in the context of the allegations pertaining to submission, that in the absence of specific denials it must be held that it is admitted that the awards were made in strict compliance with the terms of submission. Now coming to the third condition, namely, the proof of the fact that the awards are valid according to the law of the country where they were made, the same equivocal attitude is adopted by the defendants in their written statement. In para 8 of the plaint there is the following specific allegation in that regard : ". . the said arbitration having been duly held and the said awards having been duly made, signed, acknowledged and published according to the said rules and the laws of the State of New York, and the defendants not having taken steps to have the said awards or either of them set aside or modified., as provided in the said rules and by the laws of the State of New York, the said awards are binding on the defendants and the defendants are now precluded and estopped from disputing the same. " Here there is a definite averment that the awards were made according to the laws of the State of New York. In the written statement of the defendants, though they generally deny that the awards are binding on them, there is no specific denial that the awards are not in accordance with the laws of the State of New York. Applying the same rules of construction which I invoked in the case of the other averments in the plaint, I must also hold that the 43 defendants must be held to have admitted the fact that the awards were made in accordance with the laws of the State of New York. There is one important circumstance which must be borne in mind in construing the terms of the written statement. It is not disputed that the plaintiffs have filed affidavits disclosing the copies of the documents mentioned in the plaint. The defendants ' Advocate bad inspection of the said documents before he filed his written statement. It is not disputed that the defendants received a copy of the petition filed by the plaintiffs in the Supreme Court of the State of New York, along with a copy of the awards and the order of the Court to show cause. With the knowledge of the contents of the copies of the letters and the contents of the awards, the Advocate for the defendants rightly and properly was not in a position to deny the factual aspect of the passing of the letters and the making of the awards and the delivery of the judgment by the Supreme Court of the State of New York confirming the said awards. That is why the written statement contained vague and general denials only speci fically raising disputes on legal questions, and designedly giving equivocal answers to factual aspects. It is said that no inference of tacit acceptance on the part of the defendants or their counsel can be drawn, for the defendants ' Advocate, after inspection of the documents, asked the plaintiffs ' Advocate to produce the originals, but the plaintiffs failed and neglected to do so. But this circumstance does not detract from the knowledge of the defendants and their Advocate of the existence of the said documents and their contents before the written statement was drafted. This circumstance gives a satisfactory explanation for the vagueness of the allegations in the written statement of the defendants. They were designedly made vague as the Advocate presumably could not bring himself to go the whole length of denying the facts. I, therefore, hold, on a fair and reasonable construction of the pleadings and written statement that the existence of the three conditions for enforcing the awards have been admitted by the defendants in their pleadings and that, therefore, they need not be independently proved. I would go further and hold that the said three con 44 ditions are also proved by exhibit X 9, The said exhibit is the record of proceeding of the Supreme Court of the State of New York relating to the arbitration between the plaintiffs and the respondents. That record contains the certificate issued by the Counsul General,and other papers relating to the proceedings including the order and judgment of the said Supreme Court. The Certificate reads thus : "THIS IS TO CERTIFY (a) that the annexed pro ceedings have been duly had in accordance with the laws of the State of New York. (b) that the annexed proceedings are duly certified by the officer having the legal custody of the originals thereof at the time such annexed proceedings were issued by the Supreme Court of New York. (c) that the several persons named in the annexed proceedings as holding the respective offices stated therein in respect of each of them did in fact bold such respective office at the time the same took place. The Consulate General of India assumes no responsibility for the contents of this document. Dated: New York, N.Y. June 18th, 1957. Sd./ M. Gopalcharan CONSUL GENERAL Seal of CONSULATE GENERAL OF INDIA, New York, N.Y. The order and judgment of the Supreme Court of New York dated March 21, 1950, give in detail the filing of the application by the respondents for an order confirming the two awards ; the consideration given to the said application by the Court ; the Court 's satisfaction, after perusing the awards and the connected papers, that the said proceedings were in all respects regular; and the terms of the order made on the said application. The decretal portion of the order confirms the awards. The judgment is signed by Archibald R. Watgon, Clerk, and certified both by the clerk and the Clerk of the Supreme court of New York County. If the judgment goes into evidence, the, three conditions are satisfied, namely, that there was 45 a submission, that the arbitrators gave the awards in terms of the submission and that a judgment was made on those awards on the ground that the awards were made in accordance with law. But it is argued by the learned Solicitor General that the said judgment has not been proved in the manner prescribed by the Indian Evidence Act. The relevant sections of the Evidence Act may now be read : Section 74 : The following documents are public documents : (1) documents forming the acts, or records of acts (iii)of public officers, legislative, judicial and executive of any part of India or of the Commonwealth or of a foreign country. Section 78: The following public documents may be proved as follows (6) Public documents of any other class in a foreign country, By the original, or by a copy certified by the legal keeper, thereof with a certificate under the seal of a notary public, or of an Indian Consul or diplomatic agent, that the copy is duly certified by the officer having the legal custody of the original, and upon proof of the character of the document according to the law of the foreign country. " Section 86 : The Court may presume that any document purporting to be a certified copy of any judicial record of any country not forming part of India or of Her Majesty 's Dominions is genuine and accurate, if the document purports to be certified in any manner Which is certified by any representative of the Central Government in or for such country to be the manner commonly in use in that country for the certification of copies of judicial records. . . " It is not disputed that the copy of the Judgment is certi fied by the legal keeper of the original within the meaning of section 78(6) of the Evidence Act; nor is it contended that there is no certificate under the seal of an Indian Consul certifying that the copy is certified by the officer having 46 the legal custody of the original. But what is contended is that under section 78(6) of the Evidence Act three conditions must be complied with before the judgment can be admitted in evidence and the third condition, namely, proof of character of the document according to the law of the foreign country, is not forthcoming in this case. A perusal of section 78(6) of the Evidence Act makes it clear that apart from the two certificates one by the legal keeper of the original documents and the other by the Consul General there shall also be proof of the character of the document according to the law of the foreign country before the document is admitted. It is a condition precedent. The short question, therefore, is whether there is such proof in this case. Proof can be by direct or circumstantial evidence. Proof can also be given by placing before the Court facts giving rise to presumptions, rebuttable or irrebuttable. Section 86 of the Evidence Act lays down that a Court may presume the genuineness and accuracy of any document purporting to be a certified copy of any judicial record of any foreign country, if such a copy is duly certified in the manner and according to the rules in use in the country for certification of copies of judicial records. To give rise to this presumption it is not necessary that the judgment of the foreign country should have already been admitted in evidence. While section 78(6) of the Evidence Act lays down three conditions for admitting the judgment in evidence, the admission of the judicial record is not a condition precedent for drawing the requisite presumption under section 86 of the Evidence Act. That presumption may be drawn before the said record is admitted. The document may be looked into for the purpose of ascertaining whether there is the requisite certificate, viz., a certificate issued by any representative of the Central Government in the concerned country to the effect that the said document was certified in the manner commonly in use in that country for the certification of copies of judicial record. If the distinction between the certificate and the judgment is borne in mind, the fallacy of the argument becomes apparent. The requisite certificate makes the document admissible and not viace versa. If there was such a certificate forthcoming in this case there is such a certificate the document may be presumed to be genuine and accurate. If it is presumed 47 to be genuine and accurate, it shows its character, viz., that it is a genuine judgment made by the Supreme Court of New York. This is a fit case for raising the said presump tion and with the aid of this presumption the third con dition is also complied with i.e., it is a judgment of the Supreme Court of the State of New York made in accordance with law. As the three conditions laid down in section 78(6) of the Evidence Act are fulfilled, the document can legitimately be admitted in evidence, and if it is admitted, the document, by its own force, establishes that the aforesaid three conditions for the enforceability of the awards have been fulfilled. Now I come to the second contention. This deals with the jurisdiction of the Bombay High Court on its original side to entertain the suit. Clause 12 of the Letters Patent for Bombay enables a party to file a suit with the leave of the Court, if the cause of action arises in part within the local limits of the ordinary original Jurisdiction of the said High Court. The cause of action in the plaint is given as follows : ". . the terms of business were accepted by the defendants in Bombay and the proposal or acceptance of the said contracts by the defendants took place in Bombay. The defendants ' refusal to pay the said sum also took place in Bombay. " On those allegations the leave of the High Court of Bombay was obtained and the suit was filed in the said Court. I have already pointed out that in the case of a claim based on an award, it is in effect a claim to enforce the award on the footing that the submission implied a contract to give effect to the award. I have also held that all the necessary documents relating to the preliminary as well as subsequent contracts are admitted in the written statement. The said documents clearly establish that the parties agreed that their disputes under the contracts should be submitted to arbitration in the manner prescribed by the rules of the American Spices Trade Association. Those contracts were concluded within thne local limits of the original jurisdiction of the Bombay High Court. It follows that a part of the cause of action accrued within the said limits and that as the leave of the High Court was obtained, the said High Court had jurisdiction to entertain the 48 claim. No other point is argued before us. In the result, I agree with the conclusions arrived at by the High Court. The appeal is dismissed with costs. MUDHOLKAR J. This is an appeal by a certificate granted by the High Court of Bombay from its judgment dated September 12, 1958 reversing that of Mody J., who, by his judgment had dismissed a suit instituted by the East India Trading Co., respondents before us, against the defendants Badat & Co., on the original side of the High Court for a sum of Rs. 92,884 4 10 with interest and costs on the basis of a judgment of the Supreme Court of New York affirming awards given by a domestic tribunal or alternatively on the awards themselves. The plaintiff company was incorporated in the State of New York and among other things, engages in the import of spices. The defendant company, was a partnership firm and at the relevant time was carrying on import and export business in Bombay. According to the plaintiffs, by two letters dated September 7, 1948, and September 13, 1948, the first written by the plaintiffs and the second by the defendants, the parties agreed to do business upon the terms of the American Spice Trade Association. One of the terms agreed between the parties was that the plaintiffs at the time of placing an order for the supply of spices with the defendants were to open a letter of credit to the extent of 95 per cent of the value of the commodity ordered to be supplied and the balance to be settled immediately after the goods were weighed and delivered. By their cable dated March 3, 1949, the defendants offered to sell to the plain tiffs 30 tons of Alleppey Turmeric Fingers at a certain rate, to be shipped in March/April. This offer was immediately accepted by the plaintiffs. A somewhat similar offer was again made by the defendants to the plaintiffs on March 7, 1949, which offer also was accepted by the plaintiffs. The plaintiffs claim to have forwarded to the defendants in respect of the said transactions two contracts in duplicate on the standard forms issued by the American Spice Trade Association with a request to the defendants to return to them a duly signed 49 from in respect of each of the transactions and their grievance is that the defendants failed to comply with the request. The plaintiffs further aver that though they opened letters of credit, the defendants committed a breach in respect of both the contracts by failing to supply turmeric. The plaintiffs have alleged in para 3 of the plaint that the defendants were well aware of and knew what the terms and conditions of the American Spice Trade Association were. One of the terms of the Association which they have set out is as follows: "All questions and controversies and all claims arising under this contract shall be submitted to and settled by Arbitration under the Rules of the American Spice Trade Association printed on the reverse side thereof. This contract is made as of in New York. " In pursuance of this term, the plaintiffs who had declared the defendants in default appointed one Edward B. Polak as their Arbitrator and on May 24, 1949, called upon the defendants to appoint an arbitrator on their behalf. They also informed the defendants that if they failed to do so, they, the plaintiffs, would request the Association to appoint an arbitrator on the defendants ' behalf. The defendants not having appointed any arbitrator on their behalf, the Association at the plaintiffs ' request appointed one Michael F. Corio to act as an arbitrator on the defendants ' behalf. This person informed the defendants of his appointment as Arbitrator and requested them to furnish him with all documents and information which might be necessary or useful in the matter of arbitration and further informed them that in the absence of such documents and information the Arbitrators will have to proceed with the arbitration upon the documents and information made available by the plaintiffs. The defendants did not reply to this communication. The Arbitrators before entering upon arbitration, selected one James F. Knight as Umpire and Chairman as required by the rules of the Association. Thereafter the Arbitrators and the Umpire entered upon arbitration and gave two awards, in the sum of $9,538.64 in respect of the first contract and in the sum of $9,209.36 in respect of the second 50 contract by way of damages. The plaintiffs thereupon drew a bill of exchange on the defendants at Bombay for $18,748 being the aggregate sum awarded by the two awards. According to them, though it was presented to the defendants several times in Bombay they "failed and neglected to accept or to pay the same." Then, according to the plaintiffs, they adopted proceedings in the Supreme Court of the State of New York to have the said awards confirmed and judgment entered thereon. Notices of the proceedings were said to have been served on the defendants and judgment confirming the said awards and ordering the defendants to pay $19,554.17, including interest and costs, was pronounced on April 13, 1950. The plaintiffs eventually instituted the suit out of which this appeal arises in the High Court of Bombay on January 14, 1954. According to the plaintiffs, the defendants have, by the terms of the contract voluntarily submitted themselves to the jurisdiction of the Supreme Court of New York and have agreed to the said Court, which was a Court having jurisdiction in that behalf, confirming the said awards and entering judgment thereon. Further, according to them, the parties had expressly agreed that judgment might be entered on any award that might be made in respect of any question, controversy or claim between the parties arising under or out of the said contracts in accordance with the practice of an Court having jurisdiction. Alternatively they have contended that if the Court held that the judgment was not a judgment of a foreign Court on which action would lie in the High Court the defendants having by the terms of the said contracts expressly agreed to have any dispute arising under the contracts settled by arbitration in New York under the rules of the Spice Trade Association and the arbitration upon which the awards arc founded having been duly made and published according to the rules and laws of the State of New York and further having become final are binding on the defendants, the defendants are bound to carry out the terms of the said awards and to pay to the plaintiffs the sums awarded under them. Thus the suit is substantially based on a foreign judgment and in the alternative on the two awards given by a domestic 51 tribunal functioning in New York. The defendants raised a number of pleas in defence. In the first place they said that they did not reside within the limits of the original jurisdiction of the High Court or carry on business therein and the High Court had no jurisdiction to entertain the suit. They further contended that no part of the cause of action had arisen in Bombay. It may be mentioned that the plaintiffs had sought for and obtained ex parte leave of the court under cl. 12 of the Letters Patent and the defendants submitted that the leave should be revoked. The next important contention of the defendants was that the Supreme Court of New York had no jurisdiction to pass the judgment and the order sought to be enforced. Further, according to them, the Arbitrators and the Umpire who gave the alleged awards on which the judgment of the Supreme Court was founded had no jurisdiction to make those awards. They raised a number of other pleas also and elaborate judgments have been delivered by Mody J. as well as by the appeal court consisting of Chagla C.J., and section T. Desai J., dealing with those contentions. Upon the view we take on the question of the enforceability of the awards in question in the manner sought in this case it is not necessary to advert to those pleadings. It was not disputed before us that the defendants had, at the date of suit, ceased to reside or carry on business within the limits of the original civil jurisdiction of the High Court of Bombay. The appeal court, while holding that the judgment of the Supreme Court of New York cannot be enforced against the defendants in a suit brought on the original side of the High Court took the view that the awards upon which the judgment is based can be enforced because they give rise to a cause of action and a part of that cause of action had arisen in Bombay. The reason why the judgment of the Supreme Court of New York could not be the foundation of the suit is, in the words of the learned Chief Justice, as follows : "The foreign judgment was passed in New York and the defendants did not reside and carry on business within jurisdiction at the relevant date. The only way that jurisdiction could possibly have been attracted was by an averment that there was an obligation 52 under the judgment on the part of the defendants to pay the amount in Bombay or that the defendants had undertaken the obligation to pay the judgment amount in Bombay. There is no such averment in the Plaint and in the absence of any such averment if the Plaint had been based only on the foreign judgment then we might have agreed with the learned Judge and held that the Court had no jurisdiction. " No doubt, the learned Chief Justice has further said that it was unnecessary to decide the matter finally because in his view the plaintiffs were entitled to the relief claimed on the basis of the awards. We may point out that Mr. Setalvad, who appeared before us for the plaintiffs, did not challenge the finding of the appeal court on this point and did not seek to argue that the judgment of the Supreme Court could furnish a cause of action to the plaintiffs in respect of the present suit. We entertain no doubt as to the correctness of the view that the plaintiffs are not entitled to enforce the judgment of the Supreme Court against the defendants by a suit instituted on the original side of the High Court and therefore, we should ordinarily have let the matter rest there. Our reasons for agreeing with the High Court 's conclusion on the point are, however, different and, therefore, it is necessary for us to state them. Before we do so, it would be desirable to examine the position regarding the enforcement of foreign awards and foreign judgments based upon awards. Under the Arbitration Protocol and Convention Act, 1937 (VI of 1937), certain commercial awards made in foreign countries are enforceable in India as if they were made on reference to arbitration in India. The provisions of this Act, however, apply only to countries which are parties to the Protocol set forth in the First Schedule to the Act or to awards between persons of whom one is subject to the jurisdiction of some one of such powers as the Central Government being satisfied that the reciprocal provisions have been made, may, by notification declare to be parties to the Convention, setforth in the Second Schedule to the Act. It is common ground that these provisions are not applicable to the awards in question. Apart from the provisions 53 of the aforesaid statute, foreign awards and foreign judg ments based upon awards are enforceable in India on the same grounds and in the same circumstances in which they are enforceable in England under the common law on grounds of justice, equity and good conscience. We may add that in cases arising on the original side of the High Court of Bombay, English common law is applicable "has nearly as the circumstances of the place and the inhabitants admit" by virtue of cl. 19 of the Letters Patent read with cl. XLI of the Charter of the Bombay High Court. The common law on the subject is crystallised thus as rule 198 in Dicey 's Conflict of Laws, 7th edn. at p. 1.056. "Rule 198(1) : A foreign arbitration award which has been rendered enforceable by a judgment in the country where it was given may be enforced by an action as a foreign judgment. (2) A foreign arbitration award which has not been rendered enforceable by a judgment in the country where it was given may be enforced by an action at the discretion of the court if the award is, (a) in accordance with the terms of the submission agreement; and (b) valid according to the law governing the arbitration proceedings; and (c) (semble) final according to the law governing the submission agreement. " The position as summarised in Russel On Arbitration, 16th edn. is set out thus at p. 282 : "An award made by foreign arbitrators, which requires an enforcement order to render it enforceable by the local law, is not a judgment of a foreign tribunal which can be enforced by action in English courts. But an award which is complete and could be enforced in the country where it was made is enforceable in England at common law, quite apart from any rights given by Part II of the Act. (Arbitration Act, 1950 14 Geo. 6, c. 27). " Dealing with actions upon foreign awards at common law, it is stated further at p. 283 thus : "To succeed in such an action the plaintiff must 54 prove : (1) That there was an arbitration agreement (2) That the arbitration was conducted in accordance with that agreement ; and (3) That the award was made pursuant to the provisions of the agreement and is valid according to the lex fori of the place where the arbitration was carried out and where the ward was made. If the award is validly made in consequence of a valid arbitration agreement, a sum found due by the award and unpaid may be sued for in an action upon the agreement." Thus commercial arbitration awards, though based on a contract to arbitrate are not contracts and although they are decisions they are not judgments. Even though that is so, it has been held in several cases in England that even where an award has not been reduced to a judgment in a foreign country it can be enforced in England provided, of course, the award answers mutatis mutandis the tests for determining the enforceability of foreign judgments. Thus, the foreign arbitration tribunal must have acted upon a valid submission within the limits of jurisdiction conferred by the submission, and the award must be valid and final. (see Dicey 's Private International Law, p. 1057). Then it is stated there: "Others believe that enforcement in England must depend upon the nature of the award in the country where it was given. Thus, if the award must be, and has been, reduced to a judgment abroad, the judgment and not the award must be enforced in England. If the award gives rise to a claim in contract abroad, it must be enforced as a contract in England. However, as will be shown, this is not the view generally adopted by the courts, for the award is treated as a contract in England, no matter whether foreign law so regards it or not. Still others assert that the enforcement of an award in England is based not on the award, but on the contractual agreement to submit to arbitration all differences arising out of the original contract, on the ground that the submission to arbitration itself implies a contractual 55 agreement to abide by the award, thereby extinguishing the original cause of action." After stating this, the learned author proceeds to say "It is submitted that no one short formula is satisfactory and that the enforcement of a foreign award involves a complex of questions which must be treated separately. " He has then dealt with various decisions in England and also the opinions of certain writers. The conclusions stated in so far as they are relevant to this case are 1. In all enforcement proceedings in England the plaintiff must first obtain an enforceable title in England i.e., he must either apply for leave to enforce the award or must bring an action on the award. In an enforcement proceeding in England the action on the award must take the form of a claim in contract. This rule is based upon the assumption that the agreement to perform the award is implied in the submission and that the submission is the contract on which the action is based. In order to be enforceable in England, the foreign award need not first be pronounced enforceable in the country of its origin. (see Union National des Cooperatives Agricoles de Cereales vs Robert Catterall & Co. Ltd.(1) though there the award was being enforced under the Arbitration Act, 1950). If, however, the foreign award is followed by judicial proceedings in the foreign country resulting in a judgment of the foreign court which is not merely a formal order giving leave to enforce the award, enforcement proceedings in England must be brought on the foreign judgment or possibly on the original cause of action but probably not on the award. If the foreign judgment has the character of a formal order giving leave to enforce the award it is doubtful whether the foreign award or the foreign order is to be enforced in England. If the distinction between foreign judgments on the award and foreign 56 formal enforcement orders can be maintained in practice, then, it is believed that the foreign award and not the foreign order, will be enforced in England, if the enforcement order is purely formal. For the purpose of enforcing a foreign award plaintiff must prove only (1) submission, (2) compliance with the submission in the conduct of an arbitration and (3) the validity of the award according to the law of the country where it was made. This is also laid down in Norske Atlas Insurance Co. Ltd., vs London General Insurance Co., Ltd.,(1) and according to the learned author this decision correctly indicates the conditions which must be fulfilled if a foreign award is to be enforced in England. We may, however, mention that relying upon Merrifield, Ziegler & Co., vs Liverpool Cotton Association Ltd. ,(2) the learned Solicitor General contended that an award should also be one which is enforceable in the country in which it was rendered without the aid of an enforcement order or a judgment. There, a German award was sought to be executed in England. Eve J., who decided the case, found that under the German law the award had the effect of a final judgment pronounced by a court of law. But it could not be enforced by execution unless an enforcement order was made by the Court and further no enforcement order will be made if any grounds exist for setting the award aside. In the course of his judgment the learned judge observed : "It is not even as though the award were enforceable unless the court stays its operation ; the contrary is really the case, and for all practical purposes it is stillborn until vitality is infused into it by the court. It is then, for the first time, endowed with one, at least, of the essential characteristics of a judgment the right to enforce obedience to it." Dicey has pointed out that this is the only case where such a view has been taken and that it was not even referred to in the Norske 's case(1). Nor was it referred to (1) (2) in the Union National case(1). There, a Danish award, though not enforceable in Denmark in the absence of an ' enforcement order was held by the court of Appeal to be enforceable under the Arbitration Act of 1950 on the ground that it had become final and that under the Danish law only formal objections could be taken to such an award in the proceedings for obtaining an enforcement order. It will thus be seen that there is a conflict of opinion on a number of points concerning the enforcement of foreign awards or judgments, based upon foreign awards. However, certain propositions appear to be clear. One is that where the award is followed by a judgment in a proceeding which is not merely formal but which permits of objections being taken to the validity of the award by the party against whom judgment is sought, the judgment will be enforceable in England. Even in that case, however, the plaintiff will have the right to sue on the original cause of action. The second principle is that even a foreign award will be enforced in England provided it satisfies mutatis mutandis the tests applicable for the enforcement of foreign judgments on the ground that it creates a contractual obligation arising out of submission to arbitration. On two matters connected with this there is difference of opinion. One is whether an award which is followed by a judgment can be enforced as an award in England or whether the judgment alone can be enforced. The other is whether an award which it not enforceable in the country in which it was made without obtaining an enforcement order or a judgment can be enforced in England or whether in such a case the only remedy is to sue on the original cause of action. The third principle is that a foreign judgment or a foreign award may be sued upon in England as giving good cause of action provided certain conditions arc fulfilled one of which is that it has become final. Bearing in mind these principles let us consider whether the judgment of the Supreme Court could be enforced against the defendants by instituting a suit on (1) 5 2 section C. India/64 58 the original side of the High Court. The appeal court has, as already stated taken the view that the original cause of action having arisen wholly or in part within the limits of the original Jurisdiction of the High Court, the suit was maintainable. If the plaintiffs were suing upon the original cause of action, there would have been no difficulty and the High Court could have granted leave under cl. 12 to the plaintiffs to institute the suit. But here, we are concerned not with the original cause of action but with the judgment of the New York Supreme Court and the award. The judgment furnishes an independent cause of action. The question would be whether the cause of action furnished by it arose within the limits of the original jurisdiction of the High Court. The judgment was rendered in New York and, therefore, the cause of action furnished by it arose at that place and not anywhere else. This cause of action is really independent of the cause of action afforded by the contract and, therefore, if advantage was sought to be taken of it, the suit would not lie at Bombay. This point does not appear to have come up for a direct decision in any case. We may, however, refer to the decision in East India Trading Co., vs Carmel Exporters & Importers Ltd.(1) There, an action was brought in England to enforce a foreign judgment awarding damages for breach of contract and the question for consideration was the relevant date for converting the amount of damages into sterling. After considering the relevant decisions on the point Sellers J., held that the relevant date would be the date of the foreign judgment. The ground given by him was that the plaintiff 's cause of action was the foreign judgment and it is that judgment which creates the debt which was enforceable by action in England. The principle underlying this case should also apply to the present one because in both cases the cause of action is founded on foreign judgments, though in the case before us it is founded alternatively, upon foreign awards also. The only difference is that while in. our case the question is where it arose, in the case cited the question was as to (1) 59 when it arose. The reason why a foreign judgment should be deemed to create a new obligation has not been stated in this case. But it is to be found in the judgment of Blackburn J. in Schibsby vs Westenholz(1) where at p. 159 he has stated : "The true principle on which the judgments of foreign tribunals are enforced in England is that stated by Parke B. in Russel vs Smyth(1), and again repeated by him in Williams vs Jones(1) that the judgment of a court of competent jurisdiction over the defendant imposes a duty or obligation on the defendant to pay the sum for which judgment is given, which the courts in this country are bound to enforce. . As James L. J., has said in Re Davidson 's Settlement Trusts(4) "It would be impossible to carry on the business of the world if courts refused to act upon what has been done by other courts of competent jurisdiction. " Schmitthoff in The English Conflict of Laws, 3rd edn. has stated at p. 459 : "The English courts recognise that a foreign judgment gives rise to private rights which, on principle, should be protected by them. Consequently, when referring to the recognition of a foreign judgment, what is actually meant is the recognition of the pri vate right that is created by the judgment and not the enforcement of a foreign judicial act of State. In the words of Professor Read(5) 'The true basis upon which the Anglo Dominion authorities. . place the recognition of a foreign judgment is that it proves the fact that a vested right has been created through the judicial process by the law of a foreign law district. . The view that the re cognition of a foreign judgment in the English juris (1) (2) ; (3)(1845) ; (4 ) (1873) L.R./E. & 383, 386, (5) "Recognition and enforcement of foreign judgments (1938)" by Prof. Read. Quoted by Schmitthoff in "The English Conflic; of Laws" 459 60 diction is based on the assumption that the foreign, judgment creates a new legal Obligation is firmly established by numerous decisions. " No divergent views have been expressed upon this question. No doubt, the English doctrine of merger has been consistently held in England not to apply to a foreign judgment with the result that despite the fact that a plain tiff has obtained a foreign judgment he may never the less sue in an English court upon the original cause of action instead upon the judgment. When he sues upon the original cause of action, no doubt, the court within whose 'Jurisdiction the cause of action arose would be entitled to entertain the suit. But, if on the other hand, he chooses to sue upon the judgment, he cannot found jurisdiction for the institution of the suit on the basis of the original cause of action because once he chooses to rest himself on the judgment obtained by him in a foreign court, the original cause of action will have no relevance whatsoever even though it may not have merged in that judgment. Since the judgment with which we are concerned was pronounced in New York the cause of action for a suit based thereon must be said to have arisen at that place. Since that is so, it follows that the cause of action in so far as it rests on the judgment, did not arise within the limits of the original jurisdiction of the High Court of Bombay and the suit based upon that judgment must be held to be beyond the jurisdiction of the Court. The alternative claim of the plaintiffs is for the en forcement of the awards themselves and it is this which the Appeal Court has held to be one which can validly form the basis of the present suit. The learned Solicitor General contended that the awards having merged in the judgment cannot afford a basis to the present suit. It is true that it is pointed out in Dicey 's Conflict of Laws that some writers have expressed the view that where a foreign award must be, and has been, reduced to a judgment the judgment and not the award must be enforced in England. But it has also been pointed out that this is not the view generally adopted by the courts in the United States of America as would appear from the following passage from Lorenzen 's "Cases on Conflict of Laws" 4th edn. : "As a judgment of a foreign country is held not to merge the original cause of action, it would follow that an action might be brought upon the award, notwithstanding the fact that it has been converted into a judgment abroad." This question was left open by the Privy Council in L. Oppenheim & Co., vs Mahomed Haneef(1) as it had not been raised in that case. The recognition given to a foreign judgment by the English Courts is, as pointed 'out by Schmitthoff at p. 459 of the English Conflict of Laws, not based upon the doctrine of merger. For, this doctrine does not apply to judgments of courts which are not courts of record in the English sense. It may be that founded as the American legal system is on the common law of England the New York Supreme Court would be a court of record in the English sense and, therefore, the doctrine of merger could be said to apply to a judgment recorded by it. However, as no contention was raised before us that the Supreme Court of New York was a court of record, we would leave the matter there. Just as a foreign judgment affords a fresh cause of action upon which a suit can be brought in an English court, so is the case with regard to a foreign award. Thus, in Bremer Oeltransport GMBH vs Drewey(2) it was held that a foreign award furnishes a new cause of action based on the agreements between the parties to perform the award. This view has been accepted in Halsbury 's Laws of England Vol. II, p. 45. In that case it was contended for the respondents that in so far as the submission is a contract whereby the parties to it impliedly undertake to abide by and carry out the award of the arbitrators, the enforcement of the award would be the enforcement of a contract made within jurisdiction (the contract having been entered into in London while the award thereunder made at Hamburg in Germany). On the other hand it was contended for the appellant that the award having been made in Hamburg the action for its enforcement in England would not be an action for the enforcement of a contract made in England. Rejecting this contention Slesser (1) I.L.R. (2) 62 L.J., after considering the authorities on the subject observed at p 760 : "So far it would appear clear that in the opinion both of common law and equity judges the award is to be regarded as merely the working out of a term of the original agreement of submission. . and then referred to the following observations of James L.J., in Llanelly Ry. and Dock Co., vs London and North Western Ry. Co.,(1): "It would be difficult to say that the real question between the parties could be determined by the arbitrator under that clause ; because, if the plaintiffs are right in their contention, they have determined that part of the agreement as well as everything else:" Now, when a plaintiff sues upon a foreign award what he in fact does is to ask the court to pass a judgment in his favour for the amount stated in the award only after proving five facts : (1) that there was a contract between the parties where under disputes between them could be referred to arbitration to a tribunal in a foreign country,; (2) that the award is in accordance with the terms of the agreements; (3) that the award is valid according to the law governing arbitration proceedings obtaining in the country where the award was made ; (4) that it was final according to the law of. that country; and (5) that it was a subsisting award at the date of suit. A. view has been expressed in some English cases that an award must also be enforceable in the country in which is was made before a suit call be brought, in England on its basis. But upon the view we are taking it is not necessary to decide this point. Now, when a suit is brought by a plaintiff on the basis of an award it is not necessary for him to prove that the amount claimed was actually payable to him in respect of the dispute nor is it open to the defendants to challenge the validity of such an award on grounds like those which are available in India under section 30 of the Arbitration Act. A very limited challenge to the claim based (1) , 948. 63 on the award is permissible to the defendants and that is one of the reasons why it is important to ascertain whether the award has in fact attained finality in the country in which it was made. We will assume that the plaintiffs have satisfactorily established the first three of the five conditions which we have set out above. The question then is whether the fourth and the fifth conditions have been satisfied. As to when an award can be regarded as final has been considered recently in the Union Nationale case(1). The facts of that case are succinctly summarised in the head note and we can do no better than reproduce its relevant portion: "By an agreement in French made in Paris, dated August 31, 1956, the appellants agreed to sell to the respondents a quantity of wheat seed. The agreement contained an arbitration clause, the English translation of which was: 'All differences arising out of the present contract will be judged by the Arbitration Chamber of Copenhagen which will settle without appeal with the powers of an amicable arbitrator. ' Differences having arisen between the parties they were referred pursuant to the arbitration clause to the Copenhagen Chamber of Arbitration. Under the rules regulating the procedure of the arbitration chamber, awards are made by a committee of the chamber. Regulation 14 of the rules provides that : ,awards made by the Committee shall be final. An award can only be appealed against to the appeal court attached to the committee. If the presidency decides that the appeal can 't be made the award made by the judgement and arbitration committee shall be final. By an order of October 6, 1958, the committee awarded to the respondents the sum of $183,000. The presidency of the arbitration committee on November 25, 1958 refused the appellants ' application for leave to appeal and notified them that the award of October 6, 1958 was final. The award could not be en forced in Denmark without an order of a Danish court. The respondents, by summons under section 36 and 26 of the Arbitration Act, 1950, which applies to arbitration awards made in Denmark, applied for leave to en (1) , 64 force that award. The appellant claimed that the award was a foreign award and had not become final. in the country in which it was made. " The contention raised on behalf of the appellants was that the award had not become final in the country in which it was made because it was not enforceable in that country. The Court of Appeal referred to regulation 14 which gives finality to an award made in accordance with the rules re gulating the procedure of the arbitration chamber and ac cepted the opinion of a qualified Danish lawyer that accord ing to the Danish law the award had become final, though it could not be enforced in Denmark without obtaining a judgment from a Danish Court and that during the pro ceedings before such court it would be open to the defendant to complain that the award suffered from formal defects but nothing else. Thus, in this case the Court of Appeal has drawn a distinction between 'finality ' and enforceability of an award and held that where under the laws of the country in which an award has been made, it is no longer open to challenge it on merits it must be regarded as final even though in the form in which it stands it may not be enforceable there. Rule 15, cl. (E) of the American Spice Trade Association whereunder the awards in the plaintiff 's favour were made runs thus "The award of such arbitrators and umpire or sole arbitrator shall be final and binding on both parties unless within three business days after receipt of the award, an appeal with a fee $75 be lodged with the Secretary of the Association by either disputant. Settlements under an arbitration award or awards of the Arbitration Committee shall be made within 10 days from the date of such award, and if not so settled, judgment may be entered therein in accordance with. the practice of any Court having jurisdiction. " One point of distinction between the Danish rule and rule 15E of the American Rules is that the latter requires the obtaining of a judgment for enforcing it in case the claim arising out of the award is not settled. No doubt, the American rule also says that the award shall become final and binding on the parties but whether it takes away the jurisdiction of the courts to go behind its finality will have to be ascertained by reference to the laws of New York 65 State. For, that rule is no more than a term of the con tract between the parties and must be subject to the laws of the State. It would be desirable at this stage to compare foreign judgment with foreign awards and bear in mind the difference between them. No doubt, both of them create new obligations. The judgment of a foreign sovereign is a com mand of that sovereign which has to be obeyed within the territorial limits of that sovereign 's jurisdiction. On the principles of comity it is, therefore, accorded international recognition provided it fulfills certain basic requirements. A foreign award, on the other hand, which is founded on a contract of the parties and is not given the status of a judgment in the country in which it is made, cannot claim the same international status as the act of a foreign sovereign. As pointed out by Schmitthoff on the English Conflict of laws, at p. 489 : "It follows that unless the plaintiff can satisfy the English court that the award is treated, in the country where it was made, like a judgment of the court he should sue on the original cause of action, but even in that case he should plead the award because it might in appropriate cases, be regarded by the English courts as conclusive between the parties. " These observations would perhaps now stand slightly modified by the view taken by the Court of Appeal in the Union Nationale case(1) in the sense that even an award which has not obtained the status of a judgment in the country in which it was rendered but which possesses an essential attribute of a judgment, that is, finality, it could be sued upon in another country. Bearing in mind these principles we must consider what are the requirements of the laws of New York State for giving an award finality. In Appendix I to Sturges ' Cases on Arbitration Law, the New York Arbitration Law, article 84 of the New York Civil Practice Act, as in force on September 1, 1952, has been set out. Section 1461 which deals with confirmation of an award runs thus: "Motion to confirm award: At any time within one year after the award is made, as prescribed in the (1) 66 last section, any party to the controversy which was arbitrated may apply to the court having jurisdiction, as provided in section fourteen hundred fifty nine for an order confirming the award; and thereupon the court must grant such an order unless the award is vacated, modified or corrected, as prescribed in the next two sections or unless the award is unenforceable under the provisions of section fourteen hundred fifty eight. Notice of the motion must be served upon the adverse party or his attorney,, as prescribed by law for service of notice of a motion upon an attorney in an action in the same court. In the Supreme Court, the motion must be made within the judicial district embracing the country where the judgment is to be entered. " Then follows section 1462 which deals with a motion to vacate award; section 1462 a which deals with a motion to modify or correct an award; section 1463 which deals with 'notice of motion and stay '; section 1464 which deals with 'entry of judgment on award and costs '; section 1465 which deals with the judgment roll and section 1466 which deals with effect of a judgment and its enforcement. It is clear from section 1462 that in the motion to vacate an award a party to the arbitration can challenge the award on the following five grounds : "1. Whether the award was procured by corruption, fraud or other undue means. Where there was evident partiality or corruption in the arbitrators or either of them. Where arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehaviour by which the rights of any party have been prejudiced. Where the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted was not made. If there was no valid submission or contract, and the objection has been raised under the conditions set forth in section fourteen hundred fifty eight. " It will thus be seen that despite the finality spoken of by 67 Rule 15E, this section enables the defendants to apply for vacating the award on certain grounds and thus imperil the finality accorded to the award by his contract. It is only after the objections under section 1462 are disposed of that a judgment putting an end to all controversy, can be entered under section 1464 which reads thus: "Entry of judgment on award and costs: Upon the granting of an order confirming, modifying or correcting an award, judgment may be entered in conformity therewith, as upon a referee 's report in an action, except as is otherwise prescribed in this article. Costs of the application and of the proceedings subsequent thereto; not exceeding twenty five dollars and disbursements, may be awarded by the court in its discretion. If awarded, the amount thereof must be included in the judgment." After the judgment is pronounced a judgment roll is prepared and the judgment docketed as if it was rendered in an action. The effect of the judgment as enunciated in section 1466 is as follows: "Effect of judgment and enforcement: The judg ment so entered has the same force and effect, in all respects as and is ' subject to all the provisions of law relating to, a judgment in an action ; and it may be enforced as if it had been rendered in an action in the court in which it is entered. " From all these provisions it would be abundantly clear that the award has no finality till the entire procedure is gone through and that the award as such can never be enforced. What is enforceable is the judgment. There is no provision in the law providing for taking proceedings for the confirmation of an award in which all objections to the award could be made except section 1461. The proceedings taken thereunder must, however, culminate in a judgment. In this respect the procedure under the law of the New York State is quite different from that under the Arbitration law of Denmark. Apparently, that is why the plaintiffs, after ob taining the awards, went up to the Supreme Court of New York for obtaining a judgment confirming the awards. No doubt, as a result of the judgment the decision of the arbitrators became unchallengable in the New York State and for all practical purposes in India as well but in the pro 68 cess the award made by them has given way to the judgment of the Supreme Court of New York. It is this judgment which can now furnish a cause of action to the plaintiffs and not the awards. No doubt, an award can furnish a fresh cause of action. But the award must be final. If the law of the country in which it was made gives finality to judgment based upon an award and not to the award itself, the award can furnish no cause of action for a suit in India. In these circumstances we hold that though the High Court of Bombay has jurisdiction to enforce a final award made in a foreign country in pursuance of a submission made within the limits of its original jurisdiction, the awards in question being not final, cannot furnish a valid cause of action for the suit. Upon this view we allow the appeal and dismiss the suit with costs throughout The normal rule as to costs must apply because the choice of forum made by the plaintiffs was deliberate and with the knowledge that they were taking a risk in not seeking out the defendants at the place where they reside or carry on business. By Court Following the opinion of the majority, the appeal is allowed with costs. Appeal allowed.

The respondent company, which was incorporated in New York and carried on business in spices, brought a suit in the original side of the Bombay High Court against the appellant for recovery of a sum of Rs. 92,884 4 10 on the basis of a judgment of the Supreme Court of the State of New York affirming two awards obtained by it and also on the awards in the alternative. 20 The respondent was a partnership firm carrying on import and export business in Bombay. By two letters exchanged between them, the appellant and the respondent agreed to do business in turmeric fingers on the terms and conditions of the American Spice Trade Association, one of which was an arbitration clause which ran as follows : "All questions and controversies and all claims arising under this contract shall be submitted to and settled by Arbitration under the Rules of the American Spice Trade Asso ciation printed on the reverse side thereof. This contract is made as of in New York. " The appellant failed to supply turmeric in terms of the two contracts it entered into with the respondent. The respondent put the matter into arbitration in pursuance of the arbitration clause. The appellant took no part in it. The arbitrators gave the two awards in favour of the respondent for damages. The appellant did not pay. The respondent then took appropriate proceedings and got the awards confirmed by the judgment of the Supreme Court of the State of New York. The single judge of the Bombay High Court who tried the suit held that it was not maintainable either on the foreign judgment or on the awards and (dismissed the suit. The Division Bench on appeal held that the suit was maintainable on the awards, though not on the judgment, as part of the cause of action had arisen in Bombay and the relevant facts had been proved by the Public documents produced by the respondent and the admissions made by the appellant and decreed the suit. Held, (per Dayal and Mudholkar JJ.) The decision of the Single judge of the High Court that the suit was not maintainable on the foreign judgment must be affirmed but on other grounds. Apart from the provisions of the Arbitration Protocol and Conventions Act, 1937, foreign awards and foreign judgments based upon award arc enforceable in India on the same grounds and in the same circumstances in which they are enforceable in England under the Common Law on grounds of justice, equity and good conscience. On the original side of the Bombay High Court English Common Law is also applicable under cl. 19 of the Letters Patent read with cl. XLI of the Charter of that Court. If the award is followed by a judgment which is rendered in a proceeding in which the person against whom judgment is sought can take objections as to the validity of the award, the judgement will be enforceable in England. Even then the plaintiff will have the right to sue on the original course of action. Secondly, even a foreign award will be enforced only if it satisfies mutate 's mutandis the tests applicable to the enforcement of foreign judgments on the ground that it creates a contractual obligation arising out of submission to arbitration. But there is a difference of opinion in this connection on two matters, (1) whether an award which 21. is followed by a judgment can be enforced as an award or whether the judgment alone can be enforced, and (2) whether an award which is not enforceable in the country in which it was made without an enforcement order or a judgement, can be enforced or in such a case the only remedy is to sue on the original cause of action. Thirdly, both a foreign judgment and a foreign award may be sued upon provided certain conditions are fulfilled one of which is that it has become final. Although, therefore, the respondent could sue on the original cause of action in the Bombay High Court that cause of action must be distinguished from the one furnished by the 'judgment of the New York Supreme Court which must be held to have arisen in New York and not in Bombay and was a cause of action independent of the one afforded by the contracts and the Bombay High Court would, consequently, have no jurisdiction to try the suit based on that judgment. East India Trading Co. vs Carmel Exporters & Importers Ltd., , Schibsby vs Westenholz., and Re Davidson 's Settlement Trust, (1873) L. R. 15 Eq. 383, referred to. In a suit based on a foreign award the plaintiff has to prove,. (1) that the contract between the parties provided for arbitration by a tribunal in a foreign country, (2) that the award is in accordance with the agreement, (3) that the award is valid according to the law of that country (4) that it was final according to that law and, (5) that it was subsisting award at the date of the suit. The essential difference between a foreign judgement and 2 foreign award is that while the former is a command of the foreign, sovereign and the coming of nations accords international recognition to it if it fulfill certain basic requirements, the latter is founded on the contract between the parties and is not given the status of a judgment in the country in which it is made 'and cannot claim the same international status as the act of a foreign sovereign. Even though an award may not have obtained the status of judgment in the country in which it is made, if it possesses the essential attribute of a judgment, that is finality, it can be sued upon in in other country. Union Nationaledes Cooperatives Agricoles de Careales vs Robert Catterall & Co. Ltd. ' , referred to. But the finality that r. 15, cl. (E) of the American Spice Trade Association gives to the awards in question is no more than a matter of contract between the parties and must be subject to the law of the State. A reference to the laws of the State of New York makes it abundantly clear that the relevant provisions of the laws of the 22 State under which alone the awards could become final had not been complied with and they could not, therefore, provide a cause of action for the suit. For an award to furnish a fresh cause of action, it must be final. If the law of the country in which it was made gives finality to the judgment based on an award and not to the award itself, the award cannot furnish a cause of action in India. Although the High Court of Bombay has jurisdiction to enforce a final award made in a foreign country in pursuance of a submission made within the limits of its original jurisdiction, the awards in question not being final the suit must fail. Per Subba Rao J. The doctrine of non merger of the original cause of action with the foreign judgment pronounced upon it is a well established doctrine. Popat vs Damodar, , Oppenbeim and Co. vs Mohmed Haneef, Mad. 496 and Nil Ratan Mukhopahya vs Cooch Behar Loan Office, Ltd. I.L.R. , referred to. If the contract does not merge in the judgment, by a parity of reasoning an award on which a foreign judgment is passed cannot also merge in the judgment. There is no distinction between a foreign award which would require an enforcement order to be enforceable in law and an award which cannot be enforced except by a judgment. An en forcement order as well as a judgment on an award serves the same purpose and they are two different procedures for enforcing, an award. Meerifield Ziegler & Co. vs Liverpool Cotton Association Ltd., , referred to. A suit would, therefore, lie on a foreign award completed according to the law of that country and before a decree can be passed on it three things must be proved, (1) arbitration agreement, (2) that the arbitration was conducted in accordance with the agreement, and (3) that the award was valid according to the law of the country when it was made. Norske Atlas Insurance Co. Ltd. vs London General Insurance Company Limited. , referred to. It was not correct to say that the High Court had gone wrong in holding that the three necessary conditions had been proved by the admission of the appellants in their pleadings. Rules 3, 4 and 5 of the Order VIII of the Code of Civil Procedure form an integrated code dealing with the manner in ,which the allegations of fact made in a plaint has to be traversed :and the legal consequences that follow from its non compliance. 23 The written statement must deal specifically with each allegation of fact made in the plaint and if the defendant denies any such fact, such denial must not be evasive, he must answer the point of substance and if he fails to do so the said fact must be take to be admitted. The discretion under the proviso to r. 5 has to be exercise by the court as justice demands and particularly according to the nature of the parties, standard of drafting prevailing in the locality and the practice of the court. There can be no doubt that pleadings on the original side of the Bombay High Court have to be strictly construed in the light of the said provisions unless the court thinks fit to exercise it discretion under the proviso. Tildesley vs Harper, and Laxmi narayan vs Chimniram Girdharilal, Bom. 89 referred to. The said three conditions were also proved by the exhibited record of the proceedings of the Supreme Court of New York containing the certificate of the Consul General of India in New York and certified copies of the order and judgment of the Supreme Court. While under section 78(6) of the Indian Evidence Act, proof of the character of the document according to the law of the foreign country, is condition precedent to its admission, such admission is not a condition precedent for drawing the requisite presumption under section 86 of the Act. That presumption can be drawn before the document is admitted. The judgment of the Supreme Court of New York, therefore, which satisfied the first two conditions laid down by section 78(6), could be legitimately admitted into evidence. The contracts between the parties having been concluded within the local limits of the original jurisdiction of the Bombay High Court, a part of the cause of action must have arisen there. and that court had jurisdiction to try the suit on the awards.

Civil Appeal No. 440 (N) of 1970. Appeal by special leave from the judgment and order dated the 18th June 1969 of the Bombay High Court in Misc. Civil Appln. No. 139 of 1968. 290 Naunit Lal, for the Appellant. A.G. Ratnaparkhi for Respondents Nos. M.N. Shroff, for Respondents Nos. 17 19. The Judgment of the Court was delivered by PATHAK, J. This appeal by special leave is directed against the judgment of the Nagpur Bench of the Bombay High Court quashing the grant of Nazul land to the appellants on a writ petition filed by the respondents Nos. 1 to 16. The respondents Nos. 1 to 16 applied on March 15, 1963 for the grant of sixteen plots of land included in Government Nazul Plot No. 31/1 (Sheet No. 49 D) in Yeotmal Town for the purpose of constructing shops thereon. They alleged that they had not been allotted any land yet for carrying on business at Yeotmal, and inasmuch as land sites were being released to refugees or displaced persons they claimed that having been compelled to migrate from West Pakistan to India during the partition of 1947 they were entitled to the grant of such plots. The appellants made a similar application on May 16, 1964 and it is their case that they had also applied earlier in the same behalf on February 27, 1962. There were applications from other claimants also. The State Government, acting on the report of the Commissioner, Nagpur Division, rejected all the applications. The appellants say that they sought a review of the order of the Government, and on June 28, 1965 the Government reversed its order and decided to grant plots on permanent lease to the appellants. The Collector, Yeotmal submitted a report to the Government pointing out that each plot would be 192 sq. in area and having regard to its market value each allottee should be required to pay a premium of Rs. 960. The State Government granted the plots to the appellants as shop sites in Bhumidhari right without auction on payment of premium, and the decision was conveyed in a Memorandum dated March 3, 1966. The allotment was assailed by the respondents, and they represented to the State Government that after further inquiry the land should be reserved for deserving claimants. The respondents filed a writ petition before the Nagpur Bench of the Bombay High Court challenging allotment made by the Government in favour of the appellants. They urged that no reason 291 able opportunity had been given to them to press their claims for grant of plots after the Government had reversed its earlier decision not to grant land, that the appellants had been unduly favoured and that the order was bad in law because the plots had been granted without holding an auction. It was also contended that the power to grant the plots was vested in the Collector and not the State Government. During the pendency of the writ petition a statement was made on behalf of the State Government that it was prepared to consider the claims of the respondents. The appellants, however, maintained that they had acquired a right to the land in terms of the order dated March 3, 1966 and that they could not be divested of those rights. By its judgment dated March 14, 1968 the High Court allowed the writ petition, quashed the order granting plots to the appellants and directed the State Government and its officers to take appropriate action on the several claims for allotment of land. The High Court held that in view of sub section (2) section 149 read with sub section (3) of section 164 of the Madhya Pradesh land Revenue Code, 1954, as applied to the Vidharba region of Maharashtra, and rules 22 and 26 framed under the Code, it was not open to the State Government to dispose of the plots without holding a public auction unless there were reasons recorded in writing for doing so, and that after initially deciding not to grant the plots the subsequent decision to allot them to the appellants was contrary to law inasmuch as the claims of others had not been considered. In this appeal, it is urged by the appellants that the High Court erred in applying sub section (3) of section 164 and rule 26, and therefore in holding that the lease of the plots without auction and without recording any reasons was invalid. When the Government decided to grant land to the appellants, it thought that the grant should take the form of a permanent lease in their favour. The Collector was requested to frame suitable proposals and to submit them to the Government. The Collector submitted a report dated November 23, 1965 suggesting the allotment of plots for the construction of shops on the footing that each plot would measure 192 sq. and its market value, worked out on the basis of recorded sale transactions, and taking into regard the commercial purpose for which the land was intended, indicated a premium of Rs. 960. He recommended further that the plots may 292 be granted without auction and in Bhumidhari right on payment of premium for constructing shops thereon for carrying on business. On March 3, 1966 the State Government made an order accordingly. Now section 149 of the Madhya Pradesh Land Revenue Code 1954 provides: "149. (1) Subject to rules made under this Code, land belonging to the State Government, not being land herein after mentioned in sub section (2), shall be disposed of in Bhumidhari or Bhumiswami rights by the Deputy Commissioner who may require payment of a premium for such right or sell the same by auction. (2) The land referred to in sub section (1) shall be the following, namely: (a) land situate in the bed of a river of a tank; (b) land reserved for communal purposes such as common grazing ground and cremation grounds; (c) land given out on favourable terms for the promotion of religious, charitable, educational, public or social purposes; (d) land given out to persons on the condition that it shall be used only for grazing cattle; (e) land given out for temporary purposes or for limited periods or for mining and purposes subsidiary thereto or for industrial or commercial purposes; (f) land given out to persons on favourable terms for rendering service as a kotwar; (g) any other land which the State Government may, by notification issued in this behalf, specify. " Section 164 of the Code may also be set forth: 293 "164. (1) Every person who holds land from the State Government or to whom a right to occupy land is granted by the State Government or the Deputy Commissioner and who is not entitled to hold land as a tenure holder shall be called a Government lessee in respect of such land. (2) The Government lessee shall, subject to any express provision in this Code, hold his land in accordance with the terms and conditions of the grant which shall be deemed to be a grant within the meaning of the . (3) The State Government or the Deputy Commissioner may, subject to rules made under this Code, dispose of the right to occupy the land specified in sub section (2) of section 149 on payment of a premium or by auction or on such terms and conditions as may be prescribed. " It is apparent that the grant cannot be attributed to clause (c) of sub section (2) of section 149. The land was disposed of in Bhumidhari right. Moreover, it was not given on favourable terms to the appellants; the market value of the plots was taken for fixing the premium. From the nature of the grant, it is clear that action under sub section (1) of section 149 was intended. Now Part III of the Notification No. 1118 1832 55 XXVIII dated May 22, 1956 sets forth the rules framed with reference to sub section (1) of section 149. These rules provide for the grant of Bhumiswami and Bhumidhari rights in nazul land for dwelling houses and ancillary purposes. Rule 24 defines the expression "Nazul Land" to mean land belonging to the State Government which is used for building on, or for roads, markets and other public purposes. Rule 26 applies the provisions of rules 18 to 36 contained in Part V of the Notification No. 1119 1832 55 XXVIII dated May 22, 1956 to the disposal of nazul land under Part III. The provise to rule 26 declares that where nazul land is put to auction it should normally be granted in Bhumiswami right, and where it is disposed of without auction it should normally be granted in Bhumidhari right. Rule 22 of Part V defines the power of the State Government and of the Collector to dispose of nazul plots with or without auction. Rule 22 provides: 294 "22. Power to dispose of nazul plots with or without auction shall be exercised in accordance with these Rules (1) by the State Government in the case of (i) plots of which the freehold market value is not less than Rs. 5,000; (ii) plots within the limits of the Municipal Corporation of the City of Nagpur, whether or not included in the Schemes of Nagur Improvement Trust; (iii) plots reserved for specific purposes under rule 20; (iv) strips of land not being independent plots to be settled with the occupants of adjoining land where the freehold value of the strip is not less than Rs. 5,000; (v) small strips of land adjacent to occupied plot, which cannot be disposed of as a separate site and in respect of which there is a difference of opinion between the Collector and the Officer in charge, Town Planning and Valuation: (vi) independent plots not included in the approved lists where there is a difference of opinion between the Collector and the Officer in charge, Town Planning and Valuation; (vii) plots granted without auction. (2) by the Collector, in case of the other plots. " Sub rule (1) of rule 26 in Part V declares: "26. (1) Leasehold rights in nazul land shall be disposed of by public auction except when in any particular case the State Government or as the case may be, the Collector thinks for reasons to be recorded in writing that there is good reason for granting the land without auction." 295 It seems indisputable that under the Rules as a general principle leasehold rights in nazul land are to be disposed of by public auction. If in any particular case the State Government or, as the case may be, the Collector considers that there is good reason for granting the land without auction the reasons must be recorded in writing. The existence of good reason for departing from the general principle, and the recording of the reason in writing are essential prerequisites which must be satisfied before leasehold rights are granted without auction. It is pointed out that under clause (vii) of sub rule (1) of rule 22 the State Government is empowered to dispose of nazul plots without auction. We have no doubt it can do so, but only after full compliance with sub rule (1) of rule 26. The sub rule (1) controls the power of the State Government conferred by clause (vii) of sub rule (1) of rule 22. To hold otherwise would be to confer an arbitrary power on the State Government to dispose of nazul plots. It would be in the absolute discretion of the State Government to decide whether nazul plots should be granted with auction or without auction. If that construction is accepted, it is clear that sub rule (1) of rule 26 would be negatived. The only reasonable construction, it seems to us, is to read the two provisions together. In the present case there is no evidence that the State Government has recorded any reasons in writing for preferring the mode of disposing of the land without auction and we are not satisfied that it had good reason for favouring that mode. In the circumstances the grant of land to the appellants has been rightly quashed by the High Court. There is also sufficient justification in the grievance of the respondents that the State Government did not consider the claims of other persons, including the respondents, when making an allotment of the plots. The State Government had decided earlier, as a matter of policy, not to allot nazul land to displaced persons, and pursuant to that decision all the applications for allotment were rejected. The applications were not rejected on the merits of the respective claims set out therein. Subsequently when the State Government made an allotment of the plots to the appellants, it was consequent to a decision which analytically must be regarded as a composite of two decisions, one, a policy decision to throw open 296 the land to allotment in reversal of the earlier policy and, two, to allot the land to the appellants. It will be remembered that the applications of the respondents for allotment of plots were rejected on the ground that the land was not available for allotment. That was a policy decision. When it was reversed, it was incumbent on the State Government to reconsider those applications or to notify that the land was available for allotment and to invite fresh applications in that behalf. It was not open to the State Government to allot the plots to the appellants in disregard of the claims of others who had also applied for allotment. In quashing the order granting plots to the appellants and directing the State Government or its appropriate officers to consider the several claims for allotment the High Court, in our opinion, did that which was plainly right. The appellants say that the respondents must be taken to have accepted the rejection of their applications for allotment, and it was only the appellants who pursued the matter and obtained a reversal of the order of the Government and therefore the appellants alone were entitled to the allotment of plots. The submission would have had force but for the circumstance that the State Government effected what was a change of general policy. The change of policy altered the situation completely, and all the claimants were entitled to the benefit of that change. By adopting the new policy, the State Government must be taken to have declared that the land was now open to allotment to the claimants who were found most deserving. There were several applicants for allotment, and a selection had to be made. It cannot be contended, as indeed it is urged before us, that the appellants constitute a distinct and separate class from the respondents only because the appellants agitated against the rejection of their applications while the respondents did not. The controversy which remains is whether it is the State Government or the Collector who has power to dispose of the plots in view of their market value. That is a matter on which we need express no opinion, having regard to the quashing of the entire allotment proceeding from its inception. It will be for the Govern 297 ment or the appropriate authority to decide what should be the nature of the rights to be conferred on the allottees and, therefore, what should be the premium to be fixed. In the result, the appeal is dismissed with costs. N.V.K. Appeal dismissed.

Respondents Nos. 1 to 16 applied for the grant of plots of land for purposes of constructing shops, alleging that they were displaced persons and entitled to the grant of plots. The appellants also made a similar application. There were applications from other claimants. The State Government acting on the report of the Commissioner rejected all the applications. Subsequently the Government at the instance of the appellants who had sought a review, reversed its earlier order and decided to grant plots on permanent lease to the appellants. The decision was conveyed in a memorandum by the State Government, who granted the plots to the appellants as shop sites in Bhumidhari rights without auction on payment of premium. The allotment was assailed by the respondents and they represented to the State Government that only after further inquiry should the land be reserved for deserving claimants. The respondents filed a writ petition in the High Court challenging the allotment made by the Government in favour of the appellants contending that no reasonable opportunity had been given to them to press their claim for grant of plots, after reversal of the earlier decision not to grant land, that the appellants had been unduly favoured, and that the power to grant plots was vested in the Collector and not in the State Government. The appellants contested alleging that they had acquired a right to the land that they could not be divested of those rights. The High Court quashed the order granting plots to the appellants and directed the State Government to take appropriate action on the several claims for allotment of land. It held that under sub section (2) of section 149 read with sub section (3) of section 164 of the Madhya Pradesh Land Revenue Code, 1954, and rules 22 and 26 framed under the Code it was not open to the State Government to dispose of the plots without holding a public auction unless there were reasons recorded in writing for doing so and that after initially deciding not to 289 grant the plots, the subsequent decision to allot them was contrary to law as the claims of others had not been considered. Dismissing the appeal, ^ HELD :1. The High Court was right in quashing the order granting plots to the appellants and directing the State Government to consider the several claims for allotment. [296 C D] 2. The grant cannot be attributed to clause (c) of sub section (2) of section 149. The land was disposed of in Bhumidhari right. It was not given on favourable terms to the appellants, the market value of the plots was taken for fixing the premium. From the nature of the grant, it was clear that action under subsection (1) of section 149 was intended. [293 E] 3. Under Rules 24 to 26 of the Land Revenue Code, lease hold rights in nazul land are to be disposed of by public auction. If in any particular case the State Government or the Collector considers that there is good reason for granting the land without auction the reasons must be recorded in writing. The existence of good reason for departing from the general principle and the recording of the reason in writing are essential prerequisites which must be satisfied before lease hold rights are granted without auction. [295 A C] In the instant case there is no evidence that the State Government has recorded any reasons in writing for preferring the mode of disposing of the land without auction. It had also no good reason for favouring that mode. In these circumstances the grant of land to the appellants was rightly quashed by the High Court. [295 E F] 4. The State Government had decided earlier, as a matter of policy, not to allot nazul land to displaced persons, and pursuant to the decision all the applications for allotment were rejected. The applications were not rejected on the merits of their respective claims. Subsequently, when the State Government made an allotment of the plots to the appellants, it was consequent to a decision, which must be regarded as a composite of two decisions, one a policy decision to throw open the land to allotment in reversal of the earlier policy and, two, to allot the land to the appellants. The applications of the respondents for allotment of plots were rejected on the ground that the land was not available for allotment. That was a policy decision. When it was reversed it was incumbent on the State Government to reconsider those applications or to notify that the land was available for allotment and to invite fresh applications in that behalf. It was not open to the State Government to allot the plots to the appellants in disregard of the claims of others who had also applied for allotment.[295 G H; 296 A B]

Civil Appeal Nos. 68 of 1974 and 936 of 1975. Appeals by Special Leave from the Judgment and order dated 5 11 1973 of the Punjab & Haryana High Court in Sales Tax Reference Nos. 12 and 11 of 1969. Desai, (In CA No. 936/75), P. C. Bhartari, R. Narain, K. J. John, O. C. Mathur for the Appellants. B. Sen, (In CA No. 68/74), and R. N.Sachthey for the Respondent. P. C. Bhartari for Applicant/Interveners (In CA No.68/74). The Judgment of the Court was delivered by RAY, C.J. This appeal by special leave is on the question whether the appellant is exempt from inter State tax on the sales of poles and cables to the Delhi Electric Supply Undertaking by reason of the provisions contained in section S(2)(a)(iv) of the Punjab Sales Act hereinafter referred to as the State Act. Section 5(2) (a) (iv) of the State Act is as follows: "5(2) In this Act the expression "taxable turnover" means that part of a dealer 's gross turnover during any period which remains after deducting therefrom (a) his turnover during that period on (iv) sales to any undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the , of goods for use by it in the generation or distribution of such energy. " Under section 8 of the hereinafter referred to as the Central Act, every dealer, who in the course of inter State 994 trade or commerce sells to the Government any goods; or sells to a registered dealer other than the Government goods of the description referred to in sub section (3) shall be liable to pay tax under this Act, which shall be three per cent of his turnover. The provisions in section 8(2A) of the Central Act are as follows : "Notwithstanding anything contained in sub section (1A) of section 6 or sub section (1) or sub section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than three per cent, (whether called a tax of fee or by any other name), shall be nil or, as the case may be, shall be calculated at the lower rate. EXPLANATION: For the purposes. , of, this sub section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the ' appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. " The contention on behalf of the appellant is that by reason of the Explanation to section 8(2A) of the Central Act read with section 5(2)(a)(iv) of the State Act the appellant is exempt from payment of inter State sales tax. The words "goods for use by it in the gene ration or distribution of such energy" occurring in section S (2) (a) (iv) of the State Act are said by counsel for the appellant to be descriptive of the goods. In short, the appellant 's contention is that goods for use by the undertaking supplying electrical energy are generally exempt from taxation, and, therefore, they should not be included in the turn over. The contention on behalf of the State is that the exemption granted under section 5(2)(a)(iv) of the State Act is exemption in specified circumstances and under specified conditions. The specified circumstances are said to be sales to an undertaking supplying electrical energy to the public under the . The specified conditions are that the goods are for use by the undertaking in the generation or distribution of such energy. The answer to the question in this appeal is whether the exemption mentioned in section 5(2) (a) (iv) of the State Act is in specified cir circumstance or under specified conditions, as the Case may be, or it is a general exemption as the appellant contends in cases of sales of goods to an Electric Supply Undertaking for use by it in the generation or distribution of such energy. 995 The appellant referred to Schedule read with section 6 of the State Act and in particular Items 33 and 46 to illustrate what would be exemption under specified circumstances or specified conditions. In Schedule there are two columns. The first column describes the goods. The second column describes the conditions which make the goods tax free. In Item 33 in Schedule "Photographs including Xrays photographs" mentioned in the first column are tax free "when sold by photographers and radiologists preparing them" as mentioned in the second column. In Item 46 "hand spun yarn" mentioned in the first column becomes tax free "when sold by one who deals in hand spun yarn exclusively" as mentioned in the second column Section 5(2) of the State Act deals with taxable turnover. There is no dispute that electricity poles and cables sold to the undertaking supplying electric energy are exempt under the State Act from being included within the taxable turnover. The question is whether such sales made in the course of inter State trade are also exempt from the levy of Central Sales Tax. The appellant contends that the exemption in the State Act is general because exemption applies in respect of goods without any enumeration or classification of goods. Further, it is said that exemption is general because the sales are for use in generation and distribution of electrical energy. According to the appellants sales of all goods to the undertaking supplying electrical energy are exempt from being included in the taxable turnover as long as the goods answer the description that they are for use in the generation or distribution of electrical energy. The appellant relied on the decision of the Madhya Pradesh High Court in Commissioner of Sales Tax, Madhya Pradesh vs Kapoor Dori Niwar & Co., Gwalior(1) tn support of the meaning of the expression "exempt from tax generally". In the Madhya Pradesh case (supra) the State Government issued a notification in the year 1959 exempting from the payment of sales tax for a period of one year sales of niwar by a dealer registered under the 1958 relevant State Act. The exemption was later on extended up to 31 March, 1963. The assessee a registered dealer claimed exemption on inter State sales of niwar. The Madhya Pradesh High Court held that during the period of the exemption, the sales of niwar by a registered dealer were exempt from tax generally within the meaning of section 8(2A) of the Central Act, and, therefore, the assessee 's inter State sales of niwar were exempt from tax under the Central Act. The expression "exempt only in specified circumstances or under specified conditions" occurring in the Explanation to section 8(2A) of the Central Act was held to mean such circumstances or conditions the non existence or non performance of which precludes the grant of exemption. In other words, if those circumstances do not exist or those conditions are not performed then the sales of goods cannot be exempted from tax even if they are effected by a class of dealers to whom exemption is granted and during the period for which exemption is granted. 996 In the Madhya Pradesh case (supra) there was no dispute that the sales effected by the assessee fell under section 8(1) of the Central Act. The State Act granted exemption from sales tax on sales of niwar effected by a registered dealer. The exemption granted to sales by a registered dealer under the notification was without any restriction or limitation so far as sales by a registered dealer were concerned. Though the period of exemption was fixed, it was not regarded as a condition imposed in relation to the exemption. It was also contended there that because the exemption was granted to the registered dealers the exemption was granted to a class of dealers, and, therefore, it should be construed to be an exemption in specified circumstances or under specified conditions. The Court repelled the contention by stating that the exemption was to all registered dealers without any restriction or condition. The other decision on which the appellant relied is of the Allahabad High Court in Hindustan Safety Glass Works (P.) Ltd. vs The State of Uttar Pradesh & Anr.(1) In the Safety Glass Works case (supra) the company manufactured toughened glasses and mirrors in its factories. Under a notification issued by the State Government under the State Act sales of mirrors and safety glasses were liable to sales tax either at the point of sale by the importer of such goods or at the point of sale by the manufacturer thereof. Subsequently, a notification was issued by the State Government exempting toughened glasses and mirrors manufactured by the company at Allahabad from payment of sales tax for a period of three years. The company claimed that the turnover of sales of toughened glasses and mirrors manufactured by it, being generally exempt from tax under the State Act, was also not liable to Central Sales Tax because of the provisions contained in section 8(2A) of the Central 'Act. It was held that for purposes of section 8(2A) of the Central Act, sale of mirrors and toughened glasses manufactured by the company was under no condition and in no circumstance liable to be taxed in the hands of the company. The reasons given were that normally it will be taken that the sale of mirrors and toughened glasses by the company was exempt from to the generally unless it could be shown that such goods belonged to the class specified in the Explanation to section 8(2A) of the Central Act. As the toughening glasses and mirrors manufactured by the company did not fall in such a category the turnover of the sales of those goods in the hands of the company was not liable to tax under the Central Act. The stipulation in the notification in the Safety Glass Work case (supra) that the turnover of such sales would for a period of three years be exempt from payment of sales tax did not amount to exempting the turnover of such goods from tax under specified circumstances or specified conditions. Section 6 of the State Act does not speak of exemption, but deals with tax free goods. In other words, section 6 deals with specified goods on which no tax is payable. Section S of the State Act deals with what has to be excluded from the taxable turnover of the dealer. 997 Both the sections deal with goods which do not suffer from sales tax. A Section 8(2A) of the Central Act exempts goods from inter State sales tax where a tax law of the State has exempted them from sales tax. The Explanation to section 8(2A) of the Central Act takes away the exemption where it is not general and has been granted in specified circumstances or under specified conditions. The provisions contained in section 5 (2) (a) (iv) of the State Act exclude sales which are made under specified circumstances or specified conditions. The specified circumstances are that the sale must be to an undertaking engaged in supplying electrical energy to the public under a licence or sanction granted under the . The specified condition is that the goods purchased by the undertaking must be used for the generation or distribution of electrical energy. If the circumstances do not exist or if the conditions are not performed then the sales of goods cannot be exempted from tax. General exemption means that r the goods should be totally exempt from tax before similar exemption from the levy of Central sales tax can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances there is no exemption from tax generally. The contention of the appellant that the words "in the generation or distribution of such energy" in section 5(2)(a)(iv) of the State Act are descriptive of goods is unacceptable. The expression "generation or distribution of such energy" specifies the condition under which exemption is granted. For these reasons we are of opinion that the High Court was correct in holding that the sales by the undertaking supplying electrical energy were not exempt from tax generally within the meaning of section 8(2A) of the Central Act read with section 5(2)(a)(iv) of the State Act. The appeal is dismissed. In view of the fact that the High Court directed the parties to pay and bear their own costs, similar order is made here. S.R. Appeal dismissed.

Under section 5(2)(a)(iv) of the Punjab Sales Tax Act "taxable turnover" meant that part of a dealer 's gross turnover during any period which remains after deducting therefrom, his turnover during that period on sales to any undertaking supplying electrical energy to the public under a licence or sanction granted under the , of goods for use by it in the generation or distribution of such energy. Under section 8 of the Central Sales Tax, every dealer. who in the course of inter state trade or commerce sells to the Government any goods: or sells to a registered dealer other than the Government goods of the description referred to in sub section (3) shall be liable to pay tax under the Act, which shall be three per cent of his turnover. Section 8(2A) reads as follows: "Notwithstanding anything contained in sub section (1A) of section 6 or sub section (1) or sub section (2) of this section, the tax pay able under this Act by a dealer on his turnover in so far as the turn over or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate state, exempt, from tax generally, or subject to tax generally at a rate which is lower than three per cent. (whether called a tax or fee or by any other name), shall be nil or, as the case may be shall be calculated at tho lower rate. Explanation: For the purpose of this sub section or sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate state, if under the law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. " The appellants were suppliers of poles and cables to the Delhi Electric Supply Undertaking and the sales were in the course of inter state trade or commerce and admittedly exempt under the state sales tax u/s 5(2) (a) (iv). The state assessed tax u/s 8 of tho on the ground that the exemption granted u/s 5(2)(a)(iv) of the state Act fell under Explanation to section 8(2A) of the . The High Court held that the sales by the undertaking supplying electrical energy were not exempt from tax generally within the meaning of section 8(1A) of the Central Act read with Section 5(2)(a)(iv) of the State Act. Dismissing the appeal, by special leave, the Court. ^ HELD: (I) General exemption means that goods should be totally exempt from tax before similar exemption from the levy of central sales tax can become available. Where the exemption from taxation is conferred by conditions or in certain circumstances there is no exemption from tax generally. Section 6 of the State Act does not speak of exemption but deals with tax free goods. Section 6 deals with specified goods on which no tax is payable. 993 Section 5 of the State Act deals with what has to be excluded from taxable turnover of the dealer. Both the sections deal with goods which do not suffer from Sales tax. Section 8(2A) of the Central Act exempts goods from inter State Sales tax where a tax law of the state has exempted them from sales tax. The explanation to section 8(2A) of the Central Act takes away the exemption where it is not general and has been granted in specified circumstances or under specified conditions. The provisions contained in section 5(2) (a) (iv) of the state Act exclude sales which are made under specified circumstances or specified conditions. The specified circumstances are that the sale must be to an undertaking engaged in supplying electrical energy to the public under a licence or sanction granted under the . The specified condition is that the goods purchased by the undertaking must be used for the generation or distribution of electrical energy. If the circumstances do not exist or if the conditions are not performed then the sales of goods cannot be exempted from tax. The expression "generation or distribution of such energy" specifies the condition under which exemption is granted. [996H, G97A D] Commissioner of Sales Tax, M.P. vs Kapoor Dari Niwar & Co., Gwalior 22 STC p. 152; Hindustan Safety Glass Works (P) Lrd. vs The State of U.P. and Anr. 34 STC 209, discussed.

No. 300 of 1969. M. C. Chagla, N. A. Palkhivala, B. Datta, J. B. Dadachanji 0. C. Mathur and Ravinder Narain, for the applicants. H. R. Gokhale and section B. Wad, for the respondent. The Judgment of the Court was delivered by Hidayatullah, C.J. This petition is an off shoot of the decision of this Court on the constitutional validity of the Banking Companies (Acquisition of Transfer of Undertakings) Act, being Act 22 of 1969. By a majority of ten Judges against one, 'this 513 Court declared the Act to be unconstitutional. The decision of the Court was given on February 10, 1970. On February 13, 1970 a meeting was organised by the Blitz National Forum at Vithalbhai Patel House at Delhi. it was presided over by Mr. Mohan Kumarmanglam, an advocate of this Court. According to the news items published the next day in the Hindustan Times, the Times of India and the Patriot, a number of persons spoke about the Act and the decision of this Court upon it. Among the speakers were Mr. R. K. Khadilkar, Minister in the Ministry of Finance, Mr. A. section R. Shari, Mr. Kumarman glam, Mr. Prabhatkar, Mr. section M. Joshi, M.P., Mr. Bhupesh Gupta M.P. and Mr. V. K. Krishna Menon M.P. These speakers criticised the decision. 'Mr. R. K. Khadilkar, the Hindustan Times, reported, said that such decisions 'do not enhance the prestige of the Judiciary ', that such acts on the part of the highest Court 'will only encourage Naxalites who have rejected constitutional means to bring about socialism ' and that the judgment would be treated with 'more and more contempt by ordinary people '. He observed that the situation would be rectified by Parliament because ten Judges 'sitting in an ivory tower ' could not sit over the verdict of Parliament which represented the people. The Times of India report said that Mr. Khadilkar said that 'Government would soon bring forward an amending measure to offset the dangerous implications for social progress of the community of the Supreme Court judgment in the Bank Nationalization case, that if necessary the issue whether Parliament or the Supreme Court was the final arbiter of the 'people 's will should be referred to the people and a mandate taken from them, and quoted Pandit Nehru that it was never the intention of the Constitution to make the Supreme Court 'the third house of correction '. The Patriot reported that 'attempts to utilize community savings lying in banks for the welfare of the common man have been blocked by the judiciary ', that 'the Supreme Court could not be accepted as the third chamber of legislature ', that he did not "want to threaten the judiciary ' but Parliament would have 'to take steps to respect the feelings of the people for stabilizing democracy '. Mr. Khadilkar also wished that the judiciary would take note 'of the changing situation and helped to transform the society for the benefit of the common man. ' The three reports also described what the other speakers had said at the meeting. On February 26, 1970, two petitioners (Mr. Krishna Rao Kaushik M.P. and Lt. Col. H. R. Pasricha) swore an information based on the newspaper reports (with copies annexed) that a serious contempt of this Court was committed by Mr. R. K. Khadilkar inasmuch as his speech had a clear tendency to affect the dignity and prestige of this Court and there was danger of grave Sup. Cl/70 4 514 mischief in the administration of justice and the confidence of the whole community in the administration of justice was bound to be undermined. Two affidavits sworn in support were based on the newspaper, reports. As some of the alleged observations, particularly those reported in the Hindustan Times, prima facie exceeded the bounds of legitimate criticism, a notice was issued to Mr. Khadilkar to show cause why action should not be taken against him. In reply Mr. Khadilkar filed an affidavit denying the main allegations. He stated in his affidavit as follows "I am a firm believer in the independence of judiciary as an integral part of our democratic polity. I am in entire agreement with the sentiment expressed in para 1 of the petition, viz. that the., dignity of the Hon 'ble Supreme Court must be maintained and the administration of justice should not be allowed to be undermined in this country. I have a deep faith in the social and economic objectives of our Constitution as enshrined in the Directive Principles of the Constitution and the democratic and constitutional methods of achieving them. Indeed, by oath of office, I am duty bound to uphold these objectives of our Constitution. " In reply to the specific charge of making statements tending to vilify the Judges and to bring the ' administration of justice into hatred and contempt, Mr. Khadilkar denied having made the statement attributed to him by the Patriot 'that attempts to utilize community savings in the banks for the welfare of the common man had been blocked by the judiciary ' and the statements attributed to him by the Hindustan Times to the effect that "(a) The majority decision in the Bank case "did not enhance the prestige of the Judiciary". (b)Supreme Court judgment would be treated with "more and more contempt by ordinary people". (c)The judiciary had persistently failed to interpret the Constitution and remained static. (d)Ten Judges sitting in ivory tower could not sit in judgment over verdict of Parliament which represented the people. " He asserted that he had said ". no aspersions should be cast on the judiciary and event bough the decision had far reaching consequences. pointed out, that the judgment was cautiously worded and the learned Judges had not challenged 515 the authority of Parliament to bring forward a measure of nationalisation". He claimed to have added: "No desire to cast aspersions on the judiciary and would very much like to see its prestige remained high and its image untarnished. We cannot, however, avoid pointing out wherein according to us the decision is erroneous primarily by reason of its consequences for 'attempts at social reform. " He explained what he had said by recalling his speech. It is not necessary to quote his version. He complained that the newspapers had picked out ideas but put them in their own words and that it was not always possible to contradict the newspapers. He expressed his views on the institution of property as a fundamental right to which it is not necessary to refer here. He concluded by saying "I may also state that in my comments on the Bank Judgment, no improper motives were attached to the Hon 'ble Judges. There was no malice either against the Hon 'ble Judges or the institution of Supreme Court, the independence of which I honestly cherish. " In support of his own affidavit, Mr. Khadilkar exhibited affidavits from Messrs. Mohan Kumarmangalam, A. section R. Chari and section M. Joshi. In these affidavits (which are insissima verba) support was given to the denials of Mr. Khadilkar. At an earlier hearing, the petitioners promised to file affidavits of reporters etc. present at the meeting. At the resumed hearing no affidavits were filed on the ground that the journalists following their code of conduct did nit wish to file any ' material unasked and request was, therefore, made to summon them in the interest of justice. We did not think it necessary to prolong the hearing of the case as on the material before us there was nothing to contradict the affidavits which deny the accuracy of the newspaper reports. We accordingly. closed the case for orders. There is no doubt that the Court like any other institution does not enjoy immunity from fair criticism. This Court does not claim to be always right although it does not spare any effort to be right according to the best of the ability, knowledge and judgment of the Judges. They do not think themselves in possession of all truth or hold that wherever others differ from then, it is so far error. No one is more conscious of his limitations and fallibility than a Judge but because of his training and the assistance he gets from learned counsel he is apt to avoid mistakes more than others. 5 1 6 Further the supremacy of a legislature under a written Constitution is only within what is in its power but what is within its power and what is not, when any specific act is challenged, it is for the courts to say. If that were realised much of the misunderstanding would be avoided and the organs of Government would function truly in their own spheres . We are constrained to say also that while fair and temperate criticism of this Court or any other Court even if strong, may be actionable attributing improper motives, or tending to bring Judges or courts into hatred and contempt or obstructing directly or indirectly with the functioning of Courts is serious contempt of which notice must and will be taken. Respect is expected not only from those to whom the judgment of the Court is acceptable but also from those to whom it is repugnant. Those who err in their criticism by. indulging in vilification of the institution of Courts, administration of justice and the instruments through which the administration acts, should take heed for they will act at their own peril. We think this will be enough caution to persons embarking on the path of criticism. With these words we order the papers to be filed.

At a public meeting held a few days after the decision of this Court on the constitutional validity of the Banking Companies (Acquisition of Transfer of Undertakings) Act 22 of 1969, K, a Minister in the Central Government, was reported by newspaper$ to have made certain critical remarks which, two petitioners before the Court contended constituted a serious contempt of this Court. The petitioners swore an affidavit in support of their petition based on the newspapers reports. As the Court considered that some of the alleged observations, prima facie, exceeded the bounds of legitimate criticism, a notice to show cause was issued to K. In reply K filed an affidavit denying the main 'allegations and contending that he has been misreported. In support of his own affidavit, three other affidavits were filed by persons present at the public meeting. Although an application was made for summoning the reporters present at the public meeting, the Court did not consider it necessary to prolong the hearing of the case as on the material before the Court there was nothing to contradict the affidavits which denied the accuracy of the newspaper reports. However, while closing the case, the Court observed : While fair and temperate criticism of this Court or any other court even if strong, may not be actionable, attributing improper motives, or tending to bring judges or courts into hatred and contempt or obstructing directly or indirectly the functioning of Courts is serious contempt of which notice must and will be taken. Respect is expected not only from those to whom the judgment of the Court is acceptable but also from those to whom it is repugnant. Those who err in their criticism by indulging in vilification of the institution of Courts administration of justice and the instruments through which the administration acts, should take heed for they will act at their own peril. [516 B]

cement of additional security deposit. It stands to reason that if there is a revision in the rate of tariff there must he an upward revision in the consumption security deposit since it has direct hearing to the level of supply in consumption of electricityThis being a condition of supply no reason need be given at the timeof upward revision. [278 C, 277 A C] & CIVILAPPELLATE JURISDICTION: Civil Appeal Nos. 2117 to 2122 of 1993 etc. From the Judgment and Order dated 28.4.1989 of the Andhra Pradesh High Court in W. P. Nos. 11162/84, 18968/87, 12007/84, 15131/87, 5050/82 and 15746/87. Altaf Ahmed, V.R. Reddy, Addl. Solicitor General, Narasimha murthy, K. Parasaran, Anil B. Divan, Harish N. Salve, Soli j. Sorabjee, G. Ramaswamy, P.P. Rao, Gobind Mukhoty, Dr. Shanker Ghosh, Shanti Bhushan, G.L. Sanghi, Pawan Kumar, P.S. Poti, B.M. Patnaik. Sanjay Parikh, P. Niriop, Kailash Vasdev, section Khaitan, K. K. Khaitan, Darshan Singh, Sushi] Kumar Jain, A.P. Dhamija, section Atreya. E.C. Agarwal, A. V. Palli. Atul Sharma, Ms Reena Aggarwal, A. K. Mehta, R. K. Gupta, P.C Kapur, T.V.S.N Chari, B. Reddy, Ms. Pramila, Anil K. Sangal, Ajay K. Tayal. Koka Raghava. B. Kanta Rao, Shiv Prakash Pandey, Ms Rekha Pandey. R.K. Priyokumar Singh, T.V. Ratlinain, K.R. Chowdhary, K. Ram Kumar, Ashok Kr. Gupta, R.B. Misra , Pradeep Misra, Mrs. Sheil Mohini Seth, Jain Hansaria & Co, R.P. Gupta, Ms. Sarla Chandra, M/s Mitter Mitter & Co. Ms Abha Jain, Ranjit Kumar, M.P. Jha, S.K. Jain, Vinoo Bhagat, Surva Kant, Aruneshwar Gupta, Badridas Sharma, Prabhu Dayal, Sudarshan La] Aneja, R. Venkataramani, Y.P. Rao, D.K Garg, K.C. Agarwals, O.P Khaitan, P.B. Agarwala, Mohinder Rupal, Mrs. Kamakshi Mehllwal, Ms Archna Kau] (For Gagrat & Co. ), Vijay Hansaria, R. section Sodhi , D.A. Dave, Raian Karanjwala, Mrs. Manik Karanjawala, Rajesh mar, Ms. Suruchi Aggarwal, K.J. John, Ms. Deepa Dixit (For 213 Swarup John & Co.), A. T. Patra, S.R. Agarwal, Ms. Bina Gupta, Prashant Bhushan, K. Rajendra Choudhary, Rakesh K. Sharma, Shivi Shamia, Anil K. Chopra, Pallav Sisodia, Ravinder Narain (For JBD & Co. ) Praveen Kumar, Virender Kaushal, Bimal Rao Jad, Ms Malini Poduval, K.K. Lahri and section Sukumaran for the appearing parties. The judgment of the Court was delivered by MOHAN,J. Leave granted. These civil appeals are directed against the judgment of the Division Bench of Andhra Pradesh High Court reported in Southern Steel Ltd. vs A. P. State Electricity Board, Hydrabad AIR 1990 Andhra Pradesh 58. The facts briefly are as under: The Andhra Pradesh State Electricity Board is constituted under Section 5 of the Electricity Supply Act, 1948 (hereinafter referred to as the Act). The said board is engaged in generation, distribution and supply of electricity in the State of Andhra Pradesh. Electric energy is supplied for industrial, commercial, agricultural and domestic purposes. To such of these industries, using energy about a particular level, it is supplied at a higher voltage. They are classified as high tension consumers (H.T. consumers). All the appellants herein belong to that category. Section 49 of the Act empowers the Board to notify the terms and conditions upon which it will supply electricity to a person. It is also empowered to frame uniform tariffs in that behalf. Sub section 2 specifies in fixing the uniform tariff, the Board shall have regard to all or any or the following factors, namely a) the nature of the supply and the purposes for which it is required; b) the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time 214 being served or adequately served by the licensee; c) the simplification and standardisation of methods and rates of charges for such supplies; d) the extension and cheapening of supplies of electricity to sparsely developed areas. Sub section 3 empowers the Board to enter into a special agreement with any consumer any prescribe different tariffs for Wm. Under Section 4, an obligation is cast on the Board not to show undue preference to any person while fixing the tarrif and terms and conditions for the supply of electricity. In all these cases, the appellants are covered by the general terms and conditions notified under Section 49 (1) of the Act. The terms and conditions were notified by the Board and the B.P.M.S. No. 690 dated 17th of September, 1975. It is not necessary to refer in detail to the various terms and conditions. However, what requires to be noticed is the terms and conditions oblige every consumer executing an agreement in the prescribed form, undertaking to abide by the term and conditions prevailing on the date of agreement and also agreed to be bound by the terms and conditions as may be notified from time to time. It is important to note under Section 25, the Board has unilateral right to vary the term from time to time under clause 25.1. The terms and conditions for supply of electricity by special or general proceedings. Condition 32. 1. provides "the Board shall as far as possible within 15 days after the expiration of each calendar month cause to be delivered to every consumer a bill of charges stating the amounts payable by the consumer towards charges for energy supplied and any other sum in connection with supply of energy by the Board. " Conditions 32.2. 1. obliges the consumers to pay the amount shown in the bill, within 15 days of the date of the bill in, default 'whereof they are liable to pay "an additional charge of 2% per month or part thereof for the period of delay" in paying the bill. Condition 32.3 empowers the Board to disconnect the supply in case of default in paying the bill, without prejudice to its right to recover the amount due. Condition 24.3 also lays down that the consumer shall pay to the Board 215 every month the charges for electrical energy supplied to him during the preceding month at the tariff in force from time to time. Condition 28 obliges the consumers to deposit an amount equivalent to three months consumption charges with the Board. It would be appropriate to set out condition No. 28 as far as it is necessary for our purposes, committing what is not relevant as under: 28.Consumption deposits: 28.1 Initial consumption deposit. The consumer shall deposit with the Board a sum in cash equivalent to estimated three month 's consumption charges. The consumer coming under the L.T. category 'domestic ' shall however pay at Rs. 30.00 per Kilowatt or part thereof connected load. "Provided that the Board may, in the case of industrial consumers, accept by way of consumption deposit a sum equivalent to two months consumption charges during a period of three years from the date of first release of supply of electricity". 28.1.2In the event of the consumer failing to pay to the Board any sum that may become due for payment to the Board on the dates fixed for payment thereof, the Board may, in addition to and without prejudice to the other rights of the Board, appropriate a part or whole of such deposit towards the sum due from the consumer. 28.2Additional Consumption Deposit All consumers other than those L.T. Domestic consumers whose monthly bills are less than Rs. 500 for a continuous period of six months, shall keep with the Board an amount equivalent to charges for three months demand and energy charges as consumption deposit. The aduacy of the consumption deposit shall be reviewed by. the Board usually once in every year and/ or at any time during the year if so warranted dur to upward revision of tariffs, enhancement of the con 216 tracted demand by the consumer charges in the pattern of consumption by the consumer relaxation of power restrictions or such other factors which in the opinion of the Board, warrant review of the, adequacy of the existing consumption deposit. The review shall take into account the following factors: (i)In the case of consumers where there is no change in the contracted demand, the average consumption for the preceeding twelve months after taking into consideration the quantum and nature of restrictions imposed, if any, during that period shall be the basis. (ii)in the case of consumers who were sanctioned additional demand and availed it during a part of the period, average recorded consumption for the period of review shall be from the date of utilisation of increased demand to the date of review after taking into consideration the nature and quantum of restrictions imposed, if any during that period. (iii)The demand shall be contracted demand of the consumer at the time of review. (iv)The rates, at which the demand or energy charges shall be calculated, will be tariff rates prevailing as on the date of review. Based on such review, if the consumption deposit of the consumer is found inadequate or has fallen short on account of adjustments made as indicated in clause 28.1.2hereof the consumer shall deposit within 30 days of receipt of notice in this regard such additional amountas may be required by the Board or replenish the required amount as the case may be. 28.3 Interest on consumption deposit: Interest shall be paid by the Board on deposits of more than Rs. 60 made in cash at the rate of 3% per annum or such other 217 rate as may be fixed by the Board from time to time. Full calender months only shall be taken into account for the purpose of calculating interest and interest shall be calculated to nearest five paisa. The interest accruing to the credit of the consumer shall be adjusted every year in the month of April in the Electricity Supply bills. 28.4 Disconnection or non payment of consumption deposit: If the consumer does not make payment of amount of consumption deposit or additional consumption deposit or where the deposit is given in Government security or National Saving Certificate Bank guarantee etc. , he fails to replace them by deposit in cash when so demanded by Board within the notice period of 30 days supply of consumer shall be liable for disconnection. 28.5 "The Consumption Deposit so calculated as per the Clause 28.1 and /or 28.2 above shall not be less than three times the monthly minimum charges, applicable to the consumer under the category to which he belongs". 28.6 "All consumers shall pay the Consumption Deposit or additional consumer deposit within thirty days from the date the demand notice if there be any delay in payment, the consumer shall pay surcharge thereon equal to 1 1/2% per month or such other percentage to be fixed by the Board from time to time, of the demanded amount for each month of delay or part thereof. This will be without prejudice to the Board 's right to disconnected supply of electricity". Clause (1) of condition 28 is general in nature. It applies to all consumers. (1.2) enables the Board to appropriate a part or whole of the said deposit towards any amount due to the Board and not paid within the prescribed period. (2) applies to all consumers, except those L.T. Domestic consumers whose monthly bills are less than Rs. 218 . 500 per month for a continuous period of six months. Such consumers are obliged to keep with the Board an amount equivalent to three months ' demand and energy charges, as consumption deposit. The deposit is liable to be reviewed by the Board from time to time, having regard to the factors mentioned in the said clause. (3) prescribes interest which the Board has, to pay on such deposit. It is 3% per annum. Clause (4) empowers the Board to disconnect the supply if consumption deposit/ additional consumption deposit is not made, or is not replaced whenever called upon to do so. Clause (5) prescribes a certain floor below which consumption deposit shall not go. Clause (6) says that the consumption deposit or additional deposit shall be paid within thirty days of the notice demanding such deposit. In default, not only interest is payable but the supply also is liable to be disconnected. The attack before the High Court was that according to Condition No. 32. 1, the bill is served within 15 days of the expiration of each calendar month. The amount covered by the bill is payable within 15 days of the date of the bill. The period of 15 days for payment is calculated not from the date of service of the bill but from the date of the bill. A bill could be served even on the very first day of the succeeding month in which event it will become payable within 15 day of the date of the bill. In such a situation, it is not correct to say that a consumer goes on availing and enjoying energy for a period of three months without paying for it. Invariably it does not exceed six weeks or at any rate, two months. In the event of non payment under Condition No. 32.3, supply of energy can be disconnected without seven days notice as contemplated under Section 24 of the . Therefore: (1)It was urged that the consumption deposit should in no event exceed two months average consumption charges. (2)The second attack was the payment of 3% interest by the Board on such consumption deposit is no longer good law in view of the judgment of Supreme Court rendered in M/s Jagdamba Paper Industries (p) Ltd. vs H.S. E. Board, ; , since this Court had taken the 'view that the interest on such deposit should be paid at the same rate as is paid by the schedule bank on fixed deposit. 219 It was generally urged that the Electricity Board being a State; within the meaning of Article 12, it has to act fairly. Any term of condition will have to answer the test of reasonableness. On the contrary, if it is arbitrary, it would be violative of Article 14. The High Court after analysing the object behind Condition No,. 28 relating to the consumption deposit held: The condition requiring the consumer to pay the charges within 15 days from `the date of the bill and on such failure, a right is conferred on the Board to disconnect the supply. The condition merely refer to the power of the Board. Existence of power is distinct from exercise of power. The Board cannot blindly act upon Condition 32.3 and disconnect the supply the moment 15 days time (from the date of the bill) expires. It has to take a realistic view of the situation. After all, these industries are engaged in production of goods essential to the community. A blind and mechanical adherence to Condition 32.3 (instant disconnection) may indeed prove counter productive in larger sense. It was also not possible for the Board to notice the non payment immediately in view of the large number of consumers and the extensive nature of organisation. Besides, huge sums are required by the Electricity Board as rotating capital. It borrows large amounts from organisations like L.I.C. and Banks, on which it pays interest to them. Hence, it is well entitled to require the consumer to co operate by paying their bills regularly, by furnishing security deposits and by conforming to the terms and conditions of supply. Under these circumstances, the requirement of three months deposit could not be said to be unreasonable and unjustified. As regards, the payment of 3 % interest, the High Court was of the view that the decision of this Court in Jagdamba Paper Industries (P) Ltd. (supra) could not be read as a decision of the Supreme Court on the basis of which it could be declared that the earlier Bench decisions of the High Court were no longer binding, Accordingly, it dismissed the writ petitions. Aggrieved by this decision, the present S.L.Ps. have come to be preferred. Mr. R.N. Narasimha nmurthy, learned counsel for the appellant 220 after drawing our attention to clauses 28 and 32 would submit that if there is any laxity on the part of the Board in preparing the bill that cannot be a ground to make a consumer to pay three months deposit. The tariffs of 1974 provided for the payment of bills within 14 days from the date of the bill while the quantum of deposit is three months consumption charges. Originally, the time for payment was 30 days from the date of the bill. That has been reduced to 15 days which is a drastic change. The security deposit is a provision for continued default of the consumer. The quantum of such a deposit is reckoned on the basis of the lapse of time between the consumption charges that become due after expiry of time required for reading of meter, billing, delivery of the bill to the consumer; grace time allowed and the reasonable time required for disconnecting the consumer 's service connection. The reduction to 15 days has great relevance on the quantum of deposit as the deposit is intended to cover the defaulted amount by the time of disconnection. However, considering that the bills of power intensive industries are prepared within 3 days of meter reading and also considering the close monitoring that is feasible in verification of payments of bills of these consumers and the small number of these consumers distributed among the several Circle Offices of the Board, any default is detectable within 20 days of the bill for appropriate action to be taken immediately. The purpose of consumption deposit is only to safeguard the actual consumption charges that become payable by the time penal action could be initiated. Even the judgment of the High Court indicates that a time lapse of 37 days from the date of the meter reading without considering the 7 days notice prescribed under Section 24 of the . The balance time of 23 days to make up for 90 days is provided for the laxity in the Board administrative system which justifiably cannot be passed on to the consumer by way of consumption deposit. In view of the high stakes involved in the case of power intensive consumers, the Board should evolve a suitable system of payments and must keep the security deposit to the minimum instead of three months. It is further submitted that the security deposit could be in the form of bank guarantee. There is no justification to require cash deposit. As a matter of fact, as noted in M/s Haryana Ice Factory vs Municipal 221 Corporation of Delhi and Another AIR 1986 Delhi 78, the security in the form of Government Bond is permissible. In Jagdamba Paper Industries Case (supra), paragraph 11 of the judgment deals with rate of interest. That is a case where 8% was increased to 10% by consent. If really, it is in the nature of a deposit, there is no Justification as to why bank rate should not be awarded. It seen from The Chairman Karnataka Electricity Board and Others vs Gadag Mining Co. & Ors. etc. AIR 1986 Karnataka 252, 10% interest had been awarded. Mr. Anil B. Divan, learned counsel for the appellant in S.L.P. (c) No. 2564/92 would submit is under: Power intensive units like the appellant 's form a distinct class of consumers. The Ferro Silicon plant of petitioner No. 1 is a power intensive one where the cost of electricity constitutes about 55% of the price of the ferro silicon produced. Electricity, thus is the basic raw 'material for this industry. On an average, the appellant is consuming electricity worth Rs. 1.6 crores per month. If there was full supply of electricity (without there being a power cut), the monthly bill would be approximately Rs. 4 crores at a present tariff. The power intensive plant of the appellant maintains a very high load factor of 0.9%. Ordinary H.T. consumers work at a load factor of only 60% and the units consumed at only 50 per KVA demand. The HT 111 tariff for power intensive consumers requires a minimum consumption of 403.3 units per KVA demand. This means more than 8 times that of H.T. consumers. The Electricity Board has always classified power intensive units as a separate category. At present, there is a special tariff called HT III tariff with a fist of power intensive industries specified in the tariff notification. The appellant No. 1 had deposited Rs. 1.07 crores in cash towards the security deposit. A bank guarantee for Rs. 53.64 lacs had also been furnished. A further demand of Rs. 96.5 lacs prompted the filing of the writ petition in the High Court. As per the order of this Court in S.L.P. No. 12077/84 it was directed on 6.2.1987 that a sum of Rs. 1 crore be paid by the 3rd of every month and the balance within 7 days of the 222 presentation of the bill This order came to be modified that Rs.1 Crore was to be paid on the 30th of the month and the balance within one week of the receipt of the bill. The said arrangement has been working satisfactorily. There has not been any default in payment of electricity bills. Therefore, the entire dispute is a theoretical one as to what the quantum of the security deposit can, or ought to be. A deposit in cash of an amount equal to three months average bills at full supply at the present tariff without any power cut will amount to Rs. 12 cores on the basis of tariff revised in October 1992. With ever increasing tariffs, the deposit demanded will also keep increasing. Under these circumstances, the condition requiring three months security deposit is arbitrary and illegal for power intensive consumers. The paid up share capital of appellant No. 1 is Rs. 3.8 crores. The gross value of the plant and machinery of the power intensive unit is Rs. 7.94 crores. The total advances made by the consortium of bankers for working capital is Rs. 4.25 crores. The total net worth of all the divisions of appellant No. 1 that is Merine products, Sugar & Engineering, Machine Building and the power intensive Ferro Silicon Plant is Rs. 14.6 crores. The security already furnished namely Rs. 5.7 crores is crippling the Ferro Silicon Plant division. A demand of three months cash deposit would be in the range of Rs. 12 crores. It is arbitrary and unjustifiable to require appellant No. 1 to deposit several times its share capital by way of security. If this demand is enforced strictly, the plant of the appellant will become sick and ultimately, will have to be wound up. In other States, the provision is not so harsh. If the security deposit is 'consumption deposit ' and it is for meeting the cost of supply in advance, then the Electricity Board cannot charge penal interest at 2% per month for non payment of bills within the stipulated period. The deposit, first must be appropriated against the dues and the interest charged only if there is balance due. The Stand of the Electricity Board is perverse and illegal. Equally, there can be no question of 'supply on credit ' if deposit is adjusted against consumption all the time. The consumer has got a right to negotiate. In The Indian Aluminum Co. vs Karnataka Electricity Board , this Court directed the Electricity Board to adopt a realistic policy. Here also Condition No. 28 must be altered. 223 There is no power under the Electricity Supply Act to enable the Board to raise revenue or to cover its capital cost etc. except by way of adjusting tariffs as seen from under Section 59 of the Supply Act, 1948. Therefore, consumption deposit cannot be used for the purpose of revenue or raising revenue. In this case, the Electricity Board had not placed any material to give interest only at 3%. Mr. K. Parasaran, learned counsel appearing in S.L.P. No. 13004/ 89 after referring to the passage occurring at page 66 of Haryana Ice Factory case (supra) submits that the security deposit cannot go to buildup the capital or fixation or tariff. Under Sections 49 and 59 of the Supply Act, finance is required to be adjusted including the payment of interest. Demand of three months consumption deposit cannot be resorted to. In support of his submission, reliance is placed on Hindustan Zinc Ltd. etc. vs Andhra Pradesh State Electricity Board & Ors. ; Mr. Kailash Vasudev. learned counsel for appellant in S.L.P. 13004/89 submits that under Section 49 of the Supply Act, it is enjoined upon the Board to adjust its tariffs by keeping the factors detailed in the said Supply Act. Therefore, the Board cannot have recourse methods not provided under the said Act. The demand for a deposit to ensure the due payment of the bills for electrical energy consumed amounts to framing an additional tariff. The Board cannot do indirectly what it cannot do directly. The Board being 'a state monopoly ' has to act reasonably and not arbitrarily. The terms and conditions of supply cannot be unfair and oppressive. Mr. R. Venkataramani, learned counsel in his written submis sions in Writ Petition Nos. 1293/89 & 1353/89 and S.L.P. (c) Nos. 4791 92/90 & 4793 94/90 would urge that Section 49 of the Supply Act is unconstitutional since there are no guidelines for framing the terms and conditions of supply of electricity. The said Section does not specifically spell out fairness of action. Clause 28 of the terms and conditions of supply is a clear illustration of arbitrariness and subordinate legislation. 224 The words as the Board thinks fit ought to be interpreted so as to be consistent with the fairness of State action. They are to be construed as "reasonably thinks fit" as held in Roberts vs Hopwood, and Granite vs Minister of Housing and Local Government, Clause 28 of the terms and conditions of supply relation to fixation of 3% interest and additional charges are vitiated due to non application of mind. Under clause 28.6 of the terms and conditions, in the event of delay in payment of consumption deposit or additional consumption deposit within the stipulated period, the consumer is obliged to pay surcharge at 18%. The obligation to pay surcharge and the power of the Board to vary the percentage from time to time would constitute draconian provision. Money, wherever it is held in deposit could only be used to earn some interest. Therefore, paying 3% interest on the consumer deposit is not at all justified. A public institution cannot be allowed to get excessive interest. In meeting these arguments, the learned Additional Solicitor General submits that under Electricity Supply Act, the finances of the Board are controlled to the minutest detail. Originally, prior to 1978, Section 59 required the Board as far as practicable and after taking credit for any subvention from the State Government not to carry on its operation on loss. For this purpose, it was empowered to adjust its charges accordingly from time to time. Section 59 was amended by Act 23 of 1978. After the amendment, the Board after taking credit for any subvention from the State Government was required to carry on its operations and to adjust its tariffs so as to ensure that the total revenues in any year after meeting of the expenses left such surplus as state government may specify from time to time. This Court has taken the view in Kerala State Electricity Board vs S.N. Govinda Prabhu & Bros. & Ors ; that even if the Government had, not prescribed surplus, the Electricity Board could generate surplus. After the amendment by Act 16 of 1983 which came into force on 225 1.4.1985, the Board was to create a minimum surplus of 3% or such higher percentage as the State Government would specify in this behalf. It is in this background. , the matter will have to adjuged. The reason why three months security deposit is demanded is, for two months, the consumer gets free electricity. For supply of such electricity, the Board has to borrow and make payment of interest. If there are no consumer deposits, the tariff shall have to be increased. That will effect all the consumers. Interest at 2% is charged in case of default only in order to ensure proper payment. It is penal in character. In the judgment under appeal, the High Court held that the burden relating to interest can be reflected either in the tariff or could be set off by calling upon the consumer to make deposit. In fact, this Court has upheld the tariff revision effected by Andhra Pradesh Electricity Board as seen from Hindustan Zink Ltd. Etc. v, Andhra Pradesh State Electricity Board & Others ; It cannot be contended that the three months consumption deposit is arbitrary. This argument ignores the following important factors: i)This is not a security deposit but a consumption deposit. ii) It in the nature of an advance payment. iii)In the event of failure to pay, it could be proceeded against as seen from clause 28.1.2. (iv) Consumption deposit is variable as per clause 28.2 (iv) If therefore, the object of consumption deposit is to ensure proper payment with reference to electricity supply, there is nothing arbitrary or unjustifiable. The fact that some of the appellants pay large amounts by way of electricity charges will have nothing to do with the nature of deposit. Merely because it is a power based unit, it cannot be treated separately. Nor can the appellant make a virtue out of necessity. The terms of supply relating to consumer deposit must be uniform, therefore, it is not correct to contend that the power based unit must be treated separately. As regards payment of interest at 3%, electricity supply is made on 226 credit basis. Therefore, it is a matter of adjustment of Board finances. Strictly speaking, the consumer deposit is in the nature of fidelity guarantee to ensure proper payment by consumer. The consumer may not be entitled to interest at all. However, where the Board has so adjusted finances and pay 3% interest, the Board cannot be defaulted. Jagdamba Paper Industries case (supra) cannot be said to be a decision as to the rate of interest payable by the Electricity Board. Upon reading paragraph 11 of the judgment, it will be clear that it proceeded on the consent of the counsel. RAJASTHAN The writ petitioners applied to appellant Board for the supply of high tention power for their factories. After the execution of the necessary agreement and furnishing of security deposit, power connections were given. Subsequently, the Board issued notice requiring the consumers to deposit the enhanced amount of cash security as well as the bank guarantee on the basis of maximum power consumption of three months. With regard to security deposit, Part 11 of the General Conditions of Supply and Scale of Miscellaneous Charges in Note II stated that no interest will be paid by the Board on the security deposit. Two contentions were raised in the petitions, (i) Note II providing for no interest was bad in law, (ii) the enhanced security must be calculated not on three months maximum consumption but on the basis of minimum power consumption. These two contentions found favour with the learned Single Judge. The Rajasthan Electricity Board filed special appeals while the consumers filed cross appeals. The Division Bench held as under: i)The Board has power to demand additional security but the average consumption of three months should be taken as the basis for calculating the amount of such security. ii)The clause relating to non payment of interest was not reasonable. Interest must be allowed on the entire amount of cash security from the date of the writ petition. The appeals by the Board were dismissed while cross appeals by the consumers were allowed. Ag 227 grieved by this judgment, the present S.L.Ps. have come to be preferred by the Rajsthan Electricity Supply Board. Mr. Soli J. Sorabjee, learned counsel appearing for the appellant argued as follows: There is no legal obligation to pay interest on a deposit made by the consumer with the Board in terms of Clause 20 (a) & (c) of the General Conditions of Supply. Nor even interest is payable under common law or in equity. In this connection, the learned counsel draws our attention to Halsbury 's 4th Edition, volume 32 pages 54 55. There is no legal or equitable obligation to pay interest for detention of monies. In support of this argument, learned counsel relies on Bengal Nagpur Railway company Ltd. vs RuttanjiRamji, (1937) L.R. 65 I.A. 66 and Union of India vs A.L. Rallia Ram ; , pages 187, 189 190. There is no contract or agreement which provides for payment of interest. On the contrary, Clause 9 (b) (ii) of the General Conditions expressly provides that no interest will be paid by the Board on security deposit. There is no statutory provision which casts an obligation on the Board to pay interest on the security deposit. The High Court erred in relying on the model form of draft conditions of supply because the said model form is applicable to only licensee as defined under Section 2 (h) of Electricity Act. It is not applicable to a Board which is not a licencee. Further, it is not necessary on the part of the Board to adopt model form. Schedule VI of 1948 Act again cannot be pressed into service as the Board is not a licencee clause 2 (b) (v) of Schedule VI merely specifies interest on security deposit as properly incurred item of expenditure for the purpose of determining the 'clear profit ' of the licencee. The said clause does not and cannot by itself impose an obligation on the licencee to pay interest on security deposit. Should interest be paid, then it qualifies as an item of expenditure properly incurred. The High Court also erred in relying on Section 4 (2) of the . Section 4 (2) has no application where on account of contractual term or a statutory provision, payment of interest is not permitted. Section 4 (2) of the merely enlarges the 228 categories of cases mentioned under Section 4 (1). The said Section cannot override other statutory provisions or a contract between the parties. The non obstante clause under Section 4 (2) is restricted only to the provisions of Interest Act, 1948. It is submitted that under the billing practice prevalent with the Rajasthan Electricity Board the consumer has free use of electricity during the period between consumption of electricity and expiry of period after notice. During this period which varies from 2 to 2 1/2 months, the consumer in effect enjoys a credit facility. Therefore, if security deposit is demanded for three months, it is neither unreasonable nor arbitrary. As a matter of fact, the security demanded by the appellant Board is in the form of cash for one month and bank or insurance guarantee for two months. Therefore, it is all the more reasonable. In support of this, reliance is placed on Kistna Cement Works Tadepalli vs The Secretary APSEB, Vidyut Soudha AIR 1979 A.P. 291, B.R. Oil Mills, Bharatpur vs Assistant Engineer (D) R.S.E.B., Bharatpur, AIR , .Municipal Corporation for Greater Bombay vs M/s Devidayal Metal Industries, , Haryana Ice Factory vs Municipal Corporation of Delhi, AIR 1986 Delhi 78 and Southern Steel Ltd. vs The A.P. State Electricity Board, Hyderabad, AIR 1990 A.P. 58. On the question of the constitutionality of the provisions regarding non payment of interest and whether it is violative of Article 14, it is submitted: i)Article 14 does not mandate mathematical exactitude or scientific precision; ii)The mode and period of security should be related to the billing practice prevailing in Rajasthan Electricity Board. iii)The consumer with open eyes has entered into the agreement and has solemnly undertaken to abide by the condition regarding nonpayment of interest. He cannot resile from that condition. There is nothing inherently objectionable, nor is the condition illegal or void as opposed to public policy. Even assuming, the contract between the consumer and the Board is an adhesion contract it is not necessarily unconscionable. In this connection, reference is invited to Black 's Law Dictionary, 6th Edition, page 40. That passege has been cited with 229 approval in Central Inland Water Transport Corpn. vs Brojo Nath Ganguly. In such matters, relief is given to the party only if the contract is so unreasonable as to be unconscionable. In this connection reliance is placed on Gillespie Brothers Ltd. vs Roy Bowles Ltd. at 200 (g), Farmsworth on Contracts, 2nd Edition, 319 & 320 para 4.27. The rate of interest on security deposit cannot be equated with the rate of interest payable on fixed deposit because the nature and character of a security deposit is basically different from fixed deposit. This is clearly brought out by the Companies (Acceptance of Deposits) Rules, 1975. The said Rules expressly exempt security deposit in definition of Rule 2, clause (v) & (vi), In Jagdamba paper Industries case (supra). the rate of interest was based on a concession by the parties. The Court had no occasion to decide the rate of interest. That part of the judgment proceeds sub silentio. The argument based on surcharge levied for delayed payment is a non sequitur. If the provision for non payment of interest is valid and not arbitrary, it does not become arbitrary and unconstitutional because surcharge is levied at 2% per month. In fact, surcharge has not been challenged. Surcharge is attracted only if the bill is not paid within the due date. The submissions based on Sections 57 & 59 of the Supply Act in relation to security deposit proceed on a misconception of the nature and character of payment as a security deposit. The object of security deposit is to secure prompt payment of electricity bills. They are not intended to finance the Board 's transaction. Section 57 read with sixth Schedule is meant to ensure a reasonable return. expression 'charges ' in the Sixth Schedule clearly shows that security deposits are not included within the expression 'charges '. There is no mutual exclusivity between increase of tariffs and earning interest on security deposits, It is also incorrect to contend that prompt payees of electricity bills are treated on par with the defaulters and thus anequals are treated alike. The real test is, whether in the general application of law there is any discrimination. In support of this submission, the learned counsel placed his reliance on: The Collector of Customs, Madras vs Nathella Sampathu Chetty 230 ; , Vivian Joseph Ferreira vs Municipal Corporation of Greater Bombay , B. Banerjee vs Anita Pan [975] 2 774 and Fatehchand Himmatlal vs State of Meharashtra ; The last submission of the learned counsel is that a statutory provision may be struck down as unconstitutional only if it is palpably arbitrary and irrationality is writ large. Merely because the Court considers a particular provision to be unwise or undesirable, it is never struck down. The learned counsel fairly concedes that the enhanced security deposit could be calculated only on the average consumption of three months of the previous years. Mr. Altaf Ahmad, learned counsel supporting the arguments of Mr. Soli J. Sorabjee would urge: In this case, the consumers are those who use H.T. and E. H. T. lines. Section 49 (3) gives the clue that each Board can have its own scheme. Section 79 of the Supply Act speaks of the power to make regulation. Clauses (i) and (j) are relevant because they talk of principles governing the making of arrangements with licensees under Section 47 and other then licensees under Section 49. The industrial consumers constitute the majority user of the electricity amounting to 49.51 per cent. the transmission losses for 1992 93 alone are 22 per cent. Besides, the Board is also purchasing power from other corporations and States. Therefore, the demand for security deposit is fully justified and there is nothing arbitrary in not providing for interest. That is what is provided under clause 21 (a) of the agreement in relation to high tension supply. The consumption deposit cannot be equated to the deposit in a bank and interest could be demanded as of right. Mr. Kapil Sibal, learned counsel appearing for the Haryana Board which Board has now withdrawn payment of interest, has filed intervention application since the present day position of the Haryana Board is on a par with Rajasthan. Mr. R.K. Mehta, learned counsel for the intervenor on behalf of 231 the Orissa Electricity Board through his written submissions.urges that it may be that the regulations in the case of Andhra Pradesh, Utter Pradesh and Bihar Provide for payment of interest at a certain rate on the security deposit. However, the Rajasthan and Orissa regulations provide that no interest shall be payable on the securities furnished by the Board. In the impugned judgment the Division Bench has not given any cogent or valid reason for striking down Condition No. 20 of the General Conditions of the Rajasthan Electricity Board. The High Court had failed to appreciate the following factors while quashing the impugned clause of the regulations. Electricity is an item which cannot be sold and supplied immediately after generation. For the sale of electricity one has to take meter reading meant for the said purpose and, therefore, the Board sends the bill for particular duration. It is obvious that the reading of the meter could not be taken at every point of time but only for duration/period. In the process 2 1/2 months elapse. The Board does not charge any interest at least for 2 1/2 month from its consumers. At the same time, the Board needs finance for production, supply and other charges necessary for supply of electricity. The Board is thus obliged to take loans from various financial institutions. The consumers who are utilising electricity for 2 1/2 months without making any payment will be unjustifiably enriched at the cost of general public in the absence of security deposit. Further taking of advance money without interest for Providing other services in the market is a general practice. Therefore, a similar provision in the general conditions for supply of the Board cannot be treated as arbitrary or unreasonable. A consumer is not entitled to claim interest on his security deposit having regard to the following considerations. 1.The security deposit is furnished in consideration of the performance of the consumer 's obligation for obtaining the service essential to the life and the well being of community. The electricity supply is made to that consumer on credit withoutrequiring him to make instant payment. The billing time taken by the Board is for the benefit and convenience of the consumer as he saves additional expenditure on 232 account of instant or shorter billing time, possibly through electronic devices which will be included in the tariffs. 4.The public revenues Ire blocked in the generation, transmission and distribution of electricity for the performance of supply on which the Board pays interest in so far as they form part of the loans borrowed by the Board for performing the public service. On the return of the blocked moneys the Board gets no interest from the consumers. 5.The Board needs back its blocked money to carry out service with a reasonable recompense. 6.The Board is not essentially a commercial Organisation to which the consumer furnishes the security deposit to earn interest. Having entered into a contract with open eyes it is not open to the consumer to say that interest should be paid. The basis of supply of electricity and the conditions on which it is supplied being statutory, the provisions under the conditions of supply that the Board shall not pay interest on the security deposit has statutory basis and accordingly cannot be struck down as arbitrary on the basis of a commercial transaction governing a bank deposit. Therefore, it is submitted that regulation 7 of the Orissa State Electricity Board General conditions of Supply Regulations, 1981 providing that no interest would be payable on security deposit is just and reasonable and is not arbitrary or violative of Article 14 of the Constitution. Mr. Shanti Bhushan, learned counsel opposing the stand of Rajasthan Electricity Board submits that the only question in this special leave petition is whether Electricity Board is obliged to pay interest on the cash security deposits as the Board compels industrial consumers to secure against default in payment of electricity bills. In the first place, as laid down in Jagdamba Paper Industries (Pvt.) Ltd. vs Haryana State Electricity Board ; this Court has indicated that the security amount should bear the same interest as admissible on fixed deposit of scheduled banks. The interest rate on 10 per cent was decided not really on the basis of admission but on a positive finding. Apart from this, this Court has in several other writ petitions ordered interest at 12 per cent. 233 It is submitted that the scheme of Indian Electricity Rules of 1956 and the scheme of the Electricity Supply Act also show that the interest on security deposit is supposed to be payable. The Board is not entitled to use the deposits to augment its finances. They are meant only to secure the default in payment of the bills. Section 59 of the Supply Act indicates that the only condition in which the Board could raise the revenue is by adjustment of its tariff. Section 49 of the Act makes provision for the sale of electricity by the Board to persons other then licensees under the terms and conditions as the Board thinks fit. It can be seen from the definitions of the Sixth Schedule to the Supply Act that the scheme was meant to be applicable to licensees. The place of the licensees has been taken over by the Board. That is why clause 2 (b) (v) of Schedule VI of the definition of "clear profit" states that the interest on security deposits was to be a part of the expenditure properly incurred by licensees. Then again, the manner in which the accounts are to be maintained by the licensees also shows that the licensees have to make a provision for payment of interest on security deposits. The High court is right in relying on Section 4 of the Interest Act. The contract in the instant case is between a consumer, however, high he might be and a monopolistic public utility company. It is clearly an adhesion contract. This Court in Central Inland Water Transport Corporation vs Brojo Nath Ganguly has clearly held that an unreasonable term of an adhesion contract will not be enforced by the Court. Interest on security deposit is also admissible under equity or common law. Halsbury 's 4th Edn. 32, paragraph 106 at page 53 defines "interest" as the return or compensation for the use or retention by one person of a sum of money belonging to or owing to another. The Board is clearly in the position of a trustee in respect of this money since the money is deposited by the consumers in trust with the Board to secure the Board against default in payment of bills. The deposit of security is like the usufructory mortgage which is provided for in Section 76 of the Transfer of property Act. Section 76 G & H 234 provide that the mortgagee in a usufructory mortgage would have to keep account of the incomes received from the mortgagee in his use and would have to pay compensation for the benefit derived by the user of the mortgaged property. The position here is more or less similar. It is not correct to state that security is an advance payment. If it is so, it would amount to Board taking three months advance payment from the consumers. In such a case, the Board cannot disconnect the electricity until the period of three months is over. But the rules of the Board enable it to disconnect even if the consumer fails to pay his bills on the due date. Then again, a penal interests is charged in case of default. If it is in the nature of an advance payment there is no scope for charging 2 1/2 per cent penal interest. Lastly, it is submitted that even under English Law interest is payable on security for electricity as seen from Halsbury 's Volume 16 paragraph 129: "129. Giving of security. Security required under the Schedule to be Electric Lighting (Clauses) Act 1899 to be given to an electricity board (See the Electric Lighting (Clauses) Act 1899, Schedule, sections 25 (2), 27 (2), (3), and paras. 115, 118, ante.) may be by deposit or otherwise, and of an amount agreed or, failing agreement, determined by a magistrates ' court, and that court may deal with the caused of the proceedings and its decision is final and binding on all parties, (bid., Schedule, section 71; Electricity Act 1947, section 57 (2), 1 Sch 4, Part 111) Where security is given by way of deposit the party to whom it is given must pay interest at the rate of 4 per annum an every sop for each period of Six months during which it remains so deposited. (Electric Lighting (Clauses) Act 1899, Schedule, section 71 proviso; Decimal Currency Act 1969, section 10 (I)." UTTAR PRADESH STATE ELECTRICITY BOARD The question raised before the High Court was as to the rate of 235 interest. The respondent (U.P.State Electricity Board ) amended the rate of security deposit as Rs. 2 per K.V.A. On such deposit it paid only 3 per cent interest whereas on late payment of the bills it charged more than 24 per cent surcharge from the consumer. The appellants preferred writ petitions in so far as they were denied 12 per cent interest on the deposit taken from the consumers. The Division Bench of the High Court held: "These petitions are dismissed with a direction that in case the Supreme Court decided that the interest at a rate higher that 3% should be paid on such security and additional security deposit, the benefit of the same judgment shall also be extended to the petitioners herein without the necessity of any further proceedings being taken by the petitioners." Hence, the special leave petitions. Mr. G. Ramaswami learned counsel for the appellants would urge that Jagdamba 's case (supra) has decided that rate of interest. Therefore, that should govern. In a number of matters this Court has also ordered interest at 12 per cent. The same principle should apply to this case as well. 1.Security Deposit is a compulsory levy. The consumer has no option. 2.Even in contractual matters if the Board, which is a State, does not behave fairly, this Court can always interfere. 3.The Board cannot compel the consumer to make a security deposit without corresponding obligation to pay interest. Deposit does not contemplate appropriation. Prior to appropriation, what is the character of the deposit, requires to be determined. It is not the payment of money by way of 236 advance. As to the meaning of interest it could be gathered from the case in Riches vs West minister Batik Limited. 1947 Appeal Cases 390 at 400. In Union of India vs A.L. Rallia Ram ; this Court held that interest is awardable in equity. A distinction will have to be made between unreasonable and unconscionable. In Administrative Law mere unreasonableness is enough to set aside a contract while unconscionable relates to private law. If interest is not paid security deposit cannot be demanded as this will amount to unconscionable bargain. As to the meaning of unconscionability, Black 's Law Dictionary. (Fifth Edition) at page 1367 can be usefully referred to: "Basic test of "unconscionability" of contract is whether under circumstances existing at time of making of contract and in light of general commercial background and commercial needs of particular trade or case, clauses involved are so one sided as to oppressor unfairly surprise party. Division of Triple 7. Service, Inc. vs Mobil oil Corp., 60 Misc. 2d 720, , 201. Unconscionability is generally recognized to include an absence of meaningful choice on the part of one of the parties. to a contract together with contract terms which are unreasonably favorable to the other party. Gordon vs Crown Central Petroleum Corn., D.C. Ga., 423F. Supp. 58, 61. Typically the cases in which unconsionablity is found involve gross overall one sidedness or _gross one sidedness of a term disclaiming a warranty, limiting damages. or granting procedural advantages. In these cases one sidedness is often coupled with the fact that the imbalance is buried in small print and often couched in language unintelligible to even a person of moderate education. Often the seller deals with a particularly susceptible clientele. Kugler vs Romain, 58, N.J. 522, 237 As to the meaning of reasonableness it is stated in G.B Mahajan and Ors. vs Jalgaon Municipal Council and Ors. ; at 109. Under English Law relating to electricity supply as seen from Halsbury 's Vol. 16 at paragraph 129 it is clearly stated that interest on security deposit is payable. Therefore, all the more the reason why here also it must be held to be payable. Mr. Kapil Sibal, opposing the stand of Mr. G. Ramaswami arguers that there is no order of this Court adjudicating the rights of the Board on the consumer in respect of the validity of consumption security deposit being condition precedent for the supply of electricity by the Board as we II as the liability of the Board to pay interest to the consumer in respect of the consumption security deposit. In the absence of any such adjudication the question of Board being bound by the previous orders of this Court. does not arise. In cases where 12 per cent interest was awarded it was only by way of ad interim measure. The other orders are also not conclusive on this aspect. Therefore, the matter will have to be decided afresh in the instant cases. Far from being a compulsory levy, the consumption security deposit is not only a deposit in cash to safeguard recovery of electricity dues for the energy supplied to the consumer on credit but also a security towards payment or satisfaction of any money (For example, theft), which may become due and payable to the Board by the consumer. The obligation to pay interest to the consumer proceed on the assumption that the Board is keeping the security deposit and depriving the consumer of tile use of the money which is alleged to be earning interest with the Board. This assumption is not warranted for the followings reasons: 1, The cycle of billing demonstrates that in the very nature of things the consumer is supplied energy on credit. The security deposit is hardly sufficient to secure the payment to the Board by the time the formal bill by the Board is raised on the consumer. 2.The consumption security deposit indeed represents only part of he money which is payable to the Board at the end of the billing 238 cycle. ' The said amount can be appropriated at any time towards the payments that are due to the Board and reflected in the formal bill. 3.In the nature of billings cycle it is the Board which has to receive interest on the energy supplied to the consumers on credit. 4.The concept of interest earned on a fixed deposit is alien to the issue. The liabilities of the consumer increase on a daily basis depending on the level of supply and consumption. Therefore, the amounts due are liable to be appropriated forthwith. That is not possible where moneys are placed either on fixed deposit or a savings bank account. It is incorrect to contend that the amount is lying in trust with the Board. The amount lying with the Board could also be appropriated for satisfaction of any amount liable to he paid by the consumer for violation of any conditions of supply in the context of wide scale theft of energy and tempering with meters. Therefore, the security deposit serves not only to secure the interest of the Board but also serves as a deterrent on the consumer in discharging his obligation towards the Board. Under section 49 the Board is enabled to supply electricity upon such terms and conditions, as it thinks fit under Article 226 of the constitution, the Court is to conduct a limited scrutiny whether by imposing such a condition the Board has not acted as a private trader and there by shd off its public utility character. Should the Coust come to the conclusion that the Board has not acted as a private trader and tile nature of ' deposit has a rational relationship, the issue will fall outside the scope of judicial purview. Section 49 must be read alongwith Section 59. The contention that the Board can achieve a surplus by adjusting its credit does not flow from the language of Section 59. The requirement of consumption security deposit is a condition of supply. It has a direct bearing on the operation of the Board. Hence it is 'per se ' reasonable and constitutional. If there is a revision in the rate of tariff there has to be an upward revision of the consumption security deposit since it has a direct bearing on the level of supply in consumption of electricity. In October 239 1986, the tariffs in the State of Uttar Pradesh were adjusted upwards. The revision in the form of an additional security deposit with interest at the rate of 3 per cent was made in January 1987. These facts would suggest the rationale in the imposition of additional security deposit. This being a condition of supply no reasons need be given at the time of upward revision. Union of India vs A.L Rallia Ran ; relates to the award of interest by an Arbitrator. The nature of consumption security deposit is such that it represents the moneys of the Board. There is no relationship of debtor and creditor. There is no deprivation of property which alone will entail the consequences like payment of interest. The learned counsel has also filed a tabulated statement to show that the security deposit made by the appellant is 72.42 lakh for all industries while the affairs in electricity come to 965.73 lakh. A formal chart has been filed based on the figures for August. September and October 1991 to show that after the third month the consumption charges total to 45.09 lakh. While security that is offered is 15.95. The same is the position with reference to other industries as well concerning whom the learned counsel has filed a tabulated statement. This so to establish how the Electricity Board has supplied electricity on credit to the various consumers and the security deposit is hardly sufficient even for one month 's consumption. BIHAR SLP 11799 of 1989 The appellant (Bihar Electricity Board) provided 4 per cent interest per annum on security deposit. When this was questioned in C.W.J.C. No. 3000 of 1987 in the matter of Dhanbad Flour Mills, a Division Bench of the High Court was of the view that an interest at 4 per cent appeared to be unreasonable and directed the Board to examine the question of enhancement of the rate of interest. Similar directions were issued in another case. The appellant Board after examining the matter issued a Notification on 27th of May, 1988 and enhanced the rate of simple interest to 5 per cent per annum. This was because the amount of security deposit was kept in the savings account which earned 5 per cent interest which was passed on the consumer. The said notification was questioned before the High Court by seeking 240 a writ of mandamus claiming interest at the rate payable on fixed deposit by a nationalised bank in view of the decision by this court in Jagdamba 's case (supra). By the impugned judgment the High Court directed payment of interest on security deposit at the rate payable on fixed deposit by nationalised banks. Aggrieved by this judgment the Bihar State Electricity Board has preferred the special leave petition. Mr. G. L. Sanghi learned counsel appearing for the Bihar Board draws our attention to clause 15.3 of the tariff notification and submits that the consumption security deposit is not only for the supply of energy on credit but also for satisfaction of any money payable by him. If the consumer does not pay the dues in time the arrears of consumption charges will have to be adjusted against the security deposit. Therefore, the security deposit can never be kept in bank under fixed deposit. This is the reason why the amount is kept in savings bank account and whatever interest is earned thereon. that is passed on to the consumer. Therefore, the High Court was not right in awarding a higher rate of interest. In other respect, the learned counsel adopts the argument of the other learned counsel appearing for the various Boards including the contention that Jagdamba 's case (supra) did not lay down the rate of interest. Normally, in market transaction when any one supplies on credit to a consumer a guarantee is taken for the payment on dues. Such a guarantee may be in the shape of a bank guarantee, fixed deposit. Similarly, the Board when it supplies electricity on credit it keeps tile security for the amount of supply of the electricity. According to Board 's standing order No. 433 dated 31.12.74, dues at any time are not allowed to exceed amount of security deposit and adjustment is to be made against the security deposit after the disconnection of supply. Therefore, it is not correct to state that the security is not adjusted towards the bill and is kept in tact. Section 24 of the Electricity Act is the only provision to ensure payment is indicated in Bihar State Electricity Board Patna vs M/s. Green Rubber Industries and other [1990] 1 SCC 731. In meeting these arguments it is submitted by Mr. M.P. Jha, learned counsel for the respondent that the stand of the Board in 241 making payment of interest at 4/5 per cent is clearly arbitrary. The security aspect of the Board requirement can easily be satisfied by the board resorting to liquidation of security deposit. As a matter of fact, the security deposit was never adjusted by the appellant Board. As a result large amounts were kept without investing them in fixed deposit. Learned counsel for the respondent relies on the orders issued by this Court and submits that the question of interest is settled by the ruling in Jagdamba 's case (supra). Section 24 is of no help for payment of a lower percentage of interest. W.P. No. 578 of 1987 In this writ petition, under Article 32 of the Constitution, the challenge is to the increase of security deposit for L and H power consumers above 100 B.H.P. It has been increased from Rs. 170 to Rs. 200. No reason whatever has been assigned for such an increase of security deposit. That will he bad in law as laid down in Central Inland Water Transport Corporation Limited (supra). This is the argument of Mr. Gobind Mukhoty. 'This is countered saying that when there is an increase in tariff the security deposit also is liable to be increased. PUNJAB W.P. NO. 1317 of 1990 In this writ petition, the challenge is to the validity of Sections 49 and 79 of the Supply Act. According to the respondent (Punjab State, Electricity Board), the writ petition is not maintainable. A challenge to the imposition of advance consumption of deposit does not involve any fundamental right. The Punjab State Electricity Board is a licensee of the State of Punjab. The electrical energy is generated through hydro as well as thermal plants for ultimate sale to consumers. 50% of powers generated through hydro while the remaining through thermal plants which consume coal/oil. The coal companies and those major suppliers of power plants are demanding cost of coal in advance. On these advances no interest is payable to the Board. Therefore, while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers also use and consume electricity 242 on credit ranging from 2 to 3 months depending upon the category of consumers. To off set part of the amount that the consumer owes to the Board constantly and also to ensure timely payment of advances by the Board to its suppliers an advance consumption deposit is insisted upon before commencing supply to the consumer. If this is not so taken the Board will be left with no other option than to increase the tariff. This advance deposit cannot be termed as a fixed deposit as the amount cannot be utilized against non payment of dues from consumers. Besides,the consumers can also ask for the refund. Sections 49(1) and 79 (j) cannot be termed as arbitrary. In fact, this Court has upheld the validity of Section 49 (1) in Jagdamba 's case (supra). Lastly, it is submitted that the Board is generating electricity and each unit so generated costs the Board rupee one per unit. The Board is selling at an average rate of 50 paisa per unit to the consumer which includes the agricultural sector. Therefore, the amendment to clause 23 of abridged conditions of supply requiring to pay advance consumption deposits is perfectly reasonable. Mr. P.P. Rao, learned counsel appearing as intervenor on behalf of Calcutta Electricity Supply Corporation supplements the submissions of Mr. Soli J. Sorabjee. The deposit though called security deposit is really an adjustable advance payment of consumption charges. The amount is revisable from time to time depending upon the average consumption charges on the basis of actual consumption over a period. The true nature of transaction in these cases is one of advance for consumption of electricity estimated for a period of three months subject to adjustment /revision, if necessary. Such an advance is liable to be made good and kept at a stipulated level from month to month. It is open to the consumer to permit adjustment of the advance in the first instance. Thereafter, make good the shortfall in consumption charges and the security deposit before actual disconnection of supply which takes at least about three months. In short, it is in the nature of a running account. The security deposit does not remain in tact like a fixed deposit but gets depleted day after day depending on the extent of consumption More often than not, the consumption charges and other dues exceed the security deposit. That necessitates calling for 243 additional advance to make up a shortfall. In the absence of any usage or contract or any provision of law requiring payment of interest is not payable for wrongful detention of money. In this case, there is no wrongful detention of even. Section 4 (2) of the Interest Act has no application to this deposit. When electricity supply is duly made with a consequential liability to pay for each day 's consumption, the so called security deposit is not a deposit in the real sense for the consumers to claim the benefit of Interest Act. We will now proceed to consider the correctness of the above submissions with reference to the following aspects: (i) Whether Section 49 is bad for want of guidelines. (ii)The nature of consumption deposit, irrespective of the nomenclature by which it is called. (iii)(a) The liability of the Electricity Board to pay interest. (b) Whether the clause in the terms of supply providing for nonpayment of interest is unconstitutional or arbitrary. (iv)The demand for additional consumer deposit Whether valid? VALIDITY OF SECTION 49 The law relating to electricity is principally contained in two Acts. (i)The of 1910 (hereinafter referred to as the "Electricity Act"). 'Ms provides for grant of licences in relation to supply of electricity and the projects of undertakings. It also provides for supply of electricity including the protective clauses. (ii)The of 1948 (hereinafter referred to as the "Supply Act") provides for constitution of State Electricity Boards, the powers and duties of such Boards. Certain important 244 provisions of the Act may now be seen. Section 2 is interpretation Section, Under Section 2 (2) the Board means a State Electricity Board constituted under Section 5. Under Section 2 (10) states that regulation means regulations made by the Board under Section 79. Section 5 deals with the constitution and composition of State Electricity Board. Section 49 is the provision for sale of electricity by the Board to persons other than the licensees. Sub section (1) of the said Section commences with the words "Subject to the provisions of this Act and of Regulations". This means if there are any provisions regulating the Board in the matter of supplying electricity to any persons not being a licensee then the supply by the Board will he subject to all those provisions. It has been so laid down in Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd., 28 at page 1136: "The expression "Subject to the provisions of this Act" merely that if there are any provisions regulating the Board in the matter of supplying electricity to any person not being a licensee, then the supply by the Board will be subject to those provisions. No provision has been brought to our notice which regulates the Board in the matter of the charges which it may fix for the supply of electricity." This Court had occasion to deal with the scope of the said Section and Section 59. In Hindustan Zinc Ltd. vs Andhra Pradesh State Electricity, Board ; at pages 317 319 it has been observed thus: "Section 49 makes provision for the sale of electricity by the Board to persons other than licensees. Sub 245 section (1) starts with the words "Subject to the provisions of this Act and of regulations, if any, made in this behalf '. This means that the provision made therein is subject to other provisions of the Supply Act and the regulations. It then proceeds to say that the Board may supply electricity to any person not being a licensee upon 'such terms and conditions as the Board thinks fit and may for the purposes of such supply frame 'uniform tariffs '. Sub section (2) then enumerates several factors which the Board is required to 'have regard to ' in fixing the uniform tariffs. The meaning of the expression have regard to is well settled, it means that the factors specifically enumerated shall be taken into account while performing the exercise which in this case is fixation of the uniform tariffs. Ordinarily, therefore, uniform tariffs are required to be framed by the Board for making such supply. Sub section (3) then proceeds to say that nothing in the earlier enacted provisions shall derogate from the power of the Board, "if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person", having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required an d any other relevant factors '. Sub section (4) then says that in fixing the tariffs and terms and conditions for the supply of electricity, 'the Board shall not show undue preference to any person. , In other word, subsection (4) provides against any unreasonable dis crimination in fixing the tariffs and terms and conditions for supply of electricity. The power of fixation of tariffs in the Board is provided in this manner by Section 49 of the Supply Act which requires the fixation of uniform tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors, providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixin the tariffs. 246 The next important provision is Section 59 of the Supply Act. For appreciating the argument based on Section 59, it is necessary to bear in mind the distinction in Section 59 as it stood prior to 1978, as amended by Act 23 of 1978 and finally as amended by Act 16 of 1983, quoted earlier. Prior to 1978, Section 59 required the Board, as far as practicable and after taking credit for any subventions from the State Government under Section 63, not to carry on its operations under this Act at a loss and for this purpose, it was empowered to adjust its charges accordingly from time to time. Under the provision as it then existed, the main thrust was to avoid the Board incurring any loss and for that purpose, it could adjust its charges accordingly from time to time. Section 59 as amended by Act 23 of 1978 required the Board, after taking credit for any subventions from the State Government under Section 63, to carry on its operations under this Act and to adjust its tariffs so as to ensure that the total revenues in any year after meeting all expenses properly chargeable to revenue including those specified,left such surplus as the State Government specified from time to time. The shift was, therefore, towards having a surplus. as the State Government specified from time to time. Sub section (2) then provided guidelines for the State Government in specifying the surplus under sub section (1) and mentioned the factors to which regard was to be had for this purpose. The effect of the amendment made in Section 59 by Act 16 of 1983, which came into effect from April 1, 1985, was to provide for a minimum surplus, of three per cent or such higher percentage as the State Government is to specify in this behalf. In other words, prior to 1978 amendment, the requirement from the Board was towards ensuring a surplus as specified by the State Government, and after the 1983 amendment the Board is required to ensure a surplus of at least three per cent unless the State Government specifies a higher. sur 247 plus. This is the scheme of Section 59 and it is Section 59 as amended by 1978 Act but prior to its amendment by the 1983 Act, with which we are concerned in the present case. It cannot be doubted that Section 59 requiring the Board to adjust its tariffs for the purpose of Board 's finance is to be read along with Section 49 which provides specifically for fixation of tariffs and the manner in which that exercise has to be performed while dealing with any question relating the revision of tariffs. into force from April 1, 1985, is that the Board entitled to adjust its tariffs to ensure generating a surplus of not less than three per cent even without such specification by the State Government and when the State Government specifies a higher surplus, then the Board must ensure generating the higher specified surplus. This is, of course, subject to the accepted norm of the Board acting in consonance with its public utility character and not entirely with a profit motive like that of a private trader. The pre 1978 concept of the Board 's functioning to merely avoid any loss is replaced by the shift after 1978 amendment towards the positive approach of requiring a surplus to be gener ated, the quantum of Surplus being specified by the State Government, with a minimum of three per cent surplus in the absence of the specification by the government of a higher surplus, after the 1983 amendment. This construction made of Section 59, as it stood at different times in Govinda prabhu case ; indicated earlier cannot be faulted in any manner. In Govinda Prabhu case the same argument which is advanced before us was expressly rejected. We are of the same view. " The next Section is Section 79 which talks of power to make 248 regulations. Clause (j) deals with the principles governing the supply of electricity by the Board to persons other than the licensees under Section 49. In accordance with this, each of the Boards has framed regulations. All consumers are required to execute agreements governing the supply of energy. The attack against Section 49 is that it does not contain any norm of guideline with regard to framing of terms and conditions for the supply of electricity and in particular, the demand of payment of interest on the amounts due to the Board. Further, the principle of fairness of action has not been explicitly set out so as to make it a visible guide. The words occurring in the Section "as the Board thinks fit" must be construed as "reasonably thinks fit". We are unable to countenance this argument. A careful reading of Section 49 clearly discloses as was noted in Hindustan Zinc Ltd. vs A.P.S.E.B. ; at 317 sub section (1) of the said section starts with the words "Subject to the provisions of the Act and all regulations, if any, made in this behalf '. Therefore, the Board has to conform to the various provisions of the Act and the regulations. Section 49 contains two powers: 1. To prescribe terms and conditions of supply; and 2. fix the tariff. No guidelines are required in this regard. In Jagdamba Paper Industries Pvt. Ltd. vs Haryana State Electricity Board ; at 513 14 it was pointed out as follows: "We are of the view that the Board has been conferred statutory power under Section 49 (1) of the Act to determine the conditions on the basis of which supply is to be made. This Court in Bisra Stone Lime Company Ltd. vs Orissa State Electricity Board ; , took the view that enhancement of rates by way of surcharge was well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act. What applied to the tariff would equally apply to the security, that being a condition in 249 the contract of supply. Each of the petitioning consumers had agreed to furnish security in cash for payment of energy bills at the time of entering into their respective supply agreements. There was no challenge in these writ petitions that the demand of security at the time of entering into supply agreements has to be struck down as being without jurisdiction. Section 49 (1) of the Act clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit. In exercise of this power the Board had initially introduced the condition regarding security and each of the petitioners had accepted the term." (Emphasis supplied) Where, therefore, under Section 49 read with Section 79 (j) regulations are made, the validity of the regulations could be examined by the Court, whether they are reasonable or not. In Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State Electricity Board AIR 1990 Andhra Pradesh 58 at 66 67, it was observed: "Before we proceed to deal with the rival contentions, it would be appropriate to notice the scope of judicial scrutiny by this Court in such matters. Acting under article 226 of the Constitution, this Court does not sit as an appellate authority over the Electricity Board. Indeed, the Act has not chosen to provide an appeal against the terms and conditions under S.49. The jurisdiction exercised by this Court under article 226 is supervisory in nature. It is to ensure the observance of fundamental right the rule of law, and to keep the authorities within their bounds. Undoubtedly, the Electricity Board is a 'State ' within the meaning of article 12 and hence it is subject to Parts III and IV of the Constitution. The scope of enquiry, therefore, would be to examine whether the power conferred 250 upon the Board by S.49 of the Act has been exercised so unreasonably and arbitrarily that interference by this Court is called for. For the purpose of this enquiry it is not necessary for us to go into the question whether the terms and conditions notified under S.49 are statutory, in nature or not. We shall proceed on the assumption that they are not statutory. We shall also proceed on the assumption that the terms and conditions notified under section 49 ought to be reasonable, in the sense that they must be related to the object and purpose for which they are issued. We are equally aware that the power under section 49 cannot be allowed to be used for oblique purposes, or for purposes unrelated to the one sought to be achieved by a given condition. " In M/s Mills, Bharatpurv Assistant Engineer(D) R.S.E .B. ,Bharatpur AIR at 109, it was observed: "Where demand for deposit of cash security for one month 's estimated consumption charges and bank security equal to two months estimated charges as contemplated by Regulation 20 read with the Schedule theret o was made by the Electricity Board from a consumer of high tension electricity, the demand could not be said to be unreasonable and the consumer would not be entitled to continuation of the energy under Sec. 24 of the Electricity Act on his failure to deposit such security, even if no agreement had been entered. into between the consumer and the Board after the commencement of high tension supply. Once the supply for electricity had commenced the consumer was bound by the terms and conditions of supply contained in the Regulations. Further, in such a case, merely because the Board did not encase or could not encash a small portion of the security deposited in the form of National Saving Certificates before coming into force of the Regulations, it could 251 not be said that the demand of cash security in the form of Bank guarantee by the Board under the Regulations was unreasonable. furthermore, the demand of security from the consumer which was in accordance with the Regulations framed by the Board could not be said to be unreasonable merely because no interest is paid on the cash security deposited by the consumer. " In other words, the terms and conditions notified under Section 49 must relate to the object and purpose for which they are issued. Certainly, that power cannot be exercised for a collateral purpose. In this view, we hold Section 49 as valid. NATURE OF CONSUMPTION SECURITY DEPOSIT Each of the Electricity Boards before us is a State within the mening the meaning of Article l2 the Constitution of India. The Boards are different from licensees. (Emphasis supplied) Each of the Board has framed the tern is and conditions of supply. One such condition relates to security deposits. Such a deposit varies from Board to Board. For example, under the terms and conditions notified by Andhra Pradesh Electricity Board under Condition No. 28. 1.1 the consumer is required to deposit with the Board a sum in cash equivalent to estimated three months consumption charges. In the case or Rajasthan, the security is in the form of cash for one month and bank or insurance guarantee for two months. The legislative Sanction behing the power of the Board to direct a consumer to furnish security may be examined. It has already been seen that the Supply Act is complementary to the Electricity Act, 1910. Section 26 of the supply Act states that the Board shall have all the powers and obligations of a licensee under the Electricity Act. And this shall be deemed to be a licence of the Board for the purpose of the Act. Under the regulations framed by the Board in exercise of powers of Section 49 read with Section 79 (j) the consumer is only entitled and the Board has an obligation to supply energy to the consumer upon such terms and conditions as laid down in the regulations. If, therefore, the regulations prescribed a security deposit that will have to be complied with. It also requires to be noticed under clause (6) of Schedule II of 252 the Electricity Act that the requisition for supply of energy by the Board is to be made under proviso (a) after a written contract is duly executed with sufficient security. This, together with the regulations stated above, could be enough to clothe it with legal sanction. In cases where regulations have not been made Rule 27 of the Rules made under the Electricity Act enables the adoption of model form of draft conditions of supply. Annexure VI in clause 14 states that the licensee may require any consumer to deposit security for the payment of his monthly bills for energy supplied and for the value of the meter and other apparatus installed in his premises. Thus, the Board has the power to make regulations to demand security from the consumers. The next question will be: what is the object in demanding security? The deposit though called security deposit is really an adjustable advance payment of consumption charges. The payment is in terms of the agreement interpreting the conditions of supply. This security deposit is revisable from time to time on the basis of average consumption charges depending upon the actual consumption over a period. This is the position under the terms of supply of energy with reference to all the Boards. As a matter of fact, electricity is supplied in anticipation of payment. In almost every case it takes nearly 2 1/2 months for the recovery of the amount before action for disconnection could be taken. We will give one illustration as is in the case of Rajasthan. The following.is the billing cycle: (a) Consumption period 30 days (b) Period consumed after taking the meter readings to issue bills. 10 days (c) Period allowed for payment 17 days (d) Notice for disconnecting 253 supply if consumer fails to deposit energy bill in 7 days time. (e) Period taken in actual disconnection after expiry of notice. 10 days Total: 74 days In practice, some time is also taken between the period allowed for payment and the notice of disconnection. At the same time, there is no obligation that the consumer must use only a particular quantum of electricity. He could even consume more than the average consumption. The Board after 2 1/2 months recovers amount for the electricity supplied by it. It could charge late surcharge in case of high tension tariff after the expiry of the said period. Thus, it will be clear that the true nature of the transaction in these cases is one of advance payment of charges for consumption of electricity estimated for a period of approximately three months. Such an advance is liable to be made good and kept at the stipulated level from month to month. It is open to the consumer to permit adjustment of the advance in the first instance. Thereafter, he could make good the shortfall in consumption charges and the security deposit before actual disconnection. Actually speaking, it is only after three months the disconnection takes place. Hence, it is like a running current account. The cycle of billing by the Board demonstrates that in the very nature of things, the consumer is supplied energy on credit. The compulsory deposit in the context of billing cycle is hardly adequate to secure payments to the Board by the time the formal bill by the Board is raised on the consumer. In one sense, the consumption security deposit represents only a part of the money which is payable to the Board on the bill being raised against the consumer. Thus, the Board secures itself by resorting to such deposit to cover part of the liability. For supply of electricity the Board needs finance for production, supply and other charges necessary for supply of electricity. For this purpose, it takes loans from various financial institutions. This is best 254 illustrated if one looks at the transactions of Punjab Electricity Board where electric energy is generated through hydro as well as thermal plants for ultimate sale to the consumers of the total power generated about 50 per cent is through hydro plants. The remaining energy is generated through thermal power plants which are operated on coal/ oil. Due to limited hydro resources within the State of Punjab the dependency on power on thermal plants is on the increase. The present requirement for working of thermal plants is more than 52 lakh tonnes of coal per annum. In addition, 60 thousand kolo litre of furnace oil is required. The coal companies/Coal India Limited together with major suppliers of power plant like M/s. BHEL demand cost of coal/ spares/projects in advance for the supply of material. The Board is also required to purchase power from Central projects N.T.P.C., N.H.P.C. in order to meet the demand for power by the consumers. For purchase of such power again advance payment are made by the Board. On such advances the Board is not paid any interest. The effect is, the Board is obliged to bear the liability of hundreds of crores of rupees per annum. It has no option but to pay the charges and deposits in order to keep the power available at a level to meet with the demand of the consumers. It is the case of the Board that it has opened letters of credit by making advance deposits in favour of National Thermal Power Corporation and the suppliers. Coal India Limited has also asked the Board to open revolving letters of credit in favour of Coal companies/Coal India Limited. Despatch of coal is only against the letter of credit. From the above, it is clear that while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers, the consumers use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers. To off set part of the amount the consumer owes to the Board continually to ensure timely payment of bills by the Board to its suppliers, the advance consumption deposit is required to be kept with the Board before commencing supply to the consumer. The clauses in the contract in relation to conditions of supply of electric energy enable the Board to adjust the bill against such deposits. Therefore, this is not a case of mere deposit of money as in commercial transaction. In demanding security deposit it is open to the Court to take note of pilferage as laid down in Ashok Soap Factory vs Municipal Corporation of Delhi J.T. at page 137: 255 ". . The variation in the electricity consumed by different consumers indicated that the charge of pilferage of electricity and gross under utilisation or consumption of electricity compared to the sanctioned load was not without foundation. . The meaning of he term "deposit" is given in Corpus Juris Secundum, Vol. quoted in Davidson vs U.S., CCA.Pa., , 752 as follows: "In the sense of an Act. A deposit has been described as a mere incident of custody, and, in its ordinary signification, implies something more than mere possession, negatives all idea of loan with contemplation of use for profit, and has been defined as an act by which a person receives the property of another, binding himself to preserve it and return it in kind; the act of one person giving to another, with his consent the possession of personal property to keep for the use and benefit of the first or of a third party. It may mean a permanent disposition of the thing placed or deposited, or a mere temporary disposition or placing of the thing. In these circumstances, we conclude that the object of security deposit is to ensure proper payment of bills. Three months ' security deposit cannot be characterised either unreasonable or arbitrary. This Court had occasion to point out in Jagdamba Paper industries Pvt. (supra) at paragraph 10 which reads as under: "We agree however, on the facts placed that the stand of the Board that a demand equal to the energy bill of two months or a little more is not unreasonable. Once we reach the conclusion that the Board has the power to unilaterally revise the conditions of supply, it must follow that the demand of higher additional security for payment of energy bills is unassailable, provided 256 that the power is not exercised arbitrarily or unreasonably." Several High Court decisions also had taken this view as seen from K.C Works vs Secretary APSEB. Vidyut Soudha AIR 1979 Andhra Pradesh 291 at 294: "The reasonableness of such a requirement is explained by the Board in its counter in W.P. No. 2359/ 75 out of which W.A. No. 156 of 1977 arises. In the counter it was stated as follows: "The consumer is billed for such month separately. The consumers electricity consumption during the month is billed at the end of the succeeding month and 30 days time is given to him for payment of the bill. If he does not pay the bill his supply is liable to be disconnected after giving one week 's notice under Section 24 of the . Meanwhile he will be consuming the power. So by the time the supply is disconnected to a defaulting consumer the would have consumer energy for 3 months. The Board 's interest requires that there should be some protection by way of security of advance payment in respect of the consumption of this three months period. " This is how the Board sought to explain the reasonableness of the requirement of security representing three months average consumption charges. Nobody can say that this is unreasonable. For three months a consumer can go on consuming electrical power without paying any charges. It is therefore, eminently reasonable for the Board to require the consumer to furnish security for three months charges. Therefore, we are satisfied that the requirement of security for three months consumption charges is reasonable. " At page 295 it was observed thus: 257 "As a matter of fact it may be that the writ appellant and the writ petitioner before us are prompt in paying their electrical dues. but the Board alees with lakhs and lakhs of consumers and it should have a uniform policy in demanding security. It cannot make a dis tinction or discrimination from one consumer to another. That is why a uniform policy has been laid down by incorporating it in the conditions aforesaid. For these reasons we are satisfied that the requirement of security for three months average consumption charges by way of cash deposit is reasonable. " In Municipal Corporation for Greater Bombay vs M/s D.M Industries at 256 it was observed thus: "This brings us to the last argument advanced by Mr. Hidayatullah that Clause 12 of the draft agreement is arbitrary and unreasonable. The argument was that the power to impose conditions cannot be exercised to impose unreasonable conditions and it must also be ascertained whether the condition achieves the object for which it is imposed. On principle, the proposition is undisputable. Clause 12 which can be described as unreasonable and whether this Clause has no nexus with the object of the Act and the Rules. The argument ,appears to be that if the object of security is to secure payment of bills, then insistence on cash deposits would be unreasonable because the object could also be served by furnishing of any security and it is said that the consumer was willing to furnish a bank guarantee. In addition, it is urged that the period of. consumption for which these security is required should not exceed two months and, therefore, the determination of three months is arbitrary. " In Haryana Ice Factory vs Municipal Corporation of Delhi AIR 1986 Delhi 78, It was held thus: "Also, the demand of the security was corelated to the 258 consumption Pattern of the consumers and to cover the energy charges from the date of its consumption till the date of ultimate disconnection as a result of non payment of the changes due. The court cannot enter into mathematical calculations to come to a conclusion that in stead of three months it should be 21/2 months. The fixing of the period of security equal to energy consumption of three months is reasonable. It may be that the Haryana Electricity Board has fixed the period of security deposit equal to the amount of energy consumed for a period of two months but that would depend upon the billing cycle adopted by the Haryana State Electricity Board. " In Southern Steel Ltd. Hvderabad V. The A.P. State Electricity Board AIR 1 990 Andhra Pradesh 58 at pages 68 69 it was observed: "It is also stated by the Board that huge sums are required by it as rotating capital; that it borrows large amounts from organisations like L.I.C. and Banks; that it pays interest to them, and that in such circumstances it is well entitled to require the consumer to co operate by paying their bills regularly, by giving security deposits, and by conforming to the terms and conditions of supply. It is argued that this consideration was also one of the bases of condition No. 28. We do not think it necessary to express any opinion on this question, though the truth of the matter cannot be denied. There are two views upon the matter. The petitioners say that the interest burden should be reflected in the tariffs, while the Board says that interest burden can be reflected in consumption deposits, and not necessarily in tariffs. All that can say is that there no hard and fast rule in this behalf. The interest burden can be reflected either in tariffs, or can be sought to be set off by calling upon the consumers to make deposits. In this case, however. It is unnecessary to go into this aspect, since the requirement of three months deposit, in our opinion, cannot be said to be unreasonable and unjustified having regard to the facts mentioned above. It cannot be said that the said condition is so unreasonable and. arbitrary as to call for interference by this Court under article 259 226 of the Constitution. We reiterate that even if this court comes to the conclusion that the deposit should not be 3 months, but 2 months 7 days, or 2 1/2 months, it would not be entitled to interfere in the matter, not being an appellate authority. It cannot substitute its own opinion for the opinion of the Board. It can interfere only when the exercise of power is shown to be arbitrary, and unrelated to the object sought to be achieved. " We are in agreement with the above extracts. The liability of Electricity Board to pay interest on Security Deposit: Now, we come to the crucial question as to whether interest is payable on security deposit or advance consumption deposit. We will examine from the following angle: (a) The scheme of Electricity Acts. (b) Schedule VI of the Supply Act. (c) (d) Equity or Common Law. (a & 6) Scheme of Electricity Acts & Schedule VI of Supply Act: It is the submission of Mr. Shanti Bhushan, learned counsel appearing for the respondent against Rajasthan Electricity Board that the scheme of the Electricity Act and Supply Act together with the rules suggest the payment of interest. The Board is 'not entitled to utilize the security deposits for augmenting its finances as they are meant to secure the Board against default in payment of the bills. The correctness of this argument may now be seen: There is no statutory provision which casts an obligation on the Board to pay interest on security deposit. However, reliance is placed on model form of draft conditions of supply as is found in Annexure VI, traceable to Role 27 of Indian Electricity Rules, 1956. Clause 14 relating to security deposit of the said Annexure reads: 260 ". Interest at the rate of per cent per annum will be paid by the licensee on deposits exceeding Rs. 251/ ". (Emphasis supplied) The model form is applicable only to a licensee as defined in Section 2 (4) of the Electricity Act. Though Rule 27 prescribes a model form it is not compulsory,even for a lincesee to adopt the model condition of supply. This is because Rule 27 itself Stipulates the model conditions of supply contained in Annexure VI, may with such variations as the circumstances of each case require, be adopted by the licensee. " Therefore, there is an option available to adopt with such modifications. In such a case, the adoption of the model form becomes permissive. In this connection, Section 26 of the Supply Act, to which we have made a reference earlier, must be looked at. Though the Board is to have powers and obligations of a licensee under the Electricity Act, the second proviso to this Section assumes importance. It reads: "Provided further that the provisions of Clause VI of the Schedule to that Act shall apply to the Board in respect of that area only where distribution mains have been laid by the Board and the supply of energy through any of them has commenced." Second proviso of the Supply Act leads us to Schedule VI. This Schedule has been framed in exercise of powers under Sections 57 and 57A. In defining "clear profit" paragraph (2) of clause XVII, Item (v) makes a reference, as interest of security deposits which is a part of expenditure properly incurred by the licensee. From this it is impossible to hold that this clause imposes an obligation on the licensee to pay interest on security deposits. All that would mean is, if interest is paid then it qualifies as an item of expenditure properly incurred. This is the position with regard to licensee. But this cannot apply to the Board, which as stated above, is not a licensee. For the same reason Item L 1 (c) of Form IV of the Electricity Rules relating to interest paid and accrued on consumers ' security deposits is of no avail because that relates to the manner of keeping accounts by the licensee, not being applicable to a Board. 261 In the above premises, it follows that there is nothing to indicate under the scheme of the Electricity Act or Schedule VI of the Supply Act that interest must be paid on the security deposit. (c) : applicability. As regards the applicability of , we find that the Division Bench of Rajasthan High Court has erred in holding that it is applicable. Section 4(2) (g) of the of 1978 reads as under: "Notwithstanding the aforesaid and without prejudice to the generality of the provisions of sub section (1), the Court shall in each of the following cases allow interest from the dates specified below to the date of institution of the proceedings at such rate as the Court may consider reasonable, unless the court is satisfied that there are special reasons why interest should not be allowed namely: (a)Where money or other property has been deposited as security for the performance of an obligation imposed by law or contract from the date of the deposit. " This section has no application to a case where on account of a contractual term or a statutory provision payment of interest is not permitted, A careful reading of Section 4(2) of the would disclose that it merely enlarges the category of cases mentioned in Section 4(1). Even otherwise, there is nothing to indicate that section 4(2) could override other statutory provisions or a contract between the parties. No doubt, Section 4(2) contains a non obstante clause. But such a clause is restricted to the provisions of and cannot extend to other laws or a contract between the parties. Accordingly we overrule the judgment of Rajasthan High Court which holds the is applicable. 262 The deposit made cannot be equated to a fixed deposit. It has already bee In seen that in the case of daily supply of electricity, there is a consequential liability to pay for each day 's consumption of electricity. To ensure that payment, the security deposit is furnished. Hence ' it cannot be equated to a deposit at all. It is in the nature of a running current account. (d) Position in Equity or Common Law If this be the position, could interest be claimed either on equity or common law? The argument on behalf of the consumers is, if money belonging to any person is used by someone else he is oblilsed to pay interest for the period of its user. Halsbury 's Volume 32 (page 53 para 106) defines "interest" as "the return or compensation for the use or retention by one person of a sum of money belonging or owed to another". Therefore, it is contended that the Board is clearly in the position of a trustee in respect of this money since the money is deposited by the consumer in trust with the Board to secure the Board against default in payment of interest. The object of the deposit is to secure the payment of consumption charges. These charges may very depending upon the daily consumption, depending on the level of supply. The amount due by way of consumption charges would also be liable to be appropriated. Therefore, it is incorrect to state that the Board is a trustee. The relationship between the Board and consumer is not that of a trustee and a beneficiary but a depositor and deposited. This is not even a case of a constructive trust under Section 90 of the Indian Trust Act, since no advantage is gained by the Electricity Board in derogation of the rights of the consumer in, view of what we have observed above. Strictly speaking, the word "interest" would apply only to two cases where there is a relationship of debtor and creditor. A lender of money who allows the borrower to use certain funds deprives himself of the use of those funds. He does so because he charges interest which may be described as a kind of rent for the use of the funds. For example, a bank or a lender lending out money on payment of interest, In this case, as already noted, there is no relationship of debtor and creditor. We may now refer to Halsbury 's Vol. 32 para 108: 26 "108. When interest is payable at common law. At common law interest is payable (1) where there is an express agreement to pay interest; (2) where an agreement to pay interest can be implied from the course of dealing between the parties or from the nature of the transaction or a custom or usage of the trade or profession concerned; (3) in certain cases by way of damages for breach of a contract (other than a contract merely to pay money) where the contract, if performed, would to the knowledge of the parties have entitled the plaintiff to receive interest. Except in the cases mentioned, debts do not carry interest at common law. " Consumption security deposit does not fall under any of categories mentioned above. Para 109 says: "Equitable right to interest. In equity interest may be recovered in certain cases where a particular relationship exists between the creditor and the debtor, such a mortgagor and mortgagee, obligor and obliged on a bond, personal representative and beneficiary, prin cipal and surety, vendor and purchaser, principal and agent, solicitor and client, trustee and beneficiary, or where the debtor is in a fiduciary position to the creditor, Interest is also allowed on pecuniary legacies not paid within a certain time, on the dissolution of a partnership, on the arrears of an annuity where there has been misconduct or improper delay in payment, or in the case of money obtained or retained by fraud. It may also be allowed where the defendant ought to have done something which would have entitled the plaintiff to interest at common law, or has Wrongfully prevented the plaintiff from doing something which have so entitled him." This Paragraph is also inapplicable to the present case. 264 Even a case of wrongful detention of money cannot arise. In Bengal Nagpur Railway vs RuttanjiRamji AIR 1938 PC67 the question arose whether interest was payable on damages on account of wrongful detention of money. It was held: "The however contains a proviso that "interest shall be payable in all cases in which it is now payable by law. " This proviso applies to cases in which the Court of equity exercises jurisdiction to allow interest: As observed by Lord Tomlin in Maine and New Brunswick Electrical Power Co. Ltd. vs Hart, 1: "In order to invoke a rule of equity, it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as for example, non performance of a contract of which equity can give specific performance." "The present case does not however attract the equitable jurisdiction of the Court and cannot come within the purview of the proviso. " The very passage was noted by this Court in Union of India vs A.L. Rallia Ram ; at 188 189. The argument of Mr. G., Ramaswami, learned counsel, that the deposit does not contemplate appropriation is not correct because in the nature of contract it is liable to be appropriated for the satisfaction of any amount liable to be paid by the consumer to the Board for violation of any conditions of supply in the context of wide scale theft of energy, tempering with the meters and such other methods adopted by the consumers. Therefore, the said consumption security deposit serves not only to secure the interest of the Board for any such violation but should serve as a, deterrent on the consumer in discharging his obligations towards the Board. Mr. G. Ramaswami would rely on Riches vs Westminster Batik Limited 1947 Appeal Cases 390 at 400. 265 That is a case which arose under Income Tax Act. That has no application to this case. What came up for consideration in A.L Rallia Ram 's case (supra) was the power of the Board to award interest. Hence, that case has no application. Accordingly, it is held that the claim for interest cannot be legally founded either on common law or equity. As is rightly contended by Mr. Kapil Sibal, learned counsel and the other learned counsel appearing for the various Boards, it is the Board which should be entitled to receive interest on energy supplied to the consumers on credit as the consumers enjoy a credit facility as noted already. We are also unable to accept the argument advanced on behalf of consumers that because the Electricity Boards charge interest on belated payments, interest must be paid on security deposit. Interest on belated payments is by way of penalty. That has no bearing, Clause providing for non payment of interest: Whether unrea sonable? While the terms and conditions of supply of Andhra Pradesh, Uttar Pradesh and Bihar provide for payment of interest at certain rate, in the case of Rajasthan and Orissa the Boards have clearly stipulated that no interest shall be payable on the securities furnished to the Board. Whether that clause could be considered unconstitutional or arbitrary? In examining the constitutionality of this provision, in that it is violative of Article 14 of the Constitution of India, the following factors have to be borne in mind: 1.Article 14 does not mandate mathematical exactitude or scientific precision. 2.The mode and the period of security vis a vis the billing practice must form the consideration. 3.The consumer with open eyes has entered into the agreement and solemnly undertaken to abide by the conditions regarding nonpayment of interest. He cannot resile from the condition because there is nothing inherently objectionable about such a condition nor is such a condition per se illegal or void as opposed to public policy. It is not uncommon in commercial transaction, such a provision is entered into. 266 The argument that the Board is monopolistic in character and therefore, the consumers have no other option but to enter into contract appears to be misconceived. The Board under Section 49 of the Supply Act is entitled, apart from framing uniform tariff, to insist upon such terms and conditions as the Board thinks fit. This has also been so stated in. Jagdamba case (Supra). The consumption security deposit whether or not it carries interest is a condition precedent for the supply of electric energy. We are clearly of the view that the scrutiny by the Court in determining the unconstitutionality of a provision not providing for interest must be tested on the following touchstone: In imposing such a condition has the Board acted as a private trader and thereby shed off its public utility character '? By referring to Hindustan Zinc Ltd. (supra) we have earlier pointed out the interrelationship between Sections 49 and 59 as noted by this Court. We are therefore. of the view that in imposing such a condition the Board has not acted as a private trader. The nature of deposit has a rational relationship to the object which is incorporated as a condition of supply. Some of the learned counsel appearing for the consumers would draw our attention to Section 59 of the Supply Act as well. Under the said section the Board is obligated to carry on its operation as to ensure that it generates a surplus of 3 per cent or as specified by the State Government. The Board is obligated to adjust its tariffs for ensuring such surplus. The condition of supply requiring a consumption security deposit has a direct bearing on the operations of the Board which are to be conducted in such a manner as to ensure a surplus. The language in Section 59 of the Supply Act is "carry, on its operations under this Act and adjust its tariffs. " The language of the said section is not by adjusting tariff. Therefore, the argument that the only manner in which the Board can achieve a surplus is to adjust its tariffs does not flow from the language of Section 59. So read, in the context of the insistence of a security deposit which has direct bearing on the operations of the Board is per se reasonable and constitutional. We will assume, for a moment, that the contract is an adhesion contract. But still, it is not unconscionable. 267 In Central Inland Water Transport Corporation vs Brojo Nath Ganguly at 208 "adhesion contract" is defined quoting Black 's Law Dictionary, Fifth Edition, at page 38, as follows: "Adhesion contract. Standardized contract form offered to consumers of goods and services on essentially 'take it or leave it ' basis without affording consumer realistic opportunity to bargain and under such condition that consumer cannot obtain desired product or services except by acquiescing in forth contract. Distinctive feature of adhesion contract is that weaker party has no realistic choice as to its terms is. Not every such contract is unconscionable." With reference to these contracts the Court offered relief to the parties against such a clause if it is so unreasonable as to be unconscionable. As a matter of fact at page 21 1, paragraph 83 of Central Inland Water Transport Corporation vs Brojo Nath Ganguly it stated thus: "Yet another theory which had made its emergence in recent years in the sphere of the law of contracts is the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power. Lord Denning, MR, appears to have been the pro pounder, and perhaps the originator at least in England, of this theory. In Gillespie Brothers & Co. Ltd. vs Roy Bowled Transport Ltd. , 416 where the question was whether an indemnity clause in a contract, on its true construction, relieved the indemnifier from liability arising to the identified from his own negligence, Lord Denning said (at pages 415 416): The time may come when this process of 'construing ' the contract can be pursued no further. The words are too clear to permit of it. Are the courts then powerless? Are they to permit the party to enforce his unreasonable clause, even when it is so unreasonable, 268 or applied so unreasonably, as to be unconscionable? When it gets to this point, I would say, as I said many year ago:. 'there is the vigilance of the common law which, while allowing freedom of contract, watches to see that it is not abused ' John Lee & Son (Grantham) Ltd. vs Railway Executive , 584. It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so. (emphasis supplied,)" Farms worth on Contracts, 2nd Edn. 319, 320 para 4.27 states: "4.27 Precursors of Unionscionability. Courts of equity did not share the reluctance of common law courts to police bargains for substantive unfairness. Though mere "inadequacy of consideration" alone was not a ground for with holding equitable relief, a contract that was "inequitable" or "unconscionable" one that was so unfair as to "shock the conscience of the court ' would not be enforced in equity. In one such case, a man promised to give a 20 percent interest in all property that he might later acquire in Alaska in return for the Promisee 's payment of $1,000 and his cancellation of an $11,225 debt of questionable collectability. When the promiser acquired property worth over $ 750,000, the promises sought specific Performance. The court refused to grant it. Though the fairness of the bargain was to be judged as of the time that the bargain was made, in equity as at common law, here the "inadequacy of consideration" for the promise sought to be enforced was "so gross as to render the contrast unconscionable." In dealing with the validity of the agreement containing a clause 269 relating to minimum guarantee this Court had occasion to observed in Bihar State Electricity, Board vs Green Rubber Industries [1990] 1 SCC 731 at page 740 as follows: "It is true that the agreement is in a standard form of contract. The standard clauses of this contract have been settled over the years and have been widely adopted because experience shows that they facilitate the supply of electric energy. Lord Diplock has observed: "If fairness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would arise a strong presumption." That their terms are fair and reasonable. Schroeder(A.) Music Publishing Co. Ltd. vs Macaulayr ,624. in such contracts a standard form enables the supplier to say: "If you want these goods or services at all, these are the only terms on which they are available. Take it or leave it. "It is a type of contract on which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone. The contract, which frequently contains many conditions is presented for acceptance and is not open to discussion. It is settled law that a person who signs a document which contains contractual terms is normally bound by them even though he has not read them, even though he is ignorant of the precise legal effect. " In the light of the above discussion we hold that the clause not providing for interest is neither arbitrary nor palpably unreasonable, nor even unconscionable. In holding so we have regard to the following: 1.The consumer made the security deposit in consideration of the performance of Ms obligation for obtaining the service which is essential to Wm. 2.The electricity supply is made to the consumers on credit as has been noted above. 270 3. The billing time taken by the Board is to the advantage of the consumer. 4.Public revenues are blocked in generation, transmission and distribution of electricity for the purpose of supply. The Board pays interest on the loans borrowed by the Board. This is in order to perform public service. On those payment made by the Board it gets no interest from the consumers. 5.The Board needs back its blocked money to carry out public service with reasonable recompense. 6.The Board is not essentially a commercial Organisation to which the consumer has fumished the security to earn interest thereon. Weshould also observe that the rate of interest on security deposit cannotbe equated with the rate of interest on the fixed deposit. First of all, if the consumption charges are to be appropriated the moneys accrued by way of deposits cannot be held in fixed deposits. Nor all deposits need carry interest in every transaction. Secondly, the nature and character of the security deposit is essentially different from fixed deposit. It is worthwhile, in this connection, to refer to Companies Acceptance of Deposits) Rules, 1975. In Rule 2 it is stated: "2. Definitions. In these Rules, unless the context otherwise requires. (a) (b) "deposit" means any deposit of money with, and includes any amount borrowed by, a company, but does not include (i) (ii) (iii) 271 (iv). . . (v) any amount received from an employee of the company by way of security deposit; (vi) any amount received by way of security or as an advance from any purchasing agent, selling agent, or other agents in the course of or for the purposes of the business of the company or any advance received against orders for the supply of goods or properties or for the rendering of any service;. . We may add that merely because the English Acts provide for interest, it is not necessary the same should be adopted here as well. Thus, we hold that the Division Bench of the Rajasthan High Court erred in striking down Condition No. 20 of the General Conditions of the Rajasthan Electricity Board as violative of Article 14 of the Constitution of India. Has this Court decided the question of rate of interest in jagdamba Paper Industries (Pvt.) Ltd. vs Haryana State Electricity Board ; In that case the following two points were raised as seen from paragraph 3 at page 51 1: 1.The enhancement made in the security amount towards the meter is without any justification. The enhancement of security deposit was not warranted. On the question of interest in paragraph 11 at page 515 in Jagdamba 's case (supra) it is stated thus: "On the security amount interest at the rate of 4 per cent was initially payable. The same has already been enhanced to 8 per cent per annum. Since the amount is held as security, we indicated to the counsel for the Board that security amount should bear the same 272 interest as admissible on fixed deposits of Scheduled Banks for a term of years and we suggested keeping the present rate of interest in view that it should be enhanced to 10 per cent. Board 's counsel has now agreed that steps would be taken to enhance the present rate of interest of 8 percent to 10 percent 'with effect from October 1, 1983. " It requires to be carefully noted that the question of interest on security was not raised before the Court. Therefore, the Court had no occasion to decide this issue of interest. That part of the judgment, as rightly contended by Mr. Soli J. Sorabeejee, learned counsel, is sub silentio. However, the learned counsel for the consumers pressed into service the various orders passed by this Court in relation to interest and urged that it is concluded by those orders. We are unable to accept his argument. All the orders have their root in Interlocutory Application No.1 of 1989 in Writ petition No. 578 of 1987. That order is extracted in full: "We have heard counsel for the parties. Mr. Gopal Subramaniam ' counsel for the State Electricity Board on instructions states that the initial deposit which has been made by the consumer petitioner, to the tune of Rs. 10,07,378.81 was intended as security for pay ment of energy dues. In terms of our order of 5th May. 1988. the petitioner would be entitled to the interest on that amount from the date of the deposit at the rate of 12% per annum. Mr. Gobind Mukhoty, counsel for the petitioner now agrees to deposit the balance amount of Rs. 691,621 minus the interest which is said to be the additional security and while making the deposit of the additional amount, the petitioner is entitled to deduct the interest already accrued on the deposit of Rs. 10,07,378.81 from the date of the deposit at the rate of 12% per annum. The balance amount after deduction of the interest shall be deposited in two equal quarterly instalments, the first being due by 15.10.89. 273 The application for directions is disposed of accordingly. " Based on this, in Writ Petition No. 613 of 1990 it was stated thus: "In view of the order made by this Court in the connected matters on September 7, 1989, after hearing parties in Writ Petition No. 578/87 on the amount deposited by the consumer as security, interest at the rate of 12% would be admissible. The Writ petition is disposed of accordingly. " Two other orders remain to be seen. One rendered in W.P. 5582 of 1989 which was disposed of by consent and the other in W.P.No.576 of 1990 where the writ petition was disposed of in the following manner: "If the Electricity Board has been directed to allow interest at the rate of 12% per annum on the security deposited with the Board by the petitioners similarly situated, the claims of the petitioners should similarly be dealt with by the Board. The Writ Petition is disposed of. " On careful examination of the above orders, we do not think the Court ever intended to adjudicate upon the rate of interest or render a decision on that question. Therefore, it cannot be contended that the disposal of Writ Petition No. 613 of 1990, though by a Bench of 3 judges would be binding on us because, as pointed out above. It was entirely based on Interlocutory order. We are of the view that we are free to decide the question on its merits. The argument of Mr. Anil Divan, learned counsel that unequals are treated equals has no basis. It may be that the consumers of electricity, where it is raw material, would be prompt in their payment .in their own interest. On that basis, it cannot be contended that they 274 cannot be treated in the same way as defaulters. The test, in our considered opinion, is whether in the general application of law there is any discrimination. Merely because some of the consumers are prompt those related cases cannot render the provision constitutional. We may usefully refer to the following cases: The Collector of Customs, Madras vs Nathella ; at 829 30 it was observed? "The deleterious effects of smuggling, as pointed out in the extract from the Report, are real and it is not in dispute that the prevention and eradication of smuggling is a proper and legally attainable objective and that this is sought to be achieved by the relevant law. If therefore for the purpose of achieving the desired objective and to ensure that the intentions of Parliament shall not be defeated a law is enacted which operates somewhat harshly on a small section of the public, taken in conjunction with the position that without a law in that form and with that amplitude smuggling might not be possible of being effectively checked, the question arises whether the law could be held to be violative of the freedom guaranteed by article 19 (1) (f) & (g) as imposing an unreasonable restrain. That the restrictions are in the "interest of the general public" is beyond controversy. " In Vivian Joseph vs Municipal Corporation, Bombay, ; at 276 77 it was observed: "The levy of the cess under section 27 of the Act is not based on the principle of quid pro quo. Its object is not to repair all residential premises, but to preserve and prolong their lives in order to avert the dilema caused by the acute shortage of residential accommodation on the one hand, and the reluctance and/or inability of the owners to carry out repairs resulting from the Rent Act, on the other and to establish an agency so that structural repairs to buildings in dangerous or ruinous 275 conditions can be carried out. The finances for these objects are provided from a fund from the impugned cess and contributions by the State and the Corporation. The contention that some of the buildings falling in categories B and C would not need structural repairs throughout the life of the Act or that such repairs would carried out in buildings not cared for by defaulting landlords, takes no notice of the fact that the primary object of the Act is not to repair all buildings subject to cess but to prevent the annually recurrent mischief of house collages and the human tragedy and deprivations they cause. The cess being thus levied to prevent such disasters, there is no question of unequal treatment between one class of owners and another. The classification of buildings into three categories is based, as already stated, on their age and the construction current during the periods of their erection. It is,therefore, based on an intelligible differentia and is closely related to the objects of the legislation. There is, therefore no question of unequals being treated as equals, as each building of the Board and has to be structurally repaired if the need were to arise." In B. Banerjee vs Anita Pan, ; at 787 88 it was observed: "Moreover, what is the evil corrected by the Amendment Act? The influx of a transferee class of evictors of tenants and institution of litigation to eject and rack rent or re build to make larger profits. Apparently, the inflow of such suits must have been swelling slowly over the years and when the stream became a flood the Legislature rushed with an amending bill. Had it made the law merely prospective these who had in numbers, already gone to Court and induced legislative intention would have escaped the inhibition. This would defeat the object and so the application of 276 the additional than to pending actions could not be called unreasonable. To omit to do so would have been unreasonable folly. The question is whether those cases which were filed several years ago should have been carved out of the category of transferees hit by the act? Where do you draw the line? When did the evil assume proportions? These are best left to legislative wisdom and not court 's commensense although there may be grievances for some innocent transferees. If this be the paradigm of judicial review of constitutionality, we have to ignore exceptional cases which suffer misfortune unwittingly. The law is made for the bulk of 'the community to produce social justice and isolated instances of unintended injury are inevitable martyre for the common good since God Himself has failed to make perfect laws and perfect justice, Freaks have to be accepted by the victims rightly or wrongly as froensic fate" In Fatelichand Himmatlal vs State of Maharashtra, ; at 851 it was observed: "May be, some stray money lender,. may be good souls and to stigmatize the lovely and unlovely is simplistic betise. But the legislature cannot easily make meticulous exceptions and has to proceed on broad categorisations, not singular individualisations. so viewed pragmatics overrule punctilious and unconscionable money lenders fall into a defined group. Nor have the creditors placed material before the Court to contradict the presumption which must be made in favour of the legislative judgment. After all, the law makers representatives of the people, are expected to know the socioeconomic conditions and customers. Since nice distinctions to suit every kindly creditor is beyond the law making process, we have to uphold the grouping as reasonable and the restrictions as justified in the circumstances of, the case. In this 277 branch, there are no finalities. " The attack on additional consumer deposit is that no reasons have been adduced for additional demand. It stands to reason that if there is a revision in the rate of tariff there must be an upward revision in the consumption security deposit since it has direct bearing to the level of supply in consumption of electricity. For example,in the State of Uttar Pradesh, the tariffs were adjusted upwards in October 1986. The revision in the form of an additional security deposit with interest at the rate of 3 per cent was made in January 1987. These facts indicate the rationale in the demand of additional security deposit. As stated above, this being a condition of supply, no reason need be given at the time of upward revision. Therefore. we reject the argument of Mr. Govind Mukhoty, learned counsel in this regard. In view of the above finding, upholding the clause relating to nonpayment of interest, for example, Rajasthan and Orissa, what is to happen to such of those cases where interest is provided like Andhra Pradesh, Utter Pradesh and Bihar? In all those cases wherever the electricity boards have framed a provision for payment of interest after adjusting its finances at a stated rate they cannot be allowed to delete such a clause. The provision for interest has been made by the various Boards having regard to the overall budgetary and financial position. Further, keeping in view the quantum and made of security deposit and billing and recovery practice. Nor again, could the Board withhold payment of interest on the basis of this judgment. However, if there is any change in the circumstances affecting the budgetary and financial position, the Board can examine the case and decide the future course of action. But any change resulting in non payment or reduction of interest will have to be justified by cogent reasons and materials having a bearing on the financial position of each Board and facts and circumstances of each case. We also add that not withstanding Jagdamba 's case (supra) as on today, Haryana Electricity Board has dispensed with payment of interest. We make it clear by this judgment that we are not deciding the validity of such provision since the matter is stated to be pending. Inconclusion, We hold: 278 (1) Section, 49 of the Supply Act is valid. (2) The nature of consumption deposit is to secure prompt payment and is intended for appropriation. (3)There is no liability on the Electricity Board either tinder the statute or common law or equity to pay interest. (4)Conditions and the terms of supply providing for non payment of interest is not so unconscionable as to shock the conscience of the Court. (5)No reason need be given for. enhancement of additional security deposit. Accordingly we uphold the judgment of Andhra Pradesh High Court and reverse the judgment of Rajasthan High Court. In the result, the following cased filed against Andhra Pradesh Electricity Board are dismissed: S.L.P. (c) Nos. 13004/89, 14995/89,14629/89,14899/89,15739/ 89,15817/89,7475/90,6374/90,9661 65/90,5461/90,6371/00,5294/ 90, 6779/90, 5492/90, 5921/90, 5559/90, 4793 94/90, 4791 91/90, 6375/90. 6570/90, 12270/90, 9926/90, 11548/90, 2600/90, 6372.73/90, 6035 44/90, 6505/90,6374/90, 6094/00, 6765 68/90,6462/90, 5306 08/90, 9132/00, 12424/90, 6370/90, C.A. No. 1779/90, S.L.P. (c) Nos. 17465/91, 17679/91, 17865 66/91, 20125/91, 19532/91, 18043/91, 19586 93/91, 19597 600, 20076/91, 21/92, 649/92, 2564/92,5782 83/92,8336/92,9124 25/92,9488/92,12318/92,12506/ 92, 12610/92, 12805/92, 12804/92, 12814/92, 14439/92, 14449/92, 14555/92, 1739 43&43A/92, 13593/92, C.A. No. 2409/92, W.P. (c) Nos. 603/92,455/92, 3558/83, 566/92, 1353/89, 48/92, 362/92, 1293/ 89, 6770/90. The Transfer Petition (c) No. 366/92 filed by the Andhra Pradesh Electricity Board is allowed. 279 The following cases filled by Rajasthan State Electricity Board are allowed: C.A. Nos. 4714/91 &4028 43/91,S1,P(c) Nos.446/92.703/92, 12941/90. 433 36/92, 439 42/92, ( '.A. Nos. 5342/92. 1187 88/92, 4512/92, 45 10/92. 4511/92, 2800/92. 1204/92, 406 436/92, section L. P. (c) No. 20/92,46/02.47/92,50/92,53/02,449 452/92,494/02,516/92,48/92.49/92.51/02.52/92,54/92,55/92,43 45/92,56 72/92,428 432/92, 443 444/92,453 457/92,503 08/92. 512 14/92.530 33/92,14450/92. The following cases filed by the Bihar Electricity Board are allowed: SLP(c) Nos. 11799/89, 1856/90, 8318/92, 16028/92. The following, cases against Uttar Pradesh Electricity Board are dismissed. W.P. (c) Nos, 513/87, 804/87, 1144/87. 743/87, 531/87, 725/87. 739/87, 526/91. 576/87, 577/87, 801/87, 833/87. 769/87, 676/87, 578, 87, 728/87, 762/87. 818/87, 526/87, 744/87. 742/87. 540/87, 1238/87, 738/87.684/87, S.L.P. (c) Nos, 2952 56/1987, 15885/91, & 12902/9 1. The W.P. (c) No. 1317/90 filed against Punjab Electricity Board is dismissed. All the I.A.s are allowed. However, there shall he no order as to costs. T. N. A. Petitions disposed of.

Under the General Terms and Conditions for supply of electricity notified by the Andhra Pradesh State Electricity Board, under Section 49(1) of the , the consumers were obliged to keep with the Electricity Board an amount equivalent to three month 's demand and energy charges as consumption deposit on which Interest at the rate of 3% per annum was payable by the Board. In the event of delay in payment of consumption deposit within the stipulated period not only surcharge was payable by consumer but also the supply was liable to be disconnected. Various petitions were riled before Andhra Pradesh High Court challenging the validity of terms and conditions contending that the consumption deposit should In no event exceed two months average consumption charges and that In view of the judgment of Supreme Court In M/s. Jagdamba Paper Industries vs H.S.E.B. Board, [1983] 4 S.C.C. 508, the Board was liable to pay Interest at the game rate as Is paid by a Scheduled Bank on fixed deposit. The High Court dismissed the petitions. In appeals to this Court, It was contended on behalf of the consumers that: (1) Section 49 of the is ,unconstitutional since there are no guidelines for framing the terms and conditions of supply of electricity; (2) in view of the fact that in case of power intensive consumers the cost of Electricity is very high the condition requiring 3 months ' security deposit is arbitrary and illegal for power intensive consumers; and (3) there is no power under the Electricity Supply Act to enable the Board to raise revenue or to cover its capital cost etc. except by way of adjusting tariffs as seen from under Section 59 of the Supply Act, 1948. Therefore, consumption deposit cannot be used for the purpose of revenue or raising revenue. On behalf of the Electricity Board it was contended that: (1) In view of the fact that the object of consumption deposit (which is In the nature of advance payment and not a security deposit) Is to ensure prompt payment of electricity supply, It cannot be contended that 3 201 month 's consumption deposit Is arbitrary; (2)the fact that some of the consumers pay large amounts by way of electricity charges has nothing to do with the nature of deposit. Merely because a unit Is power based it cannot be treated separately for the terms of supply relating to consumer deposit must be uniform. In the case of Rajasthan Electricity Board the General Conditions expressly provided that no Interest will be paid by the Electricity Board on security deposit. Futher, the Electricity Board issued notices requiring the consumers to deposit the enhanced amount of cash security as well as bank guarantee on the basis of maximum power consumption. The consumers flied petitions In the Rajasthan High Court contending that provision for no Interest was bad In law and that the enhanced security deposit must he calculated not on three months maximum consumption but on the basis of minimum power consumption. A Single Judge of the High Court allowed the petitions. On appeal, the Division Bench held that the clause relating to nonpayment of interest was not reasonable. Relying on Section 4 of the as well as on the Model Form of draft conditions contained In Schedule VI of the 1948 Act, the Division Bench held that interest was payable on the security deposit. In appeals to this Court, it was contended on behalf of the Rajasthan State Electricity Board that: (1) there is no statutory provision which casts an obligation on the Board to pay Interest on the security deposit; nor even Interest is payable under common law or in equity; (2) the High Court erred In relying on the Model Form conditions as well as on the ; (3) the security deposit for three months is neither unreasonable nor arbitrary; (4) even if the contract between the Board and consumer is adhesion contract, it is not necessarily unconsciable; (5) in Jagdamba Paper Industries case the right of Interest was based on the concession of parties and the Court had no occasion to decide the rate or interest. On behalf of the consumers it was contended that: (1)the scheme of the Electricity Act and Supply Act together with the Rules suggest the payment of interest; (2) since the money is deposited but the consumers with the Board to secure the Board against default In payment of bills, the Board Is in the position of a trustee in respect of 202 this money; (3) even under English Law, interest was payable on security for electricity. For the intervenor on behalf of the Electricity Board of Orissa, it was submitted that Regulation 7 of the Orissa State Electricity Board General Conditions of Supply Regulations 1981 providing that no interest would be payable on security deposit is just and reasonable and is not arbitrary or violative of Article 14 of the Constitution. The Uttar Pradesh State Electricity Board was also paving 3% interest on consumption deposit. The consumers preferred writ petitions before the Allahabad High Court claiming 12% interest ,but the same were dismissed. In appeals to this Court it was contended on behalf of the consumers that in a number of matters this Court has also ordered interest at the rate of 12% on security deposit and the same principle should apply to this case; (2) if interest is not paid, security deposit cannot be demanded as this will amount to unconscionable bargain; and (3) the security deposit does not contemplate appropriation. On behalf of the Electricity Board it was contended that: (1) in cases where 12 per cent interest was awarded it was only by way of ad interim measure. Therefore, orders are not conclusive on this aspect; (2) under Article 226 of the Constitution, the court is to conduct a limited scrutiny whether by imposing a condition the Board has not acted as a private trader and thereby shed off its public utility character. If the Court comes to the conclusion that the Board has not acted as a private trader and the nature of deposit has a rational relationship, the issue will fall outside the scope of judicial purview. The Bihar State Electricity Board was paying 5 % interest on the security deposit. The consumers claimed interest at the rate payable on fixed deposit by a nationalised bank and the High Court allowed the same. The Electricity Board filed petition in this court contending that the High Court erred in awarding a higher rate of interest. On behalf of the consumers it was contended that the increase in security deposit without assigning any reason was had in law. 203 In the connected writ petition, the challenge is to the validity of Sections 49 and 79 of the Supply Act. According to the Punjab State Electricity Board, while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers also use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers. To off set part of the amount that the consumer owes to the Board constantly and also to ensure timely payment of advances by the Board to its suppliers an advance consumption deposit is insisted upon before commencing supply to the consumer. If this is not so taken the Board will be left with no other option than to increase the tariff. Thus advance deposit cannot be termed as a fixed deposit as the amount cannot be utilised against nonpayment of dues from consumers. Besides, the consumers can also ask for the refund. Therefore, Sections 49(1) and 79 (j) cannot be termed as arbitrary. It was also contended on behalf of the Punjab State Electricity Board that the amendment to clause 23 of abridged conditions of supply requiring consumers to pay advance consumption deposits is perfectly reasonable. For the intervenor on behalf of Calcutta Electricity Supply Corporation, it was submitted that the deposit though called security deposit is really an adjustable advance payment of consumption charges. The amount is revisable from time to time depending upon the average consumption charges on the basis of actual consumption over a period. In short, it is in the nature of a running account. The security deposit does not remain in tact like a fixed deposit but gets depleted day after day depending on the extent of consumption. More often than not. the consumption charges and other dues exceed the security deposit. That necessitates calling for additional advance to make up a shortfall. In the absence of any usage or contract or an,*, provision of law requiring payment of interest is not payable for wrongful detention of money. In this case, there is no wrongful detention [of even.] Section 4(2) of the has no application to this deposit. 204 Disposing the petitions, this Court, HELD:1. Section 49 of the is valid Sub section(1) of the said section starts with the words "Subject to the provisions of the Act and all regulations, if any, made in this behalf". Therefore, the Board has to conform to the various provisions of the Act and the regulations. Section 49 contains two powers; (1) to prescribe terms and conditions of supply; and (2) fix the tariff. No guidelines are required in this regard. [278A 248CE] Hindustan Zinc Ltd. vs A.P.S.E.B., ; ; Mysore State Electricity Bought vs Bangalore Woolen Cotton and Sill Mills Ltd. A.I.R. 1963S.C. 1128, Jagdamba Paper Industries Pvt. Ltd. vs Haryana State Electricity Board, ; , referred to. Roberts vs Hopwood, ; Pyx Granite vs Minister of Housing and Local Government, , cited. 1.1.Where regulations are made under Section 49 read with Section 79 (j), the validity of the regulations could be examined by the court, whether they are reasonable or not. [249 D] Southern Steel Ltd., Hyderabad vs The Andhra, Pradesh State Electricity Board, A.I.R. 1990 Andhra Pradesh 58, and M/s. B.R. Oil Mills. Bharatpur vs Assistant Engineer (D) R.S.E.B. Bharatpur, A.I.R , referred to. 1.2The terms and conditions notified under Section 49 must relate to the object and purpose for which they are issued. Certainly, that power cannot be exercised for a collateral purpose. In this Section 49 is valid. [251 C] 2.The nature of consumption deposit is to secure prompt payment and is intended for appropriation. The deposit though called security deposit is really an adjustable advance payment of consumption charges. The payment is in terms of the agreement interpreting the conditions of supply. This security deposit is revisable from time to time on the basis of average consumption charges depending upon the actual consumption over a period. This is the position under the 205 terms of supply of energy with reference to all the Boards. [278 A, 252 D E] 2.1The cycle of Billing by the Board demonstrates that in the very nature of things, the consumer is supplied energy on credit. The compulsory deposit in the context of billing cycle is hardly adequate to secure payments to the Board by the time the formal hill by the Board is raised on the consumer. In one sense, the consumption security deposit represents only a part of the money which is payable to the Board on the bill being raised against the consumer. Thus, the Board secures itself by resorting to such deposit to cover part of the liability. [253 F G] 2.2The deposit made cannot be equated to a fixed deposit. In the case of daily supply of electricity, there is a consequential liability to pay for each day 's consumption of electricity. To ensure that payment the security deposit is furnished. Hence, it cannot he equated to a deposit at all. It is in the nature of a running current account. [262 A] 2.3The argument that the deposit does not contemplate appro priation is not correct because in the nature of contract it is liable to be appropriated for the satisfaction of any amount liable to be paid by the consumer to the Board for violation of an), conditions of supply in the context of wide scale theft of energy tempering with the meters and such other methods adopted by the consumers. Therefore, the said consumption security deposit serves not only too secure the interest of the Board for any such violation but should serve as a deterrent on the consumer in discharging his obligations towards the Board. [264 F 6) Union of India vs A.L. Rallia Ram, ; ; Riches vs West minister Bank Ltd. 1947 Appeal Cases 390, held inapplicable. 2.4While the Electricity Board is required to make colossal advances to generate electricity and supply to consumers, the consumers use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers. To off set part of the amount the consumer owes to the Board continually to ensure 206 timely payment of bills by the Board to its suppliers, the advance consumption deposit is required to he kept with the Board before commencing supply to the consumer. The clauses in the contract in relation to conditions of supply of electric energy enable the Board to adjust the bill against such deposits. Therefore, this is not a case of mere deposit of money as in commercial transaction. In demanding security deposit, it is open to the court to take note of pilferage. [254 F H] Ashok Soap Factory vs Municipal Corporation of Delhi, J.T. , referred to. Corpus Juris Secundum, Vol.26A,p.194,Davidson vs U.S., C.C.A. Pa., , 752, referred to. 2.5Three month 's security deposit cannot be characterised either unreasonable or arbitrary. 1255 F] Jagdama Paper Industries P. Ltd. vs Haryana State Electricity Board, [1993] 4S.C.C.508; K.C. Works vs Secretary A.P.S.E.B., Vidyut Soudha, A.I.R. 1979 Andhra Pradesh 291; Municipal Corporation for Greater Bombay vs M/s D.M. Industries, ; Haryana Ice Factory vs Municipal Corporation of Delhi, A.I.R. 1986 Delhi 78, referred to. Southern Steel Ltd., Hyderabad vs The A.P. State Electricity Board, A.I.R. 1990 Andhra Pradesh 58, approved. Indian Aluminium Company vs Karnataka Electricity Board ; , cited. 2.6Under the regulations framed by the Board in exercise of powers of Section 49 read with Section 79 (j) the consumer is only entitled and the Board has an obligation to supply energy to the consumer upon such terms and conditions as laid down in the regulations. If, therefore. the regulations prescribed a security deposit that will have to be complied with. In cases where regulations have not been made Rule 27 of the Rules made under the Electricity Act enables the adoption of model form of draft conditions of supply. 207 Annexure VI in clause 14 states that the licensee may require any consumer to deposit security for the payment of his monthly bills for energy supplied and for the value of the meter and other apparatus installed in his premises. Thus, the Board has the power to make regulations to demand security from the consumers. [251F H, 252A B] 2.7Under Section 59 the Board is obligated to carry on its operation as to ensure that it generates a surplus of 3 per cent or as specified by the State Government. The Board is obligated to adjust its tariffs for ensuring such surplus. The condition of supply requiring a consumption security deposit has a direct bearing on the operations of the Board which are to be conducted in such a manner as to ensure a surplus. The language in Section 59 of the Supply Act is "carry on its operations under this Act and adjust its tariffs. " The language of the said Section is not by adjusting tariff. Therefore, the argument that the only manner in which the Board can achieve a surplus is to adjust its tariffs does not flow from the language of Section 59. So read, in the context of the insistence of a security deposit which has direct bearing on the operations of the Board is per se reasonable and constitutional. [266 E 6] Kerla State Electricity Boaed vs S.N. Govinda Prabhu & Bros. 3.There is no liability on the Electricity Board either under the statute or common law or equity to pay interest on security deposit. [278 B] 3.1There is no statutory provision which casts an obligation on the Board to pay interest on security deposit. Model form of draft conditions of supply containing Clause 14 relating to interest on security deposit) as found in Annexure VI. traceable to Rule 27 of Indian Electricity Rules, 1956, is applicable only to a licensee as defined in Section 2 (4) of the Electricity Act. Even for a licensee it is not compulsory to adopt the model condition of supply. These is an option available to adopt the model conditions of supply with such modifications as the circumstances of each case require. [259G H, 260 A C] 208 3.2Schedule VI has been framed in exercise of powers under Sections 57 and 57A. In defining "clear profit" paragraph (2)of clause XVII, Item (v) makes a reference, as interest on security deposits which is a part of expenditure properly incurred by the licensee. From this, it is impossible to hold that this clause imposes an obligation on the licensee to pay interest on security deposits, All that would when is, if interest, is paid then it qualifies as an item of expenditure properly incurred. This is the position with regard to licensee. But this cannot apply to the Board, which is not a licensee. For the same reason Item L 1 (c) of Form IV of the Electricity Rules relating to interest paid and accrued on consumers ' security deposits is of no avail because that relates to the manner of keeping accounts by the licensee, not being applicable to a Board. Therefore, there is nothing to indicate under the scheme of the Electricity Act or Schedule VI of the Supply Act that interest must be paid on the security deposit. Accordingly the Division Bench of Rajasthan High Court has erred in holding that is applicable. [260 F H, 261 A B] 3.3Section 4(2) of the has no application to a case where on account of a contractual term or a statutory provision payment of interest is not permitted. A careful reading of Section 4(2) would disclose that it merely enlarges the category of cases mentioned in Section 4(1). Even otherwise, there is nothing to indicate that Section 4(2) could override other statutory provisions or a contract between the parties. No doubt, Section 4(2) contains a non obstante clause. But, such a clause is restricted to the provisions of and cannot extend to other laws or a contract between the parties. [261 F 6] Civil Special Appeal No. 83 of 1987, decided on 30th July, 1991 by a Division Bench of the Rajasthan High Court, overruled. 3.4The word 'interest ' would apply only to cases where there is a relationship of debtor and creditor. A lender of money who allows the borrower to use certain funds deprives himself of the use of those funds. He does so because he charges interest which may be described as a kind of rent for the use of the funds. For example, a bank or a lender lending out money on payment of interest. In this case, there is no relationship of debtor and creditor. Accordingly, the claim for 209 interest cannot be legally founded either on common law or equity. [262 G, 265 A] Halshury 's Vol. 32 para 108: (Discussing cases where interest is payable under common law) para 109 (Discussing cases where there is equitable rights to interest), held inapplicable. Bengal Nogpur Railway vs Ruttanji Ramji, A.I.R. 1939 P.C. 67, referred to. 3.5The object of the deposit is to secure the payment of consumption charges. These charges may vary depending upon the daily consumption, depending on the level of supply .The amount due by way of consumption charges would also be liable to he appropriated. Therefore, it is incorrect to state that the Board is a trustee. The relationship between the Board and consumer is not that of a trustee and a beneficiary but a depositor and deposits. This is not event case of a constructive trust under Section 90 of the Indian Trust Act, since no advantage is gained by the Electricity Board in derogation of the rights of the consumer. 1262 D F] 4.The clause not providing for interest on security deposit is neither arbitrary nor palpably unreasonable not even unconscionable for the following reasons: (a)The consumer made the security deposit in consideration of the performance of his obligation for obtaining the service which is essential to him. (b The electricity supply is made to the consumers on credit. (c)The billing time taken by the Board is to the advantage of the consumer. (d)Public revenues are blocked in generation, transmission and distribution of electricity for the purpose of supply. The Board pays interest on the loans borrowed by the Board. This is in order to perform 210 public service. On those payments made by the Board it gets no interest from the consumers. (e) The Board needs back its blocked money to carry out public service with reasonable recompense. (f) The Board is not essentially a commercial organisation to which the consumer has furnished the secu rity to earn interest thereon. [269 F H, 270 A C] 4.1The argument that the Board is monopolistic in character and therefore, the consumers have no other option but to enter contract appears to be misconceived. The consumption security deposit whether or not it carries interest is a condition precedent for the supply of electric energy. The scrutiny by the Court In determining the uncon stitutionality of a provision not providing for interest must be tested on the touchstone whether in imposing such a condition the Board has acted as a private trader and thereby shed off Its public utility character? In imposing such a condition the Board has not acted as a private trader. The nature of deposit has a rational relationship to the object which is Incorporated a condition of supply. [266 A D,] Jagdamba Paper Industries (Pvt. ) Ltd. vs Haryana State Electric in Board; , , referred to. 4.2Assuming that the contract Is an adhesion contract, still it is not unconscionable. Conditions and the terms of supply providing for non payment of interest is not so unconscionable as to shock the conscience of the Court. [266 H] Central Inland Water Transport Corporation vs Brojo Nath Ganguly ; Bihar State Electricity Board vs Green Rubber Industries, [1990] 1 S.C.C. 731, referred to. Farmsworth on Contracts, 2nd Edn. 319.320, para 4.27, referred to. Gillespie Brothers Ltd. vs Roy Bowles Ltd. (1973) 1 A. E. R. 193; 211 G.B Mahajan and Ors. vs Jalalgaon Municipal Council and Ors. ; cited. 4.3In Jagdamba Papers the question of Interest on security was not raised before the Court. Therefore, the Court had no occasion to decide this issue of interest. That part of the judgment is sub silentio. [271 E, 272 A C] Jagdamba Paper Industries (Pvt.) Ltd. vs Haryana State Electricity. Board, ; , explained and held inapplicable. 4.4This Court never Intended to adjudicate upon the rate of interest or render a decision on that question. Therefore, it cannot be contended that the disposal of the Writ Petition though by a Bench of 3 Judges would be binding on a Bench of two Judges because it was entirely based on interlocutory order. Therefore, this Court is free to decide the question on Its merits. [273 F 6] 4.5The Division Bench of the Rajasthan High Court erred in striking down condition No. 20 of the General Conditions of the Rajasthan Electricity Board as violative of Article 14 of the Constitution of India. [271 D] 4.6The rate of interest on security deposit cannot be equated with the rate of interest on the fixed deposit. Firstly, if the consumption charges are to be appropriated the moneys accrued by way of deposits cannot be held in fixed deposits. Nor all deposits need carry Interest In every transaction. Secondly, the nature and character of the security deposit is essentially different from fixed deposit. [270 D E] 5.It may be that the consumers of electricity, where it is raw material, would be prompt in their payment in their own interest. On that basis, it cannot be contended that they cannot be treated in the same way as defaulters. The test, in Court 's considered opinion, is whether in the general application of law there is any discrimination. Merely because some of the consumers are prompt those isolated cases cannot render the provision unconstitutional. [273 H, 274 Al 212 The Collector of Customs Madras v, Nathella Sampathu Chetty; , ; Vivian Joseph vs Municipal Corporation. Bonmbay ; , Fatehchand Himmatlal vs State of Maharashtra, [1977]2 S.C.R. 828 and; B. Banerjee vs Anita Pam, [1975]2 S.C.R. 774, referred to.

Appeal Nos. 2863 65 of 1993. From the Judgment and Order dated 21.2.91 of the Kerala High Court in C.M.P. No. 2170/90, 596/91, 597/91 in M.F.A. No. 518 of 1981. WITH Civil Appeal No. 2960 of 1993. K.K. Venugopal, G. Ramaswamy, M.N. Krishnamani, K.P. Dandapani E.M.S. Anam, P.N. Puri, A.T.M. Sampath, Pravir Choudhary for the Petitioner/ Appellant. Shanti Bhushan. Joshph Vellapall vs R.K.Jain, A Mariarputham, for M/s A. Mariarputham and Mrs. Aruna Mathur for Mrs. Aruna Mathur & Co. for the respondents. The Judgment of the Court was delivered by R.M. SAHAI, J. How far could we protect the interests of subscribers who had subscribed to a chit run by a subsidiary company of the appellant ordered to be wound up when allegedly subscriptions were made good by them not merely out of their hard savings but also of sums got by even, pledging and selling the jewelleries and ornaments of their wives, in the fond hope of getting a lumpsum amount on a future date, to meet the expenses of marriages in the family or health hazards of family members and the like, is the issue that really bothered us at the hearing of the appeals. About 15 years ago the subsidiary company under winding up, diverted the amount of rupees ten crores received by it by way of chit subscriptions to its holding, company (the appellant) resulting in its inability to pay the subscribers, when they became entitled to (yet the prize amounts. When some of the subscribers approached the High Court and succeeded in getting the subsidiary company wound up, the appellant holding company appeared in Court and prayed for an opportunity to be given to it to revive its subsidiary company. That prayer was accepted by a Division Bench of The Kerala High Court in the case of Suarshan Chits (India) Ltd., vs G.S. Pilai ILR 1983 vol. 1 Kerala p. 700. The Division 906 Bench approved the scheme of compromise and arrangement under Sec. 391 of the . Consequently, it ordered the winding up order to be held in abeyance on condition that the holding company shall execute a security bond to cover subsidiary company 's liability to the extent of a sum of Rs. 10.40 crores owed to its subscribers. It also directed the holding company to pay off that amount within a period of five years. Restriction was also placed on alienation of any property by tile holding, company without obtaining prior permission of the Court. Arrangement was made for managing, affairs of the appellant company as well. Apart from the Board of Directors an Additional Director was nominated to supervise and keep a watch on the affairs of the company. Since than the appellant company is run as directed by the High Court but neither the subscribers are paid, as a body of creditors, not the entire amount of rupees ten crores and odd is paid by the appellant to the subsidiary company. True, that out of nearly one lakh subscribers. twenty nine thousand and odd subscribers only remain unpaid. But, that is hardly satisfactory. Regret is that more than one third of the subscribers remain unpaid even after ten years from the date the High Court ordered the winding up to be in abeyance. Payment of rupees two crores and odd by the holding company which had the benefit of ten crores and odd rupees for the last 15 years, which amount by any standard is equivalent to fifty crores of rupees of today, we must state, is a poor consolation, for the holding company to claim that all steps to discharge its obligations is taken. Having noticed in brief, how matters have proceeded, we shall advert to the dispute which has arisen in respect of an offer now made by the holding company to sell 20.79 acres of land for paying the creditors. Whatever that be, one situation which has been brought about is, its successful attempt in involving, many subscribers who had formed themselves into a creditors association and an owner of a factory adjoining the disputed land, in litigation which has reached this Court more than once. It is unfortunate that a company which had volunteered to pay ten crores of rupees with in a period of five years has successfully evaded the payment by offering a pittance. From the date of offer in 1987 six ears have elapsed but no amount worth consideration, appears to have been paid to the subscribers. We consider it unnecessary to recount in detail the offer made by Ramaswamy Udayar, the appellant in the other appeal, counter offer made by the creditors association, delay in payment by the association, extension of time by this Court for payment by the association, withdrawal of offer by the holding company in the meantime as the High Court had after detailed examination accepted the offer of creditors association for purchase of disputed land and rejection of the claim of Udayar. Nor do we consider it necessary to deal with rival submission made by learned senior counsel appearing for respective parties, although we heard them at length, as in our opinion that rupees fifty two lakhs and odd the total amount for which the land 907 has to be sold could hardly be sufficient to relieve the agony of the body of subscribers for whose benefit the entire exercise was undertaken by the High Court. As we have understood the matter, there may be a grain of truth in the allegation that it is Estate Dealers with vested interests who are interfering and in fact the amount paid by the creditors association is of estate dealers. It may also. be true that the total membership of the association is not even 5% of the unpaid subscribers. In the said circumstances and taking into consideration the board consensus reached among learned counsel as to what needs to be done, we decide the two appeals, one filed by the holding company for release of the land and other by Udayar for accepting his bid on the following terms and conditions: (1)The holding company shall deposit with the official Receiver or Assignee concerned a sum equivalent to the deposited sum on which the High Court was pleased to direct sale deed to be executed in favour of the creditors association together with 25% interest minus the interest, if any earned by the deposit made, calculated on the deposited amount, from the date of deposit till 31st July, 1993, within a period of three months from today. (2) Out of the amount of sale price of the land already deposited by the creditors Association and the interest if any earned thereon plus the sums of money to be deposited by the holding company under the above term and condition (1), a sum equivalent to the amount deposited by creditors Association, together with interest at 25% thereon from the date of deposit upto 31s t July, 1993 shall be refunded to the creditors association in lieu of their claim for disputed land being, given up. The balance amount shall remain the benefit of general body of creditors of the subsidiary compa (3) The holding company shall pay the entire outstanding de (amounts) payable to the subscribers who were members of creditors association on the date when their claim applications w decided by the Kerala High Court, together with interest there of 12 percent from the date of decision till 31st July, 1993, within same period, namely, three months. This amount too shall deposited with the receiver for immediate payment to those cre 908 tors subscribers for giving discharge of their claims against the subsidiary company. (4) In case the above terms and conditions as to deposits to be made by the holding company are complied with. within the period allowed, for which no extension of time shall be granted, then the disputed land offered for sale by the holding company and purchased by creditor 's associations shall stand released in its holding company 's) favour. If such deposits are not made, the sale in favour of creditors company shall stand confirmed. (5) An offer was made by the appellant in Appeal No. 6614 of 1991 that the land being adjacent to its factory he was willing to pay even rupees five lakhs per acre. Therefore, on release if the land is sold, it shall be sold, as and when such occasion arises, for a price not less than five lakhs per acre. The amount so realised shall also be deposited by the holding company with the receiver for distribution among general body of creditors of the subsidiary company in discharge of its obligations to pay of the creditors of the subsidiary company. (6) (a) The receiver shall further take steps to see that the holding company fulfils its obligations and pays the entire balance within a period of one year from 31st August, 1993. (b) In case of failure to clear the dues of all the subscribers it shall be open to any unpaid subscriber to approach the High Court for recalling the order passed by the High Court in 1983 directing the winding up to be put in abeyance. (c) It shall also be open to the unpaid subscribers to approach the High Court for th e aforesaid reasons mentioned in clause (b) to take steps to get the amount realised from assets of the holding company. If such an application is made it shall be disposed of by the High Court expeditiously in accordance with law after hearing, parties concerned. Both the appeals are decided accordingly. The parties shall bear their own costs. R.P Appeals disposed of.

A subsidiary company of the appellant holding company (C.A. No. 2866 of 1993) diverted to the appellant rupees ten crores received by it by way of chit subscriptions. It failed to pay the subscribers the prize money. When some of the subscribers initiated winding up proceedings against the subsidiary company the appellant appeared before the High Court and undertook the liability of the subsidiary company to an extent of a sum of Rs 10.40 Crores to the subscribers. The High Court approved the scheme of compromise and arrangement under section 391 of the and directed the winding up order to be held in abeyance on the condition that the appellant holding company would pay off the amount or Rs. 10.40 Crores to the subscribers, within five years. It also restricted alienation (of any property by the holding company. Without obtaining prior permission (of the Court. Even ten %,Cars after the order of the High Court, more than one third of the subscribers remained unpaid. Meanwhile the appellant company took steps to sell 20.79 acres of land to pay the Creditors. The appellant in C.A.No. 2863 65 (if 1973 made an offer where as the respondent creditors ' association made a counter offer. The High Court accepted the (offer of Creditors ' association. Hence the appeals by special leave. Disposing of the appeals, this Court gave the following 904 Directions : 1. The holding company shall deposit with the official Receiver fir Assignee concerned a sum equivalent to the deposited sum on which the High Court had directed sale deed to be executed in favour of the creditors association together with 25% interest minus the interest, if any earned by the deposit, made, calculated (in the deposited amount, from the date of deposit till 31st. July, 1993, within a period of three months. Out of the amount mentioned in condition (1) above, a sum equivalent to the amount deposited by creditors Association, together with interest at 25% thereon from the date of deposit upto 31st July, 1993 shall be refunded to the creditors association in lieu of their claim for the disputed land being given up. The balance amount shall remain for the benefit of general body of creditors of the subsidiary company. Tile holding company shall pay through the receiver the entire outstanding debts payable to the subscribers who were members of the creditors association on the date when their claim applications were decided by the High Court, together with interest thereon at 12 per cent from the date of decision till 31st July, 1993. In case the above terms and conditions are complied with, within the period allowed then the disputed land offered for sale by the holding company and purchased by creditors ' associations shall stand released in holding company 's favour. If such deposits are not made, the sale in favour of creditors company shall stand confirmed 5. In view of the offer made by the appellant in Appeals No. 2863 65 of 1993, the land on its release shall be sold, for a price not less titan five lakhs per acre. The amount so realised shall also be deposited of the holding company with the receiver for distribution among general body of creditors of the subsidiary, company. The receiver shall further take steps to see that the holding company fulfils its obligations and pays the entire balance within a period of one year from 31st August, 1993. In case of failure to clear the dues of all tile subscribers it shall he open to an%. unpaid subscriber to approach the High Court for recalling the order passed by the High Court for in 1983 direction the winding up to be plot in abeyance, as well as to the steps to get the amount realised front assets of 905 the holding company. If such an application is made it shall be disposed of by the High Court expeditiously in accordance with law after hearing parties concerned.

Civil Appeal No. 1390/1978. Appeal by special leave from the Judgment & Order, dated 26 3 1976 of the Punjab & Haryana High Court in Civil Writ Petition No 506/76. Baldev Raj in person. U.R. Lalit and Miss A. Subhashini for the Respondent. 432 The Judgment of the Court was delivered by KRISHNA IYER, J. The appellant, an Accounts Officer compulsorily retired betimes, appearing in person, has painstakingly and proficiently presented his case which calls for mercy, if not justice obsession with one 's own case and inability to see things in perspective are often a frailty of a party who spends the enormity and anguish of his superannuated leisure on the main pursuit of his litigative points, and this makes for prolixity and subjectivity of submissions, which are not the persuasive but the provocative part of the art of advocacy. Even so, we have listened with sympathy to the studious orality and read with patience the manuscript arguments emanating from the appellant. He was an Accounts officer since December 30, 1961, having been so promoted and appointed by the Comptroller and Auditor General of India (C & AG). The story of his career was snapped when he was compulsorily retired 'in the public interest ' on August 27, 1975 under; F.R. 56(j)(i) by the Accountant General (A.G.). Had he run his full course, his continuance until April 1980 would have been sure. Finding himself an uneasy casualty when the easy axe of F.R. 56(j)(i) fell on him, the appellant challenged the premature retirement in the High Court only to be greeted with a dismissal in limine. Here he has arrived by special leave and argued before us that his forced retirement is dubious and violative, in many ways, of F.R. 56(j)(i). The Fundamental Rules govern the Central Civil Services and ensure the career security which is the sine qua non of contended service. But potential compulsory retirement under F.R. 56(j)(i) haunting the afternoon of official life injects an awesome uncertainty which makes even the honest afraid, the efficient tremble and almost everyone genuflect not a happy prospect for a civil servant too young to sit idle and too old to get a new job. A jetsam has no option but to become driftwood or join the other profession where everyone, desirable and undesirable, has a chance. We stress his deleterious latency of F.R. 56(j)(i) to underscore the unwitting harm to public interest it does in the name of public interest. Judicial monitoring becomes an unpleasant necessity where power may be humour and a career may be a victim. The grounds on which the order of retirement has been challenged by the appellant may be formulated immediately after quoting the rule itself: 56(j): Notwithstanding anything contained in this rule the appropriate authority shall, if it is of the opinion that it is the public interest to do so have the absolute right to retire any 433 Government servant by giving him notice of not less than three months in writing or three months ' pay and allowances in lieu of such notice. (i) If he is in Class I or Class II service or post and had entered Government service before attaining the age of thirty five years after he has attained the age of fifty years. Note 1: Appropriate authority, means the authority which has the power to make substantive appointment to the post or service from which the Government servants is required or wants to retire. A break down of the provision brings out the basic components. The order to retire must be passed only by 'the appropriate authority '. That authority must form the requisite opinion not subjective satisfaction but objective and bona fide and based on relevant material. The requisite opinion is that the retirement of the victim is 'in public interest ' not personal, political or other interest but solely governed by the interest of public service. The right to retire is not absolute, though so worded. Absolute power is anathema under our constitutional order. 'Absolute ' merely means wide, not more. Naked and arbitrary exercise of power is bad in law. These essentials once grasped, the appellant 's submissions become self evident. His principal contentions, not all the secondary details, alone need detain us. His first challenge is to the competence of the Accountant General compulsorily to retire him because, according to the appellant, he is not the 'appropriate authority ' within the meaning of the rule. The appointing authority who actually appointed the appellant was the C & AG, but the A.G. retired him on the assumption that he had the requisite power. Article 311(1) insists that a civil servant shall not be dismissed or removed by an authority "subordinate to that by which he was appointed". The appellant, by parity of reasoning, argues that the A.G., being subordinate to the C & AG, has no power to retire him. The fallacy in the argument lies in the confusion between 'dismissal ' and 'compulsory retirement '. The two cannot he equated and the constitutional bar cannot be operative. Therefore, we have to find, on an independent enquiry, as to who is the appropriate authority under r. 56(j)(i). Under Note 1 to F.R. 56, the authority entitled to make substantive appointments is the appropriate authority to retire government servants under the said rules. From this Note, which is virtually a part of the rule, the respondents contend that the power of the appropriate authority in respect of 434 Accounts Officers like the appellant has been vested in the A.G. by Notification of the Ministry of Finance dated 29 11 1972. Since the A.G. has been clothed, from that date, with power to appoint substantively Accounts Officers, he has become the appropriate authority for compulsory retirement even though the appellant Accounts Officer had been appointed by the & AG prior to 29 11 1972. In the light of the note which is part of the rule, read with the notification delegating the power to the A.G., we see no flaw in the order impugned. No doubt, ordinarily the appointing authority is also the dismissing authority but the position may be different where retirement alone is ordered. There, the specific provision in the Note to FR 56 must hold good and article 311 is not violated either. Nor is there any discrimination, as contended for, because retirement is a category different from the punishments covered by article 311. Who is the retiring authority on a given date? This is answered by the Note which, in substance, says that he who is empowered to appoint the Accounts officer is also the appropriate authority to retire compulsorily, on that date. In this view, we cannot nullify the retirement of the appellant for want of competence. This takes us to the meat of the matter, viz., whether the appellant was retired because and only because it was necessary in the public interest so to do. It is an affirmative action, not a negative disposition, a positive conclusion, not a neutral attitude. It is a terminal step to justify which the onus is on the Administration, not a matter where the victim must make out the contrary. Security of tenure is the condition of efficiency of service. The Administration, to be competent, must have servants who are not plagued by uncertainty about tomorrow. At the age of 50 when you have family responsibility and the sombre problems of one 's own life 's evening!, your experience, accomplishments and fullness of fitness become an asset to the Administration, if and only if you are not harried or worried by 'what will happen to me and my family? ' 'Where will I go if cashiered? ' How will I survive when I am too old to be newly employed and too young to be superannuated? ' These considerations become all the more important in departments where functional independence. fearless scrutiny, and freedom to expose evil or error in high places is the task. And the ombudsmanic tasks of the office or audit vested in the C & AG and the entire army of monitors and minions under him are too strategic for the nation 's financial health and discipline. that immunity from subtle threats and oblique overawing is very much in public interest. So it is that we must emphatically state that 435 under the guise of 'public interest ' if unlimited discretion is regarded acceptable for making an order of premature retirement, it will be the surest menace to public interest and must fail for unreasonableness, arbitrariness and disguised dismissal. To constitutionalise the rule, we must so read it as to free it from the potential for the mischiefs we have just projected. The exercise of power must be bona fide and promote public interest. There is no demonstrable ground to infer mala fides here and the only infirmity alleged which deserves serious notice is as to whether the order has been made in. public interest. When an order is challenged and its validity depends on its being supported by public interest the State must disclose the material so that the court may be satisfied that the order is not bad for want of any material whatever which, to a reasonable man reasonably instructed in the law, is sufficient to sustain the grounds of 'public interest ' justifying forced retirement of the public servant. Judges cannot substitute their judgment for that of the Administrator but they are not absolved from the minimal review well settled in administrative law and founded on constitutional obligations. The limitations on judicial power in this area are well known and we are confined to an examination of the material merely to see whether a rational mind may conceivably be satisfied that the compulsory retirement of the officer concerned is necessary in public interest. We will consider this question to the extent disclosed by the record and in the light of the submissions made by both the parties. The whole purpose of the rule is to weed out the worthless without the punitive extremes covered by article 311 of the Constitution. After all, administration, to be efficient, must not be manned by drones, do nothings, incompetents and unworthies. They may not be delinquent who must be punished but may be a burden on the Administration if by insensitive, insufficient, unintelligent or dubious conduct impede the flow or promote stagnation, in a country where speed, sensitivity, probity. and non irritative public relations and enthusiastic creativity are urgently needed but paper logged processes and callous cadres are the besetting sin of the Administration. It is in public interest to retire a never do well, but to juggle with confidential reports when a man 's career is at stake is a confidence trick contrary to public interest. Moreover, confidential reports are often subjective, impressionistic and must receive sedulous checking as basis for decision making. The appropriate authority, not the court, makes the decision, but, even. so, a caveat is necessary to avoid misuse We are inclined to ignore the case that the appellant was retired because he had declined 'to proceed on leave forcibly in September 1974 '. While it is reprehensible for Government or any in the higher 436 echelons to compel a civil servant to go on leave on pain of being suspended, retired or transferred to a far off place or indifferent post and the court may readily infer mala fides in the subsequent order if there is proof of antecedent pressure to take forced leave we cannot judge the legality of a compulsory retirement on suspicions and apprehensions invariably urged even by deserving victims. Let us look at the facts from these broad lines of Law. The A.G. has, in vindication of his action, submitted that "the impugned order of compulsory retirement was made by the Accountant General on the basis of the recommendations dated 23 8 1975 of the Reviewing Committee constituting the following officers: 1. Accountant General 2. Senior Deputy Accountant General (IC) 3. Senior Deputy Accountant General (Administration) Punjab 4. Deputy Accountant General (Administration) Office of the Accountant General, Haryana. The said Committee reviewed the service record of the appellant and found adverse entries in various confidential reports, and inter alia, held that the appellant was unable to perform his duty efficiently and effectively in the post held by him and recommended compulsory retirement under FR 56(j)(i). The appellant was accordingly retired by the Accountant General on 27 8 1975". We are not inclined to agree with the appellant that the Reviewing Committee is an illegal body and taking its recommendations into consideration vitiates the A.G. 's order. On the other hand, it is clear that the decision to retire is surely that of the A.G., and the Reviewing Committee 's presence is persuasive, not decisive, and prevents the opinionatedness of one by the collective recommendations of a few. Now we will enter the substantive dispute and search for the presence of public interest as the basis of the impugned order. The A.G., Mr. Khanna has, in his affidavit in this court, sworn: In this connection I respectfully submit that the Petitioner 's work was found to be below average and that fact was noted by the appropriate authority in the confidential reports of the 437 petitioner as per details given below: ____________________________________________________________ Period of Adverse Remarks Date of Report Communication ____________________________________________________________ 1961 62 Yes. An Average Officer. Though he did try to tackle the arrears in the GAD section under his charge. I was unhappy to observe that he was trying to shield those who shirked work. I also noticed that while he was anxious to bring to my notice persons who did their duties well, he was willing to play down the lapse on their part, if any, without adequate justification. 5.12.1962 14.12.64 A mediocrity who should take more Adverse to interest in the work remarks 20.3.65 noted on 15.1.66 29.7.69 Industry and application. Poor to 15.11.70 Ability to organise and manage Poor, sections competently. Adverse remarks communica ted on May 1970. General Assessment:An average officer who would do better if he showed more initiative and resourcefulness. 1.4.70 1.Technical ability:Below average to 3(a) Ability to organise and manage 9.12.70 sections competently. Poor (b) Ability to control subrodi nates and get the best out of them. Poor 10. General Assessment:Below Adverse Average. My remarks against remarks 1,3(a)(b) and 10 may be seen. communica The performance of Shri ted, on Chaddha as the officer in 29th Sept. charge of the Account Current 1971. sections was not upto the mark and consequently he had to be given a change. This officer is definitely below average. 438 The aforementioned adverse remarks in the confidential reports of the petitioner were communicated in all the cases to the Petitioner and the Petitioner made representation which was rejected by the competent authority after due consideration. At the time of the review of the retention of the petitioner and other accounts officers, a Committee consisting of Accountant General, Senior Deputy Accountant General (IC), Senior Deputy Accountant General, (Admn.), Office of the Accountant General, Haryana was constituted to review the cases of the Accounts officers for their retention, on their attaining the age of 50 years. The said Committee was constituted on 23 8 1975. The said Committee after careful assessment of the performance of the employees concerned depicted in their confidential reports found that the persons including the Petitioner who were not able to perform their duty efficiently and effectively in the posts held by them at that time and the Committee therefore recommended to retire the Petitioner among others under F.R 56(j)(i). A copy of the minutes of the meeting held is annexed herewith as Annexure Y. The Reviewing Committee report runs thus: "The Committee after a careful assessment of the performance of the employees concerned as depicted in their confidential reports have come to the conclusion that the persons mentioned below are not able to perform efficiently and effectively the duties of the posts held by them. (1) Shri Baldev Raj Chadda, Accounts Officer. " A bare glance at the confidential reports of the appellant brings out the striking fact that they relate to 1961 62 to the end of 1970. The appellant was promoted only in 1961 and was regularly drawing increment for well over a decade, without let or hindrance. What is far more significant is the further fact that the Reviewing Committee and the A.G. appear to have ignored entries in yearly/half yearly reports in the seventies. The appellant states categorically: "A perusal of the extract from the Confidential reports would show that there were no adverse remarks in the Confidential Reports of the Appellant for the year 1971 72, 1972 73, 1973 74, 1974 75 and 1975 76 till the date of his retirement from service on 27 8 75." He further rightly points out that the stand of the A.G. before the High Court was that the impugned order was not grounded on the adverse entries: Since the adverse entries in the Confidential Reports of the petitioner were not, in terms, stated to be the ground for exer 439 cising the powers under F.R. 56(j), it was not necessary for the Respondent to deal with the various allegations levelled by the petitioner against the higher authorities in this regard. We must read these materials against the further background set out by the appellant: If I was considered to be unsuitable to continue to officiate as Accounts officer even after 14 years of continuous service without break and after I reached the maximum of the scale both old/revised without being held up or even delayed at E.B. or for increment, then the proper course open to the authorities was to take action against me under C.C.S. (C.C.A.) Rules 1965 to revert me and not to retire me by taking shelter under F.R. 56(j)(i) to avoid initiating disciplinary action. This is thus a clear case of vindictive misuse of powers by the Appointing Authority under F.R. 56(j). One wonders how an officer whose continuous service for 14 years crossing the efficiency bar and reaching the maximum salary in the scale and with no adverse entries at least for five years immediately before the compulsory retirement, could be cashiered on the score that long years ago, his performance had been poor, although his superiors had allowed him to cross the efficiency bar without qualms. A short cut may often be a wrong cut. The order of compulsory retirement fails because vital material, relevant to the decision, has been ignored and obsolete material, less relevant to the decision, has influenced the decision. Any order which materially suffers from the blemish of overlooking or ignoring, wilfully or otherwise, vital facts bearing on the decision is bad in law. Likewise, any action which irrationally digs up obsolete circumstances and obsessively reaches a decision based thereon, cannot be sustained. Legality depends on regard or the totality of material facts viewed in a holistic perspective. For these reasons, the order challenged is obviously bad and we quash it. It is, however, open to the A.G. to take a fresh decision based on legal material and guided by legal principles. The appellant has, by now, reached the age of superannuation in the normal course. The result is that the consequence of any fresh order may only be financial. It is for the A.G. to consider whether in the circumstances, a fresh evaluation for the purpose of compulsory retirement is called for. We merely allow the appeal, quash the order of compulsory retirement and leave the law to take its course. The appellant will be entitled to costs which we quantify at Rs. 2,000. N.K.A. Appeal allowed.

The appellant, an accounts officer, was promoted and appointed by the Comptroller and Auditor General of India. He was compulsorily retired on 27th August, 1975 in the public interest under F. R. Rule 56(j)(i) by the Accountant General. The appellant challenged his pre mature retirement in the High Court by a Writ Petition which was dismissed in limine. In his appeal by Special Leave, the appellant challenged the order of retirement and argued that (i) the Accountant General is not "appropriate authority" within the meaning of the rule and (ii) the retirement was not in the public interest. The respondent contended that (i) the power of the appropriate authority in respect of accounts officers like the appellant was vested in the Auditor General by Notification of the Ministry of Finance dated 19 1 1972 and (ii) the impugned order of compulsory retirement was made by the Accountant General on the basis of the recommendations dated 23 8 1975 of the Reviewing Committee. Allowing the appeal. ^ HELD: An officer with continuous service for 14 years crossing the efficiency bar and reaching the maximum salary in the scale and with no adverse entries at least for five years immediately before the compulsory retirement cannot be cashiered on the score that long years ago, his performance had been poor, although his superiors had allowed him to cross the efficiency bar without qualms. The order of compulsory retirement fails because vital material, relevant to the decision, has been ignored and obsolete material, less relevant to the decision, has influenced the decision. [439D E] Any order which materially suffers from the blemish of overlooking or ignoring wilfully or otherwise vital facts bearing on the decision is bad in law. Likewise, any action which irrationally digs up obsolete circumstances and obsessively reaches a decision based thereon, cannot be sustained. [429 F] The Fundamental Rules govern the Central Civil Services and ensure the career security which is the sine qua non of contended service. But potential compulsory retirement under F. R. 56 (j) (i) haunting the afternoon of official life injects an awesome uncertainty which makes even the honest afraid. the efficient tremble and almost everyone genuflect, and is not a happy prospect for a Civil Servant too young to sit idle and too old to get a new job. A jetsam has no option but to become driftwood or join the other profession where everyone, desirable and undesirable, has a chance. This deleterious latency 431 of F.R. 56(j)(i) is stressed to underscore the unwitting harm to public interest it does in the name of public interest. Judicial monitoring becomes an unpleasant necessity where power may be humour and a career may be a victim. [432 E G] The order to retire must be passed only by the appropriate authority. That authority must form the requisite opinion not subjective satisfaction hut objective and bona fide and based on relevant material. The requisite opinion is that the retirement of the victim is in public interest not personal political or other interest but solely governed by the interest of public service. The right to retire is not absolutely, though so worded. [433 C D] Since the A.G. has been clothed, from 29 11 1972 with power to appoint substantively Accounts officers, he has become the appropriate authority for compulsory retirement even though the appellant had been appointed by the C & AG prior to 29 11 1972. In the light of the note which is part of the rule, read with the notification delegating the power to the A.G., there is no flaw in the order impugned. [434 A B] Ordinarily the appointing authority is also the dismissing authority but the position may be different where retirement alone is ordered. The specific provision in the Note to FR 56 must hold good and article 311 is not violated either. Nor is there any discrimination, because retirement is a category different from the punishment covered by article 311. [434C] Security of tenure is the condition of efficiency of service. The Administration, to be competent, must have servants who are not plagued by uncertainty about tomorrow At the age of 50, your experience, accomplishment and fulness of fitness become an asset to the Administration, if any only if you are not harried or worried. These considerations become all the more important in departments where functional independence, fearless scrutiny, and freedom to expose evil or error in high places is the task. And the Ombudsmanic tasks of the office of audit vested in the C & AG and the entire army of monitors and minions under him are too strategic for the nation 's financial health and discipline that immunity from subtle threats and oblique overawing is very much in public interest. Under the guise of public interest if unlimited discretion is regarded acceptable for making an order of premature retirement, it will be the surest menace of public interest and must fail for unreasonableness, arbitrariness and disguised dismissal. The exercise of power must be bona fide and promote public interest. [434 F H, 435 A B] Judges cannot substitute their judgment for that of the Administrator but they are not absolved from the minimal review well settled in administrative law and founded on constitutional obligations. Administration, to be efficient, must not be manned by drones, do nothings, incompetents and unworthies. It is in public interest to retire a never do well, but to juggle with confidential reports when a man 's career is at stake is a confidence trick contrary to public interest. Confidential reports are often subjective, impressionistic and must receive sedulous checking as basis for decision making. [435D, E G]

Appeal No. 2632 of 1969. Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated October 27, 799 1969 of the Allahabad High Court in Election Petition No. I of 1969. G. N. Kikshit, for the appellant. K. C. Sharma, M. section Gupta and section K. Dhingra, for respondent No. 1. The Judgment of the Court was delivered by Bhargava, J. This is an appeal by Manti Lal who was one of the candidates for election to the U.P. Legislative Assembly from Ahirori (Scheduled Caste) Constituency of Hardoi District, and who was defeated at that election by respondent No. 1 Parmai Lal. The election was challenged on two principal grounds. One ground was that respondent No. I was disqualified under section 8(2) of the Representation of the People Act, 1951 (hereinafter referred to as "the Act") for being chosen as a member of the Legislative Assembly, because he was convicted for offenses under sections 148 and 304 of the Indian Penal Code on 11th January, 1969, and was sentenced to imprisonment exceeding two years. The other ground was that a number of ballot papers cast in favour of the appellant had been wrongly rejected instead of being counted in favour of the appellant, that some ballot papers were wrongly counted for respondent No. I instead of being rejected, and that some ballot papers were wrongly counted in favour of respondent No. 1 instead of being counted in favour of the appellant or other candidates. The High Court of Allahabad framed three different issues in respect of this claim of wrong rejection or wrong counting of the ballot papers, In the written statement,respondent No. I pleaded that a number of ballot papers were wrongly counted in favour of the appellant instead of being counted in favour of the other candidates, that a number of ballot papers were wrongly rejected instead of being counted in favour of respondent No. 1, and, further, that a number of ballot papers were wrongly counted in favour of the appellant instead of being rejected. The learned Judge, who tried the election petition, framed three issues in respect of these pleadings also which were put forward in the written statement and not by way of a petition of recrimination. On the basis of examination of the ballot papers and the evidence before him, a finding was recorded that, after correcting the errors made in counting, the net result would ' be that the appellant will have a net gain of only 6 votes, while respondent No. I would have a net loss of 24 votes. It appears that respondent No. I had received 13,508 votes, while the appellant had received 13,271 votes. After taking into account the finding, the valid votes received by the appellant would total to 13,277, while respondent No. I would still have 13,484 valid ' votes, so that the election of respondent No. 1 could not be declared 800 void. The appellant had claimed that, on a proper counting, . it would be found that he had a majority of votes, and had prayed for a declaration that he is the successful candidate. On the finding recorded, both the prayers of the appellant failed. The High Court further held that respondent No. I was not disqualified under section 8 (2) of the Act and, consequently, his election was valid. The petition having been dismissed by the High Court, the appellant has now come up in this appeal under section II 6A of the Act. On the issue relating to disqualification, the facts that need be .noticed are that 9th January, 1969 was the last date for filing nominations in this constituency and respondent No. 1 was convicted two days later on 11th January, 1969 and sentenced, inter alia .to ten years ' rigorous imprisonment under section 304, I.P.C. On 16th January, 1969, he filed an appeal against this conviction in the High Court. Polling took place on 9th February, 1969 and the result was declared on 11th February, 1969. Respondent No. 1 was declared as the successful candidate having secured the largest majority of votes. On 30th September, 1969, his appeal was allowed by the High Court and his conviction and sentence were set aside. At this time, the election petition was still pending. In fact, the judgment in the election petition was delivered on 27th October, 1969. On these facts, it is clear that, though the conviction of respondent No. 1 was recorded by the trial Court on 11th January ', 1969, he was acquitted on 30th September 1969 in appeal which acquittal had the effect of completely wiping out the conviction. The appeal having once been allowed, it has to be held that the conviction and sentence were vacated with effect from the date on which the conviction was recorded and the sentence awarded. In a criminal case, acquittal in appeal does not take effect merely from the date of the appellate order setting aside the conviction; it has the effect of retrospectively wiping out the conviction and the sentence awarded by the lower Court. The disqualification relied upon by the appellant wag laid under section 8 (2) of the Act read with Article 102 (1 ) (e) of the Constitution. The provision is that a person convicted by a court in India for any offence and sentenced ,to imprisonment for not less than two years shall be, disqualified .from the date of such conviction and shall continue to be disqualified for a further period of five years since his release. The argument on behalf of the appellant was that, though respondent No. I was not disqualified at the time of filing of nomination, he was, in fact, disqualified on 9th February, 1969, the date of polling, as well as on 11th February, 1969, when the result, was declared, because his conviction had been recorded and he had been sentenced to ten years ' rigorous imprisonment on 11th January, 1969. It was further urged that, though the appeal had been filed, that 801 appeal did not have the effect of Wiping out this conviction. In these circumstances, it was urged that his election was void and should have been set aside on the ground of this disqualification. This argument overlooks the fact that an appellate order of acquittal, takes effect retrospectively and the conviction and sentence are deemed to be set aside with effect from the date they were recorded. Once an order of acquittal has been made, it has to be held that the conviction has been wiped out and did not exist at all. The disqualification, which existed on the, 9th or 11th February, 1969 as a fact, was wiped out when the conviction recorded on 11th January, 1969 was set aside and that acquittal took effect from that very date. It is significant that the High Court, under section 106 ( 1) (a) of the Act, is to declare the election of a returned candidate to be void if the High Court is of opinion that, on the date of his election, a returned candidate was dot qualified, or was disqualified, to be chosen to fill the seat under the Constitution or the Act. It is true that the opinion has to be formed as to whether the successful candidate was disqualified on the date of his election; but, this opinion is to be formed by the High Court at the time of pronouncing the judgment in the elec tion petition. In this. case, the High Court proceeded to pronounce the judgment on 27th October, 1969. The High Court had before it the order of acquittal which had taken effect retrospectively from 11th January, 1969. It was, therefore, impossible for the High Court to arrive at the opinion that on 9th or 11th February, 1969, respondent No. 1 was disqualified. The conviction and sentence had been retrospectively wiped out, so that the opinion required to be formed by the High Court to declare the election void could not be formed. The situation is similar to one that could have come into existence if Parliament itself had chosen to repeal section 8 (2) of the Act retrospectively with effect from 11th January, 1969. Learned counsel conceded that, if a law had been passed repealing section 8 (2) of the Act and the law had been deemed to come into effect from 11th January, 1969, he could not have possibly urged thereafter, when the point came up before the High Court, that respondent No. 1 was disqualified on 9th or 11th February, 1969. The setting aside of the conviction and sentence in appeal has a similar effect of wiping out retrospectively the disqualification. The High Court was, therefore, right in holding,, that respondent No. 1 was not disqualified and that his election was not void on that ground. On the second point, the main argument of counsel for the appellant was that the High Court committed the error of framing three issues on the basis of pleadings in the written statement which challenged the correctness of the acceptance or rejection of ballot papers without any recrimination being filed by respondent L 169 Sup. C I (P)/71 7 802 No. 1 under section 97 of the Act. Counsel wanted to argue this question of law in detail, but we consider that, in the present case, 10 is not necessary to go into this point at all. Even if the three issues framed on the basis of pleadings in the written statement are ignored, and account is taken only of findings recorded on the three issues framed on the basis of pleadings in the election petition, it would be found that respondent No. 1 still had a majority of valid votes, and the appellant could not claim that the election of respondent No. 1 be set aside and the appellant be declared as the successful candidate. The findings of fact recorded by the Judge are that, under Issue No. 5, 18 ballot papers mentioned in Schedules III and IV should be counted as valid votes for the appellant, while 24 ballot papers were wrongly counted in favour of respondent No. 1. Under Issue No. 3, the finding is that the appellant is entitled to add 111 valid votes in his favour and, under Issue No. 4, the finding is that 74 votes would be lost by respondent No. 1. If these figures are accepted and taken into account, the appellant would receive 13,400 valid votes, being the total of 13,271 votes found in his favour at the time of declaration of the result and 129 votes which the appellant is entitled to add as a result of the findings on the three issues. So far as respondent No. 1 is concerned, he loses 98 votes as a result of the findings recorded by the High Court; and, on deducting these votes from 13,508 received by him, respondent No. 1 is left with 13,410 votes. Respondent No. 1, thus, has a majority of 10 votes, so that his election is valid. ' Counsel, however, challenged one finding recorded by the High Court in respect of 64 ballot papers which, the appellant had claimed, had been wrongly rejected and should have been counted in his favour. These ballot papers have not been produced before us. The learned Judge held that they were invalid votes because "thy bear no recognizable seal impression that might be said to have been made with the instrument supplied for marking the vote. " The argument of counsel for the appellant is that, even on this finding recorded by the High Court, these votes should have been counted in his favour, because they cannot be held liable to rejection under rule 56(2) (b) of the Conduct of Elections Rules, 1961. That sub rule runs as follows : "The returning officer shall reject a ballot paper if, to indicate the vote, it bears no mark at all or bears a mark made otherwise than with the instrument supplied for the purpose. " The argument urged is that, according to the Judge, the impressions on these 64 ballot papers could not be identified with the seal supplied for marking the votes, which only leads to the inference that they may bear marks with that seal or may not. For 803 rejection under rule 56(2)(b), there must be a definite finding that they bore marks made otherwise than with the seal supplied for the purpose. In this case, the Returning Officer rejected the ballot pairs holding that the marks made on these ballot papers were mad otherwise than with the instrument supplied for the purpose. The appellant challenged that decision of the Returning Officer in this election petition. The burden lay on him to establish that the Returning Officer had wrongly rejected these ballot papers. He could only succeed if he had proved that the marks made were with the instrument supplied for the purpose. This the appellant failed to do. In fact, the finding recorded by the learned Judge of the High Court amounts to holding that the marks made cannot be identified with the seal which was supplied for marking the votes and, consequently, an inference, follows that they must have been made by some other means. On this finding, the learned Judge was quite correct in not upsetting the order of the Returning Officer rejecting these votes. If these 64 votes are not counted in favour of the appellant, the appellants case fails for the majority of votes still remains in favour of respondent No. 1. The appeal, therefore, fails and is dismissed with costs. Y.P. Appeal dismissed.

The appellant challenged the election of the first respondent to the State Legislative Assembly on the grounds : (1) the respondent was disqualified under section 8(2) of the Representation of the People Act, because, on the date of his election he stood convicted 'for offenses under .the Penal Code, though later, he was acquitted by the High Court and (ii) the Returning Officer rejected some ' ballot papers cast in the appellant 's favour holding that the marks made on those ballot papers were made otherwise than with the instrument supplied for the purpose and that those ballot papers were therefore liable to rejection under r.56(2) of the Conduct of Election Rules, 1961. The High Court dismissed the petition. In appeal to this Court, HELD: Dismissing the appeal, (1) In a criminal case, acquittal in appeal does not take effect merely from the date of the appellate order setting aside the conviction, it has the effect of retrospectively wiping out the conviction and sentence awarded by the lower court. The opinion whether a successful candidate was disqualified on the date of his election is to be formed by the High Court .at the time of pronouncing judgment in the election petition. When the High Court had before it the order of acquittal which had taken effect retrospectively, it was impossible for the court to arrive at the opinion that on the date of election the respondent was disqualified. The High Court was therefore, right in holding that the respondent was not disqualified and that his election was not void on the ground. [800 F] (2) For rejection under r. 56(2)(d) there must be a definite finding that the ballot papers bore marks made otherwise than with the seal supplied for the purpose. In the present case, the finding recorded by the High Court amounted to holding that the marks made could not be identified with the seal which was supplied for marking the, votes. On this finding the High court was right in not upsetting the order of Returning Officer for rejecting these votes, and consequently an inference follows that they must have been made by some other means. If these votes were not to be counted in favour of the appellant the appellant 's case had to fail, because, on the evidence recorded and the issues framed on the basis of the pleadings in the election petition the respondent had still a majority of valid votes. [803 A]

No. 1 of 1960. Under article 32 of the Constitution of India for the enforcement of Fundamental Rights. A. V. Viswanatha Sastri, 'K.K. Jain and Ganpat Raj, for the Petitioners. C. K.Daphtary, Solicitor General of India, V.A. Saiyed Mohamad and T. M. Sen, for the Respondents. August 8. The Judgment of the Court was delivered by SHAH, J. Controls on exports and imports imposed as an emergency measure during the last war in respect of certain commodities were kept alive after the lapse of the Defence of India Rules by the Emergency Provisions (Continuance) Ordinance, 1946 which was later replaced by the Imports and Exports (Control) Act,. 1947 ( 18 of 1947), by s.(3) of the Act, the Central Government was authorised by order published in the Official Gazette, to provide for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions if any, as may be made by or under the order, inter alia the import, export, carriage xxx xxx of goods of any specified description. By sub sec(2) of s.3. , it was provided that all goods to which an order under sub s.(1) applied shall be deemed to be goods of which the import or export has been prohibited or restricted under s.19 of the Sea Customs Act. Exercising authority under s.3 of the Imports and Exports (Control) Act, 1947, the Central Government issued notifications from time to time prohibiting, restricting or otherwise controlling the export and import of diverse commodities. By a consolidated order dated 75 December 7, 1955, known as the Imports (Control) Order, 1955, restrictions on the import of certain goods were imposed by el. 3 of the said order. By el. 3, it was provided that save as otherwise, provided in the order, no person shall import any goods of the description specified in Schedule I, except under, and in accordance with, a licence or a customs clearance permit granted by the Central Government, or by an officer specified in Schedule II. For implementing the scheme of controlling imports, diverse provisions were made in cls. 3 to 11 of the Imports (Control) Order. The Government of India makes known its import policy every six months by issuing in the Government Gazette the procedure and the conditions for eligibility of licences and for the grant of import licences. This policy is published for the use of the public in a hand book called the "Import Trade Control Policy". The policy is obviously framed having regard to requirements for home consumption of commo dities to be imported, the foreign currency situation and the economy of the country as a whole. By para 51 of the Import Trade Control Policy for the licensing period October 1958 to March 1959, a scheme of "Export Promotion" permitting imports depending upon the value of specified varieties of goods exported by the impro per was devised. It was recited in that paragraph that in certain items, the inter relation between imports and exports was direct and intimate and the ability to export some manufactured goods depended largely on the facility with which the exporter or the manufacturer could procure the basic raw materials required in the manufacture. With a view to promoting the export of such goods, a scheme was therefore devised for the grant of special import licences to 76 replace the imported raw material component of the product exported or to provide an incentive for larger exports. Artsilk yarn and artsilk fabrics were covered by the Export Promotion Scheme. In Appendix 42, cl.2 of the Import Trade Control Policy. for October 1958 to March 1959, it was stated: "With a view to stimulate exports of Indian artsilk fabrics, sarees, garments, hosiery and other artsilk manufactures, it has been decided to grant import licences at the ports under the Export Promotion Scheme for the import of permissible varieties of artsilk yarn to actual exporters upto the following percentage of the rupee equivalent of foreign exchange earned on the basis of the f. o. b. value of The artsilk goods exported, or the value assessed by customs, whichever is less. (i) 66 2/3 per cent in the case of Indian artsilk sarees, (ii) 100 per cent in the case of other Indian artsilk fabrics including Indian artsilk hosiery goods. " The petitioners, M/s. Ram Chand Jagadish Chand are a firm engaged in. business as exporters and importers. In the period October 1958 to March 1959, the petitioners exported to Singapore, Bush Shirt Cloth, Glass Nylon, Art silk Piece Goods and Superior Class Nylon of the total C.I.F. value of Rs. 7,10,817/ , and relying upon cl. (2) of the Export Promotion Scheme as outlined in the Import Trade Control Policy, called upon the Controller of Imports to issue licences for artsilk yarn for Rs. 4,04,218.62 np. and Rs. 3,03,490.93 np. respectively for the months of February and 77 March 1959. The petitioners claimed that they had, pursuant to the Export Promotion Scheme, exported artsilk goods to Singapore and had earned net foreign exchange of the value of Rs. 7,07,709.55 np. and that they were entitled to import licences for artsilk yarn of that amount. In September 1959, the petitioners were informed by the Assistant Controller of Imports and Exports that a consolidated licence for the months of February and March, 1959 was granted to them for import of artsilk goods of the value of Rs. 3,19,354/ . It appears that the Government of India, having come to learn of certain malpractice by the importers of artsilk yarn, while suspending the Export Promotion Scheme as from March 9, 1959, announced that applications which were pending with the port licensing authorities will be scrutinised by a Committee and in May 1959, the Government of India appointed a Committee for verification of the value of good exported. The petitioners appeared before the Committee and furnished documentary evidence in support of their claim for 100% of the rupee equivalent of the cloth exported. The Committee accepted as reasonable the rates at which the exported " 'Flock Printed Nylon Dyed" cloth was exported by the petitioners, but in their view, the rates at which ",Bush Shirt Cloth" was exported could not be accepted as reasonable and for the purpose of the Export Promotion Scheme, the value of that cloth should be computed at the rate of Re. 1.50 np. per yard of 36" width. The Controller of licences accepted the recommendation of the Committee and issued to the petitioners an import licence for Rs. 3,19,354/ only. The petitioners after making, an in fructuous demand for a licence for the value of the goods exported, filed this petition under article 32 of the Constitution for a writ or direction in the nature of mandamus directing the Chief Controller of Imports and ,Exports to Avant to the petitioners an import. 78 licence for the months of February and March 1959 equivalent to 100% of the goods exported by them in relevant previous months and in the alternative, to issue a writ of certiorari calling for the records and proceedings resulting in the issue of a licence of the value of Rs. 3,19,354/ and for an order quashing the same and granting to the petitioners a licence for the full amount claimed by them. The petitioners submitted that the Controller of licences had arbitrarily reduced the value of their import licence under the Export Promotion Scheme and had thereby unlawfully infringed their fundamental right to carry on business. They also claimed that the Controller was bound to grant licence to import artsilk yarn under the Export Promotion Scheme for the full value of the goods exported by them, and in failing to do so, had practiced discrimination against the petitioners, because several other importers of artsilk yarn who were the petitioners ' rivals in trade during the identical period were given licences for amounts "ranging between 85 and 100 per cent of their exports". In paragraph 22 of their petition, the petitioners submitted a table setting out the names of eight such exporters, the amount and the percentages granted to such exporters. The fundamental right of a citizen to carry on any occupation, trade or business under article 19 (1)(g) of the Constitution is not absolute : it is subject to reasonable restrictions which may be imposed by the state in the interests of the general public. The right of the State to impose controls in the larger interest of the general public on imports has accordingly not been denied: nor has the authority of the 'State to issue the Imports (Control) Order, 1955 in exercise of the powers conferred by the Imports and Exports (Control) Act providing for imposition of restrictions by permitting import of certain goods only in accordance with,,licences or customs permits granted by the 79 Central Government,, been challenged. It was suggested. somewhat faintly by Mr. Viswanatha Sastri on behalf of the petitioners that the power granted under c 1. (3) of the Imports (Control) Order, 1955 was uncanalised power in the matter of fixing percentages and to that extent, the authority imposed an unreasonable restriction on the freedom to carry on business. But the authority to grant or refuse to grant licences is conferred upon high officers of the State and the grant of licences is governed by the Import Trade Control Policy which is issued from time to time and detailed provisions are made in the Imports (Control) Order getting 'out the grounds on which licences may be refused, amended, suspended or cancelled (see cls. 6 to 9 of the Order). Provision to afford a bearing to the licence before action is taken under cls. 6 to 9 is also made. It cannot therefore be said that the power conferred is uncanalised or arbitrary. The argument seriously canvassed by counsel for the petitioners was that relying upon cl. 2 of appendix 42 of the Import Trade Control Policy, the petitioners had exported artsilk fabrics, and had earned foreign currency, and they could not, except for good and adequate reasons, be deprived of import licence to the full extent of 100% of the value of the artsilk fabrics exported. The petitioners say that they purchased the goods from various merchants and by exporting those goods earned foreign exchange which was duly credited to their account by their bankers, and in reducing the import licence to approximately 45% of the value of the goods exported, the State has, by executive order, imposed an unreasonable restriction upon their right to carry on business. But under el. 2 of the Export Promotion Scheme as outlined in appendix 42 in so far as it related to licences for import of artsilk yarn, the Controller of Imports is authorised to grant licences upto the percentages specified in that clause : there is no right thereby 80 created to the exporter to obtain a licence for the full value of the commodity exported. Under el. 2 of the, scheme the Controller has the power to grant a licence for any amount upto 100% of the rupee equivalent of the foreign exchange earned on the basis of the F.O.B. value of the goods exported. By that clause, the exporter is not given the option to claim an import licence for any amount not exceeding the value of the foreign exchange earned by export of goods. The clause invests the Controller with authority, it does not impose an obligation upon him enforceable at the instance of the exporter, to issue a licence for the amount (subject to the maximum prescribed. claimed by the exporter. The power is plainly discretionary. It is true that the discretion has to be exercised reasonably and not arbitrarily. The, licensing authority would normally issue an import licence for 100% of the value of the goods exported, but having regard to special considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State, import licences for a smaller percentage may be granted to the exporters. But by the use of the expression "upto the following percentage of the rupee equivalent" power to fix arbitrarily a percentage of the value of the goods exported for awarding an import licence is not granted. In granting a licence to the petitioners for Rs. 3,19,354/ , has the authority been exercised arbitrarily or is it supported by some reasonbly discernible principle? Ram Murth Sharma, Deputy Chief Controller of Imports and Exports in his affidavit stated that of the Export Promotion Scheme wrongful advantage was taken by some exporters of artsilk fabrics : it was found by the Government of India that invoice values or artificial silk fabrics were inflated. by the exporters by more than 100% of the value with the object of exporting "speculative" commodities like artificial 81 silk yarn. , Sharma stated that ",as against 381 thousand yards of artificial silk fabrics exported during the period January June, 1957 at a value of about Rs. 456 thousand i.e., at about Rs.2 0 L. per yard the merchants sought to show the rise in price for the export of such goods during October March 1959 at Rs. 2 9 0 per yard so that for 986 thousand yards exported, the invoice value shown was 28,799 thousand rupees, even though the actual price of the goods in the wholesale market had not at all risen to that extent between those two periods. The index number of wholesale price in India in respect of "silk and rayon" fabrics during the month of June 1957 was 85 and during the month of March 1959 it rose to 95.7 only thus showing a rise of about 11%. Against this rise, the rise in the price invoiced by the exporters showed a rise of over 125% during the span of the same period. This will clearly show that the aforesaid rise was shown by merchants merely with a view to get licences for higher value for the import of speculative item like "Art Silk Yarn. " Relying upon this evidence, counsel for the Union contended that this perversion of the Export Promotion Scheme had serious repercussions on the foreign exchange position, and the scheme was suspended by notification dated March 6, 195 , and government directed that the pending applications for import licences for artsilk yarn be scrutinised by a Committee appointed in that behalf. The Committee scrutinised the cases of 1106 parties including the petitioners, and the petitioners were given a, licence for Rs. 3,19,354/ , and by reducing the value of ' the import licence, no fundamental right of the petitioners under article 19 of the Constitution was infringed. A scrutiny of the applications for licences in view of the misuse of. the Export Promotion Scheme and granting of licences on the result of such scrutiny cannot be regarded as imposing an 82 unreasonable restriction. The State is as much concerned with earning foreign exchange as maintaining and consolidating its export trade. if a large quantity of goods be dumped at excessive prices foreign markets to meet a temporary demand in the ultimate result the export trade of the State may suffer. If taking advantage of temporary demands in the foreign market, the exporters charge excessive prices which axe not commensurate with reasonable profits on the real value of the goods and seek to invest the profits earned, in speculative commodities thereby endangering the internal economy of the country, the State may be justified in taking steps to prevent the exporters from obtaining advantage of such excessive profits by refusing to afford facilities for importing goods to the exporters who seek to rely upon the export Value of the goods at inflated rates. , The affidavit of Sharma shows that in a number of cases,, the importing firm in the foreign country was only a " 'sister concerns of the exporting house, and the exporters adopted the expedient of inflating the price with the object of adjusting the excess value received by them. It appears therefore that some exporters under cover of the Export Promotion Scheme by inflating the prices were found not only to import speculative varieties of goods for very much larger values than the real prices justified, but were suspected by the authorities even to repatriate foreign assets without disclosing the same to the State as required by law. It cannot therefore be said that the power granted to the licensing authorities to grant licences only upto the maximum spec ified in el. 2 of the Scheme is by itself an unreasonable restriction; nor will the notification directing scrutiny of all applications amount to imposing an unreasonable restriction. Counsel for the petitioners however submitted that the Controller had placed no evidence on the record that the petitioners have, for the goods 83 purchased by them in the Indian market, not paid M. 7,67,709.55 np. or that any part thereof represented foreign assets intended to be repatriated contrary to law. Counsel submitted that M/s. V. M. section Abdul Razak & Company to whom the goods were consigned are not a " 'Sister concern" of the petitioners and that in the affidavit of the Deputy Chief Controller of Imports and Exports it is not denied bat the petitioners bad received the full value for which the goods were exported by them. But in considering the case of the petitioners, the Committee observed : "The party has purchased Bush Shirt Cloth from J. C. Vakaria & Sons, Govardhandas Iswardass International Trading Agency, Agwarwla Brothers and Calcutta Silk Manufacturing Co., Ltd. Rates vary from Rs. 3.87 to Rs. 3.92. x x x x neither the purchase vouchers nor the export invoices contain any description nor give any idea as to whether the material was Nylon, Rayon, Nynon, etc. " The committee also observed that the petitioners were "not able to produce adequate justification of the prices of Art Silk Bush Shirting Cloth. Samples cannot be linked with the relative purchase vouchers or export invoices. " They then pointed out that the correspondence with M/s. Abdul Razak & Company did not give any "justification nor contained ' any description to link the goods with the materials sent," and in the light of these findings, the Committee recommended that. the value of bush shirt ' cloth for the purposes of import licence be calculated at the rate of Re. 1. 50 nP. per 'Yard. It is somewhat unfortunate that the Committed have not stated in the reasons given by them that Re. 1. 50 nP. was the prevailing: market rate in respect of Bush Shirt Cloth at the time of the export in the Indian market. But in paragraph 22 of the respondents ' affidavit, it is stated that "the petitioner firm has behalf granted licence equal to 84 100% of the value which has been arrived at as reasonable value of the exports effected by the firm. " The petitioners alleged that the decision of the Committee was arbitrary the licensing authority contends that the decision was made after ascertaining the reasonable value in the Indian market at the material time of the goods exported by the petitioners. The petitioners have not placed before the court any independent evidence to show that the current market rate of "bush shirt cloth" which was exported, substantially exceeded the rate of Re. 1. 50 nP. per yard of 36" width. In the circumstances, we would not be justified in assuming that the Committee made an arbitrary decision in arriving at the value of the bush shirt cloth exported for the purpose of recommending the grant of import licence. The contention that the order passed by the Controller granting a licence only for 45% of the value of the goods exported infringes the fundamental right of the petitioners under article 19 (1) (g) by imposing an unreasonable restriction cannot therefore be sustained. Does the fact that the petitioners have been granted licence approximately for 45% of the total value of the goods exported amount to discrimination entitling them to protection of article 14 of the Constitution ? Under the Export Promotion Scheme, the petitioners have exported artsilk goods of the value of Rs. 7,07,709.55.nP. and may in the normal course have been entitled to import licence for 100% of the value of the goods exported unless there was a reduction in the value of the licence for imports on account of certain circumstances such as general deterioration of the foreign exchange position or necessity to conserve a particular currency or other circumstances justifying a departure from the maxima set opt in cl. 2 of 85 appendix 42 of the Export Promotion Scheme. The reduction may also be justified on grounds personal to the petitioners or to a, group to which they belonged, Any malpractice or tinder hand dealing may warrant such a reduction. It was the case of the respondents that many exporters were guilty of malpractices and with a view either to speculate in artsilk goods or to repatriate unlawfully foreign assets, the value of the goods exported was unduly inflated. In the order passed by the Committee appointed by the Government of India, dealing with the case of the petitioners, it was observed that the petitioners had business relations with certain firms and that the rates at which bush shirt cloth were purchased varied from Rs. 3.87 to Rs. 3.92 nP. The Committee was not satisfied that the documentary evidence produced by the petitioners related to the goods exported by them. These findings disclosed that, in the view of the Committee, there was reason to believe that the claim of the petitioners that they had purchased goods approximately for the prices at which they were exported, was not made out. The Committee accordingly recommended that the value of "bush shirt cloth" should be computed at the rate of Rs. 1.50 nP. per yard. It is true that there is no definite evidence on the record indicating that was the current market rate, but the court may be justified in holding that the members of the Committee who were vitally concerned with the trade in artsilk goods were conversant with the current market rates of the cloth which was exported by the petitioners. Counsel for the Union has placed before us in the course of the hearing the report of the Committee in respect of seven out of the eight exporters who the petitioners claimed had been given import licence for the full value of the exports. The report of the Committee with regard to M/s. Rajasthan Exporters I and Importers, Calcutta 86 is not placed before us on the plea that. , it is not immediately available. On a perusal '.of the report of the Committee with regard to, the other exporters, it may be stated that the claim of the petitioners that Raghunath Rai Piyarilal were given import licence for the full value of the goods exported is not correct. It appears from the record that only 40% of 'the F.O.B. value was to be taken for "Glass, Nylon dved" exported in respect of application No. 36. Similar larly, in respect of application No. 35, 40% (if the F.O.B. value was to be taken for the purpose of granting import licences. It is true that in the cases of the other importers Premsukhdass Sitaram, Indian Exporters and Importers Corporation, M/s. Universal Watch Emporium, M/s. Jawahar Knitting Hosiery, M/s. Vastralaya Ltd. and M/s. Agarwala Trading Co., Ltd., the Committee have recommended acceptance of the purchase prices submitted by the exporters in granting import licences. It may, therefore, be assumed that these importers were, given licence for 1000% of the export value of the goods. But the Committee have given reasons which appear to be prima facie good for accepting the claims of these exporters ' If, on the materials placed before. them, the Committee were satisfied that there, was some misconduct or under hand dealing on the part of the petitioners, or that the evidence led before them justified the Committee in holding that the goods exported were not of the value ' claimed by the petitioners in their invoices, an order recommending that import licence may be granted for the value of bush shirt cloth computed on the basis of Re.1.50 nP. per yard does not. amount to discriminatory treatment of the petitioners. Article 14 confers a guarantee of the equal protection of the law a guarantee against arbitrary discrimination between persons similarly circumstanced. On the materials placed before the Committee. .there. evidence to show that the record produced by the 87 petitioners was unsatisfactory ; they were not satisfied that the prices which the petitioners said they had paid for purchasing the goods were in truth paid. If there was evidence to show that in respect of other persons who were in the opinion of the Committee found also to have inflated the prices 'in the manner adopted by :,the petitioners and still the Controller had granted import licences to those persons for the full amount of the. export value or a percentage substantially in excess of the percentage for which import licence was granted to the petitioners, a case of discrimin ation could have been made out ; but in the absence of such evidence, we do not think that any case of discrimination is made out. The petition fails and is dismissed with costs. The application filed by M/s. M. Shaams and Company for intervention is dismissed, because Miscellaneous Application No. 264 of 1960 which was filed by the applicants in the High Court of Judicature at Bombay for a writ of mandamus, direction or order under article 226 of the Constitution has been dismissed by the High Court and the remedy applicants is to file an appeal to. this Court. Petition dismissed.

Government of India published a 'scheme known as the "Export Promotion Scheme" according to which the value of import licence for raw materials in an industry depended upon the value of specified varieties of goods exported by the applicant for an import licence. It also empowered the Controller of Imports and Exports under cl. 2 'of Appendix 42 of the Import (Control) order 1955 to issue a license up to 66 2/3 per cent of the export value in the case of Indian artsilk sarees and up to 100 per cent in the case of other Indian artsilk fabrics. The appellant firm R of exporters and importers relying upon cl.2 of the Export Promotion Scheme applied for an import licence equivalent to the value of the goods it had exported and earned foreign exchange. In view of certain malpractices the Government of India suspended the "Export Promotion" scheme and set up a committee for verification of the values of goods exported. The Committee after scrutinising the firm 's claim found that rates of some of the items could not be accepted as reasonable, and recommended an import licence approximately of the value of 45 per cent of the goods exported. The firm R after making an infructuous demand for a licence for the full value of the goods exported filed a writ petition. They submitted that the Controller of Licences had arbitrarily reduced the value of their import licence and had thereby unlawfully infringed their fundamental right. They also claimed that the Controller was bound to grant licence under the Export Promotion Scheme for the full value of the goods exported by them and in failing to do so had practised discrimination 73 against them, because several other importers during the identical period were given licences for the full value of goods exported. Held, that the fundamental right of a citizen to carry on any occupation, trade or business under article 19(1)(g) of the Constitution is not absolute; it is subject to reasonable restrictions which may be imposed by the State in the interest of the general public. The right of the State to impose control in the larger interest of the general public on imports has accordingly not been denied; nor is the authority of the State to issue the Imports (Control) Order, 1955 in exercise of the powers conferred by the Imports and Exports (Control) Act providing for imposition of restrictions by permitting import of certain goods only in accordance with the licences or customs permits granted by the Central Government, open to challenge. The authority to grant or refuse to grant the licence is conferred upon high officers of the State and the grant of licence is governed by the Import Trade Control Policy and detailed provisions are made setting out the grounds on which licences may be refused, suspended or cancelled and provision to afford a hearing before action is taken is also made; thus the powers conferred under cl.3 of the Imports (Control) Order, 1955 are not uncanalised or arbitrary. The power granted to the licensing authority to grant licences only up to the maximum specified in cl.2 of the appendix 42 is by itself not an unreasonable restriction, nor will the notification directing scrutiny of all applications amount to imposing an unreasonable restriction. The clause invests the Controller with authority, it does not impose an obligation upon him enforceable at the instance of the exporter, to issue a licence for the amount (subject to the maximum prescribed) claimed by the exporter. The power is plainly discretionary and the orderd by the Controller granting a licence only for 45% of the goods exported does not infringe the fundamental right of the petitioner under article 19(1)(g) of the Constitution by imposing an unreasonable restriction. Held, further that in the absence of evidence to show that discriminatory treatment was made between the aggrieved person and to persons similarly circumstanced, there can be no violation of article 14 of the Constitution which confers a guarantee against arbitrary discrimination between persons similarly circumstanced . Held, also that where an application for writ of mandamus, direction or order under article 226 of the 74 Constitution is dismissed by the High Court, the only remedy to the aggrieved person is to come up by appeal and he has no right to be heard as an intervener.

minal Appeal No. 123 of 1968. Appeal by special leave from the judgment and order dated May 3, 1968 of the Patna High Court in Criminal W.J.C. No. 17 of 1968 and Criminal Miscellaneous Case No. 447 of 1968. B. C. Ghose, section N. Misra and A. K. Nag, for the appellant. D. Goburdhun, for the respondent. The Judgment of the Court was delivered by Shelat, J. This appeal, by special leave, is. against the dismissal by the High Court of Patna of the Writ Petition and an application under section 561A of the Code of Criminal Procedure, for a writ of habeas corpus and an order of a like nature. filed by the appellant. Both of them were heard together as they contained common allegations and both were dismissed by a common judgment. In the two aforesaid proceedings, the case of the appellant was that he was arrested on February 18, 1968, that since then he had been detained in custody without being informed of the grounds for his arrest and detention and also without having been produced before a Magistrate either within 24 hours after his detention as required under the Code, or even thereafter. On February 21, 1968, he was removed to Darbhanga jail where he was threatened that he would be falsely involved in several cases of dacoity unless he made certain incriminating statements which the police wanted him to make. He made two applications from jail one on February 25, 1968, and the other on February 28, 131 1968 to the Sub Divisional Magistrate. The first was not received at all by the Magistrate, while the second was received but after 'a long time, and was rejected. He also alleged that thereafter he made two further applications, one dated March 22. 1968 and the other dated March 27, 196,8 wherein he applied for directions to the police to 'furnish him with particulars of offences charged against him and for bail, but that he received no order on either of them. On these allegations, he claimed release forthwith from detention and the quashing of the criminal proceedings against him. In the counter affidavit filed by the State before the High Court, it was stated that one Bilat Sahni and one Baleshwar Paswan made confessions before the Magistrate at Samastipur on 23rd and 24th January, 1968 confessing their own guilt and implicating the appellant and certain other persons, in about eight dacoity cases, all having been committed in that locality, Thereupon, the appellant was arrested on February 17, 1968 He was produced before the Sub Divisional Magistrate of Samastipur on February 18, 1968, but was remanded to police custody by the said Magistrate for four days on an application by the police therefore. On February 21, 1968, the appellant was once again produced before the same magistrate and on an application by the police he was remanded to jail custody. The affidavit alleged that the appellant was involved in as many as nine dacoity case; wherein remand orders had been passed from time to time and that that was how he had, since February 21, 1968, been detained as an under trial prisoner. On April 19, 1968, an identification parade was held in connection with one, of the said nine cases whereat the relevant complainant identified the appellant. The case of the State was that the appellant was one of the three leaders engaged with certain hardened criminals in the aforesaid several dacoity cases, that it Was not true that he was unaware of the case against him or that he was not produced before the magistrate or that he was kept in prison without proper remand orders having been passed by the Magistrate. Five contentions were raised before the High Court, viz., (1) that the appellant was never produced before any magistrate within 24 hours after his arrest or even thereafter; hence his detention was in breach of article 22 of the Constitution, (ii) that although the order sheet, in respect of Laheriasarai Police Station Case No. 1 of 1968, records that the appellant had been produced before the Magistrate on several days set out therein, that order sheet had been falsely made; (iii) that the magistrates had no power to detain the appellant in jail in excess of 15 days in all, (iv) that even if he had the power to remand him in excess of 15 days in all, the condition for passing such orders was not 13 2 satisfied, and (v) that no remand order was factually ever passed. None of these contentions was accepted by the High Court, and the High Court, therefore, dismissed, as aforesaid, both the applications on May 3, 1968. Mr. Ghose, who appeared for the appellant before the High Court and who appeared before us also raised the following points: (1) that the appellant was not produced before any magistrate either on February 18, 1968 or on any other date thereafter, (2) that the appellant was never informed of the ,,rounds for his arrest, and detention thereafter, (3) that no custody warrant was ever issued warranting the jail authorities to keep the appellant in jail custody, and (4) that assuming that the said remand orders were passed, the appellant could not be kept in jail custody for more than 15 days in the whole. On the basis of these four points he urged that the appellant 's arrest .and detention were illegal and that therefore he was entitled to be released forthwith and the criminal proceedings instituted against him by the police quashed. Mr. Ghose also made a point that the jail Superintendent did not produce before the High Court the jail records which would show his having been taken out of the jail for being produced before the Magistrate when the magistrate decided the applications for remand by the police and passed the remand orders said to have been passed by him and that instead the jail Superintendent produced his report, thus disabling the appellant from establishing his case as laid in his writ petition. We may at this stage dispose of Mr. Ghose 's last point in regard to the non production of the jail record before the High ,;Court. It is true that the appellant did ask for production of that record first in the writ petition, and then on April 22, 1968 to which date the hearing of the writ petition was adjourned. But the order sheet maintained by the High Court in connection with the writ petition and the said application under section 561A of the Code shows that when the writ petition came up for admission, the learned Judges called for the record of the Magistrate 's Court and report from the jail superintendent regarding the dates on which the appellant was said to have been produced before the Magistrate for the purpose of the hearing of the remand applications. It appears that on April 22, 1968, to which date the writ petition was made returnable, neither the record of the Magistrate 's Court nor the report of the jail Superintendent had arrived. On that day, the appellant made an application for his production in Court at the time of the hearing and for the production of the jail record. The High Court, how ever, rejected the prayer for his production in Court and as regards the jail record ordered as follows: 133 so far as the production of the record of the jail is concerned, an express reminder by telegram may be sent to the Superintendent of jail to send the report already called for immediately, if possible by a special messenger. A reminder may also be sent to the Court concerned to send the records immediately, if possible, by a special messenger. " The High Court does not seem to have pressed for the produc tion of the jail record as it presumably thought that the Court 's record would show the dates when the appellant was produced before it and the Superintendent 's report would make that point clear. It 'appears from that order that the appellant also was content with the production of the Superintendent 's report and did not press for the calling of jail record. The judgment of the High Court also shows that that was also the case when the High Court heard the writ petition and the said section 561A application. Neither the order sheet nor the judgment of the High Court seems to warrant the allegations made in para 28 of the Special Leave Petition that repeated prayers were made for the production of the jail record. In any event, no prejudice appears to have been caused to the appellant 's case since the jail record could not have proved anything more than what the jail Superintendent 's report proved. The report, which was before the High Court, clearly pointed out that the appellant was remanded to jail custody on February 21, 1968 by the Sub Divisional Magistrate, Sadar in the case under section 395 of the Penal Code. The next date for his appearance was fixed on March 5, 1968, but the appellant refused to go to the Magistrate 's Court on that day as also on March 20, 1968 and April 4, 1968, on the ground that the identification parade for him had not yet been held and his going to and appearing in the Court would expose him to possible witnesses. 'Me Magistrate, therefore, had to postpone his production before him to April 18, 1968 when the appellant was produced and once again remanded to jail custody till the, next date, that is, May 2, 1968. The report of the jail Superintendent, thus, frankly conceded that the appellant could not be produced on the dates above stated and that the Magistrate, therefore, had to pass remand orders in his absence. It is clear from the report that the appellant himself had refused to appear and be present before the Magistrate when he heard the remand applications. therefore, cannot legitimately make a grievance that those orders were passed in his absence. Those orders could be passed validly in his absence if his presence at the time could not be secured. This has been held by the majority judgment of this 134 Court recently in Rai Narain vs Superintendent, Central jail, New Delhi. (1) We now proceed to consider the remaining points in the order in which Mr. Ghose raised them. The first point urged before us was that the appellant was not produced before a magistrate within 24 hours after his arrest as required by section 167 of the Code of Criminal Procedure, or even later and that therefore his arrest and the detention were bad in law. The order sheet of the Laheriasarai Police Station Case No. 1(i)68 produced before the High Court shows that the appellant was produced before the Magistrate on February 18, 1968, that is, within 24 hours after his arrest and that the Magistrate remanded him to jail custody on the application by the police until March 5, 1968. So far there is no difficulty because these entries in the order sheet are corroborated by the report of the Superintendent of jail. The order sheet, however, has entries dated March 5, 1968, March 20, 1968 and April 4, 196 8 when remand orders are shown to have been made, each for a period of 15 days, and further that the appellant was produced before the Magistrate on each of those three occasions. That, as the High Court has rightly observed, was not correct as the jail Superintendent 's report clearly showed that the appellant had refused to go from the jail for fear that he would be seen or be shown to probable witnesses. No reason has been shown as to why we should not agree with the aforesaid observation of the High Court, viz., that the Magistrate had wrongly recorded that the appellant was produced before him and that the remand orders were passed in his presence. The wrong entries made by him, however, do not mean that the remand orders were not in fact passed by him though he did so in the absence of the appellant. Such orders, as already pointed out, can be lawfully passed if ail accused person cannot for some reason or the other be brought before the Magistrate. It is, therefore, not possible to say that remand orders were not passed or that consequently his detention in the jail was without a valid basis. In the High Court no such contention, viz., that remand orders were not passed on those three dates appears to have been raised. Indeed, the allegation that the appellant was never produced before the Magistrate is belied by an elaborate order made by the Magistrate on March 28, 1968 when the appellant was represented by counsel. At that stage his counsel did not argue that the appellant was never produced before the Court or that no remand orders were ever, passed. The argument urged at that time was that the proceedings at that stage attracted section 167 of the Code, that the stage had not yet reached when section 344 would operate and that therefore the Magistrate bad no power to remand the appellant to jail custody for more than 15 days in the whole. That contention was (1) Writ Petition No. 330 of 1970, dcc. on September 1, 1970. 135 rejected by the Magistrate holding that there was an inquiry before him, and that therefore, section 344 applied and he was competent, therefore, to pass remand orders from time to time so long as each of those orders was not for a period in excess of 15 days. By that very order, the Magistrate rejected the bail application made by the appellant 's advocate holding that the investigation in the cases of dacoity in which the appellant was concerned was going on at that stage and that release of the appellant on bail would hinder its progress. The next contention was that the appellant was never informed of the grounds of his detention and that that being so, his detention was invalid. Paras 3, 4 and 35 of his writ petition did not charge that at the time of his arrest he was not informed of the grounds for his arrest and that even when he filed his writ petition he was not informed of those reasons, and that that constituted breach of article 22(1). This allegation is without any foundation. All throughout, his case was that the police had tortured him and threatened to involve him in a number of dacoity cases unless he made certain incriminating statements which they wanted from him. What were those incriminating statements which the police were trying to get from him ? From the fact that the police were wanting him to make those statements, he must have realised that those statements were related to the cases for which he had been arrested. Next, in the application he made from jail to the Magistrate on February 28, 1968, he alleged that the senior Sub Inspector of Police came to him on February 19, 1968, first abused him and then later on asked him "to admit that offence and promised that by doing so I would be discharged". According to that application he refused to admit the offence whereupon he was assaulted by the police. It also appears that he knew that an identification parade was going to be held and therefore had refused to be taken out of jail for being produced before the Magistrate. All these facts negative the suggestion of his being kept in ignorance of the reasons for his arrest or the cases charged against him. The third contention was that no valid custody warrant was issued by the Magistrate enabling the jail authorities to detain the appellant in the Darbhanga jail and licence the detention must be held to be without any legal authority. In support of the argument, counsel pointed out the custody warrant dated February 18, 1968 which according to him must be deemed to have been cancelled is at the foot of it there is the Magistrate 's endorsement that the appellant was instead remanded to police custody. Assuming that to be so, there is nothing to show that on February 21, 1968 when the Magistrate ordered the appellant to be taken into jail custody, a fresh custody warrant had not been issued by him. The Magistrate, while passing that order, must have known that the 136 jail authorities would not accept the appellant in jail unless the police taking him there produced a custody warrant. There is no reason to think first that the Magistrate had not issued such, a warrant, and secondly, that the jail Superintendent inducted the appellant in the jail without such a warrant. The contention, in our view is wholly without any basis. The last contention of Mr. Ghose was, firstly, that the remand orders passed by the Magistrate were under section 167 and not section 344, as the latter section did not apply at that stage, and secondly, that even if section 344 applied, the Magistrate could not order detention for more than 15 days in the whole. 167 appears in Ch. XIV which deals with information and investigation. As its language shows, it deals with the stage when a person is arrested by the police on information that an offence has been committed. In providing that such a person must, in terms of section 61, be produced before a magistrate within 24 hours after his arrest, the section reveals the policy of the legislature that such a person should be brought before a magistrate with as little delay as possible. The object of the section is two fold, one that the law does not favour detention in police custody except in special cases and that also for reasons to be stated by the magistrate in writing, and secondly, to enable such a person to make a representation before a magistrate. In cases falling under section 167, a magistrate undoubtedly can order custody for a period at the most of 15 days in the whole and such custody can be either police or, jail custody. Sec. 344, on the other hand, appears in Ch. XXIV which deal with inquiries and trials. Further, the custody which it speaks of is not such custody as the magistrate thinks fit as in section 167, but only jail custody, the object being that once an inquiry or a trial begins it is not proper to let the accused remain under police influence. Under this section, a magistrate can remand an accused person to custody for a term not exceeding 15 days at a time provided that sufficient evidence has been collected to raise a suspicion that such an accused person may have committed an offence and it appears likely that further evidence may be obtained by granting a remand Thus, section 167 operates at a stage when a person is arrested and either an investigation has started or is yet to start, but is such that it cannot; be completed within 24 hours. Sec. 344, on the other hand, shows that investigation has already begun and sufficient evidence has been obtained raising a suspicion that the accused person may have committed the offence and further evidence may be obtained, to enable the police to do which, a remand to jail custody is necessary. The fact that section 344 occurs in the Chapter dealing with inquiries and trials does not mean that it does not apply to cases in which the process of investigation and 137 collection of evidence is still going on. That is clear from the very language of sub section 1 A under which the magistrate has the power to postpone the commencement of the inquiry or trial. That would be the stage prior to the commencement of the inquiry or trial which would be the stage of investigation. (see A. Lakshamanrao vs Judicial Magistrate(1). Therefore, it is not as if the stage at which the Magistrate passed the remand orders was still the stage when section 167 applied and not section 344. The decision of the Orissa High Court in Artatran vs Orissa(2), to the effect that section 344 does not apply at the stage of investigation and can apply only after the Magistrate has taken cognizance of and issued processes or warrant for the production of the accused if he is not produced before him cannot, in view of A. Lakshamanrao 's case(1) be regarded as correct. The power under section 344 can be exercised even before the submission of the charge sheet, (cf. Chandradip vs State(3) and Ajit Singh vs State(4), that is, at the stage when the investigation is still not over. If the view we hold is correct that section 344 operated, the Magistrate, provided he complied with the condition in the Explanation, was competent to pass remand orders from time to time subject to each order being not for a period exceeding 15 days. There can be no doubt that the Magistrate had satisfied that condition. The judgment of the High Court in para 11 points out that the prosecution case was that the appellant had himself made a confession before the police. That was in addition to a confession by two others which implicated the appellant in the commission of offences under section 395 of the Code. In our view none of the contentions raised on behalf of the appellant can be sustained. The appeal, therefore, fails and has to be rejected. K.B.N. Appeal dismissed. (1) ; (2) A.I.R. 1956 Orissa 129. (3)(1955)Bihar Law Journal Reports, 323.

In the appeal against the order of the High Court dismissing the appellant 's petition for a writ of habeas corpus the appellant urged that he was not produced before a magistrate within 24 hours after his arrest as required by section 167 of the Code of Criminal Procedure or even later; that he was never informed of the grounds for his arrest; that no custody warrant was ever issued warranting the jail authorities to keep the appeal]ant in jail custody; that the remand orders passed by the magistrate were tinder section 167 and not under section 344 of the Code, as the latter section did not apply at the stage of investigation and that even if section 344 applied the magistrate could not order detention for more than 15 days in the whole. He also urged that the Jail Superintendent did not produce before the High Court the jail records but only produced his report, thus disabling the appellant from establishing his case. Dismissing the appeal, HELD : (1) The order sheet produced before the High Court showed that the appellant was produced before the magistrate within 24 hours after his arrest and that the magistrate remanded him to jail custody. Though the order sheet had entries showing that on subsequent occasions when remand orders were made the appellant was produced before the magistrate, the High Court has found that the Magistrate had wrongly recorded that the appellant was produced before him on those occasions. However, the wrong entries made by him do not mean that the remand orders were not in fact passed by him though he did so in the absence of the appellant. Such orders can be lawfully passed if an accused person cannot for some reason or the other be brought before the magistrate. [134 E F] Rai Narain vs Superintendent, Central Jail, New Delhi, Writ Petition No. 330 of 1970, decided on Sept. 1, 1970, referred to. (ii) The facts negative the suggestion of the appellant being kept in ignorance of the reasons for his arrest. [135 F] (iii) There is no reason to think that the magistrate ordered the appellant to lie taken into jail custody without custody warrant. [136 A] (iv) section 167 operates at a stage when a person is arrested and either an investigation has started or is yet to start, but is such that it cannot be completed within 24 hours. Section 344, on the other hand, shows that investigation has already begun and sufficient evidence has been obtained raising a suspicion that the accused person may have committed the offence 130 and further evidence may be obtained, to enable the police to do which a remand to jail custody is necessary. The fact that section 344 occurs in the Chapter dealing with inquiries and trials does not mean that it does not apply to cases in which the process of investigation and collection of evidence is still going on. Therefore, it is not as if the stage at which the Magistrate passed the remand orders was still the stage when section 167 applied and not section 334. The Magistrate, provided he complied with the condition to the Explanation, was competent to pass remand orders from time to time subject to each order being not for a period exceeding 15 days. The Magistrate had satisfied that Condition. [136 G] View contra in Artatran vs ATR 1956 Orissa 129 disapproved. A Lakshamanrao vs Judicial Magistrate, ; , Chanaraatn vs State, and Ajit Singh vs State, (1970) 76 Crl. L.H. 1075, referred to The appellant was content with the production of the superintendent 's report. No prejudice was caused to the appellant 's case since the jail record could not have proved anything more than what the jail superintendent 's report proved.

ivil Appeal Nos. 2168, 2569, of 1966, 76, 123 and 560 of 1967. Appeals by special leave from the Award dated June 30, 1966 of the Industrial Tribunal, Delhi in I.D. No. 70 of 1958. S.T. Desai, Rameshwar Nath and Mahinder Narain, for the appellant (in C.A. No. 2168 of 1966) and respondents Nos. 1 and 2 (in C.As. Nos. 123 and 560 of 1967). 311 H.R. Gokhale, A.K. Sen, R.P. Kapur and 1. N. Shroff, for the appellant (in C.A. No. 256,9 of 1966) and respondent No. 3 (in C.As. Nos. 123 and 560 of 1967). B. Sen, 1. D. Gupta, M.N. Shroff for 1. N. Shroff, for the appellant (in C.A. No. 76 of 1967). M.K. Ramamurthi, Madan Mohan, Shyamala Pappu and Vineet Kumar, for the appellant (in C.A. No. 123 of 1967), respondents Nos. 1 (a) and 4(a) (in C.A. No. 2168 of 1966), respondent No. 1 (in C.A. No. 2569 of 1966), respondent No. 1 (in C.A. No. 76 of 1967) and respondent No. 5 (in C.A. No. 560 of 1967). V.C. Parashar and O.P. Sharma, for the appellant (in C.A. No. 560 of 1967) respondents Nos. 1 (b) and 4(b) (in C.A. No. 2168 of 1966) respondent No. 2 (in C.A. No. 2569 of 1968) and respondent No. 2 (in C.A. No. 76 of 1967). The Judgment of the Court was delivered by Shah, J. These appeals arise out of an award made by the Industrial Tribunal, Delhi, in I.D. Reference No. 70 of 1958. The first three appeals are filed by the employers, and the last two by the employees. By its award the Industrial Tribunal (Delhi, has framed two schemes relating to payment of gratuity to the workmen employed in four textile units in the Delhi region. The employers and the workmen are dissatisfied with the schemes and they have filed these appeals challenging certain provisions of the schemes. In the Delhi region there are four textile units; the Delhi Cloth Mills which will be referred to. as D.C.M.; Swatantra Bharat Mills which will be referred to as S.B.M.; Birla Cotton Mills which will be referred to as B.C.M. and Ajudhia Textile Mills which will be referred to as A.T.M. The D.C.M. and S.B.M. are under one management. On March 4, 1958, the Chief Commissioner of Delhi made a reference under sections 10(1)(d) and 12(5) of the , relating to four matters in dispute, first of which is as follows: "Whether a gratuity for retirement benefit scheme should be introduced for all workmen on the following lines and what directions are necessary in this respect ? 1. for service less than 5 years Nil. for service between 5 10 years 15 days ' wages for every year of service. for service between 10 15 years 21 days ' wages for every year of service. 312 4. for service over 15 years one month 's wages for every year of service. " The reference related to workmen only and did not apply to the clerical staff or mistries. There are two workmens ' Unions in the Delhi region the Kapra Mazdoor Ekta Union hereinafter called 'Ekta Union ', and the other, the Textile Mazdoor Union. The Ekta Union made a claim principally for fixation of gratuity in addition to the benefit of provident fund admissible to the workmen under the Employees Provident Fund Act, to be computed on the consolidated wages inclusive of dearness allowance. The Ekta Union submitted by its statement of claim that a gratuity scheme based on the region cum industry principle i.e. a uniform scheme applicable to all the four units be framed. The Textile Mazdoor Union also supported the claim for the framing of a gratuity scheme on the basis of the consolidated wages of workmen but claimed that the scheme should be unit wise. At the trial, it appears that both the Unions pressed for a unit wise scheme of gratuity. The Tribunal entered upon the reference in respect of the fixation of gratuity scheme in February 1964 and made an award on June 30, 1966, operative from January 1, 1964. The award was published on August 4, 1966. By the award two schemes were framed one relating to the D.C.M. and S.B.M., and another relating to the B.C.M. and A.T.M. Under the second scheme the digit by which the number of completed year of service was to be multiplied in determining the total gratuity was smaller than the digit applicable in the case of the D.C.M. and the S.B.M. The distinction was made between the two sets of units, because the D.C.M. and S.B.M. were, in the view of the Tribunal, more prosperous units than the D.C.M. and A.T.M. The A.T.M., it was found, was a newcomer in the field of textile manufacture, and had for many years been in financial difficulties. The D.C.M. employs more than 8,000 workmen in its textile unit; the S.B.M. has on its roll 5,000 workmen; the B.C.M. has 6,271 workmen and the A.T.M. has 1,500 workmen. The D.C.M. and S.B.M. have a common retirement benefit scheme in operation since the year 1940. Under the scheme gratuity payable to workmen is determined by the length of service before retirement. The scheme of gratuity in operation in the D.C.M. and S.B.M. is as that, "In case of retirement from service of the Mills as a result of physical disability, due to over age or on account of death after a minimum of seven years '. 313 service in the concern: 7 years . Rs. 350/ 8 years . Rs. 425/ 9 years . Rs. 500/ 10 years . Rs. 575/ 11 years . Rs. 650/ 12 years . Rs. 725/ 13 years . Rs. 800/ 14 years . Rs. 875/ 15 years . Rs. 950/ 16 years . Rs. 1,050/ 17 years . Rs. 1,150/ 18 years . Rs. 1,250/ 19 years . Rs. 1,350/ 20 years . Rs. 1 '500/ The scale of gratuity, it is clear, is independent of the individual wage scale of the workman. In the B.C.M. and A.T.M. units there are no such schemes. Till the year 1958 there were no standardised wages in the textile industry. According to the Report of the Central Wage Board for the Cotton Textile Industry which was published on November 22, 1959, there were in India 39 regions in which the textile industry was located. The basic monthly wages of the workmen in the year 1958 varied between Rs. 18/ in Patna and Rs. 30/ in various centers like Bombay, Indore, Madras, Coimbatore, Madurai, Bhiwani, Hissar, Ludhiana, Cannanore and certain regions in Rajasthan and Delhi. The Wage Board recommended in Paragraph 106 of its Report: "The Board has come to the conclusion that an increase at the average rate of Rs. 8 per month per worker shall be given to all workers in mills of category I from 1st January 1960, and a further flat increase of Rs. 2 per month per worker shall be given to them from 1st January 1962. Likewise an increase at the average rate of Rs. 6 per month per worker shall be given to all the workers in mills of category 11 from 1st January 1960, and a further flat increase of Rs. 2 per month per worker shall be given to them from 1st January 1962. These increases are subject to the condition that the said sums of Rs. 8 and Rs. 6 shall ensure not less than Rs. 7 and Rs. 5 respectively to the lowest paid, and that the increase of Rs. 2 from 1st January 1962 shall be flat for all." Category I included the Delhi region. Since January 1, 1962, the basic minimum wage in the Delhi region is, therefore Rs. 40/Sup. CI/69 3 314 according to the recommendations of the Wage Board. In Bombay City and Island (including Kurla), the basic wage, according to the Report of the Wage Board, was also Rs. 30/and by the addition of Rs. 10 the basic wage of a workman came to Rs. 40/ . The workmen in other important textile centres also get the same rates. The Tribunal was of the view that the average basic wage of the workmen is Rs. 60/ since the implementation of the Wage Board in the Delhi region. No argument was advanced before this Court challenging the correctness of that assumption, by the employers or the workmen. It was also common ground that practically uniform basic wage levels prevail in all the large textile centres like Bombay, Ahmedabad, Coimbatore and Indore. Besides the basic wage the workmen receive dearness allowance under diverse awards made by the Industrial Tribunals which "seek to neutralize the cost of living index. " There is also a provident fund scheme under the Employees. Provident Fund Act, 1962, whereunder 8 1/3% of the basic wage and the dearnear allowance and the retaining allowance for the time being in force is contributed by the employee. Besides, there is a right to retrenchment compensation under the (section 25 FFF) and the Employees Insurance Scheme. In view of the observations of this Court in Burhanpur Tapti Mills Ltd. vs Burhanpur Tapti Mills Mazdoor Sangh(1), that "It is no longer open to doubt that a scheme of gratuity can be introduced in concerns where there. already exist other schemes such as provident fund or retrenchment compensation. This has been ruled in a number of cases of this Court and recently again in Wenger & Co. and others vs Their Workmen(2), and Indian Hume Pipe Company Ltd. vs Their Workmen(3). It is held in these cases that although provident fund and gratuity are benefits available at retirement they are not the same ,and one can exist with the other", no serious argument was advanced that the existence of these additional benefits disentitled the workmen to obtain benefits under a gratuity scheme if the employer is able to meet the additional burden. But on behalf of all the employers it was, urged that (1) in determining the quantum of gratuity, basic wage alone could be taken into account and not the consolidated wage; and (2 ) it was necessary for the Tribunal to fix when introducing a gratuity scheme the age of superannuation. On behalf of the D.C.M., S.B.M. and B.C.M. it was urged in addition, that a uniform scheme applicable to the entire industry on the region cumindustry basis should have been adopted and not a scheme or schemes applicable to individual units. On behalf of the A.T.M. (1) , (2) [1963] II L.L.J. 403. (3) [1959] II L.L.J. 830. 315 it was urged that its financial condition is not and has never been stable and the burden of payment of gratuity to workmen dying or disabled or on voluntary retirement from service or when their employment is terminated is excessive and the Unit was unable, to bear that burden. It was also urged on behalf of the A.T.M. that in view of a settlement which was reached between the management and workmen it was not open to the Tribunal to ignore the settlement and to impose a scheme for payment of gratuity in favour of the workmen in this reference. While broadly supporting the award of the Tribunal the workmen claim certain modifications. They claim that a shorter period of qualifying service for workmen voluntarily retiring should be provided, and gratuity should be worked out by the application of a larger multiple of days for each completed year of service; that the ceiling of gratuity should be related to a larger number of months ' wages; that gratuity should be awarded for dismissal even for misconduct; that provision should be made for payment of gratuity to Badli workmen irrespective of the number of days for which they work in a year; that the expression "average of the basic wage" should be appropriately clarified to avoid disputes in the implementation of the gratuity scheme, and that the award should be made operative not from January 1, 1964, but from the date of the reference to the Tribunal. The two schemes which have been flamed may be set out: ANNEXURE 'A ' "Gratuity scheme applicable to the Delhi Cloth Mills and the Swatantra Bharat Mills. ' Gratuity will be payable to the employees concerned, in this reference, on the scale and subject to the conditions laid down below: 1. On the death of an employee while in the service of the mill company or on his becoming physically or mentally incapacitated for further service: (a) After 5 years continuous service and less than 10 years ' service 12 days ' wages for each.completed year of service. (b) After continuous service of 10 years 15 days ' wages for each completed year of service. The gratuity will be paid in each case under clauses 1(a) and 1(b) to the employee, his heirs or executors, or nominee as the case may Provided that in no case will an employee, who is in service on the date on which this scheme is brought 316 into operation be paid an mount less than what he would have been entitled to under the pre existing scheme of the Employees ' Benefit Fund Trust. (ii) Provided further that the maximum payment to be made shall not exceed the equivalent of 15 months wages. (iii) Provided further that gratuity under this scheme will not be payable to any employee who has already received gratuity under the preexisting scheme of the Employees ' Benefit Fund Trust. On voluntary retirement or resignation after 15 years ' service 15 days ' wages for each completed year of service. Provided that the maximum payment to be made shall not exceed the equivalent of 15 months ' wages. On termination of service on any ground whatsoever except on the ground of misconduct As in clauses 1 (a) and 1 (b) above. Provided that the maximum payment to be made shall not exceed the equivalent of 15 months ' wages. Definitions: (a) 'Wages ' The term "wages" in the scheme will mean the average of the basic wage plus the dearness allowance drawn during the 12 months next preceding death, incapacitation, voluntary retirements, resignation or termination of service and will not include overtime wages. (b) "Basic wages" The term "basic wage" will have the meaning as defined in paragraph 110 of the Report of the First Central Wage Board for Cotton Textile Industry. (c) "Continuous service" means un interrupted service and includes service which may be interrupted on account of sickness, authorised leave, strike which is not illegal, lock out or cessation of work which is not due to any fault on the part of the employee: Provided that interruption in service upto six months ' duration at any one time and 18 317 months duration in the aggregate of the nature other than those specified above shall not cause the employee to lose the credit for previous service in the Mills for the purpose of calculation of gratuity, but at the same time shall not entitle him to claim benefit of gratuity for the period of such interruption. Service for the purposes 'of gratuity will include service under the previous management whether in the particular mill or other sister mill under the same management. (d) "Resignation" The word "resignation" will include abandonment of service by an employee provided he Submits his resignation within a period of three months from the first day of absence without leave. (e) "Length of service" For counting "length of service: ', fraction of a year exceeding six months shall count as one full year, and six months or less shah be ignored. "Application for gratuity" Any person eligible to claim payment of gratuity under this scheme shall, so far as possible, send a written application to the employer within a period of six months from the date its payment becomes due. "Payment of gratuity" The employer shall pay the amount of gratuity to the employee and in the event of his death before payment to the person or persons entitled to it under clause 1 above within a period of 90 days of the claim being presented to the employer and found valid. "Claims by persons who are no longer in service" Claims by persons who are no longer in service of the Company on the date of the publication of this award shall not be entertained unless the claims are preferred within six months from the date of publication of this award. "Badli service" Gratuity shall be paid for only those years of Badli service in which the employee has worked for not less than 240 days. 318 9. "Proof of incapacity" In proof of physical or mental incapacity, it will be necessary to produce a certificate from any one of the Medical Authorities out of a panel to be jointly drawn up by the parties. "Nomination" (a) Each employee shall, within six months from the date of the publication of this award, make a nomination conferring the right to receive the amount of gratuity that may be due to him in the event of his death, before payment has been made. (b) A nomination made under sub clause (a) above may, at any time, be modified by the employee after giving a written notice of his intention of doing so. if the nominee pre deceases the employee, the interest of the nominee shall revert to the employee who may make a fresh nomination in respect of such interest. " ANNEXURE 'B ' "Gratuity scheme applicable to the Birla Cotton Spg. & Wvg. Mills and the Ajudhia Textile Mills. Gratuity will be payable to the employees concerned in this reference, on the scale and subject to the conditions laid down below: 1. On the death o/an employee while in the service of the Mill company or on his becoming physically or mentally incapacitated for further service: (a) After 5 years continuous service and less than 10 years service One fourth month 's wages for each competed year of service. (b) After continuous service of 10 years One third month 's wages for each completed year of service. The gratuity will be paid in each case under clauses 1(a) and 1(b) to the employee, his heirs or executors, or nominee, as the case may be. Provided that the maximum payment to be made shah not exceed the equivalent of 12 months ' wages. On voluntary retirement or resignation after 15 years service On the same scale as in 1 (b) above. Provided that the maximum payment to be made shall not exceed the equivalent of 12 months ' wages. On termination of service by the employer for any reason whatsoever eXcePt on the ground of misconduct As in clauses 1(a) and 1(b) above. 319 provided that the maximum payment to be made shall not exceed the equivalent of 12 months ' wages." [Clauses 4 to 10 of Annexure 'B ' are the same I as in Annexure 'A ' and need not be repeated.] Whether against the A.T.M. the Tribunal was incompetent to make an award framing a .scheme for payment of gratuity may first be considered. Counsel for the A.T.M. urged that there was a settlement between the workmen and the management of the A.T.M. in consequence of which the Tribunal was incompetent to make an award. The facts on which reliance was placed are these: After ,the dispute was referred .to the Industrial Tribunal, there were negotiations between the management of the A.T.M. and workmen represented by the two Unions and an agreement was reached, the terms whereof were recorded in writing. Clauses 6 and 11 (4) of the agreement relate to the claim for gratuity: "6. The workmen agree not to claim any further increase in wages, basic or dearness, or make any other demand involving financial burdens on the Company either on their initiative or as a result of any award, till such time as the Working of the mills results in profits. The parties hereto agree to jointly withdraw in terms of this settlement, the following pending cases and proceedings before the Courts, Tribunals and Authorities and ' more especially . . . . . (4) With regard to I.D. No. 70 of 1958 the workers agree not to claim any benefits that ,may be granted under the above reference by the Hon 'ble Industrial Tribunal in case the award is. given in favour of the workmen, subject to clause 7 above." (It is common ground that reference to el. 7 is erroneous: it should be .to cl. 6.) The workmen and the management of the unit submitted an application before the Tribunal on December 28, 1959, admitting that there had been an "overall settlement" of all the pending disputes between the management of A.T.M. and its workmen represented by the two Unions, and requested that an interim award be made in terms of the agreement insofar as the dispute related to the A.T.M. No order was passed by the Tribunal on that application. On June 4, 1962, the Manager of the A.T.M. applied to the Tribunal that an interim award be pronounced in terms of the agreement. The workmen had apparently changed their attitude by that time and filed a written statement and requested that the ,prayer contained in paragraph 3 of the application "be rejected 320 as impermissible in law". The Tribunal made an order on November 26, 1962, and observed: ". the only interpretation that can be given to clause 11(4) of the settlement read with clause 7 is, that the workers of the Ajudhia Textile Mills had bound themselves not to claim any benefits that might be granted by the Tribunal in the award on the present reference, if it turns out to be in favour of the workmen unless and until the working of the Mills results in profit. The fact that the passing of an award on the demands was envisaged under the settlement goes to show that the demands were to be adjudicated upon in any case. The main case will now proceed in respect of all the mills and the effect of the settlement and of the application dated 28th December, 1959, and of the 5th July 1962 will be considered at the time of the final award. " But in making the final award the Tribunal did not specifically refer to the settlement. The terms of cl. 6 of the settlement clearly show that if it be found that the A.T.M. had acquired financial stability, it will be liable to pay gratuity to the workmen. We are unable to agree with the contention of counsel for the A.T.M. that it was intended by the parties that the adjudication proceedings against the A.T.M. should be dropped, and after the A.T.M. became financially stable a fresh claim should be made by the workmen on which a reference may be made by the Government for adjudication of the claim for gratuity against the A.T.M. The contention by the management of the A.T.M. that the Tribunal was incompetent to determine the gratuity payable to the workmen of the A.T.M. must therefore fail. The other contention raised on behalf of the A.T.M. that its financial position was "unstable" need not detain us. The Tribunal has held that the A.T.M. was working at a loss since the year 1953 54 and the losses aggregated to Rs. 6.22 lakhs in the year 1958 59, but thereafter the financial position of the Unit improved. The trading account for the period ending March 31, 1960, showed profits amounting to Rs. 3.10 lakhs. In 1960 61 there was a surplus of Rs. 11.18 lakhs out of which adjusting the depreciation, development rebate reserve and reserve for bad and doubtful debts, there was a balance of Rs. 7.10 lakhs. In 1961 62 the net profits of the Unit amounted to Rs. 7.48 lakhs and the A.T.M. distributed Rs. 52,500/ as dividend. In 1962 63 there was a gross profit of Rs. 4.18 lakhs and after adjusting depreciation and development rebate reserve there was a net deficit of Rs. 30,517/ . In 1963 64 there was a gross profit of Rs. 14.29 lakhs and after adjusting depreciation, reserve for doubtful debts, bonus to employees and development rebate reserve, there re 321 mained a net profit of Rs. 4.71 lakhs. The Tribunal observed that by 1961 62 all previous losses of the Unit were wiped out and that even during the year 1962 63 in which there was labour unrest the gross profits were substantial and taking into consideration the reserves built by the Company "the picture was not disheartening and from the great progress that had been made since 1959 60 there was every reason to think that the Mill had achieved stability and reasonable prosperity and that it had an assured future", and the Company was in a position to meet the burden of a modest gratuity scheme. We see no reason to disagree with the finding recorded by the Tribunal on this question. On behalf of the D.C.M., S.B.M., and B.C.M. it was urged that normally gratuity schemes are framed on the region cum dustry principle, i.e., a uniform scheme applicable to all Units in an industry in a region is framed, and no ground for departure from that rule was made out. It was urged that this Court has accepted invariably the region cum industry principle in fixing the rates at which gratuity should be p.aid. In our judgment no such rule has been enunciated by this Court. In Bharatkhand Textile Mfg. Co. Ltd. vs Textile Labour Association, Ahmedabad(1), this Court in dealing with the question whether the Industrial Court had committed an error in dealing with the claim for gratuity on industry wise basis negatived the contention of the employers that the unit wise basis was the only basis which could be adopted in fixing the rates of gratuity. It was observed at p. 345: "Equality of competitive conditions is in a sense necessary from the point of view of the employers themselves; that in fact was the claim made by the Association which suggested that the gratuity scheme should be framed on industry wise basis spread over the whole of the country. Similarly equality of benefits such as gratuity is likely to secure contentment and satisfaction of the employees and lead to industrial peace and harmony. if similar gratuity schemes are framed for all the units of the industry migration of employees from one unit to another is inevitably checked, and industrial disputes arising from unequal treatment in that behalf are minimaised. Thus, from the point of view of both employers and employees industry wise approach is on the whole desirable. " It is clear that the Court rejected in that case the argument that rates of gratuity should be determined unit wise: the Court did not rule that in all cases the region cum industry principle should be adopted in fixing the rates of gratuity. That was made explicit in a later judgment of this Court: Burhanpur Tapti Mills Ltd. vs (1) ; 322 Burhanpur Tapti Mills Mazdoor Sangh(x). This Court observed at p. 456: ". it has been laid down by this Court that there are two general methods of fixing the terms of a gratuity scheme. It may be fixed on the basis of industry cum region or on the basis of units. Both systems axe admissible but regard must be had to the surrounding circumstances to select the right basis. Emphasis must always be laid upon the financial position of the employer and his profit making capacity whichever method is selected." In Garment Cleaning Works vs Its Workmen(1) this Court observed at p. 713: ". it is one thing to hold that the gratuity scheme can, in a proper case, be flamed on industry cum region basis, and another thing to say that industry cum region basis is the only basis on which gratuity scheme can be framed. In fact, in a large majority of cases gratuity schemes are drafted on the basis of the units and it has never been ,suggested or held that such schemes are not permissible. " The Tribunal in the award under appeal observed: "There are . . certain peculiar features in the textile industry in this region which militate against an indnstry cum region approach. Apart from the fact that one of the four units, namely, the Ajudhia Textile 'Mills is a much weaker unit than the rest and has passed through a chequered career during its existence, it has to be borne in mind that two of the units namely D.C.M. and S.B.M. which axe sister concerns, already have some sort of a gratuity scheme providing for two important retiral benefits, namely, death and physical disablement on a scale which is independent of wage variations and is not unsubstantial at least for categories in the lower levels. " The Tribunal further observed: "if a common scheme is framed for the entire textile industry at Delhi i.e. for all the four units the quantum of benefits under that scheme will naturally have to be much lower in consideration of the financial condition of the Ajudhia Textile Mill, than if a unit wise scheme is framed. Moreover in a common scheme of gratuity the quantum of benefits to be provided will have to be (1) (2) ; [1961] I L.L.J. 513. 323 lower than the benefits already available to workmen in the D.C.M. and S.B.M. units for the most important contingencies for which gratuity benefits are meant, namely, death and retirement on account of physical or mental incapacity. Such a lowering of the quantum of benefits would not in my view be desirable as it would create legitimate discontent. " In our judgment, no serious objection may be raised against the reasons set out by the Tribunal in support of the view that unitwise approach should be adopted in the reference before it and not the region cum industry approach. No case is there/ore made out for interference with the award made determining the rates of gratuity unit wise. We also agree with the Tribunal that on the terms of the reference it was incompetent to fix the age of superannuation forworkmen. We are unable to hold that a gratuity scheme may be implemented only if the age of superannuation of the workmen is determined by the award. Support was sought to be derived by counsel for the employers in support of his plea from the observations made by this Court in Burhanpur Tapti Mills Ltd. 's case(D, where in examining the nature of gratuity, it was observed: "The voluntary retirement of an inefficient or old ' or worn out employee on the assurance that he is to get a retiral benefit leads to the avoidance of industrial disputes, promotes contentment among those who look for promotions. , draws better kind of employees and improves the tone and morale of the industry. It is beneficial all round. It compensates the employee who as he grows old knows that some compensation for the gradual destruction of his wage earning capacity is being built up. By inducing voluntary retirement of old and worn out workmen it confers on the employer a benefit akin to the replacing of old and worn out machinery. " There is, in our judgment, nothing in these observations which justifies the view that a gratuity scheme cannot be effective unless it is accompanied by the fixation of the age of superannuation for the workmen in the industry. There is another objection to the consideration of this claim made on behalf of the employers. By the express terms of reference the Tribunal is called upon to adjudicate on the question of fixation of gratuity: there is no .reference either expressly or by implication to the fixation of the age of superannuation and in the absence of any reference relating to the fixation of the age of (1) [1965] 1 LL.J. 453. 324 superannuation, the Tribunal was not competent to fix the age of superannuation. A gratuity scheme may, in our judgment, be implemented even without fixing the age of superannuation. The gratuity scheme in operation in the D.C.M. and S.B.M. has been effectively in operation without any age of superannuation for the workmen in the two units. An enquiry into the question of fixing the age of superannuation did not arise out of the terms of reference. No such claim was made by workmen and ' even in the written statement filed by the employers no direct reference was made to the fixation of the age of superannuation, nor was there any plea that before framing a gratuity scheme the Tribunal should provide for the age of superannuation. We agree with the Tribunal that fixation of the age of superannuation was not incidental to the ,framing of the gratuity scheme 'and it was neither necessary nor desirable that it should be fixed. Counsel for the employers urged that the Tribunal committed a serious error in relating the computation of gratuity payable to the workmen on retirement on the consolidated monthly wage and not on the basic wage. "Gratuity" in its etymological sense means a gift especially for services rendered or return for favours received. For some time in the early stages in the adjudication of industrial disputes, gratuity was treated as a gift made by the employer at his pleasure and the workmen had no right to claim it. But since then there has been a long line of precedents in which it has been ruled that a claim for gratuity is a legitimate claim which the workmen may make and which in appropriate cases may give rise to an industrial dispute. In Garment Cleaning Works ' case(1) it was observed that gratuity is not paid to the employees gratuitously or merely as a matter of boon. It is paid to him for the service rendered by him to the employer. The same view was expressed in Bharatkhand Textile Mfg. Ltd. 's case(2) and Calcutta Insurance Ltd. vs Their Workmen(a). Gratuity paid to workmen is intended to help them after retirement on superannuation, death, retirement, physical incapacity, disability or otherwise. The object of providing a gratuity scheme is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer. It is one of the 'efficiency devices ' and is considered necessary for an 'orderly and humane elimination ' from industry of superannuated or disabled employees who, but for such retiring benefits, would continue in employment even though they function inefficiently. It is not paid to an employee .gratuitously or merely as a matter of boon; it is paid to him for long and meritorious service rendered by him to the employer. (1) (2) ; (3) [1967] II L.L.J. 1. 325 On the findings recorded by the Tribunal all the textile units in the Delhi region are able to meet the additional financial burden, resulting from the imposition of a gratuity scheme. The D.C.M. and S.B.M. have their own schemes which enable the workmen to obtain substantial benefit on determination of employment. The B.C.M. though a weaker unit is still fairly prosperous and is able to bear the burden: so also the A.T.M. But the important question is whether these four units should be made liable to pay gratuity computed on the consolidated wage i.e., basic wage plus the dearness allowance. The Tribunal was apparently of the view that in determining the question the definition of the word "wages. " in the industrial Disputes Act, 1947, would come to the aid of work men. The expression "wages" as defined in section 2(rr) of the means all remuneration, capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment or of work done in such employment and includes among other things, such allowances (including dearness allowance) as the workman is for the time being entitled to. But we are unable to hold that in determining the scope of an industrial reference, words used either in the claim advanced or in the order of reference made by the Government under section 10 of the must of necessity have the meaning they have under the . Merely because the expression "wages" includes dearness allowance within the meaning of the , the Tribunal is not obliged to base a gratuity scheme on consolidated wages. The Tribunal has observed that the basic average wage of a workman in the textile industry in the Delhi region may be taken at Rs. 60/ per month, and the dearness allowance at Rs. 100/per month, and even if full one month 's basic wage is adopted as the minimum quantum of benefits to be allowed in the case of wage group with service of 5 years and more the scale of benefit would be very much lower than the present scale in the two contingencies provided in the Employees Benefit Fund Trust Scheme in operation in the D.C.M. and S.B.M. And observed the Tribunal: "In view of the limitations of the terms of reference, the quantum cannot exceed 15 days ' wages for every year of service from 5 to 10 years and 21 days ' wages for every year of service from 10 15 years. Any schemes framed within the limitations of the terms of reference on the basis of basic wage alone will therefore mean a scale of benefits much lower than even the present scheme under the Employees Benefit Fund Trust. Such 326 a scheme cannot, therefore, be framed without causing grave injustice and acute discontent, because it will mean the deprivation of even the present scale of benefits in the case of a large body of workers. In order to maintain, so far as possible, the present level of benefits I have, therefore, no alternative but to frame for these two units a scheme based on basic wage plus dearness allowance. " A scheme of gratuity based on consolidated wages was also justified in the view of the Tribunal because it "was also necessary to compensate for the ever diminishing market value of the rupee". The Tribunal did however observe that normally gratuity is based not on the consolidated wage but on basic wage. But since 13,000 workmen out of a total of 20,000 workmen in the region would stand to lose the benefits granted to them under a voluntary scheme introduced by the D.C.M. and S.B.M. a departure from the normal pattern should be made and gratuity should be based on the consolidated monthly wage. In our judgment, the conclusion of the Tribunal cannot be supported. The primary object of industrial adjudication is, it is said, to adjust the relations between the employers and employees or between employees inter se with the object of promoting industrial peace, and a scheme which deprives workmen of what has. been granted to them by the employer voluntarily would not secure industrial peace. But on that account the Tribunal was not justified in introducing a fundamental change in the concept of a benefit granted to the workmen in the textile industry all over the country by numerous schemes. , The appropriate remedy is to introduce reservations protecting benefits already acquired and to frame a scheme consistent with the normal pattern prevailing in the industry. We consider it fight to observe that in adjudication of industrial disputes settled legal principles have little play: the awards made by industrial tribunals are often the result of ad hoc determination of disputed questions, and each determination forms a precedent for determination of other disputes. An attempt to search for principle from the law built up on those precedents is a futile exercise. To the Courts accustomed to apply settled principles to facts determined by the application of the judicial process, an essay into the unsurveyed expanses of the law of industrial relations with neither a compass nor a guide, but only the pillars of precedents is a disheartening experience. The Constitution has however invested this Court with power to sit in appeal over the awards of Industrial Tribunals which are, it is said, rounded on the somewhat hazy background of maintenance of industrial peace, which secures the prosperity of the industry and improvement of the conditions of workmen employed in the industry, and in 327 the absence of principles precedents may have to be adopted as guides some what reluctantly to secure some reasonable degree of uniformity of harmony in the process. But the branch of law relating to industrial relations the temptation to be crusaders instead of adjudicators must be firmly resisted. It would not be out of place to remember the statement of the law made in a different context but nonetheless appropriate here by Douglas, J., of the Supreme Court of the United States in United Steel Workers of America vs Enterprise Wheel and Car Corporation(1): ". as arbitrator does not sit to dis pense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award. is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator 's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award. " We may at once state that we are not for a moment suggesting that the law of industrial relations developed in Our country has proceeded on lines parallel to the direction of the law in the United States. One of the grounds which appealed to the Tribunal in relating to the rate of gratuity to the consolidated wage was the existence of a gratuity scheme in the D.C.M. & S.B.M. and the assumption that the Tribunal in adjudicating a dispute is always, in exercise of its jurisdiction, limited when determining the rate of gratuity to the multiple number of days of service in the order of reference, and cannot depart therefrom. We are unable to hold that Industrial Tribunal is subject to any such restriction. Its power is to adjudicate the dispute. It cannot proceed to adjudicate disputes not referred: but when called upon to adjudicate whether a certain scheme "on the lines indicated" should he framed, the basic guidance cannot be deemed to impose a limit upon its jurisdiction. As already stated, gratuity is not in its present day concept merely a gift made by the employer in Iris own discretion. The workmen have in course of time acquired a right to gratuity on determination of employment provided the employer can afford having regard to his financial condition, to pay it. There is undoubtedly no statutory direction for payment of gratuity as it is in respect of provident fund and retrenchment compensation. The conditions for the grant of gratuity are, as observed in Bharatkhand (1) ; 325 Textile Mfg. Co. Ltd. 's case(1), (i) financial capacity of the employer; (ii) his profit making capacity; (iii) the profits earned by him in the past; (iv) the extent of his reserves; (v) the chances of his replenishing them; and (vi) the claim for capital invested by him. But these are not exhaustive and there may be other material considerations which may have to be borne in mind in determining the terms and conditions of the gratuity scheme. Existence of other retiring benefits such as provident fund and retrenchment compensation or other benefits do not destroy the claim to gratuity: its quantum may however have to be adjusted in the light of the other benefits. We may repeat that in matters relating to the grant of gratuity and even generally in the settlement of disputes arising out of industrial relations, there are no fixed principles, on the application of which the problems arising before the Tribunal or the Courts may be determined and often precedents of cases determined adhoc are utilised to build up claims or to resist them. It would in the circumstances be futile to attempt to. reduce the grounds of the decisions given by the Industrial Tribunals, the Labour Appellate Tribunals and the High Courts to the dimensions of any recognized principle. We may briefly refer to a few of the precedents relating to the grant of gratuity. In May and Baker (India) Ltd. vs Their Workmen(2) the claim of the workmen to fix gratuity on the basis of gross salary was rejected by the Industrial Tribunal and the quantum was related to basic salary i.e., excluding dearness allowance. The view taken by the Tribunal was affirmed by this Court. In British India Corporation vs Its Workmen(3) the existing gratuity scheme directed payment of gratuity in terms of consolidated wages. The Tribunal however modified the scheme while retaining the basis of consolidated wages which was held to be justified and reasonable. This Court observed that prima facie gratuity is awarded not by reference to consolidated wages but on basic wages and the Tribunal had made a departure from that. But in the view of the Court no interference with the scheme framed by the Tribunal was called for. In British Paints (India) Ltd. vs Its Workmen(4) the Court followed the judgment in May and Baker (India) Ltd.(a) that it would be proper to follow the usual pattern of fixing the quantum of gratuity on basic wage excluding dearness allowance. But the same principle was not adhered to in all cases. For instance in Hindustan Antibiotics Ltd. vs Their Workmen(5), it was observed: (1) ; (2) [1961] II L.L.J. 94 (S.C.). (3) [1965] II L.L.J. 556 (S.C.). (4) [1966] I L.L.J. 407. (5) [1967] I L.L.J. 114 (S.C.)==A.I.R. 329 "The learned counsel for the Company then argued that there is a flagrant violation or departure from the accepted norms in fixing the wage structure and the dearness allowance and therefore, as an exceptional case, we should set aside the award of the Tribunal and direct it to. re fix the wages. " In that case the Tribunal had awarded gratuity related to consolidated wages and without any contest the order of the Tribunal was confirmed. In Remington Rand of India vs The Workmen(1) it was contended on behalf of the employer that the Tribunal was not justified in awarding gratuity on the basis of consolidated wages and should have awarded it on the basic wages alone. In dealing with that plea this Court Observed that the Tribunal was on the facts of the case justified in proceeding in that way. It is not easy to extract any principle.from these cases; as precedents they are conflicting. If the matter rested there, we could not interfere with the conclusion of the Tribunal, but the Tribunal has failed to take into account the prevailing pattern in the textile industry all over the country. The textile industry is spread over the entire country, in pockets some large other small. There are large and concentrated pockets in certain regions and smaller pockets in other regions. Except in two or three of the smaller States, textile units are to be found all over the country. It is a country wide industry and in that industry, except in one case to be presently noticed, gratuity has never been granted on the basis of consolidated wages. Out of 39 centres in which the textile industry is located there is no centre in which gratuity. payable to workmen in the textile industry pursuant to awards or settlements is based on consolidated wages. In the two principal centres viz., Bombay and Ahmedabad, schemes for payment .of gratuity to workmen in the textile industry the rates of gratuity are related to basic wages. The B.C.M. have tendered before the Tribunal a chart setting out the names of textile units in which the gratuity is paid to the workmen on basic wages. These are the Textile Units, Bhavnagar (Gujarat) Shahu Chhatrapati Mills, Kolhapur (Maharashtra); Jivajirao Cotton Mills, Gwalior (Madhya Pradesh); Madhya Pradesh Mill owners Association, (Indore), Bombay, Ahmedabad (Gujarat); New Sherrock Spg. & Wvg. Co. Ltd. Nadiad (Gujarat); Raja Bahadur Motilal Mills, Poona (Maharashtra); Shree Gajanan Wvg. Mills, Sangli (Maharashtra); T.I.T. Bhiwani (Haryana); Jagatjeet Cotton Mills, Phagwada (Punjab); 36 Textile Mills in West Bengal; and Umed Mills (Rajasthan). It is true that the chart does not set out the gratuity schemes, if any, in all the 39 centres referred to in the Report of the First Wage Board, but the chart relates to a fairly representative segment of the industry. No evidence has been (1) [1968] I L.L.J. 542. Cl/69 4 330 placed before the Court to prove that in determining gratuity payable under any other scheme in a textile unit the rate is related to consolidated wages. The two large centres in which the industry is concentrated are Bombay and Ahmedabad. In Rashtriya Mill Mazdoor Sangh, Bombay, vs Millowners Association Bombay(1), a scheme was framed by the Industrial Court, exercising power under the Bombay Industrial Relations Act 11 of 1947, in which the quantum of gratuity was related to the basic wages alone. In paragraph 27 at p. 583 the Tribunal rejected the argument advanced by counsel for the workmen that since benefits like provident fund, retrenchment compensation, State Insurance Scheme, are granted in terms of monthly wages, gratuity should also be related to consolidated wages. They observed that in a large majority of awards of the Labour Appellate Tribunals and Industrial. Tribunals gratuity had been awarded in terms of basic wages, and that, "The basic wages reflect the differentials between the workers more than the total wages, as dearness allowance to all operatives is paid at a flat rate varying with the cost of living index. The gratuity schemes for the supervisory and technical staff as well as for clerks are also in terms of basic wages. " They accordingly related gratuity with the average basic wage earned by the workman during the twelve months preceding death, disability, retirement, resignation or termination of service. The scheme in the Bombay region was adopted in the dispute between the Textile Labour Association and the Ahmedabad Mill Owners Association. The award is reported in the Textile Labour Association, Ahmedabad vs Ahmedabad Millowners ' Association(2). The question whether gratuity should be fixed on the basis ,of consolidated wages was apparently not mooted, but it was accepted on both the sides that gratuity should be related to basic wages. An appeal against that decision in the Ahmedabad Millowners ' Association case(2) was brought before this Court in Bharatkhand Textile Manufacturing Co. Ltd. 's case(3), but no objection was raised to the award relating gratuity to basic wages. In the report of the Central Wage Board for the Cotton Textile Industry, 1959, in paragraph 110 gratuity was directed to be given on the basis. of wages plus the increases given under paragraph 106, but excluding the dearness allowance. The only departure from the prevailing pattern to which our attention is invited was made by the Labour Appellate Tribunal in regard to the textile units in the Coimbatore Region: Rajalakshmi Mills Ltd. vs Their Workmen(4). There was apparently (1) [1967] Industrial Court Reporter 561. (2) [1958] I L.LJ. 349. (3) ; (4) [1957] II L.L.J. 426. 331 no discussion on the question about the basis on which gratuity should be awarded. The Labour Appellate Tribunal observed: 2. "In all the appeals there is a contest by the mills on the subject of gratuity, and it is contended that the gratuity as awarded is too high. Both sides had much to say on the subject of the gratuity scheme as given by the adjudicator. During the course of the hearing we indicated to the parties the lines on which the gratuity scheme could be suitably altered to meet their respective points of view. We accordingly give the following scheme in substitution of the scheme at Para 85 of the award: 'All persons with more than five years and less than ten years ' continuous service to their credit, on termination of their service by the company, except in cases of dismissals for misconduct involving moral turpitude, shall be p.aid gratuity at the rate of ten days ' average rate of pay inclusive of dearness allowance for each completed year of service. ' . . . . . ." But this award was modified later by the Industrial Tribunal in Coimbatore District Mill Workers ' Union and Others vs Rajalakshmi Mills Co. Ltd.(1) The earlier award made in 1957 was sought to be reviewed before the Industrial Tribunal. The Tribunal observed that it would be the duty of the Tribunal to modify a gratuity scheme based upon some agreement or settlement if the terms of that agreement are found to be onerous and oppressive. The Tribunal stated that the original scheme was not applicable to all the units and taking into consideration the statutory provident fund scheme and "the fact that recently basic wages and dearness allowance have leaped up", there was No. justification for including the dearness allowance in any new scheme that might be framed for the new Mills; and that it would be most undesirable to have two sets of gratuity schemes in the same region with varying rates. In the view of the Tribunal there should be a uniform scheme for all the Mills, old and new, and on that ground also the retention of the dearness allowance under the old scheme must be refused. Counsel for the workmen relied upon an award made by the Industrial Tribunal in the Chemical Unit belonging to the D.C.M. which is published in D.C.M. Chemical Works vs Its Workmen(2). In that case gratuity was related to consolidated wages. The unit though belonging to the D.C.M. is entirely independent of the tex (1) [1964] I L.L.J. 638. (2) [1962] 1L.L.J. 388. 332 tile unit. The Company was treating that unit as separate from the textile unit and distinct for the purpose of recruitment of lab.our, sales and conditions of service for the workmen employed therein. The Chemical Unit had separate muster rolls for its employees and transfers from one unit to. the other, even where such transfers were possible, considering the utterly different kinds of businesses carried on in the different units, usually took place with the consent of the employee concerned. In upholding the gratuity scheme which was based on the consolidated wages, this Court observed: "As to the burden of the scheme, we do not think that, looking at it from a practical point of view and taking into account the fact that there are about 800 workmen in all in the concern, the burden per year would 'be very high, considering that the number of retirements is between three to four per centum of the total strength." The gratuity scheme was in a chemical unit, and not in a textile unit. The judgment of this Court merely affirmed the award of the Tribunal and sets out no reasons why gratuity should be related to consolidated wages. We do not regard the affirmance by this Court of the award of the Industrial Tribunal as an effective or persuasive precedent justifying a variation from the normal pattern of gratuity schemes in operation in the textile industry all over the country. It is clear that in the gratuity schemes operative at present to which our attention has been invited, in force in the textile industry payment of gratuity is related not to consolidated wages but to basic wages. It is true that under the scheme which is in operation in the D.C.M. and S.B.M. payment which is related to the length of service may in some cases exceed the maximum awardable under a scheme of gratuity benefit related to basic wages. That cannot be a ground for making a vital departure from the prevailing pattern in the other textile units in the country. But it may be necessary to protect the interest of the members governed by the original scheme. Determination of gratuity is not based on any definite rules. In each case it must depend upon the prosperity of the concern, needs of the workmen and the prevailing economic conditions, examined in the light of the auxiliary benefits which the workmen may get on determination of employment. If all over the country in the textile centres payment of gratuity is related to the basic wages and not on consolidated wages any innovation in the Delhi region is likely to give rise to serious industrial disputes in other centres all over the country. The award if confirmed would not ensure industrial peace: it is likely to foment serious unrest in 333 other centres. If maintenance of industrial peace is a governing principle of industrial adjudication, it would be wise to maintain a reasonable degree of uniformity in the diverse units all over the country and not to make a fundamental departure from the prevailing pattern. We are, therefore, of the view that the Tribunal 's award granting gratuity on the basis of consolidated wage cannot be upheld. Tiffs modification will not, however, affect the existing benefits which are available under the schemes framed by the D.C.M. and S.B.M. insofar as those two units are. concerned. Mr. Ramamurthi for the workmen also. contended that in the matter of relating gratuity to wages consolidated or basic the principle of region cum industry should be applied and an "overall view of similar and uniform conditions in the industry ' in different centres" should not be adopted. It was also urged that the basic wage is very low and the class of wage to which gratuity was related played a very important part in the determination of gratuity. The basic wage is however low in all the centres and if it does not play an important part in other centres, we see no reason why it should play only in the Delhi region a decisive part so as to make a vital departure from the scheme in operation in the other centres in the country. We are strongly impressed by the circumstance that acceptance of the award of the Tribunal in the present case is likely to create conditions of great instability all over the country in the textile industry. In that view, we decline to uphold the order of the Tribunal fixing gratuity on the basis of consolidated wages inclusive of dearness allowance. We may refer to the contentions advanced by counsel for the workmen in the two appeals filed by them. It was urged,, that the Tribunal was in error in denying to the workmen gratuity when employment is determined on the ground of misconduct. It was urged that it is now a rule settled by decisions of this Court that the employer is bound to pay gratuity notwithstanding termination of employment on the ground of misconduct. It may be noticed that in the Rashtriya Mill Mazdoor Sangh 's case(1) and in the Ahmedabad Millowners ' Association case(2) provision was expressly made denying gratuity to the workmen dismissed for misconduct. But in later cases a less rigid approach was adopted. In Garment Cleaning Works case(3) tiffs Court observed: "On principle, if gratuity is earned by an employee for long and meritorious service, it is difficult to understand why. the benefit thus earned by long and meritorious service should not be available to the employee even though at the end of such service he may have been found guilty of misconduct which entails his dismissal. Gratuity is not paid to the employee gratui (1) [1957] Industrial Court Reporter, 561. (2) [1958] I L.L.J. 349. (3) 334 tously or merely as a matter of boon. It is paid to him for the service rendered by him to the employer, and when it is once earned, it is difficult to understand why it should necessarily be denied to him whatever may be the nature of misconduct of his dismissal. " In later judgments also the Courts upheld the view that the denial of the right to gratuity is not justified even if employment is determined for misconduct. In Motipur Zamindari (P) Ltd. vs Their Workmen ( 1 ), this Court opined that the workmen should not be wholly deprived o.f the benefit earned by long and meritorious service, even though at the end of such service he may be found guilty of misconduct entailing his dismissal, and therefore the condition in a gratuity scheme that no gratuity should be payable to a workman dismissed "for misconduct involving moral turpitude" should be held unjustified. The Court therefore modified the condition and directed that while paying gratuity to a workman who was dismissed for misconduct only such amount should be deducted .from the gratuity due to him in respect of which the employer may have suffered loss by the misconduct of the employee. A similar view was expressed in Remington Rand of India Ltd. 's case (2). In Calcutta Insurance Company Ltd. 's case(3) however protest was raised against acceptance of this rule without qualification. Mitter, J., observed at p. 9 that it was difficult to concur in principle with the opinion expressed in the Garment Cleaning Works case(4). Mitter, J., observed: "We are inclined to think that it (gratuity) is paid to a workman to ensure good conduct throughout the period he serves the employer. 'Long and meritorious service must mean long and unbroken period of service meritorious to the end. As the period of service must be unbroken, so must the continuity of meritorious service be a condition for entitling the workman to gratuity. If a workman commits such misconduct as causes financial loss to his employer, the employer would, under the general law, have a right of action against the employee for the loss caused, and making a provision for withholding payment of .gratuity where such loss was caused to the employer does not seem to aid to the harmonious employment of labourers or workmen. Further, the misconduct may be such as to undermine the discipline in the workers a case in which it would be extremely difficult to assess the financial loss to the employer. " (1) [1965] II L.L.J. 139. (2) [1968] I L.L.J. 542. (3) [1967] II L.L.J. 1. (4) 335 "Misconduct" spreads over a wide and hazy spectrum of industrial activity: the most seriously subversive conduct rendering an employee wholly unfit for employment to mere technical default are covered thereby. The parliament enacted the , which by section 15 has authorised the appropriate Government to make rules to carry out the purposes of the Act and in respect of additional matters to be included in the Schedule. The Central Government has framed certain model standing rules by notification dated December 18, 1946, called 'The Industrial Employment (Standing Orders) Central Rules, 1946 '. In Sch. I Model Standing Orders cl. 14 provides: (1) . . . . . . (2) A workman may be suspended for a period not exceeding four days at a time, or dismissed without notice or any compensation in lieu of notice, if he is found to be guilty of misconduct. (3) The following acts and omissions shall be treated as misconduct : (a) wilful insubordination or disobedience, whether alone or in combination with others, to any lawful and reasonable order of a superior, (b) theft, fraud or dishonesty in connection with the employer 's business or property, (c) wilful damage to or loss of employer 's goods or property, (d) taking or giving bribes. or any illegal gratification, (e) habitual absence without leave or absence without leave for more than 10 days, (f) habitual late attendance, (g) habitual breach of any law applicable to the establishment, (h) riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline, (i) habitual negligence or neglect of work, (j) frequent repetition of any act or omission for which a fine may be imposed to a maximum of 2 per cent of the wages in a month, (k) striking work or inciting. others to strike work in contravention of the provisions of any law, or rule having the force of law." ' 336 A bare perusal of the Schedule shows that the expression "misconduct" covers a large area of human conduct. On the one hand are the habitual late attendance, habitual negligence and neglect of work: on the other hand are riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline, wilful insubordination or disobedience. Misconduct falling under several of these latter heads of misconduct may involve no direct loss or damage to the employer, but would render the functioning of the establishment impossible or extremely hazardous. For instance, assault on the Manager of an establishment may not directly involve the employer in any loss or damage which could be equated in terms of money, but it would render the working of the establishment impossible. One may also envisage several acts of misconduct not directly involving the establishment in any loss, but which are destructive of discipline and cannot be tolerated. In none of the cases cited any detailed examination of what type of misconduct would of would not involve to the employer loss capable of being compensated in terms of money was made: it was broadly stated in the eases which have come before this Court that notwithstanding dismissal for misconduct a workman will be entitled to gratuity after deducting the loss occasioned to the employer. If the cases cited do not enunciate any broad principle we think that in the application of those cases as precedents a distinction should be made between technical misconduct which leaves no trail of indiscipline, misconduct resulting in damage to the employer 's property, which may be compensated by forfeiture of gratuity or part thereof, and serious misconduct which though not directly causing damage such as acts of violence against the management or other employees or riotous or disorderly behaviour, in or near the place of employment is conducive to grave indiscipline. The first should involve no forfeiture: the second may involve forfeiture of an amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third may entail forfeiture of gratuity due to ' the workmen. The precedents of this Court e.g. Wenger & Co. vs Its Workmen(1), Remington Rand of India Ltd. case(2) and Motipur Zamindari (P) Ltd. 's case(a) do not compel us to hold that no misconduct however grave may be visited with forfeiture of gratuity. In our judgment, the rule set out by this Court in Wenger & Co. 's case(1) and Motipur Zamindari (P) Ltd. 's case(3) applies only to those cases where there has been by actions wilful or negligent any loss occasioned to the property of the employer and the misconduct does not involve acts of violence against the management or other employees, or riotous or dis (1) [1963] II L.L.J. 403. (2) [1968] I L.L.J. 542 (S.C.). (3) [1965] II L.L.J. 139 (S.C.). 337 orderly behaviour in or near the place of employment. In these exceptional cases the third class of cases the employer may exercise the right to forfeit gratuity: to hold otherwise would be to put a premium upon conduct destructive of maintenance of discipline. It was urged on behalf of the workmen that the minimum period of 15 years fixed for voluntary retirement is too long and it should be reduced to 10 years. In Hume Pipe Co. Ltd. vs Their Workmen(1) and Hydra (Engineers) Private Ltd. vs The Workmen(2) the minimum period for qualifying for gratuity on voluntary retirement was fixed at 15 years. In other cases a shorter period of 10 years was adopted: Garment Cleaning Works(a); British Paints (India) Ltd.(4); Calcutta Insurance Co. Ltd.(5), and Wengel & Company(x). Counsel for the employers have accepted that qualifying length of service for voluntary retirement should be reduced to 10 years. Counsel for the employers have also accepted that having regard to all the circumstances, notwithstanding the direction given by the Tribunal and the schemes prevailing in the other parts of the country in the textile industry, the maximum gratuity should not exceed 20 months ' basic wages and not 15 months ' as directed by the Tribunal. Further counsel for the D.C.M. and S.B.M. have agreed that in case of termination of employment on voluntary retirement one full months basic wages for each completed year of service not exceeding 20 months ' wages should be granted to workmen. Counsel for the B.C.M. has agreed that gratuity at the rate of 21 days ' wages for each completed year of service in case of voluntary retirement or resignation after 10 years ' service may be awarded as gratuity to the workmen. Counsel for the A.T.M. has shown no disinclination to fall in line with this suggestion. Counsel for the A.T.M. has also not objected to appropriate adjustments in view of the concessions made by the management of the D.C.M., S.B.M. and B.C.M. It was urged by counsel for the workmen that in providing that gratuity shall be paid to Badli workmen for only those years in which a workman has worked for 240 days, the Tribunal has committed an error. It was urged that a Badli workman has to register himself with the management of the textile unit and is required every day to attend the factory premises for ascertaining whether work would be provided to him, and since a Badli workman has to remain available throughout the year when the factory is open, a condition requiring that the Badli workman has worked for not less than 240 days to qualify for gratuity is unjust. We (1) [1959] II L.L.J. 830. (2) C.A. No. 1934 of 1967 decided on April 30, 1968. (3) (4) [1966] I L.L.J. 407 (S.C.) (5) [1967] II L.L.J. 1 (S.C.). (6) [1963] II L.L.J. 403 (S.C.) 338 are unable to agree with that contention. If gratuity is to be paid for service rendered, it is. difficult to appreciate the grounds on which it can be said that because for maintaining his name on the record of the Badli workmen, a workman is required to attend the Mills he may be deemed to have rendered service and would on that account be entitled also to claim gratuity. The direction is unexceptionable and the contention must be rejected. It was also urged by Mr. Ramamurthi that the expression "average of the basic wage" in the definition of "wages" in cl. 4 of the Schemes is likely to create complications in the implementation of the Schemes. He .urged that if the wages earned by a workman during a month are divided by the total number of working days, the expression "wages" will have an artificial meaning and especially where the workman is old or disabled or incapacitated from rendering service, gratuity payable to him will be substantially reduced. We do not think that there is any cause for such apprehension. The expression "average of the basic wage" can only mean the wage earned by a workman during a month divided by the number of days for which he has worked and multiplied by 26 in order to arrive at the monthly wage for the computation of gratuity payable. Counsel for the employers agree to this interpretation. It was then urged that whereas the reference to. the Industrial Tribunal was made by the Delhi Administration sometime in March 1958, the award is .given effect to from January 1, 1964, and for a period of nearly six years the workmen have been deprived of gratuity, when the delay in the disposal of the proceedings was no.t due to. any fault or delaying tactics on the part of the workmen. The reference was made in the first week of March, 1958. The Textile Mazdoor Union then applied to be impleaded on September 15, 1958, the D.C.M. and S.B.M. moved the High Court of Punjab at Delhi and obtained an order for stay of proceedings in writ petition filed against the order of the Tribunal impleading the Textile Mazdoor Union. That writ petition was dismissed in February 1961 and the proceedings were resumed on December 12, 1962. Thereafter preliminary issues were decided and on December 3, 1963, ,an interim award relating to other disputes was made. It must, however, be noticed that there were four claims and the claim relating to gratuity was taken in hand by the Tribunal after disposal of the other claims. Neither party was dilatory in the prosecution of any claim before the Tribunal. It has also to be noticed that in the D.C.M. and S.B.M. there was in fact a gratuity scheme already in operation. The liability of the A.T.M. to pay gratuity arises after that unit acquired sufficient financial stability and it is not suggested that the unit had acquired financial stability before January 1, 1964. The is.sue remains a live issue only in respect of the B.C.M. It is true that the gratuity 339 scheme of the D.C.M., and S.B.M. was related only to the length of service and did not take into account the varying rates of wages received by the workmen. But the question if at all would, be one of making minor adjustments in the liability of the two units to pay gratuity in the event of gratuity being payable under this award at a higher rate than the gratuity awardable under the scheme already in operation in the two units. If in respect of the A.T.M. which had no scheme gratuity for all practical purposes becomes operative from January 1, 1964, we do not see any reason why in respect of the B.C.M. any different rule should be provided for. Again, the Tribunal has fixed January 1, 1964, as the date for the commencement of the schemes. Giving the schemes effect before January 1, 1964, may rake up cases. in which the workmen have left the establishments many years ago. It would not be conducive to industrial peace to allow such questions to be raised after this long delay. The question is not capable of solution on the application of any principle and must be decided on the consideration of expediency. We do not think that any ground is made out for altering the award of the Industrial Tribunal in this behalf. It was then urged that in any event the workmen of the D.C.M. and S.B.M. should not be deprived of the right to gratuity under the scheme of the two u,nits, if gratuity at a higher rate is payable to them under the voluntary scheme. This contention must be accepted. We direct that in respect of all workmen of the D.C.M. and S.B.M. who were employed before January 1, 1964, and continued to remain employed till that date, gratuity at the higher of the two rates applicable to each workman when he becomes entitled to gratuity either computed under the Employees Benefit Fund Trust scheme of the D.C.M. and S.B.M. or under the terms of this award shall be paid. Workmen employed after January 1, 1964, will be entitled to the benefit of this award alone. Industrial disputes have given rise to considerable strife holding up development of industry and the economic welfare of the nation. Awards have been made by the Tribunals often on considerations adhoc and based on no principle and Courts have upheld or modified those awards without enunciation of any definite or generally accepted principle. In the present case we have been largely guided b37 the consideration of securing a reasonable degree of uniformity in the fixation of gratuity in the textile industry, for, in our view, a departure made from the prevailing pattern in one region is likely to give rise to claims all over the country for modification of the gratuity schemes in operation, and have been accepted as fixing the basis. of gratuity schemes. If having regard to the deteriorating value of the rupee, it is thought necessary that more generous benefits should be available to the 340 workmen by way of gratuity, the remedy lies not before the adjudicators or the Courts, but before the legislative branch of the State. In respect of the bonus, provident fund, retrenchment compensation, State Insurance Schemes as well as medical benefits, legislation has been introduced bringing a reasonable degree of certainty in the laws governing the various benefits available to the workmen and we are of the view that even in respect of gratuity a reasonably uniform scheme may be evolved by the Legislatures which could prevent resort to the adjudicators in respect of this complicated matter of dispute between the employers and the employees. It may no.t be difficult to evolve a scheme which would meet the legitimate claims. of both the employers and the employees and which might, while eliminating cause for friction, ' simultaneously conduce to greater certainty in the administration of the law governing industrial disputes, and secure benefits to the employers as well as the employees and conduce to the prosperity of the industry as well as of the workmen. We propose to summarise the effect of our judgment: (1) A unit wise approach in framing the gratuity scheme for the four units was appropriate, and on the terms of the reference the plea of the employers to fix the age of superannuation was beyond the scope of reference. The financial condition of the D.C.M., S.B.M. and B.C.M. justifies imposition of gratuity schemes as from January 1, 1964. Even the A.T.M. which is the weakest of the four units is financially stable from the date on which the award becomes operative; (2) The settlement between the workmen and the A.T.M. did not operate to bar the jurisdiction of the Tribunal to make the scheme of gratuity payable to the workmen of the A.T.M.; (3) That the Tribunal was in error in relating gratuity awardable to the workmen to the consolidated wage; (4) That the minimum period for . qualifying for voluntary retirement should be reduced to 10 years and one months basic wage in the case of D.C.M. and S.B.M. and 21 days ' basic wage in the case of B.C.M. and A.T.M. for each completed year of service should be paid but not exceeding 20 months wages in the aggregate. (This direction is made with the consent of the Advocates of the employers); 341 (5) That workmen dismissed or discharged from service for misconduct will not be entitled to gratuity if guilty of conduct involving acts of violence against the management or other employees, or riotous or disorderly behaviour in or near the place of employment; (6) No modification need be made with regard to Badli workmen; (7) The award needs no modification with regard to the date of operation of the award; and (8) The workmen of the D.C.M. and S.B.M. who commenced service and continued to serve till January 1, 1964, and thereafter will be entitled to elect at the time when gratuity becomes due to claim gratuity either on the scheme in force under the Employees Benefit Fund Trust of the employers or under this award. We have made some incidental changes to streamline the scheme. On the view we have taken of the schemes, Annexure 'A 'relating to the D.C.M. and S.B. M. of the award will be modified in the following respects: In clause 1 (a) instead of "12 days ' wages", the expression "20 days ' wages" will be substituted; In clause 1 (b) for the expression "15 days ' wages", the expression "1 month 's wages" will be substituted; In proviso (ii) to clause 1 for the expression "15 months ' wages", the expression "20 months ' wages" will be substituted; In clause 2 for the expression. "15 days ' wages", the expression "1 months wages will be substituted; and for the expression ' 15 years service , 10 years service will be substituted; In the proviso to clause 2 for the expression "15 months ' wages", the expression "20 months ' wages" will be substituted; In clause 3 in the proviso for the expression "15 months ' wages", the expression "20 months ' wages" will be substituted; Clause 3 will be followed by an Explanation: "Explanation. The expression "misconduct" means acts involving violence against the management or other employees, or riotous or disorderly behaviour in or near the place of employment. 342 Where the workman is guilty of conduct which involves the management in financial loss, the loss occasioned may be deducted from the gratuity payable." In clause 4 the words "plus the dearness allowance" will be omitted. The remaining clauses will stand unaffected except that for the words "within six months from the date of publication of this Award" ' the words "within six months from the date of this judgment" will be substituted. Annexure 'B ' relating to the B.C.M. and A.T.M. will be modified in the following respects: In clause 1 (a) for the expression "one fourth month 's wages", the expression "15 days ' wages" will be substituted; In clause 1 (b) for the expression "one third month 's wages", the expression "21 days ' wages" will be substituted; In the proviso for the expression "12 months ' wages", the expression "20 months ' wages" will be substituted; In clause 2 for the words "15 years ' service", the expression "10 years ' service" will be substituted; In clause 3 in the proviso for the expression "12 months ' wages", the expression "20 months ' wages" will be substituted and it will be followed by the Explanation of "misconduct" as in Annexure 'A '. In clause 4 the words "plus the dearness allowance" will be omitted. There will be no order as to costs in these appeals. V.P.S. Award modified accordingly.

In the Delhi region there are four textile units. namely, the D.C.M., the S.B.M., the B.C.M., and the A.T.M. The D.C.M. and the S.B.M. are under one management. Since 1940 they had also a common retirement benefit scheme with a scale of gratuity. The ' workmen in all the units were receiving basic wages plus dearness allowance. On March 4, 1958, an industrial dispute between the four units and their workmen was referred to the Industrial Tribunal and one of the matters in dispute related to gratuity. The Tribunal in its award framed two schemes relating to the payment of gratuity, one relating to D.C.M. and S.B.M., and the other, to B.C.M. and A.T.M. They were made operative from January 1, 1964. Both employers and employees appealed to this Court. On the questions: (1 ) Whether in view of a settlement between the management of A.T.M. and its workmen it was open to the Tribunal to ignore the settlement and impose the scheme on the management; (2) Whether in view of the unstable financial condition of A.T.M. the burden of payment of gratuity on A.T.M. was excessive; (3) Whether a uniform scheme applicable to the entire industry on the region cum industry basis should have been adopted instead of schemes applicable to individual units; (4) Whether in determining the quantum of gratuity, basic wage alone should be taken into account and not the consolidated wage including dearness allowance; (5) Whether in deciding this question, an overall view of similar and uniform conditions in the industry in different centers in the country, could he taken into consideration; (6) Whether it was not necessary for the Tribunal to fix the age of superannuation when introducing a gratuity scheme; (7) Whether gratuity should have been awarded even in cases of dismissal for misconduct; (8) Whether provision should have been made for payment of gratuity to badli workmen irrespective of the number of days for which they worked in a year; (9) Whether the schemes should have been made operative from the date of reference; and (10) What is the scope of the expression 'average of the basic wage '. HELD: (1) The settlement between the workmen and management of A.T.M. did not bar the jurisdiction of the Tribunal to make the Scheme of gratuity applicable to A.T.M. [340] Under the settlement all that was agreed to was, that an award should be made and if it he found that A.T.M. acquired financial stability then it would be liable to pay the gratuity to its workmen. It was not agreed that the proceedings before the Tribunal should be dropped and that it 308 was only after A.T.M. became financially stable that a fresh claim should be made by the workmen. [320 D F] (2) The trading accounts of A.T.M. showed that since 1959 60 the Mills had achieved some stability, and that by 1961 62 all previous losses were wiped out. Therefore, though it was a much weaker unit than the others, it was financially stable from the date on which the scheme became operative. [321 A C] (3) A unit wise approach in framing the gratuity scheme 'for the four units was appropriate in the present case. [323 B C; 340 D E] No inflexible rule has been laid down by this Court that gratuity schemes should he framed only on the region cure industry principle. In the present case, if a common scheme was framed for the entire industry in Delhi for all four units, in view of the financial condition of A.T.M., the benefits under such a scheme would be not only low, but would be lower than the existing benefits available to workmen in the D.C.M. and S.B.M. Units. [321 C D, H; 322 E F, H] Garment Cleaning Works vs Its Workmen, [1962] 1 S.C.R. 711: and Burhanpur Tapti Mills Ltd. vs Burhanpur Tapti Mills Mazdoor Sangh, , followed. Bharatkhand Textile Mfg. Co. vs Textile Labour Association ; , explained. (4) The Tribunal was in error in relating the gratuity awardable to the workmen to the consolidated wage instead of the basic wage. [340 G] (a) In determining the scope of an industrial reference words used, either in the claim or in the order of reference, should not necessarily be given the meaning they have under the Industrial Disputes Act. Therefore, merely because the expression "wages" in the Act includes dearness allowance, the Tribunal could not base the gratuity scheme on consolidated wages. [325 D F] (b) An industrial tribunal cannot adjudicate on disputes not referred; but when called upon to adjudicate ' whether a certain scheme, on the terms indicated in the reference should be framed, such basic guidance does not limit its jurisdiction. The Tribunal, in this case, was in error in thinking that in determining the rate of gratuity it was limited to the number of days of service in the order of reference as the applicable multiple. On that assumption, since the gratuity would be too low if only basic wage was chosen, it was not justified in choosing consolidated wage. The proper procedure would have been to choose only the basic wage and fix upon a larger number of days of service as the appropriate multiple. [327 E H] (c) The decisions of this Court in May and Baker (India) Ltd. vs their Workmen, [1961] II L.L.J. 94 (S.C.), British India Corporation vs Its Workmen, [1965] II L.L.J. 556 (S.C.), British Paints (India) Ltd. vs Its Workmen, , Hindustan Antibiotics Ltd. vs Their Workmen, and Remington Rand of India vs The Workmen, are conflicting and no principle can be extracted as to whether basic wage or consolidated wage should be considered for purposes of gratuity. Ordinarily, in those circumstances, this Court would not have interfered with the conclusion of the Tribunal choosing consolidated wage; but, the Tribunal had failed 309 to take into account the prevailing pattern in the textile industry all over the country. It is country wide industry and in that industry, gratuity has never been granted on the basis of consolidated wages. [329 C F; 330 A] (d) The primary object of industrial adjudication is to adjust the relations between employers and employees with the object of promoting industrial peace. If the basic wage alone is taken for purposes of gratuity, it would produce in the present case, a scheme which deprives the workmen of the D.C.M. and S.B.M. of benefits which had been granted to them under the voluntary scheme introduced by the management of those two units and disturb industrial peace therein. But on that account, the Tribunal was not justified in introducing a fundamental change in the concept of gratuity granted by numerous schemes in the textile industry all over the country. The appropriate remedy is to frame a scheme consistent with the normal pattern prevailing in the industry and introduces reservations protecting benefits already acquired. [326 C F] (e) In the report of the Central Wage Board for the cotton textile industry, also, gratuity was directed to be given on the basis of wages excluding dearness allowance. [330 G] (f) In D. C.M. Chemical Works vs Its Workmen, this Court affirmed the award relating gratuity to consolidated wages. Though the unit also belonged to D.C.M. it is a unit entirely independent of the textile unit. So, it cannot be regarded as an effective or persuasive precedent justifying variation from the normal pattern of gratuity schemes in operation in the textile industry all over the country. [331 H; 332 A B, D E] (5) If all over the country, in textile centres, payment of gratuity. is related to the basic wage and not to the consolidated wage any innovation Delhi region alone is likely to give rise to serious industrial disputes in other centres in the country. If maintenance of industrial peace is a governing principle of industrial adjudication, it would be wise to maintain a 'reasonable degree of uniformity in the diverse units all over the country and not to make a fundamental departure from the prevailing pattern.the basic wage is low in all other centres, and if it does not play an important part, there is no reason why it should play, only in the Delhi region, a decisive part so as to make a vital departure from schemes in operation in other centres in the country. The acceptance of the award the Tribunal in the present case is likely to create conditions of great instability in other parts of the country in the textile industry. Therefore, the Tribunal 's award granting gratuity on the basis of consolidated wage could not be upheld. [332 G H; 333 A E] (6) It is not necessary, for a gratuity scheme to be effective, that here should be fixation of the age of superannuation. [323 C D] Burhanpur Tapti Mills Case, , referred Further, on the terms of the reference the plea of the employers to fix the age of superanuation was beyond the scope of the 'reference, nor was such fixation incidental to the framing of the scheme. [323 H 324 c] (7) The object of providing a gratuity scheme is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer. It is therefore not correct to say that no misconduct, however grave, may not be visited with forfeiture of gratuity. Misconduct could be (a) 310 technical misconduct which leaves no trail of indiscipline; (b) misconduct resulting in damage to the employers ' property which may be compensated by forfeiture of gratuity or part thereof; and (c) serious misconduct such as acts of violence against the management or other employees or riotous or disorderly behaviour in or near the place of employment which, though not directly causing damage, is conducive to grave indiscipline. The first should involve no forfeiture, the second may involve forfeiture of an amount equal to the loss directly suffered by the employer in consequence of the misconduct, and the third will entail forfeiture of gratuity due to the workmen. [324 F G; 336 D F; 341 A B] Garment Cleaning Works vs Its Workmen, ; (1961) I L.LJ. 513, Wenger & Ca. vs Its Workmen, [1963] II L.L.J. 403 (S.C.), Motipur Zamindari (P) Ltd. vs Their Workmen, [1965] II L.LJ. 139 (S.C.) Calcutta Insurance Co. vs Their Workmen, [1967] II L.LJ. 1 (S.C.), and Remington Rand of India vs The Workmen, [1968] I L.L.J. 542 (S.C.). referred to. (8) The award does not require to be modified with regard to badli workmen. If gratuity is to be paid )for service rendered then there are no grounds for holding that a badli workman must be deemed to have rendered service giving rise W a claim of gratuity, merely because, for maintaining his name on the record of the badli workmen, he is required to attend the mills. [338 A B] (9) The award needs no modification with regard to the date of commencement of the schemes. The liability of A.T.M. to pay gratuity arose after it acquired sufficient financial stability and the unit acquired financial stability only from January 1, 1964. If in respect of the A.T.M. which had no scheme. gratuity becomes operative from January 1, 1964, there is no reason why respect of B.C.M. any different rule should be provided for. As regards D.C.M. and S.B.M. there was already a more advantageous gratuity scheme in operation and the workmen in those two units were not prejudiced by directing the scheme applicable to them, to commence from January 1, 1964. If effect was given to the schemes before January 1, 19 '64, it may rake up cases in which workmen have left the establishment many years ago and it would not be conducive to industrial peace to allow such questions to be raised after a long delay. In the absence of any principle, the matter must be decided on considerations of expediency. [338 G H; 339 A D] (10) The expression 'average of the basic wage ' means wage earned by a workman during a month, divided by the number of days for which he had worked, and multiplied by 26 in order to arrive at the monthly wage for the computation of gratuity payable. [333 C D] [Appropriate directions modifying the schemes were accordingly given.]

vil Appeal No. 1134 (NT) of 1987. From the Judgment and Order dated 2.3. 1984 of the Allahabad High Court in Sales Tax Revision No. 146 of 1983. Prithvi Raj, Ashok K. Srivastava for the Appellant. S.T. Desai, K.B. Rohtagi, S.K. Dhingra, Baldev Atreya and Shashank Shekhar for the Respondent. The following Judgments of the Court were delivered RANGANATH MISRA, J. Special leave granted. Delay of six days is condoned. The short question for consideration in this appeal at the instance of the Revenue is whether the High Court was justified in holding that in the absence of a notification withdrawing the earlier notification dated 25.11. 1958 made in exercise of power vested under section 4 of the U.P. Sales Tax Act, 1948, Sales Tax would not be exigible in terms of the notification dated 1.12. 1973 issued under section 3A of that Act. The notification of 1958 exempted 'cotton fabrics of all varieties ' from sales tax. It is not disputed that under it sale of patta, the goods in question on being treated as cotton fabric was exempted from sales tax. The notification of 1973 made under section 3A of the Act prescribed sales tax of seven per cent on the sale of beltings of all kinds. There is no dispute now that patta is a kind of belting material. Section 3 of the Act contains the charging provision and prescribes a uniform rate of tax on sales. Section 3A empow ers the State Government to modify the rate of tax by noti fication. The notification of 1973 in fact prescribes a rate of tax higher than provided by section 3. In 1958, under the notification referred to above, patta as an item of cotton fabric stood exempted from tax liability. The High Court has 96 referred to some of its earlier decisions and has concluded thus: "Thus the consistent view of this court throughout has been that by issuing a separate notification under section 3A, the earlier exemption granted under section 4 of the Act cannot be negatived. If the State wanted to tax 'beltings of all kinds ', it has to amend the general notification issued under section 4 by deleting cotton fabric belts from the notification issued under section 4 of the Act. ' ' As has been pointed out above, section 3 is the charging provision; section 3A authorises variation of the rate of tax and section 4 provides for exemption from tax. All the three sections are parts of the taxing scheme incorporated in the Act and the power both under sections 3A as also under section 4 is exercisable by the State Government only. When after a notification under section 4 granting exemption from liability, a subsequent notification under section 3A prescribes the rate of tax, it is beyond doubt that the intention is to withdraw the exemption and make the sale liable to tax at the rate prescribed in the notification. As the power both for the grant of exemption and the variation of the rate of tax vests in the State Government and it is not the requirement of the statute that a notification of recall of exemption is a condition precedent to imposing tax at any prescribed rate by a valid notification under section 3A, we see no force in the contention of the assessee which has been upheld by the High Court. In fact, the second notification can easily be treated as a combined notifica tion both for withdrawal of exemption and also for provid ing higher tax. When power for both the operations vests in the State and the intention to levy the tax is clear we see no justification for not giving effect to the 2nd notifica tion. We would like to point out that the exemption was in regard to a class of goods and while the exemption continues a specific item has now been notified under section 3A of the Act. The appeal is allowed. The order of the Tribunal which has been affirmed by the High Court is set aside and the assessment is restored. Parties are directed to bear their respective costs throughout. B.C. Ray, J. I have had the privilege of going through the judgment rendered by my learned brother but I am unable to concur with the reasonings recorded by my learned brother in his judgment so far as it relates to the scope and effect of the notification dated 1.12.1973 made under Section 3A of the U.P. Sales Tax Act, 1948 by providing for imposition of sales tax on "beltings of all kinds" for the reasons given hereunder: 97 Under Section 4 of the 1J.P. Sales Tax Act, 1948 the Government issued two notifications No. S.T. 4486/x dated 14.12.1957 and No. 4064/x 960(4)/58 dated 25.11. 1958 where by "cotton fabrics of all kinds" were exempted from the imposition of sales tax under the Act. Thereafter on 1st of December 1973 a notification was issued by the Government under Section 3 A of the said Act which introduces in the Schedule in Item No. 8 "beltings of all kinds" for imposi tion of sales tax. The sole question arising in this appeal is whether beltings of all kinds are excisable to sales tax by virtue of the notification dated 1.12. 1973 even though they fall within "cotton fabrics of all kinds" which are exempted from tax by virtue of the notifications dated 14.12. 1957 and 25.11. Similar question arose in the case of Porritts & Spencer Asia Ltd. vs State of Haryana, [1978] 42 S.T.C. 433 (SC) before this Court for considera tion. It was held by this Court that the words "all varie ties of cotton, woollen or silken textiles". In item 30 of Schedule B to the Punjab General Sales Tax Act must be interpreted according to its popular sense, meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it. " This Court further observed "whatever be the mode of weaving employed, woven fabric would be "textiles". What is neces sary is no more than weaving of yarn and weaving would mean binding or putting together by some process so as to form a fabric. Moreover a textile need not be of any particular size or strength or weight. It may be in small pieces or in big rolls: It may be weak or strong, light or heavy, bleached or dyed, according to the requirement of the pur chaser. The use to which it may be put is also immaterial and does not bear in its character as a textile. It may be used for making wearing apparel, or it may be used as a covering or bed sheet or it may be used as tapestry or upholstery or as duster for clearing or as towel for drying the body. A textile may have diverse uses and it is not the use which determines its character as textile. " It was also held that the textile has only one meaning namely a woven fabric and that is the meaning which it bears in ordinary parlance. The Court therefore held that dryer felts are textiles as these were made of yarn and the proc ess employed was that of weaving according to warp and woof pattern. It therefore falls within the meaning of textiles and so exempted from tax. Similar question arose in the case of State of Tamil Nadu vs Navinchandra & Company, [1981] (48) S.T.C. 118 (Madras) where exemption was claimed on the basis of a notification under Section 4 of the Tamil Nadu General Sales Tax Act 1959 in respect of hair belting 98 and cotton belting as falling within item No. 4 of the Third Schedule of the said Act. This item No. 4 reads as follows: "All varieties of textiles (other than durries, carpets, druggets and pure silk cloth) made wholly or partly of cotton, staple fibre, rayon, artificial silk or wool includ ing handkerchiefs, towels, napkins, dusters, cotton velvets and velvetten, tapes, niwars and laces and hosiery cloth in lengths. " It was held that textiles haying a wider meaning than fab rics cottonbelting and hair belting were included in the expression cotton fabrics and as such they are exempted from taxation falling within Item No. 4 of the Third Schedule as it stood prior to its amendment. It is pertinent to mention in this connection that in the case of Delhi cloth and General Mills Co. Ltd. vs State of Rajasthan and Others, ; the question arose whether rayon tyre cord fabric manufactured by the appellate company included within item No. 18 inserted in the Schedule by the Rajasthan Taxation Laws (Amendment) Act, 1964 and rayon or artificial silk fabrics extended to exemp tion under Section 4(1) of the Rajasthan Sales Tax Act which provides for exemption of sales tax of goods specified in the Schedule. It has been held that the product falls within the exempted item rayon or artificial silk fabrics in item No. 18 of the Schedule inserted by Section 4 of the said Act. This judgment was rendered by this Court to which one of us was a party. In the instant case the question arising for considera tion is whether patta covered by "cotton fabrics of all varieties" is excisable to sales tax under the notification dated 1.12. 1973 namely "beltings of all kinds". In view of the decisions referred to hereinbefore cotton beltings fall within the textiles of all varieties as notified under Section 4 of the said Act being exempt from the imposition of sales tax. The question that falls for consideration is what is the effect of the notification issued under Section 3 A of the said Act on 1.12. 1973 mentioned in the Schedule "beltings of all kinds". There is no dispute nor any chal lenge that these beltings.are cotton beltings falling within cotton fabrics of all kinds and as there is a general exemp tion granted by the notification issued in 1957 and 1958 exempting 'cotton fabrics of all kinds ', it is not possible to hold in any view of the matter that it will be excisable to sales tax on the basis of the notification dated 1.12.1973 under Section 3 A of the said Act, by the Govern ment. The next question for consideration is what is the effect of a 99 notification under Section 3 A including an item in the Schedule for imposition of sales tax though there is a general exemption from sales tax under Section 4 of the Sales Tax Act. It has been held in the case of Commissioner of Sales Tax vs M/s Dayal Singh Kulfi Wala, Lucknow, [1980] U.P.T.C. 360 as follows: "A fiscal statute like the one before me has to be interpreted strictly. If there is any ambiguity or doubt it should be resolved in favour of the subject. There is no equity about tax. The taxing liability must be express and absolute. In the present case, the specification of the goods for purpose of section 3 A is one thing, but whether or not such goods would be exempted from tax is the power conferred upon the State Government under section 4 of the Act. So long the exemption continues, the dealer can cer tainly urge and with jurtisification that the mere specifi cation of goods under section 3 A or declaring the point of sales at such turnover liable to tax would not take away the exemption from payment of tax which the goods enjoyed by virtue of the exercise of power by the State Government under Section 4 of the Act. The operating fields of the two sections namely sections 3 A by itself cannot override the power under section 4. On the other hand, if certain goods have been classified for purposes of by the State Govern ment, if such goods had been exempted from sales, the De partment cannot contend that the exemption should not be construed in favour of the assessee. " In this case the question arose whether the general exemption granted under Section 4 of the Act in respect of milk and milk products is sufficient to exempt kulfi and lassi in respect of which a separate notification was issued under Section 3 A for imposition of tax. A similar question also arose in the case of Commission er of Sales Tax vs Rita Ice Cream Co., Gorakhpur, [1981] U.P.T.C. 1239 and it was held that so long as the general exemption under Section 4 continues a particular item noti fied under Section 3 A of the Sales Tax Act cannot be taxed. On a conspectus of all these decisions aforesaid, the only irresistible inference follows that so long as the general exemption granted under Section 4 with regard to cotton fabrics of all kinds continues no sales tax can be imposed on beltings of all kinds which fall within the cotton fabrics of all kinds and the general exemption under section 4 will prevail over the notification made under section 3 A of the Sales Tax Act. I am unable to subscribe to the view that since the notification under section 3 A of the U.P. Sales Tax Act has been made subse 100 quent to the notification issued under Section 4 of the said Act, the subsequent notification under Section 3 A will prevail over the general exemption granted under Section 4 of the said Act. In my considered opinion the reasonings and conclusions arrived at by the High Court are unexception able. The appeal is accordingly dismissed and the judgment and order of the High Court of Allahabad is hereby affirmed. N.P.V. Appeal allowed.

The State Government issued a Notification on November 25, 1958 In exercise of power vested under Section 4 of the U.P. Sales Tax Act, 1948. This Notification exempted 'cotton fabrics of all varieties ' from sales tax. Under it, patta as an item of cotton fabric stood exempted from tax liability. Subsequently, another Notification was issued on December 1, 1973 under Section 3 A of the Act. This Notification pre scribed a rate of tax higher than that provided by Section 3 of the Act which contains the charging provision and pre scribes a uniform rate of tax on sales. Section 3 A empowers the State Government to modify the rate of tax by Notifica tion. This Notification of 1973 was issued without withdraw ing the earlier Notification of 1958. The High Court, affirming the order of the Tribunal, held that in the absence of a Notification withdrawing the earlier Notification of 1958, sales tax would not be exigi ble in terms of the Notification of 1973. Allowing the Appeal, HELD: (Per majority Pathak, CJI and Ranganath Misra, J., Ray, J. dissenting) 1. The High Court was not justified in holding that in the absence of a notification withdrawing the earlier Noti fication of 1958, sales tax would not be exigible in terms of the Notification of 1973. The order of the Tribunal, which has been affirmed by the High Court, is set aside and the assessment restored. [96G] 2. The Notification of 1958 issued under Section 4 of the Act exempted 'cotton fabrics of all varieties ' from sales tax. The Notification of 1973 under Section 3 A of the Act prescribed sales tax of 7% on the sale of beltings of all kinds. There is no dispute that patta is a kind of 94 belting material and, on being treated as cotton fabric, was exempted from sales tax. [95FG] 3. Section 3 is the charging provision; Section 3 A authorises variation of the rate of tax and Section 4 pro vides for exemption from the tax. When after a Notification under Section 4 granting exemption from liability, a subse quent Notification under Section 3 A prescribes the rate of tax, the intention is to withdraw the exemption and make the sale liable to tax at the rate prescribed in the Notifica tion. [96B D] 4. As the power both for the grant of exemption and the variation of the rate of tax vests in the State Government and it is not the requirement of the Statute that a Notifi cation of recall of exemption is a condition precedent to imposing tax at any prescribed rate by a valid Notification under Section 3 A, the second Notification can easily be treated as a combined Notification both for withdrawal of exemption and also for providing higher tax. [96D E] 5. The exemption was in regard to a class of goods and while the exemption continues, a specific item has now been notified under Section 3 A of the Act. [96F] (Per Ray, J. dissenting) 1. Cotton beltings fail within 'beltings of all kinds ' as notified under Section 4 of the Act, being exempt from the imposition of sales tax. As there is a general exemption granted by the Notifications issued in 1957 and 1958 exempt ing 'cotton fabrics of all kinds ', it is not possible to hold, in any view of the matter, that it will be excisable to sales tax on the basis of the Notification dated December 1, 1973 under Section 3 A of the said Act, by the Govern ment. i98F; G H] 2. So long as the general exemption granted under Sec tion 4 with regard to 'cotton fabrics of all kinds ' contin ues, no sales tax can be imposed on beltings of all kinds which fail within the 'cotton fabrics of all kinds ' and the general exemption under Section 4 will prevail over the Notification made under Section 3 A of the Sales Tax Act. [99GH] 3. It is not possible to subscribe to the view that since the Notification under Section 3 A has been made subsequent to the Notification issued under Section 4 of the Act, the subsequent Notification under Section 3 A will prevail over the general exemption granted under Section 4 of the Act. [99H; 100A] 95 Porritts & Spencer Asia Ltd. vs State of Haryana, [1978] 42 S.T.C. 433 (SC); State of Tamil Nadu vs Navinchandra & Company, [1981] (48) S.T.C. 118 (Madras); Delhi Cloth and General Mills Co. Ltd. vs State of Rajasthan and Others, ; ; Commissioner of Sales Tax vs M/s Dayal Singh Kulfi Wala, Lucknow, [1980] U.P.T.C. 360 and Commis sioner of Sales Tax vs Rita Ice Cream Co., Gorakhpur, [1981] U.P.T.C. 1239, referred to.

Appeal No. 560 of1966. Appeal by special leave from the Award dated September 28, 1964 of the Industrial Tribunal, Bihar in Reference No. 32 of 1963. A.C. Mitra and D.N. Gupta, for the appellant. O.P. Sharma and V.C. Parashar, for the respondents. The Judgment of the Court was delivered by Shelat, J. This appeal, by special leave, is against the award dated September 28, 1964 of the Industrial Tribunal, Patna. The appellant company is an all India complex having establishments in different parts of the country. In Bihar alone, it has two factories, one at Jamshedpur and the other at Ranchi, and has depots at Patna and other towns. The factory at Jamshedpur is an establishment under the Bihar Shops and Establishments Act. Certain disputes having arisen between the a_appellant company and its workmen employed in the factory at Jamshedpur, the com 553 pany and the said workmen represented by their. union called the Indoxco Labour Union, Jamshedpur, made a joint application dated September 7, 1963 to the Government of Bihar for a reference under section 10(2) of the . By a notification dated October 23, 1963, the Government referred five disputes to the Tribunal for adjudication. We are concerned ' in this appeal with only two disputes arising from demands Nos3 and 5. These demands were, No. 3. "The payment of overtime to office staff should be 11/2 times the ordinary rate beyond their normal duty hours. " No. 5. "Union representatives should be allowed special leave to attend to law courts for matters connected with the workers and the management, to attend to annual conventions of their federation, to attend to Executive Committee meeting of the union federation and convention of central organisation i.e., INTUC." As required by r. 3 of the Industrial Disputes (Bihar) Rules, 1961, the statement accompanying the said application signed by the District Manager on behalf of the company and the General Secretary of the said union representing the said workmen contamed inter alia the following information, namely, "( c ) Number of workmen employed in the undertaking affected 352 (d) Estimated number of workmen affected or likely to be affected by the dispute 352" It is quite dear from the said application and the statement signed by the parties, ( 1 ) that the said disputes concerned the 352 workmen employed in the company 's factory at Jamshedpur and (2) that these 352 workmen were represented by the Indoxco Labour Union. The said notification also stated "Whereas the Governor of Bihar is of opinion that an industrial dispute exists or is apprehended between the management of Indian Oxygen Limited . Jamshedpur 7 and their workmen represented by Indoxco Labour Union . . Jamshedpur, regarding the matters specified in their joint applications dated 7 9 1963 annexed hereto . Now, therefore, in exercise of powers conferred by sub sec. (2 ) of section 10 of the (XIV of 1947), the Governor of Bihar is pleased to refer the said dispute . . " The notification thus makes it clear that the disputes referred to the Tribunal were disputes set out in the said agreement and state 554 ment and were between the management of the appellant company 's factory at Jamshedpur and their workmen represented by the Indoxco Labour Union. It appears, however, that the union at its general meeting held on January 6, 1963, purported to amend its constitution by a resolution passed thereat by changing the name of the union to Indian Oxygen Workers Union and making the workmen of all the establishments of the appellant company in Bihar eligible for its membership. C is the copy of a letter dated January 21, 1963 by which the Secretary of the said union informed the District Manager of the appellant company at Jamshedpur of the said purported amendment. The Tribunal appears to be of the view that the ' constitution of thesaid Indoxco Labour Union came to be amended as from January 6, 1963 and that as the said reference was made in October 1963, i.e., after the said purported amendment, "the mention in it of the dispute as a dispute between the company and Indoxco Labour Union does not materially affect the position that the dispute raised by the union is in respect of the employees of the company wherever they may be stationed. Consequently, the award in this case shall be effective in respect of all of them and cannot be restricted to the workmen working at Jamshedpur". So far as the workmen 's demands Nos. 3 and 5 were concerned, the Tribunal after observing that the company 's wage scales were satisfactory, compared the rates of overtime paid by other industrial concerns in Jamshedpur and awarded 1 1/4 times the ordinary wages for overtime work exceeding 39 hours but not exceeding 48 hours per week. If the overtime exceeded 48 hours per week, 48 hours of work being the maximum provided by the Bihar Shops and Establishments Act, the company would be liable to pay at double the ordinary rate of wages as provided in that Act. Regarding demand No. 5, the union produced three letters addressed to its Secretary, ( 1 ) a letter by the General Secretary of the Tara Workers Union, (Ext. I) dated November 30, 1963, wherein it was stated that the officials of that union were granted special leave to attend the union 's executive committee meetings, the meetings of their federation and the meetings of the I.N.T.U.C. if held at Jamshedpur; (2) a letter dated January 25, 1964 by the General Secretary of Golmuri Tinplate Workers Uni , Jamshedpur, to the effect that members of the executive committee of that union were relieved from duty with pay to attend meetings of the executive committee or any other meeting called by the union except mass meetings and the union 's delegates were also. allowed special leave with p.ay to attend I.N.T.U.C. sessions; and (3) a letter dated December 7, 1963 by the Secretary of Telco Workers Union, Jamshedpur, to the effect that members of the executive committee of that union and office bearers were allowed to attend union 's meetings without loss of pay. The Tribunal noted that the appellant company 555 had been allowing without loss of pay the representatives of the workmen to attend proceedings before conciliation officers and Industrial Tribunals. This concession, it considered, was sufficient and, therefore, rejected the demand for special leave with pay to attend the law courts. But it awarded that the union 's representatives should be given special leave to attend (1 ) meetings of its executive commit, tee, (2) meetings of the federation of the union, (3) the annual convention of that federation when held at Jamshedpur and (4) the convention of the I.N.T.U.C. The first contention urged on behalf of the appellant company was that the Tribunal was in error in making its award operative not only to the said workmen at its Jamshedpur factory but also to workmen at its other establishments and that in doing so it acted beyond jurisdiction. In our view, this contention must be upheld. In the first place, the agreement by which the parties agreed to refer the said disputes for adjudication was clearly between the management of the appellant company 's factory at Jamshedpur and the workmen employed in that factory and represented by their said union the Indoxco Labour Union. The statement accomping that agreement clearly stated that the disputes agreed to be referred to were between the workmen of that factory and the management of that factory. The notification referring those disputes to the Tribunal also made it Clear that the disputes referred to were those set out in the said agreement and the statement and no other dispu,tes and further that they were the disputes between the parties to that agreement. There was no evidence before the Tribunal that similar demands were raised by workmen engaged in the appellant company 's other establishments. Even assuming that the Indoxco Labour Union validly amended its constitution so as to extend its membership to the company 's other workmen in its other establishments, inasmuch as the disputes referred to the Tribunal were only those set out in the said agreement and the said statement, any award made by the Tribunal in respect of those disputes must necessarily be confined to the disputes referred to it, the parties to those disputes 'and the parties who had agreed to refer those disputes for adjudication. Next, as to the claim of the Union that it had amended its constitution on January 6, 1963 and, therefore, as the workmen of the factory at Jamshedpur came henceforth to be represented by the Indian Oxygen Workers ' Union which represented also workmen employed in the appellant company 's other establishments, the reference extended to them also and the Tribunal 's award would cover them also. We fail to see any connection between the purported amendment of the union 's constitution and 556 the reference made by the government on the basis of the said agreement and the said ' statement. These, as aforesaid, related to the disputes between the management and the workmen of the appellant company 's factory at Jamshedpur who alone had made the aforesaid demands and disputes arising from those demands only were agreed to be referred to and were actually referred to the Tribunal by the said notification. There is nothing to show in that notification that other workmen of the company had raised similar demands or that there were any disputes existing or apprehended which were included in that reference. The question next is whether the union 's constitution was duly amended on January 6, 1963 as claimed by the union and held by the Tribunal. The constitution of the union prior to its purported amendment contained amongst other Articles, Articles 1 and 3. These Articles read as follows: "ARTICLE NO. 1: Name and Address: 1. This Union is a Trade Union Organisation of wage earners of the Indian Oxygen & Acetylene Co. Ltd., Jamshedpur and shall be called. Indoxco Labour Union. The situation of the Registered Office shall not be changed except by resolution of the General Body Meeting specially held for the purpose. Any change of the address of the Registered Office of the Union will be communicated to the Registrar of the Trade Unions within 14 days of such change." Article XII of the said constitution deals with alteration of rules and cl. (e) thereof provides that copies of all new rules and amendments or revisions of .rules shall be submitted to the Registrar within the prescribed period as required by section 28(3) of the . This rule had to be incorporated in the constitution in view of the express terms of that section. Section 6 of the provides that a trade union would not be entitled to registration under the Act unless the executive thereof is constituted in accordance, with the provisions of this Act, and the rules thereof provide amongst other things for its name and the manner in which the rules shall be amended, varied or rescinded. Section 28(3) provides that a copy of every alteration made in the rules of a registered trade union shall be sent to the Registrar Within fifteen days of the making of the alteration. Section 29 contains the power of the appropriate government to make regulations and sub section 2(a) provides that without prejudice to the generality of the power in sub section (1 ) such regulations may provide inter alia for the manner in which trade unions and their rules shall be registered. Section 30(3) lays 557 down that regulations so made shall be published in the official gazette and on such publication shall have effect as if enacted in this Act. In pursuance of the power to make regulations the Central Government framed Central Trade Unions Regulations, 1938, regulation 9 whereof provided that on receiving a copy of an alteration made in the rules of a trade union under section 28(3), the Registrar shall register the alteration in the register maintained for this purpose and shall notify the fact that he has done so to the secretary of the trade union. The combined effect of secs. 6(g), 28(3), 29 and 30(3) and regulation 9 is that a registered union can alter its rules. only in the manner provided in these provisions, that is, it has to send the amended rules to the Registrar within 15 days from the amendment and until the Registrar is satisfied that the amendments are in accordance with the rules of the union and on such satisfaction registers them in a register kept for that purpose and notifies that fact to the union 's secretary, the amendments do not become effective. The union did not produce any evidence to show that the amendments purported to have been carried out by the said resolution dated January 6, 1963 were sent to the Registrar as provided in the aforesaid provisions, nor did it produce any communication of the Registrar notifying the fact of his having registered the said amehdments. The only evidence it produced was its letter dated May 21, 1964 to the appellant company which indicated that the Registrar notified to the union of his having registered the said amendments on May 13, 1964. The Tribunal 's conclusion, therefore, that the union 's constitution was duly amended on either January 6, or 21, 1963 or that, therefore, the/ndian Oxygen Workers Union represented the workmen of the company 's factory at Jamshedpur and that consequently it made no difference that the name of Indoxco Labour Union as representing the workmen concerned was mentioned in the said agreement and the said statement and not that of the Indian Oxygen Workers Union is erroneous and cannot be sustained. Any award, therefore, made by the Tribunal in these circumstances can operate only in respect of the workmen of the appellant company 's factory at Jamshedpur and the Tribunal 's extension of that award to workmen in the company 's other establishments was clearly without jurisdiction. The decisions in The Associated Cement Companies Ltd. vs Their Workmen(1) and Ramnagar Cane and Sugar Co. Ltd. vs Jatin ChakravortY(2) on the effect and interpretation of section 18 of the , relied on by counsel for the union are beside the point and do not assist him. As regards the Tribunal 's finding on demand No. 3, counsel for the company raised two contentions: (1 ) that the company 's factory at Jamshedpur having been declared an establishment (1) ; (2) 558 under the Bihar Shops and Establishments Act, it could be made liable to pay for overtime work at the rate provided in that Act, viz. at double the ordinary rate when a workman was asked to. work beyond 48 hours per week as provided therein. Therefore, the argument ran, the appellant company could not be asked to pay more than its ordinary rate of wages payable to workmen if they were asked to work beyond 39 hours but not exceeding 48 hours. And (2) that the comparative statement (Ext. M) of overtime rates paid by other concerns in Jamshedpur before the Tribunal showed that if the company were made to pay 11/4 times its ordinary rate of wages it would, in the light of its higher scale of wages be paying more than the other concerns. In our judgment both these contentions are unsustainable. Under the conditions 'of service of the company, the total hours of work per week are 39 hours. Any workman asked to work beyond these hours would obviously be working overtime and the company in fairness would be expected to pay him compensation for such overtime work. The Bihar Shops and Establishments Act has no relevance to this question as that Act fixes the maximum number of hours of work allowable thereunder, i.e. 48 hours a week, and provides for double the rate of ordinary wages for work done over and above 48 hours. It is not, therefore, as if the provisions of that Act govern overtime payment payable by an employer where maximum hours of work are governed by the conditions of service prevailing in his establishment. Therefore, no reliance can be placed on the provisions of that Act for the company 's contention that it cannot be called upon to pay for overtime work anything more than its ordinary rate of wages if the workmen do work beyond 39 hours but not exceeding 48 hours a week. It is obvious that if the company were asked to pay at the rate equivalent to the ordinary rate of wages for work done beyond 39 hours but not exceeding 48 hours work a week, it would be paying no extra compensation at all fo.r the work done beyond the agreed hours of wo.rk. The company would in that case be indirectly increasing the hours of work and consequently altering its conditions of service. M., relied on by counsel, gives the overtime rate paid by six industrial concerns situate in Jamshedpur. Out of these six concerns, four pay overtime compensation at 11/2 times the ordinary wages and dearness allowance payable by them. If after taking into consideration the fact of the comparatively higher scale of wages prevailing in the appellant company the Tribunal fixed the rate for overtime work at 1 1/4 times the ordinary. rate of wages, it is impossible to say that the Tribunal erred in doing so or acted unjustly. The company 's contention, thcrefore, as regards this demand must be rejected. 559 As regards demand No. 5, counsel for the company very seriously challenged that part of the award as unjustified and contended that an obligation to grant special leave to attend the meetings of the executive committee of the union, the meetings of the federation and the conventions of the I.N.T.U.C. over and above the various types of leave available to the company 's workmen was tantamount to the company having practically to finance the administration and management of the union. He argued that imposing such an obligation on the company cannot be justifled on the ground of social justice or promotion of trade unionism. Counsel for the union, on the other hand, sought to support this part of the award on the ground that such a demand was justified, as the Tribunal has observed, in the interest of a proper growth ' of trade union movement and the promotion of harmony in industrial relations inasmuch as if facilities are given to the workmen to conduct the administration of the union themselves, there would be less possibility of outside elements establishing their hold on the union. We apprehend the argument does not take into consideration certain important aspects of the demand. As aforesaid, the appellant company has been allowing those of its workmen who are the tmion 's representatives to attend without loss of pay 'proceedings before conciliation officers and industrial tribunals. This is fair because conciliation proceedings are likely to get thwarte if the workmen 's representatives are not there to discuss the disputes and put forward their point of view before conciliation officers and wherever possible to arrive at a settlement or compromise. Over and above this facility, the workmen get various types of paid leave. As the figures of such leave are not correctly 'stated in the award, we collected them from counsel on both sides. The following table shows the types of leave enjoyed by the workmen: Factory Staff: Earned leave . 21 Festival leave . 10 Casual leave . 7 Medical leave . 15 53 Office Staff: Earned leave . 21 Festival leave . 17 Casual leave . 7 Medical leave . 15 560 General Staff: Earned leave . 15 Festival leave . 17 Casual leave . 7 Medical leave . 15 54 It is impossible to say that the leave granted by the company with full pay is not fair or even liberal. In conceding the demand of the union the Tribunal does not appear to have considered the adverse effect on the company 's production if further absenteeism were to be allowed especially when the crying need of the country ' s economy is more and more production and employers are exhorted to streamline their management to achieve this objective and to bring down their cost in line with international cost. In awarding this demand the Tribunal also did not specify on how many occasions the executive committee meetings of the union and other meetings would be held when the company would be obliged to give special leave with pay to the union 's representatives. Similarly there is no knowing how many delegates the union would send to attend the conventions of the federation and the I.N.T.U.C. The Tribunal could not in the very nature of things specify or limit the number of such meetings for such an attempt would amount to interference in the administration of the union and its autonomy. Its order must of necessity, therefore, have to be indefinite with the result that the appellant company would not know before hand on how many occasions and to how many of its workmen would be called upon to grant special leave. Further in case there are more than one union in the company 's establishment, the representatives of all such unions would also have to be given such leave to attend the aforesaid meetings. A healthy growth of trade union movement undoubtedly would lead to industrial peace and harmony and consequently to higher efficiency. But a demand of the type we have before us has to be considered from a11 aspects and its implications and results have to be properly examined. In considering such a demand, the first question which strikes one is as to why the meetings of the executive committee of the union cannot be held outside the hours of work. It was said that it may not be possible always do so if an emergency arises. But emergencies are not of regular occurrence and if there be one, the representatives can certainly sacrifice one of their earned leave. There can obviously be no difficulty in so doing. The meetings of the federation and the annual conventions of the I.N.T.U.C. too can be attended by the union 's delegates by availing themselves of their earned leave. 561 Industrial adjudication, as observed in 1. K. Cotton and Spinning and Weaving Mills vs Badri Mali(1) cannot and should not ignore the claims of social justice, a concept based on socio economic equality, and which endeavours to resolve conflicting claims of employers and employees by finding not a one sided but a fair and just solution. A demand for special leave has, however, nothing to do with any disparities or inequalities social or economic. On the other hand, too much absenteeism harms both the employers and the employees inasmuch as it saps industrial economy. In our view, the Tribunal, on the considerations aforesaid, was not justified in obliging the appellant company to grant special leave demanded by the union. The result is that except for the overtime rate allowed by the Tribunal which we confirm, the rest of the appeal has to be allowed and the Tribunal 's award set aside. We hold that the award is operative in respect of the workmen of the appellant company 's factory at Jamshedpur and not the workmen of its other establishments. The demand for special leave comprised in demand .No. 5 is disallowed. There will be no order as to costs. Y.P. Appeal allowed in part.

The appellant and its workmen, represented by their unio.n called the Indoxco Labour Union, Jamshedpur, made a joint application to the Government referring certain disputes to the Industrial Tribunal. The application stated that the number of workmen employed in the undertaking affected were those employed in the company 's factory at Jamshedput, and that the same number were likely to be affected by the disputes. The Government referred the disputes to the Industrial Tribunal, and the notification also stated that the disputes were between the management of the appellant company 's factory at Jamshedpur and their workmen represented by Indoxco Labour Union. Two of the demands were (1) payment of overtime to office staff should be 1 1/2 times the ordinary rate .and (2) the union representatives should be allowed special leave to attend law courts for matters connected with the workers and the management, to attend the annual conventions of their federation, to attend to Executive Committee meetings of the union federation and the conventions of the central organisation i.e., INTUC. The union at a general meeting, held prior to the reference, had passed a resolution changing the name of the union to Indian Oxygen Workers Union and making the workmen of all the establishments of the Appellant company in Bihar eligible for its membership. By a letter the union informed the appellant company at Jamshedpur of this amendment. The Tribunal held that (i) the award in this case was to apply to all of the workmen and could not be restricted to the workman working at Jamshedpur; (ii) 11/2 times the ordinary wages 'for overtime work exceeding 39 hours but not exceeding 48 hours per week should be paid; and if the overtime exceeded 48 hours per week, the company would be liable to pay double the ordinary rate of wages; and (iii) the appellant company had been allowing without loss of pay the representatives of the workmen to attend proceedings before conciliation officers and Industrial Tribunals, and that this concession was sufficient; therefore the Tribunal rejected the demand for special Leave with pay to attend the law courts; but held the union 's representatives were to be given special leave to attend (a) meetings of its executive committee, (b) meetings of the federation of the union, (c) the annual convention of that federation when held at Jamshedpur and (d) the convention of the INTUC. In appeal to this Court, HELD: (i) The award was operative only in respect of the workmen of the appellant company 's factory at Jamshedpur and not the workmen of its other establishments. [561 C D] The agreement by which the parties agreed to refer the said disputes for adjudication was between the management of the appellant company 's factory at Jamshedpur. and the wo 'rkmen employed in that factory and represented by their said union, the Indoxco Labour Union. Under the notification of the Government also 'the disputes referred to the Tribunal 551 were those set out in the said agreement. Even assuming that the Indoxco Labour Union validly amended its constitution so as to extend its membership to the company 's other workmen in its other establishments, inasmuch as the disputes referred to. the Tribunal were only those set out in the said agreement, any award made by the Tribunal in respect of those disputes must necessarily be confined to the disputes refered to it, the parties to those disputes and the parties who had agreed to refer those disputes for adjudication. There is nothing to show in that notification that other workmen of the company had raised similar demands. or that there were any disputes existing or apprehended which were included in that reference. [555 D G] The Union did not produce any evidence to show that the amendments purported to have been carried out by the resolution were sent to the Registrar as provided in sections 6(g), 28(3), 29 and 30(3) of the Trade Union Act and regulation 9 of the Central Trade Union Regulation, nor did it produce any communication of the Registrar notifying the fact of his having registered the said amendments. The only evidence it produced was its letter to the appellant company which indicated that the Registrar notified to the union of his having registered the said amendments. The Tribunal 's conclusion, therefore, that the union 'section constitution, was duly amended or that the Indian Oxygen Workers Union represented the workmen of the company 's factory at Jamshedpur and that consequently it made no difference that the name of Indoxco Labour Union as representing the workmen concerned was mentioned in the said agreement and the said statement and not that of the Indian Oxygen Workers Union is erroneous and cannot be sustained. Any award, therefore, made by the Tribunal in these circumstances can operate only in respect of the workmen of the appellant company 's factory at Jamshedpur and the Tribunal 's extension of that award to workmen in the company 's other establishments was clearly without jurisdiction. [557 D G] The Associated Cement Companies Ltd. vs Their Workmen, ; a 'nd Ramnagar Cane and Sugar Co. Ltd. vs Jatin Chakravorty, , distinguished. (ii) Under the conditions of service of the co.mpany, the total hours of work per week were 39 hours. The Bihar Shops and Establishments Act fixes the maximum number of hours of work allowable thereunder, i.e. 48 hours a week, and provides for double the rate of ordinary wages for work done over and above 48 hours. But no reliance can be placed on the provisions of that Act for the company 's contention that it cannot be called upon to. pay for overtime work anything more than its ordinary rate of wages if the workmen do work beyond 39 hours but not exceeding 49 hours a week. Any workman asked 'to work beyond 39 hours would obviously be working overtime and the company in fairness would be expected to pay him compensation for such overtime work. If the company pays at the ordinary rate of wages for work done beyond 39 hours but not exceeding 48 hours work a week, it would be paying no extra compensation at all for the work done beyond the agreed hours of work. The company would thus be indirectly increasing the hours of work and consequently altering its condition of service. [558 C F] If after taking into consideration the fact of the comparatively higher scale of wages prevailing in the appellant company, the Tribunal fixed the rate for overtime work at 11/2 times the ordinary rate of wages, it is impossible to say that the Tribunal erred in doing so or acted unjustly. (iii) The demand for special leave must be disallowed. 552 The appellant company. has been allowing those,of its workmen who are the union 's representatives to attend without loss of pay proceedings before conciliation officers and industrial tribunals. In conceding the demand of the union for more leave the Tribunal does not appear to have considered the adverse effect on the company 's production if furthern absenteeism were to be allowed especially when the crying need of the country 's economy is more and more production. In awarding this demand the Tribunal also did not specify on how many ' occasions the executive committee meetings of the union and other meetings would be held when the company would be obliged to give special leave with pay to the union 's representatives. Similarly, there is no knowing how many delegates the union would send to attend the conventions of the federation and the INTUC. The Tribunal could not in the very nature of things specify or limit the number of such meetings for such an attempt would amount to interference in the administration of the union and its autonomy. Its order must of necessity, therefore, have to be indefinite with the result that the appellant company would not know before hand on how many occasions and to how many of its workmen it would be called upon to grant special leave. Further, in case there are more than one union in the company 's establishment, the representatives of all such unions would also have to be given such leave to attend the aforesaid meetings. In considering such a demand, the question as to why the meetings of the executive committee of the union cannot be 'held outside the hours of work should be considered. It was said that it may not be possible always to do so if an emergency arises. But emergencies are not of regular occurrence and if there be one, the representatives can certainly sacrifice one of their earned leave. Similarly the meetings of the federation and the annual conventions of the INTUC too can be artended by the union 's delegates by availing themselves of their earned leave. [559 D E; 560 C H] J. K. Cotton and Spinning and Weaving Mills vs Badri Malt, [19641 3 S.C.R. 724, referred to.

Civil Appeal No. 142 of 1956. Appeal by special leave from the judgment and order dated September 13, 1954, of the Labour Appellate Tribunal of India (Calcutta Bench) in Appeal No. Cal 87 of 1953. H. N. Sanyal, Additional Solicitor General of India, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellants. P. K. Chatterjee, for the respondents. November 5. The Judgment of the Court was delivered by BHAGWATI J. This appeal with special leave arises out of an application made by the appellant to the Industrial Tribunal, Bihar under section 33 of the (hereinafter referred to as " 'the Act"), seeking permission to discharge the respondents from its employ. 873 The respondents were in the employ of the appellant and were staying in a two storeyed house in the city of Patna which had been rented by the appellant for housing its workmen. On November 20, 1952, an occurrence took place in the said house wherein the respondents were involved. Written reports of the said occurrence were sent on November 21, 1952, to the appellant 's Chief Engineer and the respondents were placed under suspension the same day. An industrial dispute was then pending between the parties i.e., the appellant and its workmen before the Industrial Tribunal, Bihar, and the appellant therefore made an application to the said Tribunal under section 33 of the Act for permission to dismiss the respondents on the ground of misconduct as per cl. 17(b)(viii) of the appellant 's Standing Orders. On November 27, 1952, the respondents also made an application before the said Tribunal under section 33A of the Act inter alia on the ground that their suspension by the appellant as aforesaid was a breach of section 33 of the Act. On December 6, 1952, the appellant made an application before the said Tribunal stating that on a reconsideration of the facts of the case of the respondents the original prayer for permission to dismiss the the respondents was not being pressed, and for the ends of justice it would be sufficient if the appellant was granted permission to discharge the respondents under cl. 14(a) of the Standing Orders instead of the original prayer for dismissal under cl. 17(b)(viii) thereof. This application was resisted by the respondents. The Industrial Tribunal, however, entertained the same and after hearing the parties duly made its award on May 14, 1953, dismissing the respondents ' application under section 33A of the Act and granting the appellant permission to discharge the respondents from its employ with effect from the date of the order on payment to the respondents of one month 's pay in lieu of notice within 15 days therefrom. The respondents carried an appeal against the said order of the Industrial Tribunal granting the appellant 's application under section 33 of the Act before the Labour Appellate Tribunal of India, Calcutta. A 874 preliminary objection was taken on behalf of the appellant before the Labour Appellate Tribunal that no substantial question of law was involved and as such the appeal was not maintainable. The Labour Appellate Tribunal was of the opinion that the appellant had alleged misconduct against the respondents and could not be allowed to adopt the expedient of terminating their services by giving notice for the requisite period or payment of salary in lieu of notice and that the Industrial Tribunal, therefore, ought not to have entertained the application for amendment of the prayer of the original application in which the appellant wanted to dismiss the respondents for misconduct. This according to the Labour Appellate Tribunal was a substantial question of law and it therefore entertained the appeal. The Labour Appellate Tribunal thereafter considered whether the appel lant had made out a case under cl. 17(b)(viii) of the Standing Orders and came to the conclusion that the respondents had not been guilty of any misconduct within the meaning of that clause and that therefore the order made by the Industrial Tribunal granting permission to the appellant to terminate the services of the respondents was liable to be set aside. In so far, however, as after obtaining the permission from the Industrial Tribunal the appellant had given notice of discharge to the respondents, the Labour Appellate Tribunal expressed its inability to give the respondents any substantial relief either in the shape of reinstatement or compensation. The appellant has come up in appeal before us against this order of the Labour Appellate Tribunal. Shri H. N. Sanyal, appearing for the appellant, has urged in the fore front the contention that no appeal from the order of the Industrial Tribunal lay to the Labour Appellate Tribunal under section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950. He contended that the said order was not a "decision" within the meaning of that expression in section 7 and even assuming that it was so, the appeal neither involved any substantial question of law nor was it a decision in respect of any of the matters specified in sub section (1)(b) 875 of that section. The answer of Shri P. K. Chatterjee on behalf of the respondents was that the action of the appellant in the matter of the termination of the services of the respondents was punitive in character, that the discharge of the respondents for which permission was sought by the appellant was a punitive discharge, that such discharge was by reason of the alleged misconduct of the respondents falling within cl. 17(b)(viii) of the Standing Orders and not within cl. 14(a) thereof and that the substantial question of law which arose in the appeal was whether the appellant could be allowed to adopt the expedient of terminating the services of the respondents, without going through the procedure of submitting a charge sheet to the respondents and holding a proper enquiry in the matter of those charges, by merely giving notice for the requisite period or payment of salary in lieu of notice and thus resorting to el. 14(a) of the Standing Orders instead of cl. 17(b)(viii) of the same. The other answer made by Shri P. K. Chatterjee was that having regard to the definition of the term "retrenchment" to be found in section 2(oo) of the Act the discharge of the respondents by the appellant really amounted to retrenchment and retrenchment being one of the matters specified in sub section (1)(b) of section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950, the respondents had a right of appeal to the Labour Appellate Tribunal. It is necessary, therefore, to appreciate what was sought to be done by the appellant when it made the application before the Industrial Tribunal on December 6, 1952. This application has been described by the Labour Appellate Tribunal as an application for amendment of the original application which had been filed by the appellant on November 21, 1952, for permission to dismiss the respondents from its employ as per el. 17(b)(viii) of the Standing Orders. It must be noted, however, that what the appellant purported to do by its application of December 6, 1952, was, in effect, to substitute another application asking for permission to discharge the respondents from its 111 876 employ under el. 14(a) of the Standing Orders, thus abandoning the relief which it had prayed for in the original application. The application dated December 6, 1952, was thus, in substance, a new application made by the appellant to the Industrial Tribunal, no doubt relying upon the facts and circumstances which were set out in the original application but asking for the permission of the Industrial Tribunal to discharge the respondents from its employ under cl. 14(a) of the Standing Orders instead of dismissing them from its employ under el. 17(b)(viii) thereof. We do not see how it was not competent to the Industrial Tribunal to allow the appellant to do so. If the appellant bad been actuated by any oblique motives and wanted to evade the consequences of its not having held a proper enquiry, after submitting a charge sheet to the respondents one could have understood the criticism made by the Labour Appellate Tribunal in regard to the same. The Industrial Tribunal, however, expressly recorded the finding that the application for leave to discharge the respondents from its employ was bona fide and what the appellant did by making the application dated December 6, 1952, was actuated by an honest motive of exercising its right to discharge the respondents under el. 14(a) of the Standing Orders instead of visiting upon the respondents the penalty of dismissing them from its employ under el. 17(b)(viii) thereof. The discharge of the respondents was a discharge simpliciter in exercise of the rights of the employer under el. 14(a) of the Standing Orders and was not a punitive discharge under el. 17(b)(viii) thereof and if it was merely a discharge simpliciter, then, no objection could be taken to the same and the appellant would be well within its rights to do so, provided, however, that it was not arbitrary or apricious but was bona fide. The only question relevant to be considered by the Industrial Tribunal would be that in taking the step which it did the appellant was not guilty of any unfair labour practice or victimization. If the Industrial Tribunal did not come to a conclusion adverse to the appellant on these counts, it would have no jurisdiction to refuse, 877 'the permission asked for by the appellant. Once the Industrial Tribunal was of opinion that the application dated December 6, 1952, and the discharge of the respondents for which . the permission of the Industrial Tribunal was sought were in the honest exercise of the appellant 's rights, no question of law, much less a substantial question of law could arise in the appeal filed by the respondents against the decision of the Industrial Tribunal and the Labour Appellate Tribunal was clearly in error when it entertained the appeal. In view of the above finding, we do not propose to deal with the contention that the order passed by the Industrial Tribunal under section 33 of the Act is not a "decision" within the meaning of that term in section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950. The argument that the discharge of the respondents though patently it was a discharge simpliciter was, in substance, retrenchment within the meaning of the definition contained in section 2(oo) of the Act is equally untenable, for the simple reason that the term "retrenchment" was for the first time defined in the manner in which it has been done by an Ordinance promulgated in October 1953 which was followed by Act 43 of 1953 which was published in the Gazette of India on December 23, 1953. The Industrial Tribunal made its order granting the permission under section 33 of the Act on May 14, 1953, so that, this definition of the term "retrenchment" could not apply to the facts of the present case. If, therefore, at the relevant period the discharge simpliciter could not be deemed to be retrenchment of the respondents by the appellant, the decision of the Industrial Tribunal could not be said to be one in respect of any of the matters specified in sub section (1)(b) of section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950. In that view also no appeal could lie from the decision of the Industrial Tribunal to the Labour Appellate Tribunal. It must be observed that neither of these two points was taken by the respondents either in the proceedings before the Industrial Tribunal or the Labour 878 Appellate Tribunal nor was either of them mentioned in the statement of case filed by the respondents in this Court. They were taken for the first time in the arguments advanced before us by Shri P. K. Chatterjee. We have, however, dealt with the same because we thought that we should not deprive tile respondents of the benefit of any argument which could possibly be advanced in their favour. We are, therefore, of opinion that no appeal lay from the decision of the Industrial Tribunal to the Labour Appellate Tribunal, that the Labour Appellate Tribunal had no jurisdiction to interfere with the order made by the Industrial Tribunal granting the appellant permission to discharge the respondents under section 33 of the Act and that the decision of the Labour Appellate Tribunal is liable to be set aside. We accordingly allow the appeal, set aside the decision of the Labour Appellate Tribunal and restore the order made by the Industrial Tribunal, Bihar, on date May 14, 1953. The appellant will be entitled to its costs of this appeal from the respondents. Appeal allowed.

The appellant made an application before the Industrial Tri bunal under section 33 Of the , for permission to dismiss the respondents, its employees, on the ground of misconduct under cl. 17 (b) (viii) of the appellant 's Standing 872 Orders, but subsequently, on a reconsideration of the facts, made another application praying instead for permission to discharge the respondents under cl. 14(a) of the Standing Orders. The Industrial Tribunal found that the second application was bona fide made by the appellant with the honest motive of exercising its right to discharge the respondents instead of visiting upon them the penalty of dismissing them, and granted the appellant permission on payment to the respondents of one month 's pay in lieu of notice. The Labour Appellate Tribunal, on appeal, was of the opinion that having once alleged misconduct against the respondents the appellant could not be allowed to adopt the expedient of terminating their services by giving notice for the requisite period, by means of a fresh application, and after considering whether the appellant had made out a case under cl. I7(b)(viii) of the Standing Orders, came to the conclusion that the respondents had not been guilty of any misconduct, and held that the Industrial Tribunal erred in granting the permission to discharge the respondents. On appeal to the Supreme Court: Held, that in an application under section 33 of the Industrial: Disputes Act, 1947, the relevant consideration was whether the employer was guilty of any unfair labour practice or victimisation, and unless the Tribunal came to a conclusion adverse to the applicant it would have no jurisdiction to refuse the permission asked for to discharge the employee. Accordingly, in view of the finding of the Industrial Tribunal that the application was bona fide, no question of law arose out of its order, and the Labour Appellate Tribunal erred in entertaining the appeal.

pt Petition Nos. 130 & 195 of 1991. IN Civil Appeal No. 2054 of 1990 From the Judgment and Order dated 23.1.87 of the Central Administrative Tribunal, Calcutta in T.A. No. 1263/86. G.S. Chatterjee and Avijit Bhattacharjee for the Appellants. Dr. Anand Prakash, P. Narasimhan for B.K. Prasad, for the Respondents. The Judgment of the Court was delivered by R.M. SAHAI, J. Why the appellants should have been forced to file these contempt applications for enforcement of the order passed by this Court as far back as on 30th April 1990 in Civil Appeal No.2054 of 1990, is not without reason. Grievance of the applicants is that despite clear findings recorded by this Court, opposite parties are going back on it and persisting in the implementation of the order in a manner which frustrates the entire purpose for which the applicants approached this Court and is a clear violation of directions of this Court issued on 30th April 1990. Entire dispute centered round the practice of exercising option by Assistant Station Masters who were recruited directly. Were they left any choice in the matter or was it compulsory. It was held by this Court, that various letters issued made it clear that the option had to be exercised at the time of appointment and where no option was exercised it was deemed to have been exercised. This Court found that the applicants were those persons who had to exercise option at the time of appointment and their options were irrevocable. Effect of this was that they had 758 to wait till 1983 when restructuring was done. The Court further found that the cadre of Assistant Station Master/Station Master in South Eastern Railway was separate and not combined. But the Chief Personnel Officer applied alternative1, which under restructuring was to be applied to a zone where combined cadre was in vogue, as it was acceptable to leaders of the Union and was beneficial to large number of employees. The Court therefore did not interfere with implementation of the alternatives, but protected the interest of the applicants by holding thus "But both the employees unions have accepted the implementation of the letter of Chief Personal Officer as it is beneficial to a majority of the employees. Therefore, it may not be disturbed. At the same time all those 204 employees who had opted before 1983 must be entitled to the benefit which would have been available to them on their options. " What remained thereafter, which could not be clear to opposite parties, cannot be appreciated. The order left no ambiguity that these employees shall be treated separately and would be granted benefit which would have been available to them. That was possible and obvious if alternative 11 was applied to them. It was for this reason that the Court directed to create even additional posts. Attempt was made by the learned senior counsel to urge that it shall disturb seniority and may result in extending it to many others. We are afraid that this Court in these applications is concerned with the implementation of the order passed by it and not whether the order passed by it was correct or not. Neither of these submissions were raised earlier and if had been raised, they should be deemed to have been rejected. Even earlier it had been made clear that no one promoted shall be disturbed. We, therefore, direct opposite parties to implement the order of this Court in respect of 204/206 employees by applying altemative II to them for purposes of determining their placement and promotion. After their placements and promotions are so determined under alternative II then they may be governed by the present alternative for future promotions. Six months ' time was granted in 1990. The opposite parties have delayed it by nearly two and half years. We direct the opposite parties to finalise it within two months from today. The promotions and all benefits shall be given retrospectively. No application for further extension by opposite parties shall be entertained. Failure to comply with the directions shall not be treated lightly in future. 759 We are not taking any action in the circumstances for the present. The contempt applications are disposed of accordingly. But the respondents shall pay a sum of Rs. 5,000 as costs to the applicants. U.R. Contempt Petition disposed of.

The dispute was about whether the exercise of option by Assistant Station Masters, directly recruited, was a matter of choice or was compulsory. The order of this court of 30 April 1990 inter alia protected the interests of the applicants by holding that the 204/206 employees who had opted before 1983 must be entitled to the benefit which would have been available to them on their options. The order was not implemented. It was argued for the condemner that the order of this court would disturb seniority and may result in extending it to many others. Disposing of the contempt petition, this court, HELD : 1. The order dt. 30.4.90 left no ambiguity that these employees shall be treated separately and would he granted the benefit that would have been available to them. (758 D) 2. The Court in contempt applications is concerned with the implementation of an order passed by it, and not whether such order is correct or not. 3.Neither the submission regarding seniority, nor that it may extend to others was raised earlier, and if raised, they should be deemed to have been rejected. Even earlier it had been made dear that no one promoted shall be disturbed. (758 F) 757 4.Within 2 months, alternative 11 to be applied to 204/206 employees for their placement and promotion. Future promotions may be governed by the present alternative. Promotions and all benefits shall be given retrospectively. (758 H) Cost to the applicants of Rs. 5,000

Criminal Appeal No. 702 of 1989. From the Judgment and Order dated 4.7.1988 of the Andhra Pradesh High Court in W.P. No. 8610 of 1988. M.C. Bhandare and Ms. C.K. Sucharita for the Appellant. Ganesh, section Muralidhar, T.V.S.N. Chari and Raghav for the Respondents. 109 The Judgment of the Court was delivered by K.N. SAIKIA, J. Special leave granted. This appeal is from the Judgment and Order of the High Court of Andhra Pradesh at Hyderabad dated 4.7.1988 passed in Writ Petition No. 86 10 of 1988. The appellant states that he enjoys popularity in his area and that he previously held several important positions in the Cuddapah District of Andhra Pradesh, such as organis ing Secretary of the Andhra Pradesh Congress Committee for several years, a Municipal Councillor from 1982 to 1986 and a Vice Chairman of Cuddapah Municipal Council. According to him in December 1985 he was elected as a Chairman of the Cuddapah Municipal Council for its residuary term and in March 1987 he was elected to the Municipal Council as an independent candidate defeating the Telugu Desam and Con gress (I) candidates by a large margin. It is his case that the local leadership of the ruling Telugu Desam Party. having failed to woo him into their fold he was pressurised through the Excise and Police authorities foisting false cases upon him. On 13.11.1987, the police having summoned him to the Police Station for taking his photograph as was done in case of criminals, he moved the Andhra Pradesh High Court by Writ Petition No. 79038 of 1987 and the High Court was pleased to issue directions as prayed for, by its order dated 17.12.1987. Thereafter the excise authorities are stated to have registered some cases against the appellant who applied for and was granted bail on 10.5.1988 rejecting the Excise authorities ' prayer for custody. Scenting a move to detain the appellant under the provisions of the Andhra Pradesh Prevention of Dangerous Activities of Bootleggers, Dacoits, Drug Offenders, Goondas, Immoral Traffic Offenders and Land Grabbers Act, 1986, hereinafter referred to as 'the Act ', the appellant filed Writ Petition No. 8610 of 1988 on 6.6.1988 in the Andhra Pradesh High Court averting, inter alia, that the successive actions initiated against him were a part of political vendetta. A learned Single Judge on 8.6.1988 was pleased to direct interim the respondents not to take the appellant into preventive custody for a period of 15 days on basis the cases already registered. However, on 10.6.1988 the appellant was served the detention order in S.No. 7/1988 dated 3.6.1988 as well as the grounds of deten tion; and he was taken into custody and detained in Secun derabad jail, but was released after four days. The deten tion order stated that with a view to preventing him from acting in a manner prejudicial to the maintenance of public order, it was 110 necessary to make an order directing that "he shall be de tained. " The grounds of detention as served upon the appel lant contained altogether 13 grounds ranging a period from 23.11.1974 to 7.5.1988. The appellant filed on 25.6.1988 in his writ petition a miscellaneous petition being W.P.M.P.S.R. No. 51830, as an additional affidavit, stating, inter alia, that the writ petition was filed by him seeking a direction to the re spondents to refrain from making an order detaining him under the provisions of the Act and the same was admitted and interim direction issued. But thereafter the detention order in S.No. 7 of 1988 dated 3.6.1988 was served on him on 10.6.1988 and, therefore, he submitted the additional affi davit with reference to the impugned order of detention. He assailed therein the grounds of detention as vague, stale, non existent and, in any case, irrelevant bearing no reasons for the decision that his detention was necessary to prevent him from acting in a manner prejudicial to the maintenance of public order. He also assailed the order on grounds of non application of mind by the respondent NO. 2 and absence of nexus between the grounds and maintenance of public order and of non disclosure of any rational basis for formation of such an opinion. He refuted and denied each of the 13 grounds and prayed that the writ petition be amended by substituting the prayer so as to issue a writ, order or direction and more particularly one in the nature of writ of mandamus declaring the order of the Collector and District Magistrate respondent No. 2 herein in S.R. No. 7 of 1988 dated 3.6.1988 made under Act 1 of 1986 as illegal and void and to pass such other orders as are necessary in the inter ests of justice. Admittedly no specific order was passed on this miscellaneous petition. It appears that a Counter Affidavit was filed in the writ petition on behalf of the respondents and the appellant filed a reply affidavit there to. A Division Bench of the High Court of Andhra Pradesh on reference by the learned Single judge heard the writ peti tion analogously with another writ petition and observing, inter alia, that as an order of detention was made even before the writ petition was filed, held that the prayer in the writ petition had become infructuous; and that there were no extraordinary or special reasons to depart from the normal rule, namely, that in such a case the appellant should first surrender and move for a writ of habeas corpus, and accordingly dismissed the writ petition. Mr. M.C. Bhandare, the learned counsel for the appellant submits, inter alia, that the High Court erred in dismissing the appellant 's 111 writ petition holding that there were no extraordinary circumstance, or special reasons to depart from the normal rule that the appellant in such a case should first surren der and then move a petition for habeas corpus thereby refusing to grant relief to the appellant against infringe ment of his fundamental right to liberty; and that the grounds of detention were vague, irrelevant, stale and non existent having no relation to the stated purpose of deten tion, and there was mala fide exercise of power and complete non application of mind on the part of the detaining author ity for which the grounds of detention ought to have been rejected and the detention order set aside. Counsel relies on a decision of the Bombay High Court reported in 1981(1) Crl. L.J. 767 and one of the Gujarat High Court since re ported in AIR 1978 Gujarat 253. Counsel further submits that the detention order having not been approved by the State Government as required under section 3(3) of the Act and the appellant 's case having not been placed before the Advisory Board as required under section 10 the detention order ceased to be in force and hence is liable to be quashed. Mr. M.S. Ganesh, the learned counsel for the respondents submits that the detention order having been passed before the writ petition was filed, the High Court was right in dismissing the same following the court 's practice and procedure; and that there were no extraordinary or special reasons to depart from the normal rule inasmuch as granting relief at such a stage would defeat the very purpose of the Act. Counsel however, could not deny that the detention order was not approved by the State Government and that the appellant 's case was not placed before the Advisory Board. The first question to be decided therefore, is whether the High Court was right in dismissing the writ petition holding that the rule or practice of the High Court in such a case was to interfere only where there were extraordinary or special reasons and otherwise to leave the appellant to first surrender and then move a petition for habeas corpus. From a perusal of the Judgment of the High Court it appears that it analysed the question of maintainability of the writ petition from two view points, namely, of the High Court 's power, and the High Court 's rule or practice. The High Court correctly analysed the power of the High Court to interfere in such a case under Article 226 of the Constitu tion of India concluding that the High Court had power to interfere. While tracing the High Court 's evolving rule or practice, the Bench took the view that it was but appropri ate and proper that the 112 court evolved and followed a practice and procedure where it would not ordinarily entertain a challenge to a preventive detention unless the person concerned submitted himself to the order and not to encourage persons against whom orders of preventive detention were made by the competent authority under a valid enactment to avoid the process of law and at the same time seek the protection of law from this Court. Relying on several decisions of its own, the Court observed: "There is no presumption that any and every order of detention is bad. The normal rule shall therefore be "surrender to the order first and then approach this Court. " Only in extraordinary cases, where it appears that the State is exercising its power under a preven tive detention statute for an oblique purpose, or in an outrageous and/or vindictive manner, or where the order of detention is ex facie invalid, would this Court depart from this rule. Now, what would be such extraordi nary case cannot and, indeed, should not be defined or specified. It is better left to the sound judgment and decision of this Court. " The High Court on facts of the appellant 's writ peti tion, observed that the allegations that the entire adminis trative machinery was being misused by the local MLA who happened to be a Cabinet Minister to hound the appellant and that the Collector and District Magistrate was being used as a tool were not correct and, therefore, said: "Once we are of the opinion that there are no extraordinary or special reasons to depart from the normal rule, we will not look into or examine the relevance or correctness of the grounds as we would do in a writ of habeas corpus. " The writ petition was accordingly dismissed. Mr. Bhandare submits that when the appellant 's fundamen tal right to liberty was threatened through the machination of a detention order, he approached the High Court for protection and when despite the interim order of the High Court his fundamental right was violated by detaining him, after serving the order of detention on vague, stale, irrel evant and non existent grounds, though he was released after four days, he ought not to have been denied relief on the ground of there having evolved a practice or procedure of the Court not to interfere in such a case except where there were extraordinary or special reasons 113 and to leave the appellant to surrender and then move a petition for habeas corpus. We find force in this submis sion. As the detention order was already passed and served and the detenu was already taken into custody during the pendency of the writ petition, these subsequent events having been brought to the notice of the court by a Misc. application in the form of an Additional Affidavit the same ought to have been dealt with by the High Court. In Jayantilal Bhagwandas Shah vs The State of Maharash tra, , the challenge was directed towards orders of detention passed under the , but the intended detenus under those orders were not in detention. The State having raised a preliminary objec tion to the maintainability of the petition on the ground that the habeas corpus jurisdiction under article 226 of the Constitution was exercisable only to examine the legality of a detention where there was a detention and in no other case, a Division Bench of the Bombay High Court took the view that though the writ of habeas corpus might be issued only when there was actual illegal detention, that was not to say that an illegal order of detention could not be successfully challenged. In para 11 of the report, the Court held: "article 226 is couched in language wide enough to protect a person against an illegal inva sion of his fight to freedom by protecting him while still free and by regaining his freedom for him if he has already been wrongfully detained. We cannot countenance and do not accept the Advocate General 's submission that the High Courts are impotent to give relief against the prospect of illegal detention and must first require the intended detenu to surrender to the illegal detention. We are satisfied that the High Courts may under the provisions of article 226 issue a direction, order and writ in the nature of mandamus and/or certiorari quashing an illegal order of detention and may by direction, order and writ in the nature of prohibition enjoin the person threatening the illegal detention from execut ing the threat. " Accordingly the Court held that it would intervene to strike down an illegal order of detention. If the court could in matters of personal liberty intervene on the strength of a mere post card, they surely could intervene on the strength of a petition, though they may seek the 114 wrong relief or be phrased in the wrong form. The position of a person who is actually under illegal detention and of a person who is in imminent jeopardy of illegal detention are not far dissimilar. We are inclined to agree with this view as we feel that refusal to interfere in such a case may amount to denial of the fundamental right itself. A Full Bench of the Gujarat High Court in Vedprakash Devkinandan Chiripal vs State of Gujarat, since reported in AIR 1987 Gujarat 253 where the petitioner was said to be detained under the provisions of Prevention of Blackmarket ing and maintenance of Supply of Essential Commodities Act, 1980 and the petitioner having absconded, a notification was issued in the official gazette as provided under section 7(1)(b) of the said Act and the person moved the petition under article 226 of the Constitution of India praying a writ of habeas corpus or a writ of mandamus, the question was whether the petition would be maintainable before the detenu had been served with order of detention and had been de tained in custody, answered the question in the affirmative. Relying on the decisions in A.K. Gopalan vs State of Madras, ; and Addl. District Magistrate, Jabalpur vs Shivakant Shukla; , , the Full Bench took the view "that before detention, if writ of mandamus is moved for challenging unauthorised detention order which is al ready passed on the ground that the order is a nullity because it is passed (a) by an incompetent person or (b) it is a mala fide order or (c) it is contrary to the legal procedure prescribed for passing such order, or (d) it is otherwise a nullity for any other reason, for example, passed against a wrong person, it cannot be said that such challenge would be per se not maintainable. " We are inclined to agree inasmuch as it would be a challenge to an existing order of detention which is posing an imminent threat to a fundamental right of the named person guaranteed under article 21. There could, therefore, be no reason why in such an exceptional and rare case, detention order already made, and either served or yet to be served, and the person is still free could not be legally brought under challenge. Article 226(1) of the Constitution of India notwith standing anything in Article 32, empowers the High Court throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government within those territo ries directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other pur pose; and it also envisages 115 making of interim orders, whether by way of injunction or stay or in any other manner in such a proceeding. Article 21 giving protection of life and personal liberty provides that no person shall be deprived of his life or personal liberty except according to procedure established by law. For en forcement of one 's right to life and personal liberty resort to Article 226(1) has thus been provided for. What is the ambit of enforcement of the right? The word 'enforcement ' has also been used in Article 32 of the Constitution which provides the remedy for enforcement of fights conferred by Part III of the Constitution. The word 'enforcement ' has not been defined by the Constitution. According to Collins English Dictionary to enforce means to ensure observance of or obedience to a law, decision etc. Enforcement, according to Webster 's Comprehensive Dictionary, means the act of enforcing, or the state of being enforced, compulsory execu tion; compulsion. Enforce means to compel obedience to laws; to compel performance, obedience by physical or moral force. If enforcement means to impose or compel obedience to law or to compel observance of law, we have to see what it does precisely mean. The right to life and personal liberty has been guaranteed as a fundamental right and for its enforce ment one could resort to Article 226 of the Constitution for issuance of appropriate writ, ' order or direction. Precisely at what stage resort to Article 226 has been envisaged in the Constitution? When a right is so guaranteed, it has to be understood in relation to its orbit and its infringement. Conferring the right to life and liberty imposes a corre sponding duty on the rest of the society, including the State, to observe that fight, that is to say, not to act or do anything which would amount to infringement of that right, except in accordance with the procedure prescribed by law. In other words, conferring the fight on a citizen involves the compulsion on the rest of the society, includ ing the State, not to infringe that right. The question is at what stage the right can be enforced? Does a citizen have to wait till the right is infringed? Is there no way of enforcement of the right before it is actually infringed? Can the obligation or compulsion on the part of the State to observe the fight be made effective only after the right is violated or in other words can there be enforcement of a fight to life and personal liberty before it is actually infringed? What remedy will be left to a person when his right to life is violated? When a right is yet to be violat ed, but is threatened with violation can the citizen move the court for protection of the right? The protection of the right is to be distinguished from its restoration or remedy after violation. When right to personal liberty is guaran teed and the rest of the society, including the State, is compelled or obligated not to violate that right, and if someone has threatened to violate it or its violation is imminent, 116 and the person whose right is so threatened or its violation so imminent resorts to Article 226 of the Constitution, could not the court protect observance of his right by restraining those who threatened to violate it until the court examines the legality of the action? Resort to Article 226 after the right to personal liberty is already violated is different from the pre violation protection. Post viola tion resort to Article 226 is for remedy against violation and for restoration of the right, while pre violation pro tection is by compelling observance of the obligation or compulsion under law not to infringe the right by all those who are so obligated or compelled. To surrender and apply for a writ of habeas corpus is a post violation remedy for restoration of the right which is not the same as restrain ing potential violators in case of threatened violation of the right. The question may arise what precisely may amount to threat or imminence of violation. Law surely cannot take action for internal thoughts but can act only after overt acts. If overt acts towards violation have already been done and the same has come to the knowledge of the person threat ened with that violation and he approaches the court under article 226 giving sufficient particulars of proximate actions as would imminently lead to violation of right, should not the court call upon those alleged to have taken those steps to appear and show cause why they should not be restrained from violating that right? Instead of doing so would it be the proper course to be adopted to tell the petitioner that the court cannot take any action towards preventive justice until his right is actually violated whereafter alone he could petition for a writ of habeas corpus? In the instant case when the writ petition was pending in court and the appellant 's right to personal liberty happened to be violat ed by taking him into custody in preventive detention, though he was released after four days, but could be taken into custody again, would it be proper for the court to reject the earlier writ petition and tell him that his petition has become infructuous and he had no alternative but to surrender and then petition for a writ of habeas corpus? The difference of the two situations, as we have seen, have difference legal significance. If a threatened invasion of a right is removed by restraining the potential violator from taking any steps towards violation, the rights remain protected and the compulsion against its violation is enforced. If the right has already been violated, what is left is the remedy against such violation and for restora tion of the right. In K.K. Kochunni vs The State of Madras and Ors., [1959] Suppl. 2 SCR 316, where the grievance of the petitioner was that the Madras Marumakkathayam (Removal of Doubts) Act, 1955 (Act 32 of 1955), 117 provided in section 2 of the Act that notwithstanding any decision of court any Sthanam which fulfilled the conditions stated in the section shall be deemed to be and shall be deemed always to have been properties belonging to the tarwad to which the provisions of the Madras Marumakkathayam Act, 1932 shall apply, and thus, unlike other Acts that contemplated some further action to be taken by the State after the enactment had come into force, automatically took away or abridged a person 's fundamental right (as right to property then was) immediately it came into force, a Consti tution Bench of this Court speaking through Das C.J. held that there was no reason why the aggrieved person should not immediately be entitled to seek the remedy under article 32 of the Constitution. The argument that an application under article 32 could not be maintained until the State had taken or threatened to take any action under the impugned law which again, if remedy to be taken would infringe the petitioner 's fundamental rights, was negatived by this Court holding that in cases arising under those enactments the proprietors could invoke the jurisdiction of this Court under article 32 when the State did or threatened to do the overt act, (emphasis supplied). It was observed that quite conceivably an enactment may immediately on its coming into force take away or abridge the fundamental rights of a person by its very terms and without any further overt act being done. The impugned Act was said to be an instance of such enactment. In such a case, it was held, the infringement of the funda mental right was complete eo instanti the passing of the enactment and, therefore, there could be no reason why the person so prejudicially affected by the law should not be entitled immediately to avail himself of the constitutional remedy under article 32. It was also observed that to say that a person, whose fundamental right had been infringed by the mere operation of an enactment, was not entitled to invoke the jurisdiction of this Court under article 32, for the en forcement of his fight would be to deny the benefit of a salutary constitutional remedy which was itself his funda mental right. The same reasoning is applicable to the facts of the instant case inasmuch as the detention order was already passed and served and the appellant was already taken into custody and though released after 4 days the Government could at any time cancel his release under sec tion 15 of the Act. In the Special Reference No. 1 of 1964, reported in [ ; the Constitution Bench speaking through Gajendragadkar, C.J. held (at page 493): "If a citizen moves this Court and complains that his fundamental fight under article 21 had been contravened, it would 118 plainy be the duty of this Court to examine the merits of the said contention, and that inevitably raises the question as to whether the personal liberty of the citizen has been taken away according to the procedure estab lished by law. In fact, this question was actually considered by this Court in the case of Pandit Sharma, [1959] Supp. 1 SCR 806." The same law applies to a High Court moved under Article 226 of the Constitution of India against similar contravention. In M.C. Mehta vs Union of India, [1987] 1 SCC 395, the Constitution Bench speaking through Bhagwati, C.J. said: "We are also of the view that this Court under Article 32(1) is free to devise any procedure appropriate for the particular purpose of the proceeding, namely, enforcement of a fundamental right and under Article 32(2), the Court has the implicit power to issue whatever direction, order or writ is necessary in a given case, including all incidental or ancillary power necessary to secure enforcement of the fundamental right. The Power of the Court is not only injunctive in ambit, that is, preventing the infringement of a fundamental right, but it is also remedial in scope and provides relief against a breach of the fundamental right already committed vide Bandhua Mukti Morcha case. ; If the court were powerless to issue any direction, order or writ in cases where a fundamental right has already been vio lated, Article 32 would be robbed of all its efficacy, because then the situation would be that if a fundamental right is threatened to be violated, the court can injunct such violation but if the violator is quick enough to take action infringing the fundamen tal right, he would escape from the net of Article 32. That would, to a large extent, emasculate the fundamental right guaranteed under Article 32 and render it impotent and futile." "Despite the power of the State" says Jean Dabin, "there are always smart people who contrive to violate the laws without incurring the rigours of compulsion; or, again, certain rules are psychologically or technically awkward to apply, so that the machinery of compulsion lends them but insufficient aid. In any case, actual inefficacy or impo tence of compulsion can affect the validity of the rule even less than disobedience; that validity binds, and continues to bind, by virtue of 119 the very disposition made by the rule. " Analytical positivist concept of right has been differ ently analysed. Hohfeld writing on fundamental legal con cepts as applied in judicial reasoning analysis four ideas. One of those is that a right may be claim right. P has a right to do X, it means to indicate that Q or everyone else has a duty to let P do X. The existence of such a duty gives P some sort of claim against Q. Claim rights may be either in personam or in rem. A claim right in personam co relates to a duty of a person, while claim rights in rem co relate to duties in principle incumbent on everyone. A right en joyed by one thus co relates to a duty on the part of oth ers. In Hans Kelsen 's analysis it is usual to oppose the concept of right to the concept of obligation and to cede priority of rank to the former as we speak of rights and duties. The behaviour of one individual that corresponds to the obligated behaviour of the other is usually designated as a content of a 'right ' as an object of a 'claim ' that corresponds to the obligation. "The behaviour of the one individual that corresponds to the obligated behaviour of the other, particularly the claiming of the obligated beha viour, is designated as exercising a right." In case of an obligation to tolerate something, the behaviour of the one corresponding to the obligation of the other is spoken of as 'enjoyment ' of the right. According to Kelsen the 'right ' or a 'claim ' of an individual, is merely the obligation of the other individual or individuals. When we speak of a right as a legally protected interest, in the words of Kelsen, it refers to a right as the "reflex of a legal obligation". Right is often understood as a will power conferred by law. A 'right ' in the sense is present if the conditions of the sanction that constitutes a legal obligation includes a motion, normally of the individual in relation to whom the obligation exists; the motion is aimed at the execution of the sanction and has the form of a legal action brought before the law applying organ. Then this organ may apply the general norm to effectuate the fight, which is the reflex of the legal obligation by executing the sanction. The right which is the reflex of legal obligation is equipped with the legal power of the entitled individual to bring about by a legal action the execution of a sanction as a reaction against the non fulfilment of the obligation whose reflex is his right; or as it is sometimes called, the enforcement of the fulfilment of this obligation. To make use of this legal power of motion is exercise of the right. In this sense each right of an individual contains a claim to the behaviour of another individual namely to that behaviour to which the second individual is obligated toward the first; the beha viour that constitutes 120 the content of the legal obligation identical with the reflex right. If an individual, towards which another indi vidual is obligated to a certain behaviour, does not have the legal power to bring about by a legal action the execu tion of a sanction as a reaction against the non fulfilment of the obligation, then the act by which he demands fulfil ment of the obligation has no specific legal effect; the act is legally irrelevant, except for not being legally prohib ited. Therefore, a 'claim ' as legally effective act exists only when a law exists, which means that an individual has the legal power. The subject of a right may be not only one individual but two or several individuals, including the State. In the language of Kelsen the right of an individual is either a mere reflex right the reflex of a legal obligation existing towards this individual; or a private right in the technical sense the legal power bestowed upon an individual to bring about by legal action the enforcement of the ful filment of an obligation existing toward him, that is, the legal power. From the above analysis it is clear that in the instant case the appellant 's fundamental right to liberty is the reflex of a legal obligation of the rest of the society, including the State, and it is the appellant 's legal power bestowed upon him to bring about by a legal action the enforcement of the fulfilment of that obligation existing towards him. Denial of the legal action would, therefore, amount to denial of his right of enforcement of his right to liberty. A petition for a writ of habeas corpus would not be a substitute for this enforcement. We, therefore, proceed to consider the merits of this case instead of remanding to the High Court to avoid further delay. Mr. Bhandare 's submission is that the detention order having not been approved by the State Government under sub section (3) of section 3 it had ceased to be in force after 12 days of its being made. We find force in this submission on the facts of the case. Section 3 of the Act provides the power to make detention orders. Sub section (1) thereof empowers the State Government to make a detention order. Sub section (2) empowers the State Government to authorise a District Magistrate or a Commissioner of Police to exercise the powers conferred by sub section (1) during such period as may be specified in the order not exceeding three months at the first instance with power to extend such period from time to time by any period not exceeding three months at any one time. Admittedly, the impugned detention order was passed by the District Magistrate in exercise of powers under section 2. Sub section (3) is to the following effect: 121 "When any order is made under this section by an officer mentioned in sub section (2), he shall forthwith report the fact to the Govern ment together with the grounds on which the order has been made and such other particulars as in his opinion, have a bearing on the matter, and no such order shall remain in force for more than twelve days after the making thereof, unless, in the meantime, it has been approved by the Government. " Examining the records we find that before the High Court in the Misc. case W.P.M.P.S.R. 51830 in the form of an Additional Affidavit at para 11 it was urged: "Apart from the infirmities stated above which vitiate the order, statutory requirement of reporting to the Government and obtaining approval of the Government within the pre scribed time has not been complied with. " In the counter affidavit filed by the Collector and District Magistrate in the High Court to the writ petition as well as the W.P.M.P., there was no reply to para 11 of the W.P.M.P. and it was nowhere stated that the detention order was approved by the State Government. In this Court in the Special Leave Petition Ground No. V is as follows: "The Hon 'ble High Court has erred in not noting the infirmity in the order of detention inasmuch as the approval of State Government of Andhra Pradesh for the order of the deten tion made by the District Magistrate, Cuddapah was not obtained within the period of 12 days as enjoined under sub section (3) of section 3 of the Act. The order is therefore non est in law." In the Counter Affidavit of the Collector and District Magistrate there was not even a whisper in denial of this fact. The learned counsel for the respondents at the heating could not deny before us that the detention order had not been approved by the Government within 12 days. On his request time was granted to produce materials. He has now filed reply affidavit on behalf of the respondents to the rejoinder affidavit filed by the appellant. Scanning this affidavit also we do not find any statement that the deten tion order was approved. Though the learned counsel submits that it was 122 approved, in view of the above affidavits it cannot be acted upon. We have, therefore, no other alternative than to hold that the detention order had not been approved by the State Government within 12 days of its being made. The result is that the order could not claim in force more than 12 days after making thereof and as such must be treated as to have ceased to be in force and non existent thereafter. Mr. Bhandare then submits that the case of the appellant was not at all referred to the Advisory Board under section 10 of the Act. This too has not been denied by the learned counsel for the respondents. Section 10 of the Act provides for reference to the Advisory Board and says: "In every case where a detention order has been made under this Act, the Government shall within three weeks from the date of detention of a person under the order, place before the Advisory Board constituted by them under section 9, the grounds on which the order has been made and the representation, if any, made by the person affected by the order, and in the case where the order has been made by an officer, also the report by such officer under sub section (3) of section 3. " Section 11 of the Act prescribes the procedure for the Advisory Board. Under sub section (1) of section 12, in any case where the Advisory Board has reported that there is, in his opinion sufficient cause for the detention of a person, the Government may confirm the detention order and continue the detention of person concerned for such period not ex ceeding the maximum period specified in section 13 as they think fit. Under sub section (2) thereof in any case where the Advisory Board has reported that there is, in his opin ion, no sufficient cause for the detention of the person concerned, the Government shall revoke the detention order and cause the person to be released forthwith. Thus section 10 makes it mandatory for the Government to place the ground on which the order has been made and the representation, if any made by the person affected by the order and in the case where the order has been made by an officer also the report by officer under sub section (3) of section 3. This section prescribes a period of 3 weeks from the date of detention irrespective of whether the person continues to be in deten tion or not. Therefore, even though the detenu was released, if the detention order was in force, his case was required to be placed before the Advisory Board. This being a manda tory provision and having not been complied with the deten tion order even if 123 otherwise it was in force, cannot be said to have been in force after three weeks. Under Article 22 of the Constitu tion of India a person cannot be kept in detention beyond three months without referring his case to an Advisory Board under the appropriate law. In either case the appellant 's case having not been referred to an Advisory Board the detention order cannot be said to have remained in force after the statutory period. It is, therefore, not necessary to go into the validity or otherwise of the grounds of detention. In the result we set aside the impugned Judgment of the High Court and hold that the detention order ceased to be in force after 12 days of making thereof and even if it was in force it ceased to be in force for failure to refer the appellant 's case to Advisory Board within the time pre scribed by law; and accordingly we quash the same. The appeal is accordingly allowed. After the Judgment was finalised, another affidavit on behalf of the respondents affirmed by one belonging to the office of the Advocate on Record has been circulated. This affidavit is not acceptable. Even if it was accepted it would not affect the ultimate legal position. R.S.S. Appeal allowed.

The appellant is a Municipal Councillor of the Cuddapah Municipal Council. He was elected to the Council as an independent candidate. According to him, he enjoys populari ty in his area and had previously held important positions in the District. He states that the local leadership of the ruling Telugu Desam Party having failed to woo him into their fold, he was pressurised through the Excise and Police authorities foisting false cases upon him. Scenting a move to detain him under the provisions of the Andhra Pradesh Prevention of Dangerous Activities of Bootleggers, Dacoits, Drug Offenders, Goondas, Immoral Traffic Offenders and Land Grabbers Act, 1986, the appellant filed a writ petition on 6.6.1988 in the High Court, averring inter alia that the successive actions initiated against him were a part of political vendetta. A learned Single Judge on 8.8.1988 was pleased to direct interim the respondents not to take the appellant into preventive custody for a period of 15 days on the basis of the cases already registered. However, on 10.6.1988 the appellant was served the detention order dated 3.6.1988 as well as the grounds of detention, and he was taken into custody, but was released after four days. The appellant filed on 25.6.1988 in his pending writ petition a miscellaneous petition, as an additional affida vit. He assailed therein the order of detention on various grounds. A Division Bench of the High Court, on reference by the learned Single Judge, held that the prayer in the writ petition had become infructuous, and that there were no extraordinary or special reasons to depart from the normal rule, namely, that in such a case the appellant should first surrender and move for a writ of habeas corpus. The Division Bench accordingly, dismissed the writ petition. Before this Court it was inter alia contended on behalf of the 106 appellant that the High Court erred in holding that there were no extraordinary circumstances or special reasons to depart from the normal rule, thereby refusing to grant relief to the appellant against infringement of his funda mental right to liberty; that the detention order having not been approved by the State Government as required under Section 3(3) of the Prevention of Dangerous Activities Act and the appellant 's case having not been placed before the Advisory Board as required under section 10 thereof, the detention order ceased to be in force and hence was liable to be quashed. On behalf of the respondent, it was contended that the detention order having been passed before the writ petition was filed, the High Court was right in dismissing the writ petition following the court 's practice and procedure, and that there were no extraordinary or special reasons to depart from the normal rule inasmuch as granting relief at such a stage would defeat the very purpose of the Act. Counsel, however, could not deny that the detention order was not approved by the State Government and that the appel lant 's case was not placed before the Advisory Board. Allowing the appeal and quashing the order of detention, this Court, HELD: (1) The position of a person who is actually under illegal detention and of a person who is in imminent jeop ardy of illegal detention are not far dissimilar. Refusal to interfere in such a case may amount to denial of the funda mental right itself. [114A]. Jayantiial Bhagwandas Shah vs The State of Maharash tra, , referred to. (2) There could be no reason why in an exceptional and rare case, detention order already made, and either served or yet to be served, and the person is still free, could not be legally brought under challenge. [114F] Vedprakash Devkinandan Chiripal vs State of Gujarat, AIR 1987 Gujarat 253. A.K. Gopalan vs State of Madras, ; ; Addl. District Magistrate, Jabalpur vs Shivakant Shukla, ; , referred to. 107 (3) For enforcement of one 's right to life and personal liberty resort to Article 226(1) has been provided for. The word 'enforcement ' has also been used in Article 32 of the Constitution which provides the remedy for enforcement of rights conferred by Part III of the Constitution. The word 'enforcement ' has not been defined by the Constitution. [115B] (4) 'Enforce ' means to compel obedience to laws; to compel performance, obedience by physical or moral force. [115C] (5) Conferring the right to life and liberty imposes a corresponding duty on the rest of the society, including the State, to observe that right, that is to say, not to act or to do anything which would amount to infringement of that right, except in accordance with the procedure prescribed by law. [115F] (6) Resort to Article 226 after the right to personal liberty is already violated is different from the pre viola tion protection. Post violation resort to Article 226 is for remedy against violation and for restoration of the right, while pre violation protection is by compelling observance of the obligation or compulsion under law not to infringe the right by all those who are so obligated or compelled. To surrender and apply for a writ of habeas corpus is a post violation remedy for restoration of the right which is not the same as restraining potential violators in case of threatened violation of the right. [116B C] (7) Law surely cannot take action for internal thoughts but can act only after overt acts. If overt acts towards violation have already been done and the same has come to the knowledge of the person threatened with the violation and he approaches the court under article 226 giving sufficient particulars of proximate actions as would imminently lead to violation of right, should not the court call upon those alleged to have taken these steps to appear and show cause why they should not be restrained from violating that right? [116 C D] (8) The difference of the two situations have different legal significance. If a threatened invasion of a right is removed by restraining the potential violator from taking any steps towards violation, the rights remain protected and the compulsion against its violation is enforced. If the right has already been violated, what is left is the remedy against such violation and for restoration of the right. [116F G] (9) In the instant case, the appellant 's fundamental right to 108 liberty is the reflex of a legal obligation of the rest of the society, including the State, and it is the appellant 's legal power bestowed upon him to bring about by a legal action the enforcement of the fulfilment of that obligation existing towards him. Denial of legal action would, there fore, amount to denial of his right of enforcement of his right to liberty. A petition for a writ of habeas corpus would not be a substitute for this enforcement. [120D E] K.K. Kochunni vs The State of Madras and Ors., [1959] Supp. 2 SCR 316; Special Reference No. 1 of 1964; , ; M.C. Mehta vs Union of India, [1987] 1 SCC 395 referred to. (10) As the detention order was already passed and served and the detenu was already taken into custody during the pendency of the writ petition, these subsequent events having being brought to the notice of the court by a Misc. application in the form of additional affidavit, the same ought to have been dealt with by the High Court. [113A B] (11) The detention order had not been approved by the State Government within 12 days of its being made, as en joined under subsection (3) of section 3 of the Act. The result is that the order could not remain in force more than 12 days after making thereof and as such must be treated as to have ceased to be in force and non existent thereafter. [122A] (12) Even though the detenu was released, if the deten tion order was in force, his case was required to be placed before the Advisory Board. This being a mandatory provision and having not been complied with, the detention order even if otherwise in force, cannot be said to have been in force after three weeks. [122H; 123A]

Appeal No. 1914 of 1968. Appeal by special leave from the judgment and order dated March 12, 1968 of the Allahabad High Court in Special Appeal No. 301 of 1966. C.K. Daphtary, R. N. Banerjee, P. N. Tiwari and 0. C. Mathur, for the appellant. S.C. Agarwala, R. K. Garg and section Chakravarty, for respon dents Nos. 1 and 3. The Judgment of the Court was delivered by Shelat, J. On May 9, 1956 the appellant company appointed respondent 3 as a foreman on probation for a period of six months. On expiry of that period the probationary period was extended from time to time and ultimately respondent 3 was transferred to the labour office of the company. On May 29, 1957, while respondent 3 was still serving his probationary period, the company terminated his service. The matter was thereupon taken up by respondent 1 before the Regional Conciliation Officer, Bareilly who registered the case as Case No. 83B/57. For the reasons hereinafter stated, no conciliation could be arrived at and the State Government declined to make a reference for adjudication under the U.P. (hereinafter called the Act). On the said refusal, respondent 3 filed a writ petition in the High Court for a mandamus. The High Court dismissed the petition on the ground that the decision of the State Government to refer or not to refer a dispute for adjudication was a matter of its discretion. By about the end of 1962 the respondent union made further representation to the State Government and by its order dated August 28, 1963 the Government made a reference of the dispute regarding the said termination of the service of respondent 3 to the Labour Court for adjudication. By its order dated March 22, 1965 the Labour Court rejected the reference on the ground that there was no industrial dispute, and therefore, the reference was not maintainable. Respondents I to 3 thereupon 'filed a writ petition in the High Court which was allowed by a learned Single Judge. An appeal against the said order filed by 373 the appellant company was dismissed. This appeal, by special leave, is directed against the order of the High Court dismissing the appellant company 's writ petition. Counsel for the appellant company, in support of the appeal, raised the following points : (1) Was it possible for the respondent union to validly espouse the cause of respondent 3 when he was not a member at the date when his service was terminated Even if it was, was there in fact an espousal so as to convert his individual dispute into an industrial dispute ? (2) Do the words "at any time" in section 4(k) of the Act have any limitations, or can the Government refer a dispute, for adjudication after the lapse of about six years, as in this case, after the accrual of the cause of the dispute ? (3) In what circumstances can the Government refer such a dispute for adjudication after it has once refused to do so ? The definition of 'industrial dispute ' in section 2(l).of the Act is in the same language as that in section 2(k) of the . The expression 'industrial dispute ', therefore, must bear the same meaning as it is assigned to that expression in the Central Act. It is now well settled by a long series of decisions that notwithstanding the wide language of the definition in section 2(k) of the Central Act, the dispute contemplated there is not an individual dispute but one involving a substantial number of work men. However, a dispute, though originally an individual dispute, may become. an industrial dispute if it were to be espoused and made a common cause by workmen as a body or by a considerable section of them. Section 4(k) of the Act, therefore, must be held to empower the Government to make a reference of such a dispute only for adjudication. It provides that where the State Government is of opinion that any industrial dispute exists or is apprehended, it may, at any time, by order in writing, refer the dispute for adjudication to a labour court or to a tribunal depending upon whether the matter. of the industrial dispute falls under one or the other Schedule to the Act. The first question that falls for determination is whether where a dispute is originally an individual dispute but becomes an industrial one as a result of its being espoused by a union or,a substantial number of workmen, the concerned workman should have been a member of such union at the time when the cause of such dispute arises. It appears that at one time there was a conflict of judicial opinion on this question. Some of the High Courts took the view that in order that an individual dispute may be converted into an industrial dispute on, as aforesaid, its being espoused by a substantial number of workmen, the concerned workman must be a member of the union at the time of the accrual of the cause of the dispute. Thus, in Padarthy, Ratnam & Co. vs Industrial Sup. CI(NP)70 9 374 Tribunal(1) the High Court of Andhra Pradesh held that a dispute simpliciter between an employer and a workman might develop into an industrial dispute if the cause is espoused by a union of which he is a member, and that the membership of the union which would give it the jurisdiction to espouse his cause must be anterior to the date of the dismissal and not subsequent to it. A similar view was also taken by the High Courts of Kerala and Punjab. (see Shamsuddin vs State of Kerala( ') and Khadi Grainodyog Bhawan Workers ' Union vs E. Krishnamurthy, Industrial Tribunal( '). In a later decision, however, the High Court of Punjab appears to have taken a contrary view. In Muller & Phipps (India) (P) Ltd. vs Their Employees ' Union( ') the dispute related to the retrenchment of a workman and the failure of the employer to re employ him in spite of its having re employed two other employees out of their turn as against the turn of the con cerned workman. The High Court rejected the employer 's con tention that the espousal of the union was not valid as it was made after the retrenched workman had ceased on his being retrenched to be a member of the union on the ground that if that contention were to be upheld it would mean that no union can ever espouse the cause of a retrenched workman. In Workmen vs Jamadoba Colliery of Tata Iron and Steel Co. Ltd.( '), the union which espoused the causE of the workman came into existence after his dismissal. The workman naturally became its member after his dismissal. The High Court disagreed with the Tribunal, which had rejected the reference, 'and held that even if, oN the date of the dismissal of a workman, the dispute was an individual dispute,, it may under some circumstances become an industrial dispute on the date of the reference and that the validity of the reference has to be judged on the facts, as they stand on the date of the reference and not at the date of the dismissal. Therefore, even if there was no union at the date of the workman 's dismissal to espouse his cause, if such a union comes into existence before the reference and the dismissed workman becomes its member and the union thereupon espouses his cause that would be sufficient. It also held that there was no principle in support of the view that the union must be in existence at the time of the dismissal. After the decision by this Court in Workmen vs Management of Dimakuchi Tea Estate(") there can be no doubt that though the words "any person" in the definition of an industrial dispute in section 2 (k) of the Central Act are very wide and would on a mere literal interpretation include a dispute relating to any person, considering the scheme and the objects of the Act all disputes are not industrial disputes and that a dispute becomes an industrial dis (1) [19581 (2) (3) A.I.R. 1966 Pun. (4) (5) (6) [19581 S.C.R. 1156. 375 pute where the person in respect of whom it is raised is one in whose employment, non employment, terms of employment or. conditions of labour the parties to the dispute have a direct or substantial interest. The question, therefore, which would arise in cases where the existence of the industrial dispute is challenged, is whether there was between the parties to the reference, i.e, the employer and his workmen, an industrial dispute. The parties to the industrial dispute are obviously the parties to the reference, and therefore the dispute must be an industrial dispute between such parties. It follows, therefore, that though a dispute may initially be an individual dispute, the workmen may make that dispute as their own, that is to say, espouse it on the ground that they have a community of interest and are directly and substantially interested in the employment, non employment, or conditions of work of the concerned workman. This premise pre supposes that though at the date when the cause of the dispute arises that dispute is an individual dispute, such a dispute can become an industrial dispute if it is spoused by the workmen or a substantial section of them after the cause of the dispute, e.g., dismissal, has taken place. It may be that at the date of such dismissal there is no union or that the workmen are not sufficiently organised to take up the cause of the concerned workman and no espousal for that or any other reason takes place at the time when such cause occurs. But that cannot mean that because there was no such union in existence on that date, the dispute cannot become an industrial one if it is taken up later on by the union or by a substantial section of the workmen. If it is insisted that the concerned workman must be a member of the union at the date of his dismissal, the result would be that if at that period of time there is no union in that particular industry and it comes into existence later on then the dismissal of such a workman can never be an industrial dispute although the other workmen have a community of interest in the matter of his dismissal, and the cause for which or the manner in which his dismissal is brought about directly and substantially affects the other workmen. The only condition for an individual dispute turning into an industrial dispute, as, laid down in the case of Dimakuchi Tea Estate(), is the necessity of a community of interest and not whether the concerned workman was or was not a member of the union at the time of his dismissal. The parties to the reference being the employer and his employees, the test must necessarily be whether the dispute referred to adjudication is one in which the workmen or a substantial section of them have a direct and substantial interest even though such a dispute relates to a single workman. It must follow that the existence of such an interest, evidenced by the espousal by them of the cause, must be at the date when the reference is made and not necessarily at the date when the cause occurs, otherwise, as aforesaid, in some (1) ; 376 cases a dispute which was originally an individual one cannot become an industrial dispute. Further, the community of interest does not depend on whether the concerned workman was a member or not at the date when the cause occurred, for, without his being a member the dispute may be such that other workmen by having a common interest therein would be justified in taking up the dispute as their own and espousing it. Any controversy on the question as to whether it is necessary for a concerned workman to be a member of the union which has espoused his cause at the time when that cause arose has been finally set. at rest by the decision in Bombay Union of Journalists vs The "Hindu", Bombay( ') where this Court laid down that the test whether an individual dispute got converted into an industrial dispute depended on whether at the date of the reference the dispute was taken up and supported by the union of workmen of the ,employer against whom the dispute was raised by an individual workman or by an appreciable number of such workmen. (see also Workmen vs M/s Dharampal Premchand (2 ) and Workmen of Indian Express (P) Ltd. vs The Management (I). The argument, therefore, that the reference in this case was not competent on the .ground that the concerned workman was not a member of the union at the date when the cause giving rise to the dispute arose, and that therefore, the union could not have espoused the dispute to convert it into an industrial dispute is not correct and cannot be upheld,. The next question is whether the expression "at any time" in section 4(k) means what its literal meaning connotes, or whether in the context in which it is used it has any limitations. Counsel for the company argued that the concerned workman was admittedly not a member of the respondent union in the beginning of 1959 when the State Government refused to make the reference, that he became a member of the respondent union in July 1962, that it was thereafter that the respondent union revived the said dispute which had ceased to be alive after the Government 's said refusal and that it was at the instance of the Union that the Government later on ,changed its mind and in August 1963 agreed to make the reference. The contention was that the Government having once declined to refer the dispute, could not change its mind after a lapse of nearly six years after the dispute arose and that though the expression "at any time" does not apparently signify any limit, it must be construed to mean that once the Government had refused to make the reference after considering the matter and the employer thereupon had been led to believe that the dispute was not to be agitated in a tribunal and had consequently made his own arrangement, the Government cannot, on a further agitation by the (1) ; (2) (3) [1991] 1 S.C. Cases 228. 377 union, take a somersault and decide to refer it for adjudication. It was argued that if it were so, it would mean that a workman, who after termination of his service, has already obtained another employment, can still go to the union, become its member and ask the union to agitate the dispute by espousing it. Such an action, if permitted, would cause dislocation in the industry as when the employer has in the meantime made his own arrangement by appointing a substitute in place of the dismissed workman on finding that the latter had already found other employment. The legislature, the argument proceeded, could not, therefore, have used the words "at any time" to mean after any, length of time. From the words used in section 4(k) of the Act there can be no doubt that the legislature has left the question of making or refusing to make a reference for adjudication to, the discretion of the Government. But the discretion is neither unfettered nor arbitrary for the section clearly provides that there must exist an industrial dispute as defined by the Act or such a dispute must be apprehended when the Government decides to refer it for adjudication. No reference thus can be made unless at the time when the Gov ernment decides to make it an industrial dispute between the employer and his employees either exists or is apprehended. Therefore, the expression "at any time". though seemingly without any limits, is governed by the context in which it appears. Ordinarily, the question of making a reference would arise after conciliation proceedings have been gone through and the conciliation officer has made a failure report. But the Government need not wait until such a procedure has been completed. In an urgent case, it can "at any time", i.e., even when such proceedings have not begun. or are still pending, decide to refer the dispute for adjudication. The expression "at any time" thus takes in such cases as where the Government decides to make a reference without waiting for conciliation proceedings to begin or to be completed. As already stated, the expression "at any time" in the context in which it is used postulates that a reference can only be made if an industrial dispute exists or is apprehended. No reference is contemplated by the section when the dispute is hot an industrial dispute, or even if it is so, it no longer exists or is not apprehended, for,instance, where it is already adjudicated or in respect of which there is an agreement or a settlement between the parties or where the industry in question is no longer in existence. In the State of Madras vs C. P. Sarathy(1) this Court held on construction of section 1 0 ( 1 ) of the Central Act that the, function of the appropriate Government thereunder is an administrative function. It was so held presumably because the Government cannot go into the merits of the dispute, its function being only to refer such a dispute for adjudication so that the industrial relations bet (1) [19531 S.C.R. 334, at 346. 378 ween the employer and his employees may not continue to remain disturbed and the dispute may be resolved through a judicial process as speedily as possible. In the light of the nature of the function of the Government and the object for which the power is conferred on it, it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to light or be cause it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference. But where it reconsiders its earlier decision it can make the reference, only if the dispute is an industrial one and either exists at that stage or is apprehended and the reference it makes must be with regard to that and no other industrial dispute. Sindhu Resettlement Corporation, Ltd. vs Industrial Tribunal( '). Such a view has been taken by the High Courts of Andhra Pradesh, Madras, Allahabad, Rajasthan, Punjab and Madhya Pradesh. (see Gurumurthi (G.) V. Ramulu (K.)( ') Vasudeva Rao vs State of Mysore( ') Rawalpindi Victory Transport Co. (P) Ltd. vs State of Punjab( '), Champion Cycle Industries vs State of U.P. (5), Goodyear (India) Ltd., Jaipur vs Industrial Tribunal (6) and Rewa Coal Fields Ltd. vs Industrial Tribunal, Jabalpur ( 7 ) . The reason given in these decisions is that the function of the Government either under section 10(l) of the Central Act or a similar provision in a State Act being administrative, principles such as res judicata applicable to judicial Acts do not apply and such a principle cannot be imported for consideration when the Government first refuses to refer and later changes its mind. In fact, when the Government refuses to make a reference it does not exercise its power; on the other hand it refuses to exercise its power and it is only when it decides to refer that it exercises its power. Consequently, the power to refer cannot be said to have been exhausted when it has declined to make a reference at an earlier stage. There is thus a considerable body of judicial opinion according to which so long as an industrial dispute exists or is apprehended and the Government is of the opinion that is so, the fact that it had earlier refused to exercise its power does not preclude it from exercising it at a later stage. In this view, the mere fact that there has been a lapse of time or that a party to the dispute was, by the earlier refusal, led to believe that there would be no reference and acts upon such belief, does not affect the jurisdiction of the Government to make the reference. It appears that there was a controversy before the High Court whether there was at all any espousal of the dispute by the respon (1) [19681 , 839. (2) (3) (4) [19641 (5) (6) (7) A.I.R. [19691 M.P. 174. 379 dent union, and if there was, at what stage. The High Court, therefore, got produced before it the record before the conciliation officer. Strictly speaking, in a proceeding for certiorari under article 226, the record which would be produced before the High Court would be that of the Tribunal whose order is under challenge. But if the High Court got produced in the interests of justice the file of the conciliation officer which alone could show whether there was espousal by the union or not, no one could reasonably object to the High Court calling for that record for the purpose of ascertaining whether the stand of the union that it had taken up the cause of respondent 3 was correct or not. As the High Court has said, that file showed that on July 2, 1957 one Har Sahai Singh, the then President of the union, had complained to the Regional Conciliation Officer against the termination of service of respondent 3 and following that complaint, respondent 3 had filed a written statement dated September 4, 1957 which was counter signed by the said Har Sahai Singh in his capacity as the President and presumably, therefore, on behalf of the union. The record also indicated that on that very day, i.e., September 4, 1957, the Conciliation Officer recorded an order that the conciliation proceedings could not be proceeded with as "no authorised agent" of the union appeared before him. Presumably, the Conciliation Officer in course of time must have made his failure report. From these facts the following conclusions must emerge : (1) that the Conciliation Officer had taken cognisance of the dispute, (2) that he took that dispute as having been espoused by the union through its president, (3) that thereupon he fixed September 4, 1957 as the date for holding the conciliation proceedings and informed the parties to attend before him, and (4) that as "no authorised agent" on behalf of the union appeared before him, he recorded that the conciliation proceedings could not go on. These facts clearly go to show that the then president of the union had not made the said complaint in his personal capacity but as the president representing the union. This is borne out to a certain extent by a subsequent resolution of the executive body of the union dated February 28, 1.963 which recites that the executive committee of the union will continue to take up the cause of respondent 3 as it had been so far doing. But Mr. Daphtary emphasised that even this resolution did not mean that the union had taken up the cause of respondent 3 as its own since the resolution uses the word 'pairavi ' and not espousing or sponsoring the workman 's cause. Pairavi, according to him, means acting as the agent of a party to a proceeding and not being a party to the proceeding which would be the position had the union taken up the Complaint as its own. In our view we need not look at the said .resolution in so narrow a manner, for, the facts taken as a whole indicate that the union had in fact taken up the cause of the workman. The President evidently could not have countersigned the 380 written statement of the concerned workman and the Conciliation Officer could not have given a notice to the union to appear before him and could not have recorded that he did not proceed with the conciliation proceedings as no authorised agent of the union appeared before him unless every one understood that the union had taken up the cause of the workman. The notice dated August 2, 1957 issued by the Conciliation Officer after the union President had lodged his said complaint is on record and shows that it was issued to the management and the union calling upon both of them to appoint their respective representatives on the conciliation board as required by the Government Order dated July 14, 1954. It also shows that the Officer treated the dispute as having been espoused by the union as the notice recites the dispute as an industrial dispute. The subsequent facts would seem to indicate that the Govern ment declined to make the reference presumably because of the report of the Conciliation Officer that in spite of the said notice no authorised agent of the union had appeared before him and therefore no conciliation had been possible. As already stated, a writ petition to compel the Government to make the reference proved unsuccessful. It may be that the respondent union may have decided to press for the reference after the concerned workman became its member. That fact, however, is irrelevant for the purposes of the jurisdiction of the Government under section 4(k). One fact, however, is clear that the respondent union carried on correspondence with the Labour Ministry and also passed the said resolution dated February 28, 1963. The correspondence which was carried on from about November 1962 shows that the union pressed the Government to make the reference and the Government ultimately made the reference in August 1963. That correspondence further shows that the Government at one stage pointed out that the union had in 1957 failed to appear before the Conciliation Officer although it had espoused the dispute and that that fact had influenced the Government 's refusal then to refer the dispute for adjudication. The union pointed out (1) that at the time when the said complaint was lodged in 1957 before the Conciliation Officer the union 's 'president was one Varma, (2) that in the meantime elections for the union 's office bearers took place when the said Har Sahai Choudhury and one Girish Chandra Bharati were elected president and working president respectively ' (3) that the above mentioned individuals appeared before the conciliation officer, but the said Varma did not, as he had failed in the elections, (4) that dispute arose about the said elections and the Registrar of the Trade Union , refused to recognise the new office bearers, and ( I) that the conciliation officer also refused to recognise the said Har Sahai Choudhary and Bharati a,; the duly elected president and working president, and therefore, although both of 381 them attended the meeting fixed by that officer, the latter recorded that no authorised agent of the union had appeared before him and no conciliation, therefore, could be arrived at. It thus appears from the correspondence that following the espousal of the said dispute by the union, two of the office bearers of the union did appear before the conciliation officer but were not recognised as the authorised agents of the union on account of the said disputes about the elections. If the Government, therefore, had refused then to make the reference on the ground that though the union had espoused the workman 's cause it had not cared to appear at the conciliation proceedings, the Government 's decision refusing to make the reference was clearly on misapprehension. If the Government subsequently found that its earlier decision was based on such a misapprehension and on facts brought to its notice it reconsiders the matter and decides to make the reference it is difficult to say that it exercised the discretion conferred on it by section 4 (k) in any inappropriate manner. But that does not mean that if section 4(k) is construed to mean that the Government can reconsider its earlier decision. such a construction would result in unions inducing workmen to join them as members or to shift their membership from one to the other rival union on promises by such union to revive disputes which are already dead or forgotten and then press the Government to make a reference in relation to them . There is no reason to think that the Government would not consider the matter properly or allow itself to be stampeded into making references in cases of old or stale disputes or reviving such disputes on the pressure of unions. It is true that where a Government reconsiders its previous decision and decides to make the reference, such a decision might cause inconvenience to the employer because the employer in the meantime might have acted on the belief that there would be no proceedings by way of adjudication of the dispute between him and his workmen. Such a consideration would, we should think. be taken into account by the Government whenever, in exercise of its discretion, it decides to reopen its previous decision as also the time which has lapsed between its earlier decision and the date when it decides to reconsider it. These are matters which the Government would have to take into account while deciding whether it should reopen its former decision in the interest of justice and industrial peace but have nothing to do with its juris diction under section 4(k) of the Act. Whether the intervening period may be short or long would necessarily depend upon the facts and circumstances of each case, and therefore, in construing the expression "at any time" in section 4(k) it would be impossible to lay down any limits to it. In the present case though nearly four years had gone by since the earlier decision not to make the reference, if the Government 382 was satisfied that its earlier decision had been arrived at on a mis apprehension of facts, and therefore, required its reconsideration, neither its decision to do so nor its determination to make the reference can be challenged on the ground of want of power. The fact that the dispute between the concerned workman and the management had become an industrial dispute by its having been espoused by the union since 1957 cannot be disputed. The fact that the workman was then not a member of the union does not preclude or negative the existence of the community of interest nor can it disable the, other workmen through their union from making that dispute their own. The fact that the Government refused then to exercise its power cannot mean that the dispute had ended or was in any manner resolved. In the absence of any material it Is not possible to say that with the refusal of the Government then and the dismissal of the writ petition by the High Court in March 1959 the dispute, which was already an industrial dispute, had ceased to subsist or that on respondent 3 joining the union in July 1962 the union revived a dispute which was already dead and not in existence. His becoming a member in July 1962 was as immaterial to the power of the Government under section 4(k) as the fact of his not being a member at the time when his cause was espoused in 1957 by the union and the dispute becoming thereupon an industrial dispute. The question of his membership, therefore, haS to be kept apart from the right of the other workmen to espouse his cause and the power of the Government under section 4(k). It may be that his becoming a member in 1962 may have been the cause of the union 's subsequent efforts to persuade the Government to reconsider its decision and make a reference on proper facts being placed before it and its earlier misapprehensions re moved. But that again has nothing to do with the jurisdiction of the Government under section 4(k) of the Act. In our view, the appellant company fails on both the points and its appeal against the High Court 's decision becomes unsustainable. Accordingly, we dismiss the appeal with costs. V.P.S. Appeal dismissed.

The appellant terminated the service of a workman in 1957. At that time he was not a member of the respondent union. The respondent however, espoused the cause of the workman and took up the matter before the Conciliation Officer. Two of the union 's office bearers appeared before the Conciliation Officer but the Conciliation Officer did not recognise them as authorised agents of the union, because, there were some disputes regarding their election. He therefore recorded that the conciliation proceedings could not be proceeded with on the ground that no authorised agent of the union appeared before him at the proceedings. The State Government assumed, that though the union had espoused the workman 's cause, it had not cared to appear at the conciliation proceedings at all, and refused to refer the industrial dispute for adjudication. In 1962, the workman became a member of the respondent union and the union again took up the matter with the Government. After some correspondence, in which it was pointed out that in fact two officers of the union did appear at the conciliation proceedings, the State Government, in 1963, referred the dispute for adjudication. On the question of the validity of reference, HELD : (1) Under section 4(k) of the U.P. , if the State Government is of opinion that an industrial dispute exists or is apprehended, it may, at any time, refer the dispute for adjudication. The expression 'of any time ', does not confer an unfettered or arbitrary discretion on the Government. At whatever time the Govern ment decides to refer a dispute for adjudication, there must, at that time, exist an industrial dispute or such a dispute must be apprehended. [373 F; 377 F G] (2)Though a dispute may initially be an individual dispute, the other workmen may espouse it on the ground that they have a community of interest and that they are directly and substantially interested in the employment, non employment or conditions of employment of the concerned workman. Therefore, when the existence of the industrial dispute is challenged, the test is whether the dispute referred to adjudication is one in which the workmen or a substantial section of them have a direct and substantial interest. The espousal by the other workmen may be at the time when the cause of the dispute occurs or later, because, the workmen may not, at the time when the dispute occurs, be sufficiently organised to espouse his cause or there may not have been a union at that time. Since no reference is contemplated by section 4(k) when the dispute is not an 371 industrial dispute, or, even if it is so, it no longer exists or is not apprehended, the existence of the community of interest, evidenced by the espousal converting an individual dispute into an industrial dispute, must be at the date when the reference is made and not necessarily at the date when the cause occurs. Further, the community of interest does not depend on whether theconcerned workman was a member or not of the union at the date whenthe cause occurred. The question of the work man 's membership has tobe kept apart from the right of the other Work men to espouse his cause and the power of the Government under section 4(k). In the present case, the reference was competent because the fact that the workman was not a member of the union on the date when the cause of the dispute arose did not preclude or negative the existence of. the community of interest, nor did it disable the other workmen, through their union, from making that dispute their own. [375 B E, G H; 376 A B, D; 382 A B, D E) Workmen vs Management of Dimakuchi Tea Estate, [1958] S.C.R. 1156, Bombay Union of Journalists vs The Hindu, Bombay,. ; Workmen of Indian Express (P) Ltd. vs The Management, [1969] 1 S.C. Cases 228, and Workmen vs Dharampal Premchand. ; followed. Muller & Phipps (India) (P) Ltd. vs Their Employees Union and Workmen vs Jamadoba Colliery of Tata, Tata Iron & Steel Co. Ltd. , referred to. Padarthy Ratnam & Co. vs industrial Tribunal, , Shamsuddin vs State of Kerala, [1961] 1 L.L.J. 77 and Khadi Gramodyog Bhawan Workers ' Union vs E. Krishnamurthy, A.I.R. 1966 Punjab 173, overruled. (3)The Government 's function is to refer a dispute for adjudication so thatindustrial relations may not continue to remain disturbed, and not todecide the merits of the dispute. Therefore, it cannot be held that once the Government has refused to refer a dispute to adjudication, it cannot change its mind on a reconsideration of the matter, either because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration, and decide to make the reference. Where, however, it reconsiders its earlier decision and makes a reference it can do so only if the dispute is an industrial one and either exists at that stage or is apprehended, and the reference must be with regard to only that industrial dispute. Further, though it does not affect the jurisdiction of the Government to make a reference, before doing so, the Government should take into account the lapse of time and any inconvenience to the employer, and should not allow itself to be stampeded into making References in cases of old or stale disputes or allow the revival of such disputes on the pressure of outside agencies. [378 A C; 381 B E] In the present case, the Government 's refusal to make a reference at the earlier stage on the ground that the union had not cared to appear at the conciliation proceedings, was based on a misapprehension. Therefore, if the Government subsequently found that its earlier decision was based on such a misapprehension, and on facts brought to its notice it reconsidered the matter and decided to make the reference since the dispute was 'still subsisting, it could not be said that the exercise of the discretion was improper, merely because, four years had elapsed since its earlier decision not to make the reference. [381 F H; 382 B D] 372 State of Madras vs C. P. Sarathy, , 346 and Sindhu Resettlement Corporation Ltd. vs Industrial Tribunal, , 839, followed. Gurumurthi vs Ramulu, , Vasudeva Rao vs State of Mysore , Rawalpindi Victory Transport Co. (P) Ltd. vs State of Punjab, [1964] 1 L.L.J. 644, Champion Cycle Industries vs State of U.P. , Goodyear (India) Ltd., Jaipur vs Industrial Tribunal, and Rewa Coal Fields Ltd. vs Industrial Tribunal, A.I.R. 1969 M.P. 174, approved.

ivil Appeal Nos. 948 950 of 1975. From the Judgment and order dated 12.9.1974 of the High Court of Patna in Tax Case Nos. 2 to 4 of 1968. Harish N. Salve, Mrs. A.K. Verma, Ms. section Sethna and Joel Peres for the Petitioner. D. Goburdhan for the Respondent. The Judgment of the Court was delivered by RANGANATHAN, J. These three appeals by the Fertiliser Corporation of India Limited (hereinafter referred to as 'the asses see ') arise out of its sales tax assessments for the assessment years 1959 60, 1960 61 and 1961 62 under the Bihar Sales Tax Act, 1959, (hereinafter referred to as 'the Act '). They raise a very short but interesting question. regarding the entitlement of the assessee to the rebate of tax provided for in section/5 of the Act. At the outset, a reference may be made to the salient portions of certain relevant provisions of the Act. Section 14(1) provides that every registered dealer shall furnish such returns within such period and to such authority as may be prescribed. The prescribed authority is the Assistant Commissioner of Sales Tax who is also the assessing authority. Under rule 10 of the Rules framed under the Act, the assessee should file quarterly returns. Such returns are to be filed within one calendar month of the expiry of the period to which they relate. Sub section (3) of section 14 provides for an extension of time for the filing of the return. It reads: "If the prescribed authority is satisfied that a dealer is, for reasonable cause, unable to furnish any return within the prescribed period or the period fixed under the proviso to sub section (1), the said authority may extend the period for submission of the return." Section 20 of the Act requires that, before any registered dealer furnishes a return under the Act, he should pay into a Government Treasury the full amount of tax due under the Act according to such return and should also furnish along with the return a receipt from such Treasury showing the payment of the said amount. section 15 is the 151 provision entitling the assessee to a rebate. It reads as follows: "Rebate A rebate at the rate of one per centum of the amount of tax admitted to be due in the return furnished under sub section (1) of section 14 in the prescribed manner and within the prescribed or extended period shall be allowed to a registered dealer who has paid such amount according to the provisions of sub section (2) of section 20. Provided that where the amount finally assessed on the dealer is less than the admitted amount, rebate at the said rate shall be allowed only on the amount so assessed: C Provided further that the State Government may, by notification, and subject to such conditions or restrictions as may be specified therein, enhance or reduce the rate of rebate in respect of registered dealers generally or any class of such dealers " It may be noted that, under the proviso to section 22 of the Act, a registered dealer is entitled to deduct from the amount of tax due from him under the Act according to his return any amount which may be admissible as rebate under the provisions of section 15. In the present case, the assessee filed its quarterly returns under section 14(1) of the Act but, except for the second quarter of 196061, the returns were all filed belatedly. To illustrate, the returns for the second, third and fourth quarters of 1959 60, were filed by the assessee only on the 7th November, 1959, 11th February, 1960 and Ist June 1960. In other words, the returns were late by a few days. It is common ground that there was no application made by the assessee to the prescribed authority for extension of the time prescribed under the Act for the filing of the return. The assessee however, paid the taxes before the due dates of the respective returns, availed itself of the rebate and deducted the same while paying the tax due on the returns filed by it. The short question that arose before the Tribunal as well as the High Court was whether the assessee was entitled to the rebate under section 15. The Tribunal held that the rebate is available to an assessee only if 152 (i) the tax on the basis of returns is paid as prescribed in section 20; and (ii) the quarterly returns of the assessee ha d been filed within the prescribed period or extended period. As the assessee had not filed its returns within the prescribed period and, since the assessee had sought no extension, it was held that the assessee was not entitled to the rebate. The assessee sought for a reference and, before the High Court, relied on a decision of the same High Court in Jamuna Flour & oil Mills Pvt. Ltd. vs State of Bihar, [1968] 22 S.T.C. 1. The facts of the case were similar to those of the present case and the assessee had been held entitled to the rebate. It is sufficient to extract the relevant portion of the head note: "For the quarter ending 30th June, 1961, the assessee had paid the tax due before 31st July, 1961, but it actually filed the return only on Ist August, 1961. The assessee was assessed on the basis of the return submitted by it but its claim for rebate under section 15 of the Bihar Sales Tax Act, 1959, was rejected by the taxing authority on the ground that for the purpose of eligibility for rebate under section 15, the assessee must fulfil two conditions, viz., (1) the tax due for the quarter must be paid before the end of succeeding month, and (2) the return must also be filed by the end of the succeeding month: Held, that the assessee was entitled to the rebate under section 15 for the quarter ending 30th June, 1961. Although the return was submitted one day late, as the assessee was assessed not under the best of judgment principle but on the return submitted by it, it must be said that, impliedly the period for furnishing the return was extended by one day as permitted by section 14(3). The passing of an express order by the taxing authority, regarding its satisfaction about the existence of reasonable cause for failure to furnish the return by 31st July 1961, was not necessary. on a proper construction of section 15 read with section 20, the eligibility for claiming rebate arises if the amount is paid under section 20(2). That portion of 153 section 15, which refers to the filing of return within the prescribed period, should not be construed as a condition for a right to claim rebate. The reference to the return in section 15 is for the purpose of ascertaining the amount of tax admitted to be due and it is not meant to restrict the assessee 's right to claim rebate. " The two judges who heard the case of the assessee were divided in their opinion on the question at issue. The matter was, therefore, referred to a larger bench. This Bench (by a majority of 2 to 1) took the same view as Tribunal. The assessee is in appeal before us, convassing the correctness of the decision of the Full Bench. We have given careful thought to the contentions of the counsel tor the parties and the differing views expressed by the Judges who heard the above two cases. We have reached the conclusion that the view taken by the High Court in Jamuna Flour and oil Mills (Pvt.) Ltd. vs State of Bihar, [1968] 22 S.T.C. 1, is the better view on a proper construction of the relevant statutory provisions. The object of section 15 of the Act is to confer a benefit on an assessee for prompt payment of the tax. In this case there is no dispute that the assessee had paid the tax before the due dates. There is also no dispute that the tax paid accords with the tax due on the basis of returns. The only question is whether the assessee should be penalised by being denied the rebate due to it because there was a short delay in the filing of the returns. The argument on behalf of the Revenue which has appealed to the High Court is this. Section 15 is not a taxing provision but one which confers a benefit or concession to assessee. Settled principles of construction of taxing statutes require that such conditions should be strictly construed. The section lays down two conditions for the grant of benefit or concession of which one is not fulfilled. Though the assessee had paid the taxes in time, it had neither filed returns within the prescribed time nor cared to obtain an extension for filing the same. There is no reason why such an assessee should be shown any leniency and given a benefit which it does not deserve on the language of the statute. Granting the correctness of the above argument and assuming that it is also a condition precedent for the grant of rebate that the assessee should have filed its return within the prescribed or extended period, we think it can be said that the said condition is fulfilled 154 in the present case. The return was admittedly not filed within the time prescribed under section 14(1). Has it been filed, then, within the extended period? In answering this question, certain features of the Act have to be kept in mind. The first is that the Act does not set out any particular procedure for obtaining extension of time. It does not prescribe any form of application. It does not say that such application must be filed before the expiry of the prescribed period. It does not require that the prescribed authority must pass an order recording his satisfaction that the time should be extended and granting time. The second is that, under the provisions of the Act three consequences are envisaged where a return is not filed within the prescribed time or extended time: (i) the assessee will lose the benefit of rebate under section 15; (ii) the assessee will run the risk of a penalty under section 14(4); (iii)the assessee will also run the risk of a best judgment assessment under section 16(4). In the present case, the assessing authority has neither levied a penalty nor made a best judgment assessment. The assessment orders, while adverting to the delay in the filing of the returns, do not record a finding that the delay was without reasonable Cause. These are circumstances from which, we think, it is reasonable to infer that the returns, though filed belatedly, have been accepted and acted upon by the prescribed authority. We see no reason why an extension of time cannot be inferred from the attendant circumstances in this case. Learned counsel for the assessee also suggests a different kind of approach to the issue before us. He submits that all that section 15 aims at is to grant a tax rebate of 1% of the amount of tax admitted to be due as per the return filed by the assessee. The further words used in section 15 to describe the return, namely, that it should be a return filed in the prescribed manner and within the prescribed or extended period are merely words descriptive of the procedure of filling a return. The basic condition necessary for claiming the tax rebate is only that there should be a valid return and that the tax on the basis of the valid return should have been paid by the assessee. He submits that while the substantive part of the condition should be strictly construed by insisting upon the presence of a valid return, the procedural aspect referred to can well receive a liberal construction. In the present case, he points out, there is no dispute that the returns 155 filed by the assessee were valid. In fact the assessments have been made on the basis of the returns filed. The tax has been paid even before the submission of the returns. There is no suggestion that the tax paid fell short of the tax due on the return. This is also not a case where the assessed tax is much higher than the tax admitted on the basis of the return. In these circumstances, he argues, the assessee must be held to have fulfilled the conditions prescribed in section 15. Learned counsel for the assessee referred to certain decisions in support of such a rule of construction. In C.I. T. vs Kulu Valley Transport Co. Pvt. Ltd., [1970] 77 I.T.R. 518 the court had to construe a provision intended to benefit the assessee. Under section 22 (2A) of the Income Tax Act, 1922, a return of loss had to be filed within the time prescribed for return under section 22(1) if the assessee wanted to carry forward the loss claimed. It was not so filed but was nevertheless treated as a valid return by reading the provisions of section 22(1) and 22(3) of the Act jointly and giving a liberal interpretation to section 22(2A). In the case of Gursahai Saigal vs C.I.T., [1963] 48 I.T.R. S.C. 1 the question was regarding the charge of interest section 18A(8) of the same Act. This provision did reveal a lacuna but reading the provision along with section 18A(6), the Court gave effect to the intendment of the Legislature. It was explained that section 18A(8) was not a provision creating a charge of tax but only laying down the machinery for its calculation or procedure for its collection. The dictum of Scott L.J. in Allen vs Trehearne, that machinery provisions should be interpreted largely and generously in order not to defeat the main object of liability laid down by the statute was referred to. The following observations of the Privy Council in C.I.T. vs Mahaliram Ramjidas, were also relied upon: "The section, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of assessment. In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable. " Though the above decisions arose under a different enactment and on different statutory language, they dealt with somewhat analogous situations and furnish useful guidance here. They do lend support to the assessee 's contention. It does seem that the condition in section 15 referring to a return has a substantive as well as procedural content and it may not be inappropriate to construe the latter 156 somewhat liberally and generously so long as the principal object of the provision is not frustrated. For these reasons, we are of the opinion that the High Court should have answered the question, as re framed by it, in the negative and in favour of the assessee. We approve the decision in Jamuna Flour & oil Mills Pvt. Ltd. vs State of Bihar, [1968] 22 S.T.C. 1 and reverse the decision in the present case. The appeal is allowed. But, in the circumstances of the case, we make no order as to costs. P.S.S. Appeal allowed.

% Section 14(1) of the Bihar Sales Tax Act, 1959 requires dealers to furnish returns within such period and to such authority as may be prescribed. Rule 10(2) of the Bihar Sales Tax Rules, 1959 requires the assessee to file quarterly returns within one calendar month of the expiry of the period to which they relate. Sub section (3) of section 14 provides for extension of time for submission of the return. Subsection (2) of section 20 requires dealers to pay into the Government Treasury the full amount of tax due and furnish a receipt along with the return. Section 15 entitles the assessee to rebate in tax on returns furnished under sub section (1) of section 14 or within extended period. The proviso to sub section (2) of section 20 entitles a dealer to deduct from the amount of tax due from him any amount which may be admissible as rebate under the provisions of section 15. The assessee filed its quarterly returns under section 14(1) of the Act late by a few days. There was no application made by it to the prescribed authority for extension of time. The assessee, however, paid the tax before the due date of the respective returns and availed itself of the rebate by deducting the same while paying the tax due. The Tribunal held that as the assessee did not file its returns within the prescribed period and had sought no extension, it was not entitled to the rebate. The High Court upheld the view taken by the Tribunal. Allowing the appeal, 149 ^ HELD: 1. The assessee was entitled to the rebate of tax provided for in section 15 of the Bihar Sales Tax Act, 1959. [156B] 2. The condition in section 15 referring to a return has a substantive as well as procedural content. The latter should be construed somewhat liberally and generously so long as the principal object of the provision is not frustrated. [155H; 156A] C.I.T. vs Kulu Valley Transport Co. Pvt. Ltd., ; Gursahai Saigal vs C.l. T. [1963] 48 I.T.R. S.C. 1; Allen vs Trehearne, and C.I.T. vs Mahaliram Ramjidas, referred to. 3.1 The object of section 15 of the Act is to confer a benefit on an assessee for prompt payment of the tax. In the instant case, the assessee had paid the tax before the due dates. The tax paid accords with the tax due on the basis of returns. There was short delay only in the filing of the returns. [153D E] 3.2 The Act does not set out any particular procedure for obtaining extention of time. It does not prescribe any form of application. It does not require that the prescribed authority must pass an order recording his satisfaction that the time should be extended and granting time. it envisages three consequences to the assessee for failure to file a return within the prescribed time, or extended time: (i) loss of rebate under section 15, (ii) risk of a penalty under section 14(4), and (iii) risk of a best judgment assessment under section 16(4). [154A D] 3.3 In the instant case the assessing authority has neither levied a penalty nor made a best judgment assessment nor recorded a finding that the delay was without reasonable cause. From these circumstances it is reasonable to infer that the returns, though filed belatedly, have been accepted and acted upon by the prescribed authority. An extention of time can thus be inferred from the attendant circumstances of the case. [154D F] 3.4 The condition precedent for the grant of rebate that the assessee should have filed its return within the prescribed or extended period, can, therefore, be said to have been fulfilled in the present case. [153H; 154A] Jamuna Floor & oil Mills Pvt. Ltd. vs State of Bihar, [1968] 22 S.T.C. 1, approved.

vil Appeal Nos. 4043 and 1370 of 1987. 221 From the Judgment and Order dated 20.11.1987 and 4.3.1987 of the Jammu & Kashmir High Court in L.P.A. No. 20/1987 and in Suit No. 235/86. K. Parasaran, Ms. section Janani and Ms. Urmila Kapur for the Appellant in C.A. No. 4043/87. P. Chidambaram, P.H. Parekh and Ms. Gitanjali Mathrani for the Appellants in C.A. No. 1370/87. M. Beg, E.C. Agarwala, Atul Sharma, Vijay Pandita and Ms. Purnima for the Respondents in C.A. No. 4043/87. E.C. Agarwala and Atul Sharma for the Respondents in C.A. No. 1370/87. Ashok Mathur for the State of Jammu and Kashmir and Advocate General. The Judgment of the Court was delivered by THOMMEN, J. Civil Appeal No. 4043 of 1987. The question which arises in this appeal is as regards the validity of clause (iii) of sub section (3) of Section 1 of the Jammu & Kashmir Houses and Shops Rent Control Act, 1966 (hereinafter referred to as "the Act"). The challenge against the clause on the ground of its alleged violation of Article 14 of the Constitution was rejected by the High Court of Jammu & Kashmir. The High Court, following its earlier decision in The J & K Bank Ltd. vs State of J & K & Another, AIR 1987 J & K 18, upheld the validity of the clause. The impugned provision, as it stood at the relevant time, reads: "1(3) Notwithstanding anything contained in sub section (2), nothing in this Act shall apply to (ii) Omitted (iii) any tenancy in respect of any house. or shop where the income of the tenant, whether accruing within or outside 222 the State, exceeds rupees 40,000 per annum; Explanation: the word 'income ' means 'net income. '" The appellant, the Delhi Cloth & General Mills Limited is the tenant of the building in question. Its claim for the protection of the Act was disallowed by the courts below on the ground that clause (iii) of sub section (3) of Section 1, read with the Explanation, was attracted in respect of the appellant. According to the appellant, the impugned clause is discriminatory and arbitrary because it draws an artificial distinction between tenants on the basis of their income. Those tenants earning net income below Rs.40,000 per annum are fortunate enough to be protected by the beneficial provisions of the Act, while a person like the appellant whose annual net income is undoubtedly in excess of the statutory limit of Rs.40,000, is unreasonably and unfairly denied the protection of the Act. This statutory discrimina tion, it is contended, places persons like the appellant at the mercy of the landlords who can easily evict them by recourse to the far less restrictive provisions of the and on the strength of their agreements of lease. Counsel for the appellant submits that the impugned clause does not take into account the nature of the build ing, but only the income of the tenant. The income of the landlord himself is irrelevant. The protection of the Act is withheld or extended, dependent solely on the financial capacity of the tenant and without regard to the need of the landlord or the age or other conditions of the building or any other factor. Treating tenants differently with refer ence to their annual income is not an intelligible classifi cation, for the income of a tenant may vary from year to year, depending upon the nature of his business and other factors. This variation in income may expose him to eviction in a particular year when the business is prosperous but protects him from eviction when the business declines and income falls. Furthermore, counsel says. "income" is not a clear and precise concept. Limiting it to net income does not make it clearer. What are the permissible deductions to arrive at the "net", the Act does not say. The Section is invalid because it is too broad or vague. Any classification based on such vague differentia is unintelligible and, therefore, violative of Article 14. In any view, counsel submits, the classification sought to be made between per sons falling on either side of the 223 specified income has no reasonable relation to the object sought to be achieved by the statute. Counsel relies on the observation of this Court in Rattan Arya & Others vs State of Tamil Nadu & Another, ; declaring Section 30(ii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 as unconstitutional. Counsel also relies upon the decision of this Court in Motor General Traders & Another vs State of Andhra Pradesh & Others, ; declaring Section 32(b) of the A.P. Buildings (Lease, Rent and Evic tion) Control Act, 1960 as unconstitutional. These decisions, in our view, are easily distinguisha ble. In Rattan Arya (supra) this Court stated that a dis tinction between residential buildings leased on rent not exceeding Rs.400 per month and all other buildings whether residential or non residential was an unreasonable classi fication. There was no reason why non residential buildings leased on rent of Rs.400 per month or less should be treated differently from residential buildings of like rent or why in the case of residential buildings the limit should have been limited to Rs.400 per month. To so restrict the protec tion of the Act was an unreasonable classification. In the Motor General Traders (supra), this Court stated that to arbitrarily prescribe a cut off date, i.e., August 26, 1957, for denying the protection of the Act, without regard to the age of the building or to the extent of realisation of the investment by the owner was an unreasonable classification. These decisions do not, in our view, support the contentions of the appellant. On the other hand, a classification with reference to economic realities was upheld by this Court in Kerala Hotel & Restaurant Association & Ors. vs State of Kerala & Ors., [1990] 1 JT SC 324. This Court stated "those who can afford the costlier cooked food, being more affluent, would find the burden lighter. This object cannot be faulted on princi ple and is, indeed, laudable". Though that principle was stated in a different context, significantly this Court accepted a classification based on financial capacity. The classic and oft repeated test to be applied when the constitutionality of legislation is questioned with refer ence to Article 14 of the Constitution is what is stated by this Court in Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Others, S.R. Das, CJ. stated: "In order, however, to pass the test of permissible classi fication two conditions must be fulfilled, namely, (i) that the 224 classification must be rounded on an intelligible differen tia which distinguishes persons or things that are grouped together from others left out of the group and, (ii) that the differentia must have a rational relation to the object sought to be achieved by the statute in question. " The object of the enactment in question is undoubtedly to protect the weaker section of tenants from. unreasonable eviction and unfair rent. The legislature, at the same time, did not desire to discourage persons from constructing buildings. The twin legislative object is the protection of economically weaker tenants and encouragement of construc tion of buildings. While protection is thus afforded to deserving tenants, construction of new buildings is encour aged by exempting buildings occupied by richer classes of tenants from the provisions of the Act. While a building is covered by the Act when occupied by a tenant whose annual net income is less than the specified amount, the protection is withheld when the same building is occupied by a richer tenant whose annual net income is higher than the specified amount. Where a building is occupied by more than one ten ant, the applicability of the Act to each of them would depend upon his net income. It is the tenant that the legis lature intends to protect and not the landlord or his build ing. The test adopted by the legislature for this purpose is with reference to the tenant 's net income, whether accruing inside or outside the State, as on the date of the land lord 's application for eviction as well as on the date of the decree for eviction. The legislative object is, there fore, to protect tenants who are economically weaker in comparison to those affluent tenants falling outside the specified limit of income, and at the same time to encourage construction of new buildings which will result in better availability of accommodation, employment opportunity and economic prosperity. This is a reasonable classification which does not suffer from the vice of being too vague or broad. Classification based on income is well known to law. Such classification has a reasonable relation to the twin legislative object mentioned above. We see nothing unreason able or irrational or unworkable or vague or unfair or unjust in the classification adopted by the impugned provi sion. Nor is there lack of clarity in the concept of "income" or "net income". Income is money or other benefit periodi cally received. It is profit or revenue and not capital. It is a gain derived from capital or labour or both. Net income is income obtained after deducting all expenses incurred for the purpose of earning the income. It is income minus oper ating expenses. The concept of net income is what it is 225 ordinarily understood to be in common parlance, and not necessarily limited by the technicalities of any fiscal enactment. See in this connection the observation of the Jammu & Kashmir High Court in Banarasi Das vs Jagdish Raj Kohli, AIR 1960 J & K 5. The legislature in its wisdom is presumed to understand and appreciate correctly the problems of the State and the needs of the people made manifest by experience. Absent blatant, disregard of constitutional provisions, legislative innovation by social and economic experimentation must be permitted to continue without judicial interference. The High Court, as stated earlier, followed its earlier decision on the construction of the Section in The J & K Bank Ltd. vs State of J & K & Another, AIR 1987 J & K 18. In that case, speaking for the Division Bench, Anand, CJ. stated as follows: "In our opinion, the challenge to vires of section 1(3)(iii) of the Act is not well founded. Undoubtedly, the Act is a piece of social and beneficial legislation. The Legislature knows and correctly appreciates the needs of its people. In its supreme wisdom it denied the protection of the Act to ten ants whose annual income exceeds Rs.40,000. Social legisla tion of this type is designed to protect the interest of a class of society who, because of their economic conditions, deserves such protection against their arbitrary eviction. The legislation is intended to protect weaker and poorer classes of the tenants and there is, therefore, an intelli gible differentia between the tenants whose annual income is Rs.40,000 and those whose annual income is more than Rs.40,000. In construing article 14, the aid whereof has been pressed into service by the learned counsel, the Court is not required to adopt a doctrinaire approach which would choke the beneficial legislation. It is open to the legisla ture to recognise the degree of harm and while doing so it can always make reasonable classification. Article 14 for bids class legislation but no reasonable classification. With a view to pass the test of reasonable classification, there must exist intelligible differentia between persons or things grouped together from those who have been left out and there must be a reasonable nexus with the object to be achieved by the legislation. Keeping in view the object which the legislation seeks to achieve, it can be safely said that there is reason 226 able nexus between the classification made by the legisla ture in the impugned section and the object sought to be achieved. We also find that there is an intelligible differ entia between the tenants who are sought to be protected by the Act from those who are denied the protection of the Act. We are in complete agreement with what has been stated by the learned Chief Justice. Accordingly, we see no merit in this appeal. It is dismissed with costs here and in the courts below. Civil Appeal No. 1370 of 1987. This appeal is brought by a nationalised bank. In view of our judgment in Civil Appeal No. 4043 of 1987, ' we dis miss this appeal with costs here and in the High Court. N.P.V. Appeals dis missed.

The appellant, a tenant, claimed protection of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966. The courts below disallowed the claim, on the ground that clause (iii) of sub section (3) of Section 1, read with the Expla nation was attracted in respect of the appellant. The appellant challenged the validity of clause (iii) of sub section (3) of Section 1 of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 before the High Court on the ground that it violated Article 14 of the Constitution. The High Court, following its earlier decision in the J & K Bank Lid. vs State of J & K & Another, AIR1987 J & K 18 upheld validity of the clause. In the appeal before this Court, the appellant tenant contended (i) that the clause was discriminatory and arbi trary, because it drew an artificial distinction between tenants on the basis of their income, in that while those tenants earning net income below Rs.40,000 per annum were protected by the beneficial provisions of the Act, those with annual net income in excess of the statutory limit of Rs.40,000 were unreasonably and unfairly denied the protec tion and this statutory discrimination placed them at the mercy of the landlords, who could easily evict them by recourse to the far less restrictive provisions of the Transfer of 219 Property Act, 1882 and on the strength of their agreements of lease, (ii) that the clause did not take into account the nature of the building, or the need and income of the land lord or any other factor and withheld or extended protection solely on the financial capacity of the tenant, which could vary from year to year, depending upon the nature of his business and other factors, thus exposing the tenant to eviction when the business was prosperous, but protecting him when the business declined and income fell, (iii) that "income" was not a clear and precise concept; limiting it to net income did not make it clearer, and the Act did not indicate the permissible deductions for arriving at the "net" and (iv) that the Section was invalid because it was too broad or vague and any classification based on such vague differentia was unintelligible and, therefore, viola tive of Article 14; and in any view, the classification sought to be made between persons falling on either side of the specified income had no reasonable relation to the object sought to be achieved by the statute. Dismissing the above appeal, and another similar appeal (Civil Appeal No. 1370 of 1987), this Court, HELD: 1.1 The object of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 is undoubtedly to protect the weaker section of tenants from unreasonable eviction and unfair rent. At the same time, the legislature did not desire to discourage persons from constructing buildings. Thus, while protection is afforded to deserving tenants, construction of new buildings is encouraged by exempting buildings occupied by richer classes of tenants from the provisions of the Act. While a building is covered by the Act when occupied by a tenant whose annual net income is less than the specified amount, the protection is withheld when the same building is occupied by a richer tenant whose annual net income is higher than the specified amount. Where a building is occupied by more than one tenant, the applica bility of the Act to each of them would depend upon his net income. It is the tenant that the legislature intends to protect and not the landlord or his building. The test adopted by the legislature for this purpose is with refer ence to the tenant 's net income, whether accruing inside or outside the State, as on the date of the landlord 's applica tion for eviction as well as on the date of the decree for eviction. [224B E] 1.2 The legislative object is, therefore, to protect tenants who are economically weaker in comparison to those affluent tenants falling outside the specified limit of income, and at the same time to encourage construction of new buildings which will result in better availability of 220 accommodation, employment opportunity and economic prosperi ty. This is a reasonable classification which does not suffer from the vice of being too vague or broad. [224E F] 1.3 Classification based on income is well known to law. Such classification has a reasonable relation to the twin legislative object of protecting economically weaker tenants and encouraging new constructions. There is nothing unrea sonable or irrational or unworkable or vague or unfair or unjust in the classification adopted by Section 1(3)(iii) of the Act. [224F; 22SD] 1.4 The legislature in its wisdom is presumed to under stand and appreciate correctly the problems of the State and the needs of the people made manifest by experience. Absent blatant disregard of constitutional provisions, legislative innovation by social and economic experimentation must be permitted to continue without judicial interference. [225B] The J & K Bank Ltd. vs State of J & K & Another, AIR 1987 J & K 18, approved. Rattan Arya & Others vs State of Tamil Nadu & Another, ; and Motor General Traders & Another vs State of Andhra Pradesh & Others, ; , distin guished. Kerala Hotel & Restaurant Association & Ors. vs State of Kerala & Ors., [1990] 1 JT SC 324, relied on. Krishna Dalmia vs Shri Justice S.R. Tendolkar & Others, ; , referred to. 2. There is no lack of clarity in the concept of "in come" or net income. Income is money or other benefit peri odically received. It is profit or revenue and not capital. It is a gain derived from capital or labour or both. Net income is income obtained after deducting all expenses incurred for the purpose of earning the income. It is income minus operating expenses. The concept of net income is what it is ordinarily understood to be in common parlance, and not necessarily limited by the technicalities of any fiscal enactment. [224G H] Banarasi Das vs Jagdish Raj Kohli, AIR 1960 J & K 5. re ferred to.

ition No. 2030 of 1980. Under Article 32 of the Constitution. Ramjethmalani, M. M. Lodha and Harjinder Singh for the Petitioner. V. section Desai, Mrs. Shobha Dixit, R. N. Poddar and Miss A. Subhashini for the Respondent. The Judgment of the Court was delivered by 643 BHAGWATI, J. This petition for a writ of habeas corpus challenges the continued detention of one Mahendra Chordia under sub section (1) of section 3 of the (hereinafter referred to as COFEPOSA Act). On 4th June, 1980 an order of detention dated 27th May 1980 was served on Mahendra Chordia (hereinafter referred to as the detenu) and he was taken under detention. The order of detention recited that the Governor of Maharashtra was satisfied with respect to the detenu that, with a view to preventing him from smuggling goods and abetting the smuggling of goods, it was necessary to make an order directing him to be detained and by the order of detention, the Governor of Maharashtra in exercise of the powers conferred under sub section (1) of section 3 of the COFEPOSA Act read with the Order of the President of India in the notification of the Government of India dated 17 February, 1980 directed that the detenu be detained under that Act. Simultaneously with the order of detention, another order dated 27th May was also issued by the Governor of Maharashtra directing that the detenu be detained in the Nasik Road Central Prison. When the petitioner was arrested and taken under detention, he was also served with a document dated 27 May 1980 containing the grounds of detention as required by sub section (3) of the COFEPOSA Act read with clause (5) of Article 22 of the Constitution. The grounds of detention referred to several documents and statements including two tape recorded conversations, one between the detenu and one Ahluwalia and the other between the detenu, Ahluwalia and an advocate by the name of Kumar Mehta. The detenu therefore addressed a letter dated 6th June, 1980 to the Deputy Secretary to the Government of Maharashtra requesting him at his earliest to send "all statements documents and material" to enable him to make an effective representation against his detention. The detenu also sent a representation dated 9th June, 1980 to the Deputy Secretary once again requesting him to supply immediately the documents, statements and materials relied upon in the grounds of detention so that the detenu could make an effective representation and also specifically calling upon the Deputy Secretary to furnish the transcripts of the tapes as also to produce the original tapes for his inspection so that he could prove that the voice recorded on the tapes was not his. This representation was admittedly received by the Deputy Secretary on 14th June 1980. The detenu thereafter addressed another communication to the Deputy Secretary requesting him to supply one accurate copy of the tapes, so that he could have the tapes played in the presence of those 644 who would recognise his voice, to enable him to lead evidence through them that the voice recorded on the tapes was not his as also to let him know on whose final satisfaction the order of detention was made. This letter though originally dated 14th June, 1980 was not despatched to the Deputy Secretary until 1st July, 1980 because in the meanwhile the detenu had been taken to Bombay and it was only after his return to Nasik Road Central Prison that the letter could be despatched through the jailor and hence the date was altered to 1st July, 1980. It appears that this letter was received by the Deputy Secretary on 8th July, 1980. But, prior to his forwarding the letter dated 1st July, 1980 to the Deputy Secretary, the detenu addressed another representation dated 26th June, 1980 to the Chairman of the Advisory Board, the Central Government and the Deputy Secretary to the Government of Maharashtra praying for re vocation of the order of detention. The detenu pointed out in this representation that, by his letters dated 5th, 6th and 14th June, 1980, he had requested for the tapes to be supplied to him to enable him to prove that the voice recorded on the tapes was not his and that this request had not been complied with and, in the circumstances, the hearing of the case before the Advisory Board would be futile. The detenu also complained in the representation that though he had asked for copies of the documents and statements relied upon in the grounds of detention, they had not been supplied to him. This representation containing the prayer for revocation of the order of detention was received by the Deputy Secretary on 30th June, 1980. Now it appears that copies of the statements and documents relied upon in the grounds of detention were forwarded by the Deputy Secretary to the Superintendent of Nasik Road Central Prison by registered letter dated 3rd July 1980 and these copies were handed over to the detenu on 11th July 1980. Mean while, one Vikraman Investigating officer of the Customs Department was deputed to the Nasik Road Central Prison alongwith the tapes and the tapes were played in the presence of the detenu and the Deputy Superintendent of Nasik Road Central Prison on 8th July 1980. The representations of the detenu dated 9th June, 1980 and 26th June, 1980 were then considered by the Under Secretary on 11th July, 1980 and since in the mean time the letter dated 1st July 1980 requesting for supply of one accurate copy of the tapes was received by the Government, the Under Secretary suggested, with reference to this request that "since the tapes were given to the detenu for inspection and played before him, the request for supply of copies of the tapes may have to be rejected" and he also recommended that the request of the detenu for revocation of the order of detention may be rejected. The Deputy Secretary approved the noting of the Under Secretary that the request for revocation of the detention order may 645 be rejected and the file was immediately put up before the Secretary on the same day and the secretary also approved the proposal for rejecting the request for revocation of the order of detention but recommended that the Customs Department must give to the detenu the transcripts of the tapes, as otherwise he would take a stand in the Court that his defence was prejudiced. It appears that the Chief Minister endorsed the noting of the Secretary on 14th July 1980. Pursuant to this decision of the Government, a letter dated 15th July 1980 was addressed to the detenu rejecting his representations and declining to revoke the order of detention. It is difficult to appreciate what purpose could possibly be intended to be served by giving copies of the tapes to the detenu after rejecting his representations, but all the same, copies of the tapes were handed over to the detenu on 20th July, 1980. The detenu 's mother in the mean while preferred the present petition in this Court and on 10th July, 1980 rule nisi was issued on the petition by this Court. There were several grounds on which the detention of the detenu was challenged in the petition. But it is not necessary to refer to all the grounds since there is one ground which is, in our opinion, fatal to the continued detention of the detenu and it will be sufficient if we confine our attention to that ground. The contention of the petitioner under the ground was that though several statements and documents were relied upon in the grounds of detention and considerable reliance was also placed on two tape recorded conversations in the grounds of detention, the detaining authority did not serve on the detenu along with the grounds of detention, copies of those statements, documents and tapes and it could not therefore be said that the grounds of detention were duly served on the detenu as required by sub section (3) of section 3 of the COFEPOSA Act and clause (5) of Article 22 of the Constitution. The petitioner urged that sub section (3) of section 3 of the COFEPOSA Act and clause (5) of Article 22 of the Constitution required that the detaining authority should as soon as may be, communicate to the detenu the grounds on which the order of detention has been made and such grounds would comprise not merely a bare recital of the grounds of detention but also all statements and documents relied upon in the grounds of detention, because these latter would also form part of such grounds. It was also contended by the petitioner in the alternative that, in any event, the detaining authority was bound to give copies of the statements, documents and tapes relied upon in the grounds of detention to the detenu without any avoidable delay in order that the detenu should have the earliest opportunity of making an effective representation against the order of detention. The argument of the petitioner was 646 that, in the present case, though the detenu asked for the copies of statements, documents and material relied upon in the grounds of detention as early as 6th June, 1980, the detaining authority did not supply copies of such statements, documents and materials until 11th July, 1980 and on that day also, what were supplied were merely copies of the statements and documents and not the copies of the tapes which were supplied only on 20th July 1980. This delay in supplying copies of the statements, documents and tapes was, in the submission of the petitioner wholly unjustified and the detenu was thus denied the earliest opportunity of making an effective representation and this infected the continued detention of the detenu with the vice of illegality. This ground of challenge urged on behalf of the petitioner appeared to us to be well founded and that is why, by an order dated 8th August 1980 made immediately on the conclusion of the arguments, we allowed the petition and directed that the detenue be set at liberty forthwith. We now proceed to give our reasons for making that Order. We may point out straightway that we are not at all happy at the thought that our order may have resulted in setting free a possible smuggler. We are not unmindful of the fact that the COFEPOSA Act has been enacted for the purpose of eradicating the evil of smuggling which is eating into the vitals of the nation like a cancerous growth and eroding the economic stability of the country and when an order is made by the Court releasing a person detained under this Act, it is quite possible that the effect of the order may be to let loose on the society, a smuggler who might in all probability, resume his nefarious activities causing incalculable mischief and harm to the economy of the nation. But at the same time we cannot forget that the power of preventive detention is a draconian power justified only in the interest of public security and order and it is tolerated in a free society only as a necessary evil. The power to detain without trial is an extraordinary power constituting encroachment on personal liberty and it is the solemn duty of the Courts to ensure that this power is exercised strictly in accordance with the requirements of the Constitution and the law. The courts should always lean in favour of upholding personal liberty, for it is one of the most cherished values of mankind. Without it life would not be worth living. It is one of the pillars of free democratic society. Men have rightly laid down their lives at its altar in order to secure it, protect it and preserve it. The Constitution has therefore, while conceding the power of preventive detention, provided procedural safeguards with a view to protecting the citizen against arbitrary and unjustified invasion of personal liberty and the courts have always zealously tried to uphold and enforce these safeguards. This Court has also through its judicial pronouncements created various legal bulwarks and breakwaters into the vast powers conferred on the executive by the laws of preventive detention prevalent at different points of time. It is true that sometimes even a smuggler may be able to secure his release from detention if one of the safeguards or requirements laid down by the Constitution or the law has not been observed by the detaining authority but that can be no reason for whittling down or diluting the safeguards provided by the Constitution and the law. If the detaining authority wants to preventively detain a smuggler, it can certainly do so, but only in accordance with the provisions of the Constitution and the law and if there is a breach of any such provision, the rule of law requires that the detenu must be set at liberty, however wicked or mischievous he may be. The law cannot be subverted, particularly in the area of personal liberty, in order to prevent a smuggler from securing his release from detention, because whatever is the law laid down by the courts in the case of a smuggler would be equally applicable in the case of preventive detention under any other law. This Court would be laying down a dangerous precedent if it allows a hard case to make bad law. We must, therefore, interpret the provisions of the Constitution and the law in regard to preventive detention without being in any manner tramelled by the fact that this is a case where a possible smuggler is seeking his release from detention. It is also necessary to point out that in case of an application for a writ of habeas corpus, the practice evolved by this Court is not to follow strict rules of pleading nor place undue emphasis on the question as to on whom the burden of proof lies. Even a postcard written by a detenu from jail has been sufficient to activise this Court into examining the legality of detention. This Court has consistently shown great anxiety for personal liberty and refused to throw out a petition merely on the ground that it does not disclose a prima facie case invalidating the order of detention. Whenever a petition for a writ of habeas corpus has come up before this Court, it has almost invariably issued a rule calling upon the detaining authority to justify the detention. This Court has on many occasions pointed out that when a rule is issued, it is incumbent on the detaining authority to satisfy the court that the detention of the petitioner is legal and in conformity with the mandatory provisions of the law authorising such detention: Vide Naranjan Singh vs State of Madhya Pradesh; Sheikh Hanif, Gudma Majhi & Kamal Saha vs State of West Bengal, and Dulal Roy vs The District Magistrate, Burdwan & Ors. It has also been insisted by this Court that, in answer to this rule, the detaining authority must place all the relevant facts before the court which would show that the detention is in accordance with the provisions of the Act. It would be no argument on the part of the detaining authority to say that a particular ground is not taken in the petition:Vide Nazamuddin vs The State of West Bengal. Once the rule is issued it is the bounden duty of the Court to satisfy itself that all the safeguards provided by the law have been scrupulously observed and the citizen is not deprived of his personal liberty otherwise than in accordance with law.:Vide Mohd. Alam vs State of West Bengal and Khudiram Das vs State of West Bengal & Ors. This practice marks a departure from that obtaining in England where observance of the strict rules of pleading is insisted upon even in case of an application for a writ of habeas corpus, but it has been adopted by this Court in view of the peculiar socio economic conditions prevailing in the country. Where large masses of people are poor, illiterate and ignorant and access to the courts is not easy on account of lack of financial resources, it would be most unreasonable to insist that the petitioner should set out clearly and specifically the grounds on which he challenges the order of detention and make out a prima facie case in support of those grounds before a rule is issued or to hold that the detaining authority should not be liable to do anything more than just meet the specific grounds of challenge put forward by the petitioner in the petition. The burden of showing that the detention is in accordance with the procedure established by law has always been placed by this Court on the detaining authority because Article 21 of the Constitution provides in clear and explicit terms that no one shall be deprived of his life or personal liberty except in accordance with procedure established by law. This constitutional right of life and personal liberty is placed on such a high pedestal by this Court that it has always insisted that whenever there is any deprivation of life or personal liberty, the authority responsible for such deprivation must satisfy the court that it has acted in accordance with the law. This is an area where the court has been most strict and scrupulous in ensuring observance with the requirements of the law, and even where a requirement of the law is breached in the slightest measure, the court has not hesitated to strike down the order of detention or to direct the release of the detenue even though the detention may have been valid till the breach occurred. The court has always regarded personal liberty as the most precious possession 649 of mankind and refused to tolerate illegal detention, regardless of the social cost involved in the release of a possible renegade. We must therefore now proceed to examine whether there was any breach of the requirements of Article 22 clause (5) of the Constitution and Section 3, sub section (3) of the COFEPOSA Act, for that is the breach which is claimed by the petitioner as invalidating the continued detention of the detenue. Clause (5) of Article 22 of the Constitution reads as follows: "article 22(5): When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. " Section 3, sub section of the COFEPOSA Act provides as under: "For the purposes of clause (5) of Article 22 of the Constitution, the communication to a person detained in pursuance of a detention order, of the grounds on which the order has been made shall be made, as soon as may be, after the detention, but ordinarily not later than five days and in exceptional circumstances and for reasons to be recorded in writing not later than fifteen days from the date of detention." The true meaning and import of clause (5) of Article 22 of the Constitution was explained by this Court in Khudiram Das vs State of West Bengal (supra): "The constitutional imperatives enacted in this article are two fold: (1) the detaining authority must, as soon as may be, that is, as soon as practicable after the detention, communicate to the detenue the grounds on which the order of detention has been made, and (2) the detaining authority must afford the detenue the earliest opportunity of making a representation against the order of detention. These are the barest minimum safeguards which must be observed before an executive authority can be permitted to preventively detain a person and thereby drown his right of personal liberty in the name of public good and social security." It will be seen that one of the basic requirements of clause (5) of Article 22 is that the authority making the order of detention must, as soon as may be, communicate to the detenu the grounds on which the order of detention has been made and under sub section (3) of section 3 of the COFEPOSA Act, the words "as soon as may be" 650 have been translated to mean "ordinarily not later than five days and in exceptional circumstances and for reasons to be recorded in writing not later than fifteen days, from the date of detention. " The grounds of detention must therefore be furnished to the detenu ordinarily within five days from the date of detention, but in exceptional circumstances and for reasons to be recorded in writing, the time for furnishing the grounds of detention may stand extended but in any event it cannot be later than fifteen days from the date of detention. These are the two outside time limits provided by section 3, sub section (3) of the COFEPOSA Act because unless the grounds of detention are furnished to the detenu, it would not be possible for him to make a representation against the order of detention and it is a basic requirement of clause (5) of Article 22 that the detenu must be afforded the earliest opportunity of making a representation against his detention. If the grounds of detention are not furnished to the detenu within five or fifteen days, as the case may be, the continued detention of the detenu would be rendered illegal both on the ground of violation of clause (5) of Article 22 as also on the ground of breach of requirement of section 3, sub section (3) of the COFEPOSA Act. Now it is obvious that when clause (5) of Article 22 and sub section (3) of Section 3 of the COFEPOSA Act provide that the grounds of detention should be communicated to the detenu within five or fifteen days, as the case may be, what is meant is that the grounds of detention in their entirety must be furnished to the detenu. If there are any documents, statements or other materials relied upon in the grounds of detention, they must also be communicated to the detenu, because being incorporated in the grounds of detention, they form part of the grounds and the grounds furnished to the detenu cannot be said to be complete without them. It would not therefore be sufficient to communicate to the detenu a bare recital of the grounds of detention, but copies of the documents, statements and other materials relied upon in the grounds of detention must also be furnished to the detenu within the prescribed time subject of course to clause (6) of Article 22 in order to constitute compliance with clause (5) of Article 22 and section 3, sub section (3) of the COFEPOSA Act. One of the primary objects of communicating the grounds of detention to the detenu is to enable the detenu, at the earliest opportunity, to make a representation against his detention and it is difficult to see how the detenu can possibly make an effective representation unless he is also furnished copies of the documents, statements and other materials relied upon in the grounds of detention. There can therefore be no doubt that on a proper construction of clause (5) of Article 22 read with section 3, sub section (3) of the COFEPOSA Act, it is necessary for the valid continuance of detention that subject to clause (6) of 651 Article 22 copies of the documents, statements and other materials relied upon in the grounds of detention should be furnished to the detenu alongwith the grounds of detention or in any event not later than five days and in exceptional circumstances and for reasons to be recorded in writing, not later than fifteen days from the date of detention. If this requirement of clause (5) of Article 22 read with section 3, sub section (3) is not satisfied the continued detention of the detenu would be illegal and void. Now, in the present case, the grounds of detention were detention were served upon the detenu on 4th June, 1980 at the time when he was taken under detention, but these grounds which were served upon the detenu did not include the documents, statements and other materials relied upon in the grounds and forming part of them. The detenu, therefore by his letter dated 6th June, 1980, requested the Deputy Secretary to send at his earliest "all statements, documents, materials" relied upon in the grounds of detention in order to enable him to make an effective representation against his detention. But copies of these documents, statements and other materials were not supplied to the detenu until 11th July, 1980 and so far as the tapes were concerned, their copies were furnished to the detenu even later on 20th July, 1980. It is clear from the discussion in the preceding paragraph that under clause (5) of Article 22 read with section 3, sub section (3) of the COFEPOSA Act, the detaining authority was bound to supply copies of the documents, statements and other materials relied upon in the grounds of detention to the detenu within five days from the date of detention, that is, on or before 9th June, 1980 and in any event, even if we assume that there were exceptional circumstances and reasons for not supplying such copies within five days were recorded in writing, such copies should have been supplied to the detenu not later than fifteen days from the date of detention, that is, on or before 19th June, 1980. It was, of course, not the case of the detaining authority before us that reasons for not supplying copies of the documents, statements and other materials to the detenu within five days were recorded in writing nor were any such reasons produced before us, but even if there were any such reasons recorded in writing, coupled with the existence of exceptional circumstances, the detaining authority, could not delay the supply of copies of the documents, statements and other materials to the detenu beyond 19th June, 1980. Even if there were any circumstances justifying the delay in supply of copies of documents, statements and other materials beyond 19th June, 1980 it would afford no defence to the detaining authority, for clause (5) of Article 22 read with section 3, sub section (3) of the COFEPOSA Act lays down an inexorable rule of law that the grounds of detention shall be communicated to the detenu not later than fifteen days from the 652 date of detention. There are no exceptions or qualifications provided to this rule which operates in all its rigour and strictness and if there is any breach of this rule, it must have the effect of invalidating the continued detention of the detenu. There can therefore be no doubt that, in the present case, the continuance of the detention of the detenu after 19th June, 1980 was unconstitutional and it was not open to the detaining authority to seek to justify the continued detention on the ground that there were sufficiently compelling reasons which prevented it from supplying copies of the documents, statements and other materials to the detenu until 11th July, 1980 and copies of the tapes until 20th July, 1980. It may be pointed out that even if our interpretation of the words "the grounds on which the order has been made" in clause (5) of Article 22 and section 3 sub section (3) of the COFEPOSA Act be wrong and these words do not include the documents, statements and other materials relied upon in the grounds of detention, it is unquestionable that copies of such documents, statements and other materials must be supplied to the detenu without any unreasonable delay, because otherwise the detenu would not be able to make an effective representation and the fundamental right conferred on him to be afforded the earliest opportunity of making a representation against his detention would be denied to him. The right to be supplied copies of the documents, statements and other materials relied upon in the grounds of detention without any undue delay flows directly as a necessary corollary from the right conferred on the detenu to be afforded the earliest opportunity of making a representation against the detention, because unless the former right is available, the later cannot be meaning fully exercised. This would seem to be clear on a fair interpretation of clause (5) of Article 22 but apart from this view which we are inclined to take on principle as a matter of interpretation, the law is now well settled as a result of several decisions of this court commencing from Ramachandra A. Kamat vs Union of INDIA (1) that: "When the grounds of detention are served on the detenu, he is entitled to ask for copies of statements and documents referred to in the grounds of detention to enable him to make an effective representation. When the detenu makes a request for such documents, they should be supplied to him expeditiously. when copies of such documents are asked for by the detenu, the detaining authority should be in a position to supply them with reasonable expedition. What is reasonable expedition will depend on the facts of each case. " The facts as we find them here are that the detenu asked for copies of the documents, statements and other materials relied upon 653 in the grounds of detention by his letters dated 6th June, 1980 and 9th June, 1980 and he also complained about non supply of such copies in his representation dated 26th June, 1980 but it was only on 11th July, 1980 that such copies were supplied to him and even then the copies of the tapes were not furnished until 20th July, 1980. There was thus a delay of more than one month in supply of copies of the documents, statements and other materials to the detenu. The burden of satisfactorily explaining this delay and showing that there was sufficient cause for it was on the detaining authority and an attempt was made by the detaining authority to discharge this burden by filing an affidavit made by C.R. Mulherkar, Deputy Secretary to the Government of Maharashtra. It was stated in this affidavit that the letter of the detenu dated 6th June, 1980 requesting for copies of the documents, statements and other materials relied upon in the grounds of detention was received in the Home Department on 10th June, 1980 and on receipt, this letter was forwarded to the Asstt.Collector of Customs for his remarks on 12th June, 1980. The Assistant Collector of Customs forwarded his remarks to the Deputy Secretary on 24th June, 1980 alongwith one set of copies of documents and statements relied upon in the grounds of detention and these were received by the Deputy Secretary in the Home Department on 27th June 1980. The next two days, namely 28th and 29th June, 1980 were holidays and on 2nd July 1980 the State Government took a decision to supply these copies to the detenu and they were forwarded to the detenu through the Superintendent of Nasik Road Central Prison alongwith a registered letter dated 3rd July 1980 which, for some inexplicable reason was not received by the Superintendent until 10th July 1980, and hence it was said these copies could not be delivered to the detenu until 11th July 1980. This was the explanation offered by the detaining authority for the delay in supplying copies of the documents, statements and other materials to the detenu but we do not think this explanation can be accepted by us as satisfactory. It is clear from the facts narrated above that though the Assistant Collector of Customs received the letter of the detenu forwarded by the Deputy Secretary on 12th June 1980, he did not respond to it until 24th June 1980 and this delay of 12 days has not been satisfactorily explained either in the affidavit of C.R. Mulherkar or in any affidavit filed by the Assistant Collector of Customs. It was urged before us that the documents and statements of which copies were requested by the detenu ran into 89 pages and it was therefore reasonable to assume that a few days must have been taken in the Customs Department to make copies of these documents and statements and hence the time of 12 days taken up by the Assistant Collector of Customs in sending copies of the documents and statements to the 654 Deputy Secretary could not be said to be unreasonable. This argument is patently unsound, because the Assistant Collector of Customs ought to have kept ready with him copies of the documents, statements and other materials relied upon in the grounds of detention since it should have been anticipated that these copies would have to be supplied to the detenu in order to enable him to make an effective representation against his detention and it does not lie in the mouth of the Assistant Collector of Customs to say that his department started making copies for the first time when a request for copies was made by the detenu. In fact, copies of the documents,statements and other materials relied upon in the grounds of detention should have been available with the detaining authority itself so that they could be supplied to the detenu immediately as soon as a request was made in that behalf. Of course, our view is and that is what we have said in the earlier part of the judgment, that copies of the documents, statements and other materials relied upon in the grounds of detention from part of such grounds and they have to be supplied to the detenu within the time limited under clause (5) of Article 22 and section 3 sub section (3) of COFEPOSA Act, but even if that be not the correct view, there is little doubt that copies of these documents. statements and other materials should be available with the detaining authority and they should be supplied without unreasonable delay as soon as the detenu makes a request for the same. The time of 12 days taken up by the Assistant Collector of Customs was therefore unreasonably long for which no explanation at all was forthcoming from the detaining authority. We must in the circumstances hold that there was unreasonable delay on the part of the detaining authority in supplying to the detenu copies of the documents, statements and other materials relied upon in the grounds of detention and the continued detention of the detenu was accordingly illegal and void and the detenu was entitled to be released forthwith from detention. It is also necessary to point out that there was unreasonable delay in considering the representations of the detenu dated 9th June 1980 and 26th June 1980. It is now settled law that on a proper interpretation of clause (5) of Article 22, the detaining authority is under a constitutional obligation to consider the representation of the detenu as early as possible, and if there is unreasonable delay in considering such representation, it would have the effect of invalidating the detention of the detenu. Vide; V. J. Jain vs Pradhan (1) here in the present case the representation of the detenu dated 9th June 1980 was received by the Deputy Secretary on 14th June 1980 while the representation dated 26th June 1980 was received on 30th June 1980 and yet no decision was taken on these representation of the detenu until 14th 655 July 1980. The question is whether this delay could be said to have been reasonably explained by the detaining authority. The representation of the detenu dated 9th June 1980 was received in the Mantralaya on 14th June 1980 but that day and the next day being holidays, it came to the hands of the concerned officer only on 16th June 1980, and a copy of it was forwarded to the Assistant Collector of Customs for his remarks on 23rd June 1980. It is difficult to see to see why the concerned officer in the Mantralaya should have taken seven days for just forwarding a copy of the representation of the detenu to the Assistant Collector of Customs. There is no explanation at all for this delay in any of the affidavits filed on behalf of the detaining authority. The Collector of Customs thereafter forwarded his remarks on 30th June 1980 and here again there was a delay of seven days for which no explanation is forthcoming. The remarks of the Assistant Collector of Customs were received by the concerned officer on 2nd July 1980 and there after the representation started on its upward journey from the Undersecretary to the Chief Minister. It appears that by this time the second representation of the detenu dated 26th June 1980 was also received by the State Government and hence this representation was also subjected to the same process as the representation dated 9th June, 1980. It was only on 11th July 1980 that these two representations dated 9th June 1980 and 26th June 1980 came to be considered by the Under Secretary and he made a noting on the file recommending that the request of the detenu for revocation of the order of detention may be rejected, and this noting was approved by the Deputy Secretary as well as the Secretary on the same day and the Chief Minister endorsed it on 14th July 1980. It is indeed difficult to see how these two representations of the detenu could be rejected by the detaining authority when the request of the detenu for copies of the tapes was pending and the Secretary to the State Government in fact made a noting on 11th July 1980 that the copies of the tapes must be given to the detenu by the Customs Department. But even if we take the view that it was not necessary for the detaining authority to wait until after the copies of the tapes were supplied to the detenu, it is difficult to resist the conclusion that the detaining authority was guilty of unreasonable delay in considering the two representations of the detenu, and particularly the representation dated 9th June 1980. This ground is also in our opinion sufficient to invalidate the continued detention of the detenu. These were the reasons for which we allowed the writ petition and directed immediate release of the detenu from detention. We may point out that we have not pronounced upon the validity of the order of detention but merely held the continued detention of the detenu 656 to be illegal on the ground of non compliance with the requirements of clause (5) of Article 22 and sub section (3) of section 3 of the COFEPOSA Act, and therefore nothing that is said by us in this judgment should be considered as an expression of opinion on the validity or correctness of the order of detention as made. We are unable to appreciate as to why the Customs Department has not yet filed a charge sheet against the detenu for prosecuting him in respect of the incidents referred to in the grounds of detention even though more than six months have passed since then. If the investigation reveals that the detenu was responsible for smuggling or abetting the smuggling of goods in contravention of law, the Customs officers should adopt criminal proceedings against the detenu as quickly as possible and try to bring him to book in the criminal courts. We hope and trust that there will be no unreasonable delay on the part of the Customs officers in completing the investigation of the cases against the detenu and prosecuting him in the criminal courts if the evidence gathered by them in the course of the investigation justifies such a course. N.V.K. Petition allowed.

The detenu was taken under detention on 4th June, 1980 by an order of detention dated 27th May, 1980. The order of detention recited that with a view to preventing him from smuggling goods and abetting the smuggling of goods it was necessary to detain him. After detention he was also served on the same day, the grounds of detention. The grounds of detention referred to several documents and statements including two tape recorded conversations. The detenu addressed a letter dated 6th June, 1980 asking for all statements, documents and material to enable him to make an effective representation against his detention. The detenu also sent a representation dated 9th June, 1980 to the Deputy Secretary once again requesting him to supply immediately the documents etc. relied upon in the grounds of detention and to furnish the transcripts of the tapes as also to produce the original tapes, so that he could prove that the voice recorded on the tapes was not his. The detenu addressed another representation dated 26th June, 1980 to the Chairman of the Advisory Board, the Central Government and the Deputy Secretary to the State Government praying for revocation of the order of detention, wherein he pointed out that by his letters dated 5th, 9th and 14th June, 1980, he had requested for the tapes to be supplied to enable him to prove that the voice recorded on the tapes was not his and that this request had not been complied with and in the circumstances the hearing of the case before the Advisory Board would be futile. Meanwhile the Investigating Officer of the Customs Department was deputed to the Central Prison alongwith the tapes, and the tapes were played in the presence of the detenu and the Deputy Superintendent of the Central Prison on 8th July, 1980. The representations of the detenu were examined by the government, who by their letter dated 15th July, 1980 rejected the representations and declined to revoke the order of detention. In the writ petition under Article 32 of the Constitution filed by the mother of the detenu it was contended: (1) that the detaining authority did not serve on the detenu alongwith the grounds of detention, copies of the statements, documents and tapes referred to in the grounds of detention and it could not, therefore, be said that the grounds of detention were duly served 641 on the detenu as required by sub section (3) of section 3 of the COFEPOSA Act and clause (5) of Article 22 of the Constitution, and (2) that the detaining authority did not supply copies of such statements, documents and materials until 11th July, 1980 and on that day also, what were supplied were merely copies of the statements and documents and not copies of the tapes which were supplied only on 20th July, 1980 and that this delay was wholly unjustified and the detenu was thus denied the earliest opportunity of making an effective representation and consequently the continued detention of the detenu was illegal and void. Allowing the writ petition. ^ HELD: 1. There was unreasonable delay on the part of the detaining authority in supplying to the detenu copies of all the relevant documents, and therefore his continued detention was illegal and void. The detenu was entitled to be released forthwith from detention. [654 F] 2. The power of Preventive detention can be justified only in the interest, of public security and order and it is tolerated in a free society only as a necessary evil. The power to detain without trial is an extraordinary power constituting encroachment on personal liberty and it is the duty of the courts to ensure that his power is exercised strictly in accordance with the requirements of the Constitution and the law, the courts always leaning in favour of upholding personal liberty. [646 F] 3. The Constitution has while conceding the power of preventive detention, provided procedural safeguards with a view to protecting the citizen against arbitrary and unjustified invasion of personal liberty and the courts have always zealously tried to uphold and enforce these safeguards. [646 H] 4. If the detaining authority wants to preventively detain a smuggler it can certainly do so, but only in accordance with the provisions of the Constitution and the law and if there is a breach of any such provision, the rule of law requires that the detenu must be set at liberty, howsoever wicked or mischievous he may be. [647 B] 5. Whenever a petition for a writ of habeas corpus has come up before this Court, it has almost invariably issued a rule calling upon the detaining authority to justify the detention and when a rule is issued, it is incumbent on the detaining authority to satisfy the court that the detention of the petitioner is legal and in conformity with the mandatory provisions of the law authorising such detention. [647 G] Naranjan Singh vs State of Madhya Pradesh AIR 1971 SC 2215, Sheikh Hanif Gudma Majhi & Kamal Saha vs State of West Bengal , Dulal Roy vs The District Magistrate, Burdwan & Ors. ; , Nazamuddin vs The State of West Bengal ; , Mohd. Alam vs State of West Bengal ; , Khudiram Das vs State of West Bengal & Ors. ; , referred to. On a proper construction of clause (5) of Article 22 read with section 3, sub section (3) of the COFEPOSA Act, it is necessary for the valid continuance of detention that subject to clause (6) of Article 22 copies of the documents, statements and other materials relied upon in the grounds of detention should be furnished to the detenu alongwith the grounds of detention or in any event not later than five days and in exceptional circumstances and for reasons to be recorded in writing, not later than fifteen days from the date of detention. If this requirement of clause (5) of Article 22 read with section 3, sub section (3) 642 is not satisfied, the continued detention of the detenu would be illegal and void. [650 H 651B] 7. The right to be supplied copies of the documents, statements and other materials relied upon in the grounds of detention without any undue delay flows directly as a necessary corollary from the right conferred on the detenu to be afforded the earliest opportunity of making a representation against the detention, because unless the former right is available, the latter cannot be meaningfully exercised. This would seem to be clear on a fair interpretation of clause (5) of Article 22. [652 E F] Ramachandra A. Kamat vs Union of India ; referred to. In the instant case the detenu asked for copies of the documents, statements and other materials relied upon in the grounds of detention by his letters dated 6th June, 1980 and 9th June, 1980 and he also complained about non supply of such copies in his representation dated 26th June, 1980 but it was only on 11th July, 1980 that such copies were supplied to him and even then the copies of the tapes were not furnished until 20th July, 1980. There was thus a delay of more than one month in supply of these copies, and the burden of satisfactorily explaining this delay and showing that there was sufficient cause for it was on the detaining authority. The delay of 12 days i.e. from 12th June, 1980 until 24th June, 1980 has not been satisfactorily explained either in the affidavit of the Deputy Secretary to the State Government or in any affidavit filed by the Assistant Collector of Customs. There was, therefore, an unreasonable delay on the part of the detaining authority in supplying to the detenu copies of the documents, statements etc. relied upon in the grounds of detention. The continued detention of the detenu was accordingly illegal and void and he was entitled to be released forthwith from detention. [652 H 653B, G; 654 F] 8. The representation of the detenu dated 9th June, 1980 was received by the Deputy Secretary on 14th June, 1980 while the representation dated 26th June, 1980 was received on 30th June, 1980 and no decision was taken on these representations of the detenu until 14th July, 1980. There is no explanation at all for this delay in any of the affidavits filed on behalf of the detaining authority. This is sufficient to invalidate the continued detention of the detenu. [654 655 C, G] 9. The Customs Department has not filed a charge sheet against the detenu for prosecuting him in respect of the incidents referred to in the grounds of detention even though more than six months have passed. There should be no unreasonable delay on the part of the Customs authorities in completing the investigation of the cases against the detenu and prosecuting him in the criminal courts if the evidence gathered by them in the course of the investigation justifies such a course. [656 B C]

Appeal No. 4 of 1956. Appeal by special leave from the judgment and order dated June 10, 1953, of the Calcutta High Court in Income tax Reference No. 39 of 1952. K. N. Rajagopal Sastri, R. H. Dhebar and D. Gupta, for the appellant. B. Sen, P. K. Ghosh and P. K. Bose, for the respondent. April 20. 'The following Judgments were delivered SINHA, J. The question for determination in this appeal by special leave, is whether the assesses, the Calcutta National Bank Ltd. (in liquidation), is liable to Excess Profits Tax in respect of Rs. 86,000/ , which it realised by way of rent of the building at its headquarters in Calcutta, during the accounting period 663 ending March 31, 1946. The Department and the Income tax Appellate Tribunal answered the question in the affirmative. On a statement of the case to the High Court under section 66(1) of the Income tax Act, a ' Bench of the Calcutta High Court (Chakravartti, C. J., and Lahiri, J.) answered it in the negative, reversing the orders of the Department and the Tribunal. As the Bench refused to grant the necessary certificate of fitness, the appellant applied for, and obtained, special leave to appeal, by an order of this Court dated September 27, 1954, The facts of this case are short and simple. The assessee was a banking company in a large way of business. It owns a six storeyed building where its offices are located on the ground floor and a part of the 6th floor, while the rest of the building is let out to tenants. The annual rental income derived from the portion let out, is about Rs. 86,000/ . The Tribunal found that the portion let out is about four to five times the floor area of the portion of the building occupied by the assessee for the purposes of its own business. By an order dated March 31, 1949, the Excess Profits Tax Officer assessed the respondent on the said rental income in respect of the accounting period ending March 31, 1946, under sub r. (4) of r. 4 of Schedule I to the Excess Profits Tax Act 1940 (XV of 1940) (which hereinafter will be referred to as the Act). On appeal by the respondent, the Appellate Assistant Commissioner, by his order dated January 3, 1950, upheld the assessment on the basis of sub r. (2) of r. 4 of Schedule I to the Act. He pointed out that the assessee carries on banking business which includes holding investments, and thus, the rental in come in respect of its investments in immovable property, is included in its business income, even though it was not chargeable to income tax under section 10 of the Income tax Act. Income from securities, like shares and properties. , is chargeable to income tax under sections 8, 9 and 12 of the Act; but that head of income is chargeable under the Act as business profits. He also pointed out that the assessee had itself included the value of these assets in the computation of its capital, 664 for claiming standard profits. This had been done in If the previous years, and the assessee bank had accepted the basis and the computation of capital assets during the previous years. On a further appeal by the respondent to the Appellate Tribunal, the Tribunal held that there was no doubt that the premises were built with a view partly to housing the head office of the company, and partly for the purpose of being let out to tenants, and that it was an investment by the Bank in immovable property. The Tribunal also found that this was within the terms of the Memorandum of Association of the respondent company. Hence, by its order dated March 22, 1951, the Tribunal held that the letting out of so much of the building as was not occupied by the company itself for its own business, was a part of its business, and the rental income was, thus, liable to tax under the Act. It made a particular reference to sub r. (4) of r. 4 of Sch. I to the Act, though the Department appears to have also relied upon sub r. (2) of r. 4, aforesaid. Thereupon, the respondent got the Tribunal to state the case to the High Court, and the following question was accordingly referred to the High Court under section 66(1) of the Income tax Act: " Whether in this case the rental income from immovable property is part of the business income taxable under section 2(5) read with rule 4(4) of Schedule I attached to the Excess Profits Tax Act, 1940. " The matter was heard by the High Court with the result indicated above. Hence, this appeal by special leave. There is no doubt that excess profits are not chargeable under the Act unless the income falls within the ambit of business profits. Section 2(5) of the Act defines business" as under : business ' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture or any profession or vocation, but does not include a profession carried on by an individual or by individuals in partnership if the profits of the profession depend wholly or mainly on his or their personal qualifications unless such profession 665 consists wholly or mainly in the making of contracts on behalf of other persons or the giving to other persons of advice of a commercial nature in connection with the making of contracts: Provided that where the functions of a company or of a society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property, the holding of the investment or property shall be deemed for the purpose of this definition to be a business carried on by such company or society: Provided further that all businesses to which this Act applies carried on by the same person shall be treated as one business for the purposes of this Act;". The definition of " business " under the Act, is wider than the definition of that term under the Income tax Act (section 2(4)). Section 2 (19) of the Act defines " profits " as follows : " I profits ' means profits as determined in accordance with the First Schedule. " Section 2 (20) defines " standard profits " as follows:" Standard profits means standard profits as computed in accordance with the provisions of Section 6". And the charging section, section 4 of the Act, provides that in respect of any business to which the Act applies, excess profits, that is, profits during any chargeable accounting period, exceeding the standard profits, shall be charged, levied and paid. Section 5 of the Act provides as follows: " This Act shall apply to every business of which any part of the profits made during the chargeable accounting period is chargeable to income tax by virtue of the provisions of sub clause (1) or sub clause (ii) of clause (b) of sub section (1) of Section 4 of the Indian Income tax Act, 1922, or of clause (c) of that sub section : Provided that this Act shall not apply to any business the whole of the profits of which accrue or arise without British India where such business is carried on by or on behalf of a person who is resident 84 666 but not ordinarily resident in British India unless the business is controlled in India; Provided further that where the profits of a part only of a business carried on by a person who is not resident in British India or not ordinarily so resident accrue or arise in British India or are deemed under the Indian Income tax Act, 1922, so to accrue or arise, then, except where the business being the business of a person who is resident but not ordinarily resident in British India is controlled ' in India, this Act shall apply only to such part of the business, and such part shall for all the purposes of this Act be deemed to be a separate business; Provided further that this Act shall not apply to any business the whole of the profits of which accrue or arise in an Indian State; and where the profits of a part of a business accrue or arise in an Indian State, such part shall, for the purposes of this provision, be deemed to be a separate business the whole of the profits of which accrue or arise in an Indian State, and the other part of the business shall, for all the purposes of this Act, be deemed to be a separate business. " The First Schedule, which contains the rules for computation of profits, provides, in sub r. 4 of r. 4, as follows: "(4) In the case of a business which consists wholly or partly in the letting out of property on hire, the income from the property shall be included in the profits of the business whether or not it has been charged to income tax under Section 9 of the Indian Income tax Act, 1922, or under any other section of that Act. " Having set out the relevant provisions of the Act, the first question that arises for consideration, is whether the letting out of the promises in question can be said to be a business of the assessee bank. The definition of " business " is only an inclusive one, and includes any sort of trade, commerce or Manufacture. Can it be said that realization of income from its investments which may be either in shares, securities or in immovable properties, is not a part of the business of a banking corporation ? In my opinion, it will 667 be taking a very narrow view of the functions of a bank to hold that such activities are not within the ambit of the business activities of a bank. In the Memorandum of Association of the assessee bank, the objects of the company are stated to be: " (a) To carry on all kinds of banking business, that are generally carried on by Joint Stock Banks. " " (b) To carry on the business of banking in all its branches and departments, including borrowing, raising or taking up money, the lending or advancing money, securities or properties ; the acquiring, holding, issuing and dealing with investment of all kinds; the managing of properties " (c) To purchase, take on lease or in exchange or otherwise acquire any moveable or immoveable property which the Company may think necessary or convenient for the purpose of its business, and to construct, maintain and alter any buildings or works necessary or convenient for the purpose of the company." Apparently, the bank constructed the six storeyed building not only for its own use and occupation, but also, according to the finding of the Appellate Tribunal, for the major part, for the purpose of realising rent from tenants. Where land in a big city, like Calcutta, is taken for building purposes, it is common knowledge that erecting a multi storeyed building, is by itself an investment, besides affording accommodation for the bank to carry on and advertise its business, and house its head office and records. The High Court answered the question referred to, in the negative on the ground that though the income was derived from the holding of property, the fuilctions of the assessee company did not consist wholly or mainly in the holding of investments or other property, as required by the proviso to section 2(5) of the Act. Since the requirement of the first proviso to section 2(5) of the Act, was not satisfied, no question of the application of sub r. (4) of r. 4, could arise; and even if such a question could arise, the word " business " in that sub rule, must take its colour from the main provisions of the section. This conclusion was reached by 668 the learned Chief Justice, who delivered the opinion of the Court, by starting with the premise that for determining the nature of the income of the company, it was not necessary to consider the provisions of the definition of " business ", contained in the main clause of section 2(5), which was also assumed to be parallel to the connotation of the term " business " under the Indian Income tax Act. Having, thus, excluded, without giving any reasons why they had to be excluded, the provisions of the main clause of the definition of " business ", as contained in the Act, the learned Chief Justice addressed himself to the question whether the first proviso to the definition clause, which was in the nature of an additional provision, could govern the facts of the case, and bring it within the ambit of that kind of business to which the Act applied. The learned Chief Justice rightly pointed out that the first proviso is limited to incorporated bodies and had no reference to individuals. Then, the learned Chief Justice observed : " It is to be noticed that in the contemplation of this proviso, property is something different from investments, for it speaks of I investments or other property '. It is also to be noticed that if the requirements of the proviso are satisfied, the holding of investments or other property shall be deemed to be a business ', which implies that it is not really a business and, but for the special provisions made by proviso would not be within the general definition contained in the main clause ". It is doubtful whether these observations are entirely correct, but, as will presently appear, we are not so much concerned with the _proviso as with the main provisions of the definition clause (section 2(5) ). The conclusion of the learned Chief Justice may better be stated in his own words, as follows: " It appears to me that the first matter to which we must address ourselves in answering the question before us is: are the functions of the assessee company such that the holding of the building in question or buildings or other property and investments in general must be deemed to be its business for the purposes of the Excess Profits Tax Act under the first 669 proviso to section 2(5) ? In order that question may be answered in favour of the Revenue, it is necessary that the holding of investments or other property should be the only or the principal function of the assessee company. As I have said, the assessee company, is a banking company in a large way of business. It is hardly disputable, and indeed it was not disputed before us, that the holding of investments or other property was not its sole or primary occupation, much less the holding of the particular building in question". In my opinion, the aforesaid conclusion of the High Court suffers from two fundamental errors, namely,(1) that the main clause of the definition section is out of the way in determining the present controversy, and (2) that it was the proviso only which had to be considered in order to answer the question referred. In the first instance, the learned Chief Justice is not entirely correct in observing that the definition of the term "business" follows the definition of the same term in the Indian Income tax Act. As already observed, the definition under the Act, is wider than that under the Income tax Act, in so far as it includes certain types of profession or vocation. The scheme of the Act, as compared to that of the Income tax Act, will have to be considered presently, but it is enough to point out that the connotation of the term " business " under the Act, is wider than that of the same term under the Income tax Act. The learned Chief Justice set aside, from his consideration, the provisions of the main clause of section 2(5), and did not indicate his reasons for doing so. Ordinarily, the Court has first to consider whether the main clause of the defini tion of the term " business ", would govern the facts of the case. The, question of the application of the first proviso, which, it is common ground, is in the nature of an additional provision which brings within its ambit certain types of income (to use a neutral term) which would not otherwise have come within the terms of the main clause of the definition, can arise only if the Court first comes to the conclusion that the main clause of the definition is out of the way. I will 670 assume that the holding of investments or other pro property, is not the whole or main business of the Respondent Company. That assumption will put aside the first proviso aforesaid, but that does not by itself lead to the inference that the main provision of the definition clause, cannot be applied to the respondent. An argument on these lines was advanced, and was repelled by Lord Greene, M. R., in the case of Commissioners of Inland Revenue vs Desoutter Bros., Ltd. (1). In that case, sub section (4) of section 12 of the Finance (No. , which deals with Excess Profits Tax, was under consideration by the Court of Appeal. The learned Master of Rolls considered the question, and made the following observations which apply with full force to the arguments which found favour ,in the High Court: "The first argument is based on the language of Section 12(4) of the Finance (No. , which deals with Excess Profits Tax. The first Sub section speaks of the profits I arising in any chargeable accounting period from any trade or business to which this section applies '. It is in respect of those profits that the tax is exigible. It will be observed that the language only extends to the profits arising from I any trade or business '. Sub section (4) says I Where the functions of a company or society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property, the holding of the investments or property shall be deemed for the purpose of this section to be a business carried on by the company or society " I should have thought that the objects of that Sub section were manifest. In my view it was intended, and quite clearly intended, to bring into the net a type of corporation which otherwise would or might have escaped it. The commonest type of corporation with which the Sub section is dealing is what may be called a trust investment company, whose business is the holding of investments and deriving income from them. Such a corporation would not be said to be carrying on a 'trade or business ' within the meaning of (1) , 160. 671 Sub section (1). Anyhow, if it were not absolutely clear, Sub section (4) makes it quite certain that type of corporation is to be included, and its operations are to be regarded as the carrying on of a trade or business. That seems to me to be the real and sole object of Sub section (4)." " The argument really amounted to this: by implication the profits from investments or property held by any other type of corporation is excluded. I cannot begin to see the shadow of a foundation for any such argument. In my opinion it breaks down completely once the real significance of Sub section (4) is appreciated. " I respectfully adopt the reasoning and the conclusion arrived at by the Court of Appeal, extracted above. It follows that the first proviso to section 2(5) does not determine the controversy arising in this case. This conclusion completely displaces the ratio of the opinion of the High Court, but it does not answer the question referred to it. It has, therefore, to be considered whether the main definition clause in section 2(5) can come into, play in giving the answer to the question referred for the opinion of the High Court. The term " business " is a word of very wide, though by no means determinate, scope. It has rightly been observed in judicial decisions of high authority that it is neither practicable nor desirable to make any attempt at de limiting the ambit of its connotation. Each case has to be determined with reference to the particular kind of activity and occupation of the person concerned. Though ordinarily " business " implies a continuous activity in carrying on a particular trade or avocation, it may also include an activity which may be called I quiescent '. This is illustrated by the case which went up to the House of Lords in The Commissioners of Inland Revenue vs The South Behar Railway Co., Ltd. (1). In that case, the facts were these. Dowri to 1906, the South Behar Railway was held by the Res pondent Company and worked by another Company on behalf of the Secretary of State for India, the Respondent Company being entitled to a share in the (1) 672 profits in consideration of its having supplied funds and materials for the construction of the Railway. In 1906, the Respondent Company relinquished possession of the Railway to the Secretary of State, on the stipulation that until the option to purchase was exercised, a fixed annuity of pound 30,000 should be paid to the Company in lieu of the share of profits so far paid. After that arrangement in 1906, the Company did nothing but receive and distribute the said annuity to its share holders. It was held by the House of Lords that the Company was carrying on a trade or business, and was, therefore, liable to Corporation Profits Tax. The House of Lords, while affirming the decision of the Court of Appeal, observed that the finding of the Commissioners, which was reversed by the Court of Appeal., was not a finding of pure fact, but was an inference of law, derived from the specific facts found in the case, and that, consequently, the decision was open to review. The House of Lords, in upholding the decision of the Court of Appeal, observed that by the agreement of 1906, the Company 's income, which previously was a fluctuating income derived from the share of the profits, had been converted into a fixed annuity irrespective of the earnings of the Railway; and that the new arrangement did not materially affect the position of the Company as a business concern. The House of Lords approved of the decision in the case of the Commissioners of Inland Revenue vs The Korean Syndicate, Ltd. (1). In that case, a Syndicate was registered in 1905 as a Company for the purposes of acquiring and working concessions and turning them to account, and of investing and dealing with any moneys not immediately required. In 1905, the Syndicate acquired part of a right to a concession in Korea, which included a gold mine, but in 1908, it assigned its rights to another Company under an agreement of lease in consideration of certain royalties, but which were really a percentage of the profits in working the property. In 1911, the Syndicate placed in deposit at a bank, certain sums of money received from the sale of shares which had (1) 673 been obtained by the Syndicate in exchange for other shares. During the relevant period, the Syndicate 's activities were confined to receiving bank interest and royalties and distributing that income amongst its shareholders. Rowlatt, J. held that the Company was not carrying on a business. On appeal, it was held that the Syndicate was carrying on a business, and that the profits derived therefrom, were liable to Excess Profits Tax. In order to ascertain the business of a Company, its Memorandum has to be looked into. The Memorandum provides the key to what the business objects of the Company are, and it has further to be ascertained whether those objects are still being pursued. In the present case, the relevant clauses of the Memorandum of Association, have been set out, and there cannot be the least doubt that the managing of property and realisation of rents therefrom, was within the objects of the Company, if it found it necessary and convenient for carrying on its business. It may be that this line of business activity may not be the main part of its business, but even so, if reali sation of rent is one of the sources of business income to the Company, it has got to be included in the computation of its profits for the purposes of the Act. This becomes clear on a reference to sub r. (4) of r. 4, quoted above. But it has been contended that the words " wholly or partly " in the Rule, are in excess of the provisions of section 2(5), where, in tile first proviso, the words are " wholly or mainly ". The suggestion is that the rule, in so far as it substituted " Partly " for It mainly ", is in excess of the provisions of the statute. In my opinion, this argument is based on an assumption which is not well founded. As will presently appear from an examination and comparison of the provisions of the Act and the lncome tax Act, r. 4(4) does not necessarily derive its operative force from the first proviso to the main clause of the definition in section 2(5). The proviso, as already observed, is limited to an incorporated body of a particular type, and has reference to the " holding of investments or other property ". Rule 4(4) is of a more general application to 85 674 a " business which consists wholly or partly in the letting out of property on hire ". In the rule, a reference to section 9 of the Indian Income tax Act, also makes it clear that the rule is concerned with " property ". It is also clear that the basis for taxation of property under section 9 of the Income tax Act, is different from the basis of taxation under the Act, in respect of income from property, and the latter is irrespective of whether income from property has been the subject matter of charge under the Income tax Act. In this connection, a reference to the second proviso is also relevant in so far as it implies that a person may carry on businesses of different kinds, and all those different lines of business have, for the purposes of the Act, to be treated as one business. Thus, the Bank may be carrying on the business of holding deposits, securities and property, as also lending money on different kinds of securities. Its income from all those activities, would have to be taken into account in order to determine its total business profits. A similar question arose in the case of Punjab Co operative Bank, Ltd. vs Commissioner of Income tax, Punjab (1), which went up to the Judicial Committee of the Privy Council. In that case, the question arose whether the realisation of higher values by sale and purchase of shares and securities by the Bank, could be said to be business profits, and thus, taxable, under the Indian In., come tax Act. On behalf of the Bank, it had been contended throughout, without success, that the realisation of higher values by the sale of shares and securities, was not a separate business of the Bank, but was in the way of its business as a banking corporation which had to deal with money and credit, and that the Bank had always to have in its hands, cash and easily realisable securities to meet any probable demands by its depositors. But it had been found as a fact that the Bank had been selling shares and secu rities not only for the purpose aforesaid, but also for augmenting its reserve funds. It was held by the Judicial Committee that it had been rightly decided by the Department and by the High Court, on a (I) ; 675 reference, that the purchase and sale of shares and securities were a part of the banking business of the Company, and the profits, thus, realised were liable to income tax. Their Lordships of the Judicial Committee also observed that it was not necessary to establish that the Bank had been carrying on a separate business of buying and selling shares and investments in order to make profits thus made taxable. Once it is found that such transactions were entered into by the Bank not merely with a view to realisation or change of investments, but with a view to carrying on a business in the sense of earning profits, the Bank was really carrying on a business within the meaning of the Income tax Act. Following this decision of the Privy Council, this Court decided in the case of Sardar Indra Singh and Sons Ltd. vs Commissioner of Income tax, West Bengal (1) that the question whether a certain income is profit from business and not an appreciation of capital arising from a change of investment, depends Upon the answer to the further question whether that income was so connected with the carrying on of the assessee 's business that it could fairly be said that it is the profits and gains of the business in its normal working. It was not necessary further to show that the income had resulted from a course of dealing which, by itself, would amount to the carrying on of a business. In that case, the assessee company had, as one of its objects to carry on the business of financiers, and to purchase and sell stock, shares, business concerns and other undertakings. In carrying out that objective, the company held a large number of shares in other companies, and was realising its holdings and acquiring new shares. In the background of those facts, it was held by a Bench of five Judges of this Court, that the profits made from the sale of investments and the making of fresh investments, were assessable to income tax. In the course of his judgment, Patanjali Sastri, C. J., speaking for the Court, made the following very pertinent observations:,, The principle applicable in all such cases is well (1) ; , 170,171. 676 settled and the question always is whether the sales which produced the surplus were so connected with the carrying on of the assessee 's business that it could fairly be said that the surplus is the profits and gains of such business. It is not necessary that the surplus Should have resulted from such a course of dealing in securities as by itself would amount to the carrying on of a business of buying and selling securities. It would be enough if such sales were effected in the usual course of carrying on the business or, in the words used by the Privy Council in Punjab Co operative Bank Ltd. vs Income Tax Commissioner, Lahore (1), if the realisation of securities is a normal step in carrying on the assessee 's business. Though that case arose out of the assessment of a banking business, the test is one of general application in determining whether the surplus arising out of such transactions is a capital receipt or a trading profit. " But the learned counsel for the Respondent Bank argued that in the present case, the earning of rental income by the Bank could not come within section 10 of the Income tax Act, and the definition of " business " in the Act and in the Income tax Act, in so far as they are relevant to the present case, must be the same. In other words, it was contended that as realisation of rents from house property of the Bank, could not come within the purview of section 10 of the Income tax Act, it could not also come within the purview of the Act we are now concerned with. In my opinion, there is a fallacy in this argument. The scheme of the two Acts is not the same. The Income tax Act has brought within its taxing ambit, not only income from what is ordinarily called business, but income from several other sources. Sections 3 and 4 of the Income tax Act render liable to tax " all income, profits and gains from whatever source derived ", and section 6 of the Income tax Act, classifies the different heads of income, profits and gains into (1) salaries, and the manner of charging the same is laid down in section 7 ; (2) interest on securities, and the manner of charging the tax is laid down in section 8 (3) income. from property, to be taxed in (1) ; 67 accordance with the provisions of section 9; and (4) profits and gains from business, profession or avocation, to be taxed in accordance with the provisions of section 10. The fifth and the sixth heads of income may be omitted from the present discussion. On the other band, under the Act in question, only tax on excess profits, arising out of certain businesses, has been imposed. The Act is not concerned with all kinds of income, but only with profits if made beyond a certain standard laid down under the Act, from business described in section 5. Under the Act, the ambit of the term " business " covers the fourth head, though not the whole of it, as also the second and the third heads, set out above, again though not, perhaps, the whole of them. It is not, therefore, correct to say that what would not come within the ambit of section 10 of the Income tax Act, would also not come within the ambit of the Act. On a proper construction of the provisions of the Act, it has got to be held that what has been covered by sections 8, 9 and 10, at least in parts, of the Income tax Act, comes within the purview of the Act. This is not intended to be a complete statement of the comparative ambits of the two Acts, but it is enough to dispose of the argument that business, as understood tinder the Act, is completely covered by the provisions of section 10 of the Income tax Act. In this connection, another argument advanced by the learned counsel for the respondent, as an additional reason for not treating rental income as Coming within the purview of the Act, may now be considered. It was argued that the first proviso to section 2(5), set out above, would become redundant if rental income were to be covered by the main clause of the definition. This argument again ignores some of the crucial words of the proviso. It speaks only of " holding of investments or other property ", which is not the same thing as dealing with shares, investments or other property. This proviso was, perhaps, inserted out of abundant caution to repel arguments, like those advanced in the case of The Commissioners of Inland Revenue vs The Tyre Investment Trust Ltd. (1) In that case, the Respondent Company was incorporated in 1917, with the (I) 678 main objects of acquiring and holding shares, etc., and was formed mainly with a view to acquiring shares in two foreign companies and selling them to an English Company which was likely to be interested in them. After the Respondent Company had purchased the shares, it took an active interest in the affairs of those two companies, and in 1920, negotiations were proceeding for the sale of those shares. The Company was assessed to Excess Profits Duty. On appeal, the Special Commissioners accepted the argument on behalf of the Company that it was not carrying on a trade or business within the meaning of the taxing statute, and that it was only a holding company and stood in the same position as an individual who had acquired and held investments. On appeal by the Revenue, it was held in the King 's Bench Division that the principal business of the Company consisted of making investments, and was, therefore, liable to Excess Profits Duty. In support of the second branch of his argument that rental income was not included in " business ", the learned counsel for the respondent called our attention to the decision of this Court in The United Commercial Bank Ltd., Calcutta vs The Commissioner of Income tax, West Bengal, (1) with special reference to the observations at p. 97 to the effect that various heads of income, profits and gains, under the Income tax Act, must be held to be mutually exclusive, each head having been meant to cover income from a particular source. The case before their Lordships was concerned with the question of set off of the carried over loss of the previous year. That case was not in any way concerned with the provisions of the statute now before us. It was concerned only with the scheme of the Income tax Act, with particular reference to the classification of income into different heads. That case does not throw any light on the interpretation of the term " business ". In view of the considerations set forth above, it must be held that the realisation of rental income by the assessee Bank, was in the course of its business in (1) ; 679 prosecution of one of the objects in its Memorandum it was, therefore, liable to be included in its business profits, and thus, was assessable to Excess Profits Tax. The appeal must, therefore, be allowed with costs here and below. KAPUR, J. I have read the judgment prepared by my learned brother Sinha, J., but I respectfully disagree with it and my reasons are these: The sole question for decision is whether a sum of Rs. 86,000/ received by the respondent during the chargeable accounting period ending March 31, 1946, as rent of its building at Calcutta can be included in the profits of its business for the purposes of Excess Profits Tax. The respondent the assessee was a banking company which at one time did considerable banking business but it has gone into liquidation. it owned a six storeyed building in a commercial locality of Calcutta. During the relevant period it was occupying the ground floor and a portion of the sixth floor and had let out the rest to tenants for which it received the sum of Rs. 86,000/ as rent, which is the amount Dow in controversy The liability of this sum to Excess Profits Tax depends upon the interpretation of the relevant provisions of the Excess Profits Tax Act Act XV of 1940) (which for the sake of brevity will hereinafter be termed the Act). The object of the Act was to impose a tax on excess profits which as the very name implies must have reference to and be the result of a business activity. Such profits for the purposes of the Act were to be computed in the manner provided by the Act. The scheme of the Act is as follows: Section 2 is the definition section ; section 4 the charging section and section 5 deals with the application of the Act. Section 6 is a provision for determining standard profits and their computation. Excess Profits Tax was chargeable on the excess of profits during the chargeable accounting period over the standard profits, i.e., profits during the standard period. Section 5 of the Act provides: This Act shall apply to every business of which 680 any part of the profits made during the chargeable accounting period is chargeable to income tax by virtue of the provisions of sub clause (i) or sub clause (ii) of clause (b) of sub section (1) of section 4 of the Indian Income tax Act 1922. . . " The charging section under the Act is section 4, the relevant portion of which is: "Charge of tax: (1) Subject to the provisions of this Act, there shall, in respect of any business to which this Act applies, be charged, levied and paid on the amount by which the profits during any chargeable accounting period exceed the standard profits. . Thus the Act applies to every business, any part of the profits of which are chargeable to income tax (section 5) and in respect of any business to which the Act is applicable, excess profits tax shall be chargeable on the amount by which the profits during the charge. able accounting period exceed the profits during the standard period (section 4). It is in respect of those profits that the tax is exigible. In order to determine whether income received during a chargeable accounting period is for the purposes of the Act " profits " arising out of " Business " or not it becomes necessary to examine what these words, i.e., " Business " and " profits " mean. Section 2(5) of the Act defined " Business " as follows: " Business ' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture or any profession or vocation, but does not include a profession carried on by an individual or by individuals in partnership if the profits of the profession depend wholly or mainly on his or their personal qualifications unless such profession consists wholly or mainly in the making of contracts on behalf of other persons or the giving to other persons of advice of a commercial nature in connection with the making of contracts: Provided that where the functions of a company or of a society incorporated by or under any enactment consists wholly or mainly in the holding of investments or other property, the holding of the investments or property shall be deemed for the purpose of 681 this definition to be a business carried on by such company or society: Provided further that all business to which this Act applies carried on by the same person shall be treated as one business for the purposes of this Act ". The definition of " business " in the main section, i.e., section 2(5) is analogous to the definition of " business " as given in section 2(4) of the Income Tax Act; but proviso (1) to section 2(5) of the Act enlarges the scope of the word " business" in the case of companies and societies incorporated under any enactment. The " words " deemed to be ". make something " business which otherwise it would not have been. In the case of an incorporated company therefore business under tile Act is not merely any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture but also that which is deemed to be business under proviso (1) which makes the holding of investments or other property by an incorporated Society or company business if one of the following two conditions is fulfilled, e.g., (1) If its functions consist wholly or mainly in the holding of investments; or (2) If its functions consist wholly or mainly in the holding of other property. It is manifest from this that in the absence of the proviso (1) to section 2(5) of the Act the word " business " would comprise no function beyond what it comprises under the Income Tax Act and. such functions as the holding of investments or the holding of other property would escape the operation of the Act. The heads of income falling under section 6 (ii), 6 (iii) and 6 (v) of the Income Tax Act, i.e., of interest on securities, and income from property and income from other sources are not business in the Income tax Act and would not be business within the Act. This Court in United Commercial Bank Ltd. vs Commissioner of Income tax (1) held that the heads of income mentioned in section 6 of the Income tax Act are mutually exclusive, each head being specific to cover the item (1) [1958]S.C.R. 79. 86 682 arising from a particular source and therefore even if securities are held as trading assets or dealt with in the course of a business by a banker or a dealer in securities the interest must be charged and computed under the head " Interest on securities" under section 8 of the Income tax Act and not as business profits under section 10 of that Act. This wider connotation of the word " business" in the Act was clearly intended to bring within its net those incorporated societies and companies which otherwise would or might have escaped it. One such company would be a trust investment company whose business is the holding of investments and getting profit therefrom. Such a company cannot be said to be carrying on business, i.e., any trade, commerce or manufacture within the meaning of the main provision, i.e., section 2(5) but it is the proviso which makes it clear that type of a, company is included and its operations are to be regarded as carrying on of 'a " business ". See also COmmissioners of Inland Revenue vs Desoutter Bros., Ltd. (1). Another such company or society would be a housing society or company which owns houses for the purpose of letting on rent. Such a company or society also cannot be said to be carrying on business within the definition in the main sub section (5) of section 2. Under proviso (1) however that class of company or society would also be deemed to be carrying on " business ". In both these cases their profits would be chargeable to excess profits tax. The word " profits " in section 2(19) of the Act means ,,profits as determined in accordance with the First Schedule" which provides the method of computation of" profits", Rule 4 of this Schedule deals with income from investments and is as follows: "(SEE SECTION 2(19) ) Rules for the computation of profits for purposes of Excess Profits Tax 1. . . . . 2. . . . . 3. . . . . 4.(1) ,Income received from investments shall be included in the profits in the cases and to the (1) , 160. 683 extent provided in sub rules (2), (2A) and (4) of this rule and not otherwise. In the case of the business of a building society, or of a money lendidg business, banking business, insurance business or business consisting wholly or mainly in the dealing in or holding of investments, the profits shall include all income received from investments, whether or not such income is included in the profits charged under section 10 of the Indian Income Tax Act, 1922, or is charged under any other section of that Act, or has been subjected to deduction of tax at source or is free of or exempt from income tax ". In the case of a business part of which consists in banking, insurance or dealing in investments, not being a business to which sub rule (2) of this rule applies, the profits shall include all income received from investments held for the purpose of that part of the business, being income to which the persons carrying on the business are beneficially entitled ". Sub rule (1) deals with business which consists wholly or mainly in the dealing in or holding of investments in the case of various kinds of companies mentioned and sub rule (2A) deals inter alia with banking business. The respondent being a banking company its business essentially consists in dealing with money and credit. Such a company has always to keep cash or realizable securities and other realisable investments in order to meet withdrawals by depositors and the holding of such securities and other investments would be the holding of " investments " and that is its normal and main activity. Punjab Co operative Bank Ltd. vs Commissioner of Income tax, Punjab (1). See also section 277F of the Indian Companies Act which is now a part of the Banking Companies Act. Therefore the respondent qua the holding of investments of this kind, was carrying on business under proviso (1) to section 2(5) of the Act but it is not that kind of business which is the subject matter of controversy in this appeal. What we have to decide is was the income received as rents from the portion of the respondents ' (1) 684 Calcutta building which was not required by the respondent for its own purposes and let out on hire profit within section 2(19) and chargeable under section 4 of the Act. Two arguments were addressed in favour of the contention that such income was profits of business within the Act: (1) that the laying out of money in a multi storeyed building was itself an investment and (2) that even if the business consisted partly in letting out of property the income from that property was profit within the Act. In support of the first submission it was argued that one of the objects in Memorandum of Association was the acquisition of immoveable property which the company may think convenient for the purpose of its business and therefore the construction of a multistoreyed building would itself be an investment. Reference was made to cl. (e) of the Memorandum of Association which relates to acquisition of moveable and immoveable property. This clause is as follows:" (e) To purchase, take on lease or in exchange or otherwise acquire any moveable or immoveable property. . . . which the Company may think necessary or convenient for the purpose of its business, and to construct, maintain and alter any building or works necessary or convenient for the purpose of the Company ". Now this argument loses sight of the fact that the Legislature has chosen to use two words " investments " and " other property " with a disjunctive " or " in between. To both these words a meaning must be assigned because it cannot be said that one or the other of them is redundant or they mean the same thing. "Investments" has been defined thus: " something acquired as a result of laying out money is an investment: Commissioners of Inland Revenue vs ' Rolls Royce Ltd. (1) but this general test as a test was not accepted in a later case, Commissioners of Inland Revenue vs Desoutter Bros. Ltd. (2) at p. 161 where Lord Greene said: " Speaking for myself, I am always disinclined to (I) (2) , 160. 685 accept any general definition or test for the purpose of solving this type of question. The question whether or not a particular piece of income is income received from an investment must, in my view, be decided on the facts of the case". In every case the facts have to be ascertained and then the question can be determined. whether the profits arising from a particular function are business profits within the Act or not. As above stated the essential function of a banking company consists in money and credit and to carry on such functions it has to hold investments which under the Income tax Act would fall under sections 8 and 12. See also section 277F of the Companies Act of 1913 which is now incorporated in the Banking Companies Act. Property is a word of wide connotation and ' includes moveable and immoveable properties, all interests therein and even investments would fall within that word but in the context it would not comprise " investments ". If a Banking Company as in the present case constructs a multi storeyed building used a part of it and lets out the rest it cannot be said 'to carry on " business " unless its main function is the holding of property and we have already seen that the main function of a Banking Company is dealing in money or credit and for that purpose it holds investments in the form of easily realisable securities. Merely because for the carrying out of its functions a Banking Company constructs a building its functions will not change from that of a Banking Company into one of a company engaged in the letting out of property on hire. As the Excess Profits Tax is a taxing measure and the object of the Act also is to tax excess profits it is reasonable to say that the words " investment " and " property " as used in the case of a Banking Company are used. in the same sense as they are used in the Income tax Act but if their holding by the company is its sole or main function then they will be deemed to be business so as to make the income derived therefrom chargeable to excess profits tax even if otherwise they 686 would not have been so chargeable. The two enactments are in pari materia and are intended to charge tax on income, profits and gains only the Act is confined to " profits " of " business" as therein defined and income tax is chargeable on all incomes, profits and gains. If the mere owning of immoveable property and letting out that portion which was not needed for its own use by a company was intended to be covered by the definition then the use of the word wholly or mainly would be wholly redundant. In construing the proviso effect has to be given to every word used. The word " functions " is defined in the dictionary to mean " activities appropriate to any business" ' and if that is substituted in the proviso to section 2(5) it would read " where the activities appropriate to any business. . consist wholly or mainly in the holding Of investments or other property ". So read, can it be said that the activities appropriate to the business of a banking company consists wholly or mainly in the holding of a multi storeyed building or such other property for the purpose of letting out the unused portion on hire. Obvious answer to this question would be in the negative. It is manifest that rents received from the multi storeyed property are not income received from a " business " within the Act. It is not a trading receipt in the case of banking company. Under the Income tax Act it falls under section 9 and there is nothing to indicate in the definition of the word " business " as given in the main portion of section 2(5) of the Act that it has a different complexion there. In the case of hotel proprietors it has been held that compensation paid by the Crown for requisitioning, during the war, of hotel premises is not its trading profits. Salisbury House Estate Ltd. vs Fry (1) ; Mellows vs Buxton Palace Hotel Ltd. (2 ). Even under the enactment imposing Profits Tax corresponding to our Excess Profits Tax it was held not to be income receivable from "investments or other property". Commissioners of Inland Revenue vs Buxton palace Hotel Ltd. (3). (1) (I 930) ; (2) (3) 333. 687 But it was urged that sub r. (4) of r. 4 of Schedule I lays down a different method of computation and qualifies the qualities of a business when it relates to holding of property. Sub rule (4) of r. 4 is as follows: " In the case of a business which consists wholly or partly in the letting out of property on hire, the income from the property shall be included in the profits of the business whether or not it has been charged to income tax under section 9 of the Indian Income tax Act, 1922, or under any other section of that Act". But before this rule becomes applicable the functions of the company have to fall within the definition of " Business " as given in the Act. The definition Schedule I is confined to computing of profits and has relation to section 2(19) wherein it is mentioned. It cannot be used to affect the quality of the word " business " as used in the Act. It only means that when the functions of a company, i. e., " the activities appropriate to any business " consist wholly or mainly in the holding of " other property " then in the case of that portion of the business which wholly or partly consists in the letting of property for hire the income from the property shall be included in " profits " in spite of the fact that the income has been assessed under section 9 of the Income Tax Act. It is a far step from saying that the definition of " business " has been modified by sub r. (4) of r. 4. It relates to a business of letting out of property. The word " business " can either mean what is contained in the main provision in section 2 (5) or the extended meaning given by the first proviso of that section. In either case it is inapplicable to the case of the respondent. It cannot be said that letting out of property is either wholly or even partly " business of the respondent. In my view the income received from rents of the portion of the building let out on hire, i. e., Rs. 86,000/ , does not fall within the word " profits " as used in the Act and is not chargeable to Excess Profits Tax. The judgment of the High Court is therefore sound and I would dismiss this appeal with costs. 688 HIDAYATULLAH, J. I have had the advantage of reading the judgments of my learned brothers, Sinha and Kapur, JJ. I agree with Sinha, J., that the appeal must be allowed with costs here and below. The question which was referred for the opinion of the Calcutta High Court was whether in this case rental income from immovable property was part of the business income taxable under section 2(5) read with r. 4 (4) of Sch. I attached to the Excess Profits Tax Act, 1940. In my opinion, the question must be answered in the affirmative for the following reasons. The Calcutta National Bank, Ltd. (in liquidation) hereinafter called the Bank, was doing business as a, bank prior to going into liquidation. Its income, it appears, was also subject to excess profits tax in the past, and we are concerned in the present case with the chargeable accounting period ending March 31, 1946. The Bank had constructed a six storeyed building, of which it occupied the ground and the top floors. The rest of it was rented out, and in the chargeable accounting period, rents totaling Rs. 86,000/ were received by the Bank. The question was, as already stated, whether this rental income was chargeable to excess profits tax under the Act. According to Kapur, J. the renting out of a building was not the business of the Bank within the definition of 'business. ' in the Act. This income, therefore, was not properly assessable to excess profits tax. Sinha, J.holds the contrary view. Under the Act, the charge of tax. is laid on any business to which the Act applies. The Act does not define I business ' exhaustively, but shows what may be included in it. The definition follows to a point the definition given in the Indian Income tax Act, but by a proviso which enlarges its scope, provides as follows: " Provided that where the functions of a company or of a society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property, the holding of the investments or property shall be deemed ?or the purpose of this definition to be a business carried on by such company or society." 689 The charging section is section 4, and it, shortly, provides that the charge is laid on the amount by which the profits in a chargeable accounting period exceed the standard profits of a business. According to another definition, "I profits " mean profits as determined in accordance with the First Schedule of the Act. In the schedule which is enacted as part of the Act, r. 4 (4), to which reference has been made in the question, reads as follows: " In the case of a business which consists wholly or partly in the letting out of property on hire, the income from the property shall be included in the profits of the business whether or not it has been charged to income tax under section 9 of the Indian Income tax Act, 1922, or under any other section of that Act. " The difference between the definition of I business ' and the rule above quoted is that while the former mentions that the business must be wholly or mainly holding of investments or other property, the rule says that if the business consists wholly or partly of letting out of property, the income of the property shall be included in the profits. Kapur, J., is of the opinion that the business of the Bank being quite different, the rule cannot be made applicable, because the definition requires that the assessee 's business should be wholly or mainly the holding of investments or other property. He also thinks that there is neither holding of an investment nor of property as investment. The definition of the term I business ' in the Act is helpful where it applies, but not being an exhaustive one. , it cannot shut out something which can be appropriately described as a business. Even the opening words of the definition show that it is meant to cover most of the activities designed to produce income or profits or gain. Under the Memorandum of Association, the Bank can acquire property, just as it acquires investments for purposes of its business and even otherwise. Clause (e) enables the Bank to purchase, take on lease or in exchange or otherwise acquire any moveable or immoveable property, which the Bank 87 690 may consider necessary or convenient for the purpose of its business and to construct, maintain and alter any buildings or works necessary or convenient for the purpose of the Bank. The acquisition of a sixstoreyed building was, therefore, within the terms of the Memorandum, and the only question is whether the income from such building, if rented out, can be taken as profits of the Bank for purposes of excess profits tax. The definition mentions the holding of investments or other property, and the words " other property " must necessarily take their colour from what precedes, that is to say, " investments ". The holding of other property must itself be investment for earning profits; otherwise, the definition does not apply. The word I investments ' is a word of large import. In one sense, every mode of application of one 's money intended to yield a return by way of interest, income or profit is investment. When the Bank builds a building more than necessary to house itself and with a desire to earning rents from it, it cannot but be stated that the building was constructed as an investment, or in other words, the Bank was holding " other property " within the meaning of the definition, in addition to the investments which it is the normal business of the Bank to hold. In my opinion, the income from the property would be regarded as profits from property held as investment, and the profits will have to be calculated, as laid down in Sch. 1, r. 4(4). The only difficulty is in the change of language between the definition and the rule, inasmuch as the former speaks of the business which is wholly or mainly the holding of investments or other property, and the latter speaks of a part of the business being the letting out of property. Kapur, J., is of the view that the section defining the word I business ' must prevail, because the Schedule is enacted. only for the purpose of computing the profits, as laid down in the definition and as the heading f the Schedule shows. That there is a difference between the Schedule and the Act is not to be denied, and the question that naturally falls for consideration is whether the 691 Schedule should be given effect to independently in the circumstances of the case. The Schedule really tends ' for the purposes of collection, to widen the definition of a business to include any letting of property for earning rents. The rule to be applied was stated by Lord Sterndale, M. R., in Inland Revenue Commissioners vs Gittus (1) in the following words: " It seems to me there are two principles or rules of interpretation which ought to be applied to the combination of Act and schedule. If the Act says that the schedule is to be used for a certain purpose and the heading of the part of the schedule in question shows that it is prima facie at any rate devoted to that purpose, then you must read the Act and the schedule as though the schedule were operating for that purpose, and if you can satisfy the language of the section without extending it beyond that purpose you ought to do it. But if in spite of that you find in the language of the schedule words and terms that go clearly outside that purpose, then you must give effect to them and you must not consider them as limited by the heading of that part of the schedule or by the purpose mentioned in the Act for which the schedule is prima facie to be used. You cannot refuse to give effect to clear words simply because ' prima facie they seem to be limited by the heading of the schedule and the definition of the purpose of the schedule contained in the Act. " In my opinion, the second of the. two propositions laid down by Lord Sterndale, M. R., applies to the exposition of the Schedule, with which we are concerned. It may be pointed out that the decision of Lord Sterndale, M. R., was accepted by the House of Lords without question in Gittus vs Commissioners of Inland Revenue(1) in an appeal from the decision of the Court of Appeal in the earlier case. Though the heading of the Schedule and the definition of the word 'profits ' show that the Schedule is designed to assist in the computation of profits, the mention of other kinds of businesses in r. 4, taken with an incomplete definition of the term in the Act, clearly (I) 576. (2) 692 shows that the legislature was defining the term business ' as and when necessary, as it laid down the rules for calculation of profits of a business. It was including different kinds of businesses within the Act and indicating how in those cases the profits had to be calculated. I do not think that the definition given in the Act can be said to control everything in the Schedule, in spite of the definition of I profits ' and the heading given to the Schedule. As I have said above, the second of the two alternatives is really applicable to the present case. For these reasons and those given by my brother, Sinha, J., I hold that this appeal should be allowed with costs here and below. BY THE COURT. In accordance with the judgment of the majority, the decision under appeal is set aside and the appeal is allowed with costs here and below.

The respondent was a banking company and the question was whether it was liable to pay excess profits tax on a sum of Rs. 86,000 received by it as rent in respect of the major part of a six storeyed building owned and constructed by it, which it had let out, the rest being occupied by its headquarters in Calcutta. The Department and the Income tax Appellate Tribunal found against the respondent but the High Court, on a reference under section 66(1) of the Income Tax Act, reversed their decision. The Memorandum of Association of the Company provided as one of its objects as follows, " (e) To purchase, take on lease or in exchange or otherwise acquire any moveable or immoveable property. . . . which the company may think necessary or convenient for the purpose of its business, and to construct, maintain and alter any buildings or works necessary or convenient for the purpose of the Company. " The question referred to the High Court for decision wag whether the said income was part of the business income taxable under section 2(5) read with r. 4(4) of the Sch. I to the Excess Profits Tax Act, 1940. The High Court held that although the income was derived from the holding of property, since the functions of the assessee company did not consist wholly or mainly in the holding of investments or other property as required by the first proviso to section 2(5) Of the Act, no question of the application of r. 4(4) could arise. Held, (Per Sinha and Hidayatullah, jj., Kapur, J., dis senting), that the question must be answered in the affirmative. Per SINHA, J. The High Court was fundamentally in error in overlooking the main provision Of section 2(5) of the Act, for even though the first proviso might not apply, that by itself would not render the main provision of the definition, which was wider than that under the Indian Income tax Act inapplicable. Commissioners of Inland Revenue vs Desoutter Bros. Ltd., , applied. 661 The term 'business ' was of wide import and each case had to be determined with reference to the particular kind of acti vity or occupation of the person concerned. Though, ordinarily it implied a continuous activity in carrying on a particular trade or avocation, it might also include an activity which might be called ' quiescent '. The Commissioners of Inland Revenue vs The South Behar Railway Co., Ltd., and Commissioners of Inland Revenue vs The Korean Syndicate, Ltd., (1921) 12 T. C. 181, referred to. The Memorandum of Association of a company provided the key to its business objects and the relevant clause in the instant case clearly showed that the managing of property and realisation of rents therefrom were within the objects of the company, and, therefore, such rents must be included in calculating its profits under r. 4(4) of the Sch. I to the Act. It was not correct to suggest that the rule, in substituting, the word " partly " for " mainly " occurring in the first proviso to section 2(5) exceeded the provisions of the statute. Rule 4(4) did not derive its operative force from that proviso, limited to an incorporated body of a particular type, and was of wider application as evident from its own terms as also from the second proviso to section 2(5) of the Act. Punjab Co operative Bank Ltd. vs ' Commissioner of Income tax, Punjab, ; [1940] 8 I.T.R. 636 and Sardar lndra Singh and Sons, Ltd. vs Commissioner of Income tax, West Bengal; , , referred to. It was not correct to say that if rental income were to be covered by the main clause of section 2(5), the first proviso to that section would become redundant. Commissioners of Inland Revenue vs The Tyre Investment Trust, Ltd., , referred to. Nor was it correct to say that " business " could not be said to include rental income. The United Commercial Bank Ltd., Calcutta vs The Commis sioner of Income tax, West Bengal; , , held inapplicable. Per KAPUR, J. The word 'business ' could either mean what was contained in the main provision of section 2(5) or have the extended meaning given by the first proviso to that section. In either case it was inapplicable to the case of the respondent whose essential function was to deal in money and credit, letting out of property being neither wholly or even partly its business. The income received by the respondent, therefore, by way of rent, did not fall within the definition of the word 'profits ' contained in section 2(19) of the Act and was not chargeable to excess profits tax under section 4 Of the Act. Salisbury House Estate Ltd. vs Fry, ; , 662 Mellows vs Buxton Palace Hotel Ltd., and Commissioners of Inland Revenue vs Buxton Palace Hotel Ltd. , referred to. In construing the first proviso, effect must be given to every word used. If the mere owning of immoveable property and the letting out of what was not needed for its own use by a company was intended to be covered by the definition, the use of the words wholly " or " mainly " would be wholly redundant. Rule 4(4) Of the first Schedule to the Act did not modify the definition of business ' so far as it related to holding of property and before it could apply, the functions of the company, which meant the activities appropriate to its business, must fall within the definition of 'business ' as given in the Act. Per HIDAYATULLAH, J. The rents realised by the respondent must be regarded as profits from property held as investment and included in the computation of profits under r. 4(4) Of the first schedule. There was undeniably a difference between the wording of the schedule and the Act and the tendency of the schedule was to widen the definition of business so as to include letting of property for earning rents. It could not, therefore, be said that the definition contained in the Act, wholly controlled the Schedule and r. 4(4) must be given effect to. Inland Revenue Commissioners vs Gittus, (192O) 1 K. B. 563, applied. Gittus vs Commissioners of Inland Revenue, , referred to.

Civil Appeal Nos. 1256 1258 of 1981. 451 Appeals by Special Leave from the Judgment and Order dated 9.9.1980 of the Calcutta High Court in Appeal Nos. 94, 122 & 95 of 1980 respectively. S.N. Kacker and H.R. Puri for the Appellant. Shankar Ghosh, B.P. Maheshwari and Miss Asha Jain for Respondent No. 1. Dalip Sinha, G.S. Chatterjee and P.K. Chatterjee for Respondent No. 2. The Judgment of the Court was delivered by DESAI, J. M/s Jethabhai Khatu & Co., a partnership firm, is the appellant in all the three appeals. The respondents in all the three appeals are: (1) Luxmi Narayan Cotton Mills Ltd., an incorporated Company ( 'company ' for short), (2) State of West Bengal, (3) S.K. Dutta, who was for some time a receiver appointed by the High Court; (4) Grindlays Bank, ( 'Bank ' for short), having a fixed deposit account in the name of Receiver. S.K. Dutta on behalf of Luxmi Narayan Cotton Mills Ltd., (5) A.K. Dutta, and (6) R.C. Deb, who claim to have been appointed as joint receivers after removal of Sh. S.K. Dutta. Appellant filed suit No. 1194/66 against the company on the original side of the Calcutta High Court to recover a certain amount due under two separate heads. By the time the suit came up for hearing the board of Directors of the 1st respondent company was superseded and one Gurudas Sharma was appointed as an Administrator. The Administrator on behalf of the 1st respondent company entered into a compromise with the appellant in respect of the claim in suit of the appellant and after obtaining leave of the Court to settle the matter, invited a consent decree by which the company was held liable and directed to pay Rs. 2,85,000 with interest thereon at 6% per annum from January 6, 1970, the date of the decree, till realisation. The Ist respondent company was given an option to pay the decretal amount by monthly instalments of Rs. 5,000, the first instalment becoming due and payable on March 15, 1970, and each subsequent instalment to be paid by 15th day of the next succeeding month. The default clause in the consent decree provided that if the company committed default in payment of any two instalments within the time stipulated in the decree, the whole of the decretal amount and the interest on the balance of the decretal 452 amount will become due and payable at once. It appears that the Ist respondent company received Rs. 15,00,000 from the Custodian of Enemy Property in respect of its cotton Mills situated in Narayanganj, Bangladesh. The 3rd respondent S.K. Dutta appears to have been appointed a receiver in respect of this compensation amount and he appears to have deposited Rs. 8,40,000 out of the compensation amount in fixed deposit account evidenced by receipt No.1002 2539 with the Bank at its Netaji Subhash Road Branch, Calcutta. The appellant, by an order dated April 5, 1978, of the Calcutta High Court, obtained leave to execute the decree by attachment of funds lying in the hands of the 3rd respondent receiver S.K. Dutta (Annexure 'D '). By the date of the order Rs. 4,20,702.94 p. had become due and payable under the decree. Pursuant to this order an interim attachment was levied under order 21 Rule 52 C.P.C. On the amount covered by the aforementioned fixed deposit receipt, and accordingly the Master of the Court, Shri S.K. Ghosh informed the 3rd respondent receiver by the writ of the Court dated April 12, 1978, that the receiver shall hold the money under the fixed deposit account subject to such order as may be made respecting the same in the suit in which he had been appointed a receiver and subject to further orders of the Court (Annexure 'E '). The Master confirmed the interim attachment by his order dated April 24, 1978 (Annexure 'F '). On May 4, 1978 upon a petition by the appellant the Court directed the receiver 3rd respondent to pay the sum of Rs. 4,20,702.94 to the appellant decree holder out of the amount in the fixed deposit account of the judgment debtor with the Bank in fixed deposit receipt No. 1002 2539 standing in the name of the receiver which was attached in terms of order dated April 12, 1978, as confirmed by the order dated April 24, 1978. Presumably neither the 3rd respondent receiver nor the Bank effectively implemented the order dated May 4, 1978, whereupon the appellant moved the Court during the vacation on May 24, 1979, for an appropriate direction and a learned single Judge of the Calcutta High Court working as vacation judge gave the directions prayed for. As this order has some legal consequences in this matter, it would be advantageous to extract it. It reads as under: "There will be an order in terms of prayers (a) & (b) of the petition. Prayer (a): That the receiver Sudhir Kumar Dutta be forthwith directed to instruct and intimate to the Grindlays Bank Ltd., Netaji Subhash Road Branch, Calcutta, to pay 453 a sum of Rs. 4,29,702.94 p. to the petitioner decree holder in terms of the payment order dated 4th May, 1978 out of the amount of the Fixed Deposit of the judgment debtor with Grindlays Bank Ltd., in Fixed Deposit Receipt No. 1002 2539 which has been Lying attached in terms of the order dated 12th April, 1978 and is confirmed by the order dated 24th April, 1978 and the said Grindlays Bank Ltd., Netaji Subhash Road, Branch, Calcutta, be directed to pay the said sum of Rs. 4,20,702.94 p. to the petitioner decree holder; Prayer (b): That Grindlays Bank Ltd., Netaji Subhash Road Branch, Calcutta, be directed to pay the said sum of Rs. 4,20,702.94 p. to the petitioner decree holder in terms of the payment order dated 4th May, 1978, out of the said fixed deposit receipt No. 1002 2539. " Effectively this order of the Court directed the receiver to pay the amount therein mentioned to the decree holder and the Bank, the keeper of the fixed deposit account of the receiver was also put under an obligation not to raise any objection on receiver withdrawing the money and paying the same to the decree holder. In fact upon its true construction, the Bank was also under an obligation to take effective steps to pay the amount mentioned in the order to the decree holder. It appears that these directions were not obeyed. Consequently, the appellant moved the Court for holding the 3rd respondent receiver S.K. Dutta and the 4th respondent Bank in contempt and for passing appropriate order for punishing them for contempt unless they purged themselves of the contempt. On June 7, 1979, when the petition for taking action against the alleged contemners came up before the Court, respondents 5 and 6 appear to have been appointed as joint receivers. The Bank appeared through its counsel Mr. Majumdar and the joint receivers appeared forth themselves as well as for their respective clients, namely, 1st respondent company and the 2nd respondent State of West Bengal. Mr. Majumder, learned advocate for the Bank undertook to the Court to comply with the order dated May 24, 1979, to pay the amount therein mentioned to M/s Maharia & Co. Advocate on record for the appellant. The court directed that on such payment being made the Bank shall be absolved from all the liability in respect of the said amount. The Court specifically noted that in view of the undertaking given by the learned advocate on behalf of the 454 Manager of the Bank, the Court was not inclined to pass any order in respect of the contempt application and the application for taking action in contempt was accordingly disposed of. At this stage. Mr. A.K. Dutta appearing for the Ist respondent company prayed for stay of a portion of the order of the Court which prayer was specifically refused observing that as no fresh orders have been passed on that day affecting the interests of the said Company, no question of granting stay of a portion of the order arises. The Court specifically directed that all the parties and particularly the Manager of the Bank should act on the signed copy of the minutes. It appears that the solemn undertaking given by the Bank was not acted upon. Probably soon thereafter some interim orders were obtained as would transpire from the order of Mrs. Padma Khastgir, J. dated March 7, 1980. When the matter came up on March 7, 1980, the court observed that there will by no order on the applications before it save and except that the receiver will hold the balance sum of Rs. 4,19,697.06p till further order of the Court. The Court also declined to grant prayer for discharge of the receiver S.K. Dutta, the 3rd respondent, because notice of the application was not served upon him. This observation would, however, establish that till March 7, 1980, the 3rd respondent was not discharged as a receiver though from the recitals in the order dated June 7, 1979, it appears that by that date A.K. Dutta and R.C. Deb were functioning as joint receivers. In this order it was distinctly made clear that except what is stated the specifically in the order all interim orders were vacated. However, the Court at the instance of joint receivers stayed the portion of the order dated March 7, 1980, for a period of a fortnight. To clarify the position it may be mentioned that when the Court directed that balance of Rs. 4,19,697.06 will be held by the receiver it would imply that would be the balance after payment of the amount directed to be paid to the appellant. Specifically this order has the effect of confirming the earlier order dated May 24, 1970, to pay the decretal amount to the appellant. If appears that thereafter three appeals came to be filed before the Division Bench of the Calcutta High Court. Appeal No. 95/80 and Appeal No. 94/80 were preferred by the Ist respondent company. Appeal No. 122/80 was preferred by the 2nd respondent State of West Bengal. These three appeals were preferred against the order dated March 7, 1980, made by Mrs. Padma Khastgir, J. In the two appeals preferred by the Ist respondent company a Division Bench of the Calcutta High Court by its order dated 455 March 27, 1980, granted ad interim stay as under: "The Joint Receivers, R.C. Deb and A.K. Dutta are directed not to part with any money lying deposited under the fixed deposit receipt No. 1002/2529 in the Grindlays Bank. There will be an order directing the Grindlays Bank Ltd., of 29, Netaji Subhash Road not to disburse any amount in respect of fixed deposit No. 1002 2539 standing in the name of S.K. Dutta, the fixed deposit receipt whereof is Lying deposited with the present joint receivers R.C. Deb and A.K.Dutta . Order of injunction restraining Jethabhai Khatau and Co. from obtaining any payment out of the moneys lying in the Grindlays Bank and held by the joint receivers or receiver. " This interim order was confirmed by the Division Bench by its order dated September, 9, 1980. Hence these three appeals by special leave. Frankly, this Court ordinarily does not interfere with interim orders unless and until manifest injustice convulsively shakes it. Even then, with our usual response of reluctance to undertake to examine interim orders, only a notice to show cause why special leave should not be granted and the interim stay application not be considered, was issued to the respondents. After notices were served and counter affidavits and rejoinder affidavits were filed, this matter came before us about four weeks back, our hands off attitude to interim orders manifested itself when we adjourned the matter for four weeks indicating to the parties, especially the respondents who are appellants before the High Court, to take executive steps to get their appeals placed on the cause list for hearing and to move for expeditious disposal of the same. We also declined to grant any interim relief. We so adjourned the matter in the fond hope that we may hang on to our tenuous view that ordinarily we would not undertake to deal with interim orders. Our hope has proved a mirage. When this matter was listed before us on April 3, 1981, Mr. Kackkar, learned counsel for the Appellant stated that almost within the dying embers of the time granted by this Court an attempt was 456 made by the respondents to get their matter listed in the High Court and the only order that the court has made is that the appeals be added to the cause list of the Division Bench and it would be anybody 's guess when this last added matter would reach hearing. Having no alternative left open to us, we have heard the matter. As the appeals are pending before the Division Bench of the Calcutta High Court and are to be heard on merits, we would make every manageable human effort to avoid any expression of opinion which may even remotely interfere with judicious adjudication of the issues before the Division Bench. However, we make it clear that even if there is any express or implied opinion discernible in this order, the same has to be wholly ignored by the High Court while disposing of the appeals on merits. With this extra caution we proceed to dispose of these appeals. As every stage of the proceeding has been neatly delineated by us with the orders of the Court referred to in details, the permissible inferences may alone be set out. What is the injudicious situation which may bring disrepute to judicial process, stares in the face. The consent decree under which appellant was entitled to recover Rs. 2,85,000 with interest, at the rate of 6% per annum from the date of the decree till realisation was made by the Court on January 6, 1970. The decree without being satisfied in its minutest part has collected dust for 11 years. And at present who is impeding the execution of the decree ? It is the 1st respondent company which has been a party to the consent decree and which decree has become final and unassailable. There is no proceeding at precent questioning the correctness, validity or legality of the decree or its binding character on the 1st respondent company. It is again incontrovertible that the judgment debtor Ist respondent company has in its fixed deposit with the 4th respondent Bank a sum of Rs. 8,40,000. That his amount is of the ownership of the judgment debtor is not in dispute. 3rd respondent S.K. Dutta was once a receiver. Respondents say that he has been removed and respondents 5 and 6 who are respectively the Advocates of the Ist respondent company and the 2nd respondent State of West Bengal claim to be appointed as joint receivers. The date of appointment is not made clear but the order dated March 7, 1980 (Annexure 'J ') by Mrs. Padma Khastgir, J. leaves no room for doubt that till that date 3rd respondent S.K. Dutta was not discharged as receiver. 457 The High Court on a petition of the appellant levied attachment under order 21 Rule 52 C.P.C. On the amount Lying in fixed deposit account with 4th respondent Bank in the name of 3rd respondent S.K.Dutta as receiver of the first respondent company by order dated April 5, 1978. This attachment order was levied by the Master of the Court and the interim attachment was confirmed. Admittedly these orders were not challenged. Sabyasachi Mukerjee, J. by his order dated May 4, 1978, directed 3rd respondent S.K. Dutta to pay the amount of Rs. 4,20,702.94 P. Out of the amount Lying in fixed deposit receipt No. 1002 2539 with the fourth respondent Bank to the appellant in satisfaction of the decree. This order may appear to have become final as not having been questioned by any one. Manoj Kumar Mukherjee, J. by his order dated May 24, 1979, directed 3rd respondent S.K.Dutta, receiver of the Ist respondent company to pay Rs. 4,20,702.94 p. Out of the fixed deposit account held by him as receiver of the Ist respondent company to the appellant and a consequential order was made directing the Bank to pay the amount set out in the order to the appellant. This order dated May 24, 1979, may appear to have become final as it appears not to have been questioned, challenged or appealed by any one. Failure to comply with the court 's mandatory direction led the appellant to file a petition for contempt. The alleged contemners impleaded were Ist respondent company and the 4th respondent Bank. When this petition for taking action in contempt came up before Manoj Kumar Mukherjee, J. there appeared on the scene one Mr. Majumdar, learned counsel for the 4th respondent Bank as well as the two joint receivers functioning in dual capacity as joint of receivers as well as learned counsel for the respective clients, namely, Ist respondent company and the 2nd respondent State of West Bengal. At the hearing of this motion for taking action for contempt, Mr. Majumdar learned counsel for the 4th respondent unreservedly agreed to comply with the order of the Court on May 24, 1979, which means that he agreed and undertook to pay the amount of Rs. 4,20,702.94 out of the fixed deposit account in the name of 3rd respondent S.K. Dutta, receiver of the Ist respondent company. It is because the Bank agreed unreservedly and unconditionally to pay up the amount that the motion for taking action in contempt was discharged by the Court. No action was sought to be taken against the joint receivers who had interposed themselves in the meantime. Therefore, the court declined to accede to their request to stay a 458 portion of the order. The order dated June 7, 1979, is not a fresh order on merits. It was merely an implementation of the order dated May 24, 1979, which may appear to have become final and binding. Yet the 1st respondent company and the 2nd respondent State of West Bengal took no further action and surprisingly the Bank also joined hands with them by not paying the amount till March 7, 1980. Maybe, there may be some interim orders. We are not made knowledgeable about the nature and character of those interim orders save and except what has been recited in the order dated March 7, 1980, of Mrs. Padma Khastgir, J. However, there seems to be some apparent collusion between the company on one hand and the joint receivers in not complying with the court 's order dated May 24, 1979, even though action for contempt was avoided by giving an unconditional undertaking to carry out that order. The three appeals were preferred against the order dated March 7, 1980. That order has nothing to do with order dated May 24, 1979, or the order dated June 7, 1979. At any rate, the order dated May 24, 1979, may appear to have become final. Would it be appropriate in such circumstances to grant an interim stay of the portion of an order which may appear to have become final in an appeal against an altogether different order? Mr. Shankar Ghose, learned counsel for the respondent wanted us to take note of various allegations against the 3rd respondent, the receiver, the fact that he was removed, the fact that he was colluding with the appellant and that he was negligent as also that he was discharged at some stage of the proceedings. At this stage, these contentions in our opinion are not very relevant. Maybe, there is merit in these contentions. Maybe, the Division Bench hearing the appeals by the Ist and 2nd respondent will examine these contentions on merits. The only live issue is whether would it be fair while granting stay of the order dated March 7, 1980 to effectively stay the order dated March 24,1979, which appears not to be under appeal though its validity may be questioned in the course of hearing of the appeal? If that be so, could the Court overlook attempt of the Ist and 2nd respondents to circumvent the order by obtaining an interim stay in such manner that an order not under appeal gets frozen '? It is, therefore, that we propose to interfere with the interim order made by the Division Bench of the Calcutta High Court on September 9, 1980, confirming the ad interim order dated March 7, 1980, to a limited extent so that an impression that the court 's process can be lightly trifled with, may be avoided. 459 Under the circumstances the proper thing to do would be to set aside the interim stay order dated March 27, 1980, as also the order dated September 9, 1980, confirming the interim order but in order to ensure the resultant justice as we are interfering with an interim order, we consider it proper to give certain directions, while restoring status quo ante in the event the appeals filed by respondents 1 and 2 are allowed or any specific positive direction is given by the court in this behalf. We accordingly allow these appeals and set aside the orders made by the Division Bench on March 27, 1980 and September 9, 1980. The result would be that the order dated May 4, 1978, by Sabyasachi Mukherjee, J. and order dated May 24, 1978, made by Manoj Kumar Mukherjee, J. as also the undertaking given by the manager of the 4th respondent Bank through his learned counsel Shri Majumdar before Manoj Kumar Mukherjee, J. On June 7, 1979, would be revived and would be effective and will have to be implemented. In pursuance to the aforementioned two orders, the 4th respondent Bank will have to pay Rs. 4,20,702.94 p. to the decree holder appellant towards the decretal amount. On receipt of the amount the appellant shall pass a receipt acknowledging receipt of the amount and to the extent of the payment of the amount herein indicated the liability of the 4th respondent Bank to the Ist respondent company or anyone claiming on its behalf or the 3rd respondent receiver shall stand discharged. Before the amount is paid, the appellant shall give security to the satisfaction of the High Court and also an undertaking on affidavit to the Division Bench of the Calcutta High Court before which the appeals preferred by the Ist and 2nd respondents are pending that in the event the appeals are allowed which makes it consequently necessary for the appellant to repay the amount received from the 4th respondent Bank in payment of the decretal amount, the appellant shall deposit the said amount with the Calcutta High Court within one month from the date of the order of the appellate Bench. The appeals will stand disposed of as herein indicated with no order as to cost. N.V.K. Appeals allowed.

The appellant filed a suit for recovery of certain amounts due from the first respondent company. By the time the suit came up for hearing the first respondent company was superseded and an Administrator was appointed. The suit was compromised and a consent decree was passed, the company being held liable and directed to make payment of Rs. 2.85 lakhs with interest at 6% from the date of the decree. The first respondent company received a sum of about Rs. 15 lakhs from the Custodian of Enemy Property as compensation in respect of certain Cotton mills owned by it. The third respondent was appointed a receiver in respect of this amount and he deposited a sum of Rs. 8 lakhs of the compensation amount into a fixed deposit account with a Bank. The decretal amount having become due and payable the appellant by an order dated April 12, 1978 obtained an interim attachment of the money in the fixed deposit account of the bank, which was confirmed by order dated April 24, 1978 on May 4, 1978 upon a petition by the appellant, the Court directed the receiver, 3rd respondent to pay the decretal amount to the appellant out of the amount in the fixed deposit account of the judgment debtor with the Bank. As this order was not implemented, the appellant again moved the Court and by its order dated the May 24. 1978 the Court directed the receiver to pay the amount to the decree holder and the Bank, the keeper of the fixed deposit account of the receiver was also put under an obligation not to raise any objection on the receiver withdrawing the money and paying the same to the decree holder. These directions not being obeyed, the appellant moved the Court for holding the third respondent receiver and the fourth respondent Bank in contempt and for passing appropriate orders for punishing them for contempt. Respondents 5 and 6 were in the meanwhile appointed as joint receivers. A solemn undertaking was given by the Bank to the Court that the decretal amount would be paid. In view of the undertaking the Court did not pass any orders on the contempt application. On March 7, 1980 the Court declined to grant the prayer for discharge of the receiver 3rd respondent and directed that the balance after payment of the decretal amount in the fixed deposit account will be held by the receiver. The Court however at the instance of the joint receivers Respondents 5 and 6 stayed the order for a fortnight. 450 Three appeals were filed against the order dated March 7, 1980. Two appeals were preferred by the Ist respondent company and one appeal was preferred by 2nd respondent, State of West Bengal. In the appeals preferred by the Ist respondent company the High Court by its order dated March 27, 1980 granted ad interim stay in the matter, by directing that the Bank would not disburse any amount in respect of the fixed deposit account and by issuing an injunction restraining the appellant from obtaining any payment. Allowing the appeals to this Court, ^ HELD: The order made by the Division Bench on March 27, 1983 and continued on September 9, 1980 are set aside. The order dated May 4, 1978 and May 24, 1979 as also the undertaking given by the Manager of the 4th respondent Bank through its Counsel on June 7, 1979 would be revived and would be effective and will have to be implemented. The 4th Respondent Bank will pay the decretal amount to the appellant, the appellant shall pass a receipt acknowledging receipt and the liability of the 4th Respondent company to the 3rd Respondent receiver shall thereupon stand discharged. Before the amount is paid, the appellant shall give security to the satisfaction of the High Court and also an undertaking on affidavit that in the event of the appeals being allowed, the appellant shall deposit the said amount with the High Court within one month from the date of the order of the appellate Bench. [459 C F] 2. This Court ordinarily does not interfere with interim orders unless and until manifest injustice convulsively shakes it. [455 E] In the instant case the interim order made by the Division Bench on September 9, 1980 confirming the ad interim order dated March 7, 1980 has to be interfered to a limited extent to avoid the impression that the Court 's process can be lightly trifled with. [458 H] 3. Failure to comply with the Court 's mandatory directions led the appellant to file a petition for contempt. The alleged contemners impleaded were Ist respondent company and the 4th respondent Bank. At the hearing, counsel for the 4th respondent unreservedly agreed to comply with the order of the Court. It was because the Bank unreservedly and unconditionally agreed and undertook to pay up the amount that the motion for taking action in contempt was discharged by the Court. [457 E, H] 4. The order dated June 7,1979 is not a fresh order on merits. It was merely an implementation of the order dated May 24, 1979 which appears to have become final and binding. [158 A] 5. The three appeals were preferred against the order dated March 7, 1980. That order had nothing to do with the order dated May 24, 1979 or the order dated June 7, 1979. At any rate, the order dated May 24, 1979 appears to have become final. [458 D]

ivil Appeal No. 3504 of 1991. the Judgment and Order dated 5.10.1990 of the Bombay High Court in W.P. No. 210 of 1990. Dhruv Mehta, S.K. Mehta and Aman Vachher for the Appellants. Jitender Sharma for the Respondents. The Judgment of the Court was delivered by SHARMA, J. Special leave is granted. The appellant was injured in a road accident and his claim petition has been dismissed as being barred by limita tion. The accident took place on 22.1.1989. The Motor Vehi cles Act, 1939 was repealed by section 217(1) of the which came into force on 1.7.1989. The period of limitation for filing a claim petition both under the old Act and the new Act being six months expired on 22.7.1989. The claim petition of the appellant, however, was filed belatedly on 15.3.1990 with ,a prayer for condonation of delay. The Accident Claims Tribunal held that in view of the provisions of subsection (3) of section 166 of the new , the delay of more than six months could not be condoned. The application was accordingly dismissed. The appellant unsuccessfully challenged the decision before the High Court. 915 3. It has been contended that since the accident took place when the old was in force, the proceeding before the Accident Claims Tribunal must be held to be governed by the old Act, and his petition cannot be dismissed on the basis of the provisions in the new Act. The period of limitation for filing a claim petition both under the old Act and the new Act is six months from the date of the accident. The difference in the two Acts, which is relevant in the present case, is in regard to the provisions relating to condonation of delay. In view of the proviso to sub section (3) of section 166 of the new Act, the maximum period of delay which can be condoned is six months, which expired on 22.1.1990. If the new Act is held to be applicable, the appellant 's petition filed in March had to be dismissed. The case of the appellant is that the accident having taken place before the new Act came into force, the proceeding is governed by the old Act, where there was no such restriction as in the new Act. The ques tion is as to which Act is applicable; the new Act or the old. It has been contended by the learned counsel that under the old Act the appellant had a right to file a claim petition even more than six months after the expiry of the period of limitation, and this right is preserved by reason of the provisions of section 6 of the . Reliance has been placed on clauses (c) and (e). The relevant portion of the section reads thus: "6. Effect of repeal Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enact ment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a). . (b). . (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in 916 respect of any such right, privilege, obliga tion, liability, penalty, forfeiture or pun ishment 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 repeating Act or Regulation had not been passed. " We are unable to agree. Clause (e) is not attracted because, by the enactment of the new law the remedy of the appellant has not been affected at all. His right to claim compensa tion by filing the claim within the same period of limita tion has been preserved. And there was no application for condonation of delay in a proceeding pending at the time of repeal so as to allow him to claim any privilege available under the old Act. So far the applicability of clause (c) is concerned, the question depends on whether the appellant had got an accrued right or privilege under the old law which he could not have been deprived of by the repealing legisla tion. Even independent of the , it is firmly established that unless a new statute expressly or by necessary implication says so, it will not be presumed that it deprives a person of an accrued right. On the other hand, a law which is procedural in nature, and does not affect the rights, has to be held to be retrospectively applicable. The question is whether the appellant has been deprived of an accrued right or privilege in the present case 7. It is true that the appellant earlier could file an application even more than six months after the expiry of the period of limitation, but can this be treated to be a right which the appellant had acquired. The answer is in the negative. The claim to compensation which the appellant was entitled to, by reason of the accident was certainly en forceable as a right. So far the period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be governed by the new Act subject to two, conditions. If under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result will be to deprive the suitor of an accrued right. The second exception is where the new enactment leaves the claimant with such a short period for commencing the legal proceeding so as to make it impractical for him to avail of the remedy. This principle has been followed by this Court in many cases and by way of illustra tion we would like to mention New India Insurance Co. Ltd. vs Smt. Shanti 917 Misra; , The husband of the respondent in that case died in an accident in 1966. A period of two years was available to the respondent for instituting a suit for recovery of damages. In March, 1967 the Claims Tribunal under section 110 of the was con stituted, barring the jurisdiction of the civil court and prescribing 60 days as the period of limitation. The re spondent filed the application in July, 1967. It was held that not having filed a suit before March, 1967 the only remedy of the respondent was by way of an application before the Tribunal. So far the period of limitation was concerned, it was observed that a new law of limitation providing for a shorter period cannot certainly extinguish a vested right of action. In view of the change of the law it was held that the application could be filed within a reasonable time after the constitution of the Tribunal; and, that the time of about four months taken by the respondent in approaching the Tribunal after its constitution, could be held to be either reasonable time or the delay of about two months could be condoned under the proviso.to section 110A(3). The learned counsel strenuously contended that the present case must be considered as one where an accrued right has been affected, because the option to move an application for condonation of delay belatedly filed should be treated as a right. This cannot be accepted. There is a vital difference between an application claiming compensa tion and a prayer to condone the delay in filing such an application. Liberty to apply for a right is not in it selt an accrued right or privilege. To illustrate the point, we may refer to some cases. In Director of Public Works and Another vs Ho Po Sang and Others, ; a Crown lessee in respect of certain premises which were in occupation of tenants and sub tenants entered into an agreement with the appellant Director for developing the site by erecting buildings. The erection of the new buildings necessitated the demolition of the existing buildings. Under the provisions of an Ordinance a Crown lessee was entitled to recover vacant possession of the premises if he obtained a re building certificate from the Director. On the application of the Crown lessee a proceeding for grant of the certificate was started and the Director issued a notice under the Ordinance indicating his intention to grant the re building certificate. Before the certificate could be finally issued, the relevant provision of the Ordinance entitling the lessee to recover vacant possession of the premises was repealed. The lessee claimed the right to vacant possession by relying on certain provi sions dealing with rules of interpretation similar in terms to section 6 of our . The plea 918 was rejected on the ground that although the lessee was entitled to make an application for vacant possession before the Ordinance was repealed, it did not amount to an accrued right or privilege, capable of being preserved after the repeal of the Ordinance, as the right was dependent on the actual issuance of a certificate. In an earlier case of Abbott vs Minister of Lands, the appellant was entitled to make purchases of Crown land adjoining his holding by virtue of certain statutory provisions, which were repealed before he could effectively enforce his right. Besides raising other grounds in respect of his claim, he argued that the right which he had under the repealed enactment was a "right accrued" and of which he could not be deprived of by the repeal. Reject ing the plea, it was observed that the mere right existing in a class of persons to take advantage of an enactment, cannot in absence of any act done by the claimant towards availing himself of that right be deemed a "right accrued". In Isha Valimohammad & Anr. vs Haji Gulam Mohammad & Haji Dada Trust, [1975] 1 SCR 720 the respondents let out the premises in question to the appellants in 1951 in a place where, by the Saurashtra Rent Control Act, sub letting by a tenant was prohibited. The appellants sub let the premises at a time when the Act was in force. In 1963 the Act was repealed and the Bombay Rent Act was made applica ble, under which there was no such prohibition against sub letting. In a suit for eviction filed subsequently the High Court assumed that a notice under the Transfer of Property Act was necessary to terminate the tenancy which had not been done before the repeal, but still held that since the respondents had an accrued right within the meaning of section 51 of the Bombay Rent Act (the provisions whereof were similar to those in section 6 of the ) the respondents were entitled to a decree. The decree was confirmed by the Supreme Court but not on the above ground. This Court held that a notice under the Transfer of Properties Act was not necessary and in that view it con firmed the decree of the High Court. With respect to the finding of the High Court regarding the respondents acquir ing an accrued right even on the assumption that a notice under the Transfer of Properties Act was necessary, it was held that the right of a landlord to recover possession is not an accrued right before the issue of a notice if under any law it was necessary for the landlord to issue the notice to determine the tenancy. The principle laid down there supports our view. 919 A question, though not identical, but somewhat similar Came up for consideration by this Court in Lalji Raja and Sons vs Firm Hansraj Nathuram, ; The appel lants had obtained a money decree against the respondents in a court in West Bengal in 1949, and got it transferred for execution to the court at Morena in the then State of Madhya Bharat. On the respondents objection on the ground of lack of jurisdiction the Madhya Bharat Court dismissed the execu tion petition. The matter was thereafter taken to the High Court and this Court, but without any success. The decision partly rested on the ground that the Indian Code of Civil Procedure was not applicable to the State of Madhya Bharat. Subsequently the Code was extended tO that area which had become a part of the State of Madhya Pradesh and a fresh order was passed by the West Bengal Court transferring the decree to Morena Court. The judgment debtors challenged the jurisdiction of the court on various grounds. One of the points which was urged was that in view of section 20 clause (b) of the Code of Civil Procedure (amendment) Act, 1951 by which the Code was extended to Madhya Bharat and other areas, the Judgment debtors ' right to resist the execution was protected. Reliance was placed on the proviso to the repeal clause in the section which declared that the repeal would not affect any fight, privilege, obligation or liabil ity acquired accrued or incurred under the repealed clause. The judgment debtors objection was over ruled by this Court. Relying on several English decisions including that in Abbott vs Minister for Lands, , it was observed that the mere right existing at the date of the repeal of statute, to take advantage of provisions of the statute repealed is not a "right accrued" within the meaning of the usual saving clause. In the case before us the period of limitation for lodging the claim under the old as well as the new Act was same six months which expired three weeks after coming in force of the new Act. It was open to the appellant to file his claim within this period or even later by 22.7.1989 with a prayer to condone the delay. His right to claim cOmpensa tion was not affected at all by the substitution of one Act with another. Since the period of limitation remained the same there was no question of the appellant being taken by surprise. So far the question of condonation of six months delay was concerned, there was no change in the position under the new Act. In this background the appellant 's fur ther default has to be considered. If in a given case the accident had taken place more than a year before the new Act coming in force and the claimant had actually filed his petition while the old Act was in force but after a period of one year, the position could be different. Having actual ly initiated the proceeding when the old Act 920 covered the field a claimant could say that his right which had accrued on filing of the petition could not be taken away. The present case is different. The right or privilege to claim benefit of a provision for condonation of delay can be governed only by the law in force at the time of delay. Even the hope or expectation of getting the benefit of an enactment presupposes applicability of the enactment when the need arises to take its benefit. In the present case the occasion to take the benefit of the provision for condona tion of delay in filing the claim arose only after repeal of the old law. Obviously the ground for condonation set up as 'sufficient cause ' also relates to the time after the re peal. The benefit of the repealed law could not, therefore, be available simply because the cause of action for the claim arose before repeal. 'Sufficient cause ' as a ground of condonation of delay in filing the claim is distinct from 'cause of action ' for the claim itself. The question of condonation of delay must, therefore, be governed by the new law. We accordingly hold that the High Court was right in its view that the case was covered by the new Act, and delay for a longer period than six months could not be condoned. The appeal is dismissed, but in the circumstances, without costs. G.N. Appeal dis missed.

The appellant was injured in a road accident on 22.1.1989, and a claim petition was filed belatedly on 15.3.1990 with a prayer for condonation of delay, before the Claims Tribunal. Meanwhile, the was repealed and the came into force with effect from 1.7.1989. The Claims Tribunal held that in view of the provisions of sub section (3) of Section 166 of the new Act, the delay of more than six months could not be condoned, and dismissed the claim. Before the High Court the appellant challenged the Tribunal 's decision, but was not successful. Thereafter, he preferred this appeal by special leave. On behalf of the appellant, it was contended that since the accident took place when the old Act was in force, the proceeding before the Accident Claims Tribunal must be held to be governed by the old Act under which the appellant had a right to file a claim petition even more than six months after the expiry of the period of limitation and this right is preserved by reason of the provisions of Section 6 of the ; and that his claim could not have been rejected on the ground of limitation under the new Act. Dismissing the appeal, this Court, HELD: 1. 'The High Court was right in taking the view that the case was covered by the new Act, and delay for a longer period than six months could not be condoned. [920D] 2. The claim to compensation which the appellant was entitled to, by reason of the accident was certainly en forceable as a right. So far the 913 period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be gov erned by the new Act subject to two conditions. If under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result will be to deprive the suitor of an accrued right. The second exception is where the new enactment leaves the claimant with such a short period for commencing the legal proceeding so as to make it impractical for him to avail of the remedy. [916F G] New India Insurance Co. Ltd. vs Smt. Shanti Misra, ; , relied on. There is a vital difference between an application claiming compensation and a prayer to condone the delay in filing such an application. Liberty to apply for a right is not in itself an accrued right or privilege. [917E] Isha Valimohammad & Anr. vs Haji Gulam Mohammad & Haji Dada Dust, [1975] 1 SCR 720 and Lalji Raja and Sons vs Firm Hansraj Nathuram, ; , relied on. Director of Public Works and Anr. vs Ho Po Sang and Ors., ; and Abbott vs Minister of Lands, , referred to. In the instant case the period of limitation for lodging the claim under the old as well as the new Act was the same viz., six months which expired three weeks after coming into force of the new Act. It was open to the appel lant to file his claim within this period or even later by 22.7.1989 with a prayer to condone the delay. His right to claim compensation was not affected at all by the substitu tion of one Act with another. Since the period of limitation remained the same there was no question of the appellant being taken by surprise. So far the question of condonation of six months delay was concerned, there was no charge in the position under the new Act. The right or privilege to claim benefit of a provision for condonation of delay can be governed only by the law in force at the time of delay. Even the hope or expectation of getting the benefit of an enact ment presupposes applicability of the enactment when the need arises to take its benefit. The occasion to take the benefit of the provision for condonation of delay in filing the claim arose only after repeal of the old law. Obviously the ground for condonation set up as 'sufficient cause ' also relates to the time after the repeal. The 914 benefit of the repealed law could not, therefore, be avail able simply because the cause of action for the claim arose before repeal. 'Sufficient cause ' as a ground of condonation of delay in filing the claim is distinct from `cause of action ' for the claim itself. The question of condonation of delay must, therefore, be governed by the new law. [919F H; A C 920A] 5. Clause (e) of Section 6 of is also not attracted because, by the enactment of the new law, viz., the remedy of the appellant has not been affected at all. Appellant 's right to claim compensation by filing the claim within the same period of limitation has been preserved. And there was no application for condonation of delay in a proceeding pending at the time of repeal so as to allow him to claim any privilege avail able under the old Act. [916C]

minal Appeals Nos. 109 111 of 1963. Appeals from the judgment and order dated May 31, 1963, of the Bombay High Court in Criminal Applications Nos. 217, 218 and 114 of 1963. The appellants (in Cr. A. Nos. 109 & 110 of 1963) appeared in person. Janardan Sharma and Appellant also, for the Appellant (in Cr. A. No. 111 of 1963). N. section Bindra and R. H. Dhebar, for respondents (in Cr. A. Nos. 109 111 of 1963). Purushottam Trikamdas and R. H. Dhebar, for the respondents (in Cr. A. No. 110 of 1963). 449 January 29, 1964. The Judgment of the Court was delivered by WANCHOO J. These three appeals on certificates granted by the Bombay High Court raise common questions of law and will be dealt with together. They arise out of three habeas corpus petitions filed by the appellants in the High Court under section 491 of the Code of Criminal Procedure challenging their detention under r. 30 of the Defence of India Rules (hereinafter referred to as the Rules). A large number of constitutional questions were raised in the applications and were decided by the High Court against the appellants. These appeals came up for hearing in August 1963 along with some other appeals from decisions of other High Courts, and the constitutional questions were decided by this Court on September 2, 1963, (see Makhan Singh Tarsikka vs State of Punjab) (1). It was held therein that the applications under section 491 (1) of the Code of Criminal Procedure were incompetent in so far as they sought to challenge the validity of the detention on the ground that the Defence of India Act and Rules framed thereunder suffer from the vice that they contravened the fundamental rights guaranteed by articles 14, 21, 22(4), (5) and (7). The other points raised in the appeals were not considered at that time and it was directed that the appeals should be set down for hearing before a Constitution Bench to be dealt with in accordance with law. Consequently, these appeals have been put up before this Bench for disposal of the other points raised therein. A preliminary objection has however, been raised on behalf of the State to the hearing of these appeals on the ground that the orders under which the appellants were detained and which are under consideration in these appeals had been revoked by the State Government and fresh orders of detention had been passed, and in consequence these appeals had become infructuous. Reliance in this connection is placed on the decision of the Federal Court in Keshav Talpade vs King Emperor(2). In that case the detenu was released while his appeal was pending before the Federal Court. It was however urged on his behalf that even (1) A.T.R. (2) 134 859 S.C. 29. 450 though he had been released and no order could thereafter be made on the habeas corpus application, the court should pronounce an opinion on the correctness of the High Court 'a ' judgment. The Federal Court refused to do so and dis missed the appeal on the ground that no order in the appeal could be made after the release of the detenu. Generally speaking, no useful purpose would be served by the appeal court deciding the appeal in a habeas corpus matter where the detenu has been released before the appeal comes up for final hearing. But the facts in the present case are different. Here what has happened is that the earlier order of detention which is the basis of the present appeals has been revoked by the Government of Maharashtra on the ground of a technical defect and a fresh order of detention was passed on the same date, and the appellants were immediately rearrested after their release from jail under the fresh order of detention. In the Federal Court case, however, it appears that the detenu was released and there was no question of a fresh order of detention being made on the same day leading to his re arrert. In the circumstances, it is urged by the appellants that though technically the appellants were released before the present appeals came up for final hearing, in substance they are under detention even now and the points of law raised by them. against the earlier order of detention will apply equally to the fresh order of detention. It is therefore urged that the Court should decide the present appeals as that would settle the law and help the detenus in case they make fresh application under section 491 of the Code of Criminal Procedure against the fresh order of detention. It is further urged that the appellants intend after the emergency is over to sue for damages for false imprisonment and the order of the Bombay High Court would stand in their way 'in case such a suit is brought, and therefore an authoritative pronouncement on the questions of law raised should be made by this Court in the present appeals, even though technically the order out of which the present appeals have arise ' in has been revoked. We are of opinion that the circumstances of the present cases are different from the circumstances in Keshav Talpade 'scase(1) and therefore it would be in the interests of justice to decide (1) 451 the points raised in the present appeals. We may add that there is nothing to preclude this Court from deciding the appeals even though the order from which these appeals have arisen has been revoked, though ordinarily this Court would not do so. But as we have already indicated, it seems to us just and fair 'in view of the fact that the appellants have not been filially released and are still under detention under a fresh order of detention under the Rules that the points raised in these appeals should be decided. The points are of general importance and are likely to arise in many cases. We therefore over rule the, preliminary objection. The facts in the three appeals are similar and we shall therefore briefly refer to the facts in Appeal No. 1 1 0 for the purposes of dealing with the points raised on behalf of the appellants. The appellants were first detained on November 7, 1962 by an order made by the Commissioner of Police, Greater Bombay, under the , No. IV of 1950. The matter was then reported to the Government. Before this, however, the security of India had been threatened by the Chinese invasion and an Emergency had been declared under article 352 of the Constitution. Further on October 26, 1962, the Defence of India Ordinance 1962 was passed, followed by the Rules framed thereunder. When the matter came before the Government, it decided that the order of November 7, 1962 made by the Commissioner of Police should be revoked and ordered accordingly on November 10. On the same day, the Government decided to detain the appellants and passed an order under r. 30 of the Rules. This order said that with a view to preventing the appellants from acting in a manner prejudicial to the defence of India, the public safety and the maintenance of public order, it was necessary to detain them,. and therefore in exercise of the powers conferred upon the Government by r. 30 of the Rules, the Government directed the detention of the appellants. This order was served on the appellants in jail. It was challenged by the appellants by filing habeas corpus petition under article 226 of the Constitution and under section 491 of the Code of Criminal Procedure. The 452 High Court, as already indicated, dismissed the applications but granted leave to the appellants to appeal to this Court. The constitutional points raised, as already indicated, were decided by this Court on September 2, 1963, and now we are concerned with the other points raised on behalf of the appellants. The first contention that has been urged is that the de tention is illegal inasmuch as the detention order was served on the appellants while they were in jail, and reliance in this connection is placed on the judgments of this Court in the cases of Rameshwar Shaw vs District Magistrate, Burdwan(1), and Makhan Singh Tarsikka vs The State of Punjab(2). In those cases, it was held by this Court that where a person is detained in jail as an under trial prisoner no order of detention either under the preventive Detention Act or under the Rules could be served on him because one of the necessary ingredients which go to make up the satisfaction of the detaining authority is necessarily absent in such a case. It was pointed out in Rameshwar Shaw 's case(1) that "before an authority can legitimately come to the conclusion that the detention of the person is necessary to prevent him from acting in a prejudicial manner, the authority has to be satisfied that if the person is not detained, he would act in a prejudicial manner and that inevitably postulates freedom of action to the said person at the relevant time. If a person is already in jail custody, how can it rationally be postulated that if he is not detained, he would act in a prejudicial manner? 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." The same principle was reiterated in the case of Makhan Singh Tarsikka(2). There is however a vital difference between the facts of those two cases and the facts in the present appeals. Those two cases were concerned with the service of an order of detention under the or under the Rules on a person who was in jail in one of two (1) A. I. 1964 S.C. 334. (2) A. I. R. 453 circumstances, namely (1) where he was in jail as an under trial prisoner and the period for which he was in jail was indeterminate, or (2) where he was in jail as a convicted person and the period of his sentence had still to run for some length of time. In those cases the service of the order of detention under the or under the Rules in jail would not be legal for one of the necessary ingredients about which the authority had to be satisfied would be absent, namely, that it was necessary to detain the person concerned which could only be postulated of a person who was not already in prison. In the present cases, however, the appellants were not under detention either as under trial prisoners for an indeterminate time or as convicted persons whose sentences were still to run for some length of time. They were detained under the Pre ventive Detention Act by an order of November 7, 1962 which had been reported to Government for approval and which order could only remain in force for 12 days under section 3 (3) of the unless in the meantime it had been approved by the State Government. The State Government, however, decided on November 10, 1962, to revoke the order of the Commissioner of Police under the and to pass an order itself under the Rules. In those circumstances, the principle of the two cases referred to above would not in our opinion apply, for the detention of the appellants depended upon the approval of the State Government. The State Government, however, decided to revoke the order of November 7, 1962 and instead decided to pass an order under the Rules on the same day, namely November 10, 1962. In these circumstances it would be in our opinion an empty formality to allow the appellants to go out of jail on the revocation of the order of November 7, and to serve them with the order dated November 10, 1962 as soon as they were out of jail. Where the detention is not of the two kinds considered in the cases of Rameshwar shaw(1) and Makhan Singh Tarsikka (2 ) and is either under the or under the Rules, and its duration is dependent upon the will of the State Government, we cannot see any reason for holding that if the State Government decides 1964 S.C. 334. (2) A. I. R. 1964 S.C. I 120. 454 to revoke an earlier order of detention it cannot pass a fresh order of detention the same day and serve it on the detenu in jail, for the two orders are really of the same nature and are directed towards the same purpose. Further the order of the Commissioner dated November 7, 1962 was subject to the approval of the State Government without which it could only be in force for 12 days. In these circumstances the order passed by the State Government on November 10 under the Rules when it had decided to revoke the order of November 7, 1962, would in our opinion be perfectly valid so far as the time of the making of the order was concerned and its service in jail on the persons who were detained not as under trials or as convicted persons but as detenus, could not be assailed on the ground on which the order of detention was assailed in the cases of Rameshwar Shaw(1) and Makhan Singh Tariskka(2). The principal of those two cases cannot in our opinion be applied to a case where a fresh order of detention is passed after the cancellation or revocation of an earlier order of detention. The contention therefore that the making of the order of detention on November 10, 1962 or its service in jail in these cases, makes the detention illegal, must be negatived. It is next urged that the detaining authority has failed to arrive at that kind of satisfaction which the Rules require. This contention is based on the words of the order dated November 10, 1962. Rule 30 inter alia lays down that the State Government, if it is satisfied with respect to any particular person that with a view to preventing him from acting in any manner prejudicial to the defence of India and civil defence, the public safety, the maintenance of public order, India 's relations with foreign powers, the maintenance of peaceful conditions in any part of India, the efficient conduct of military operations or the maintenance of supplies and services essential to the life of the community, it is necessary so to do, may make an order directing that the person be detained. Now the order of November 10, 1962 is in these terms: "No. S.B.III/DOR.1162 IV Home Department (Special) (1) ; (2) A.I.R. 1964 S.C.1120. 455 ORDER "Whereas the Government of Maharashtra is satisfied with respect to the person known as Shri Shamrao Vishnu Parulekar of Bombay that with a view to preventing him from acting in a manner prejudicial to the defence of India, the public safety and the maintenance of pub lic order, it is necessary to make the following order: "Now, therefore, in exercise of the powers conferred upon it by rule 30 of the Defence of India Rules, 1962, the Government of Maharashtra does hereby direct that the said Shri Shamrao Vishnu Parulekar be detained. By order and in the name of the Governor of Maharashtra Sd. Deputy Secretary to Government of Maharashtra, (Home Department) Sachivalaya, Bombay, this 10th day of November, 1962". The contention of the appellants is that the first part of the order does not say that it is necessary to detain the appellants. The words used in the first part of the order are "it is necessary to make the following order" and then follows the second part which says that the Government directs that the said person be detained. We are of opinion that when the first part says "it is necessary to make the following order", it in effect says that "it is necessary so to do which is what r. 30 of the Rules requires. Reading the order as a whole, in substance it does say that it is necessary to detain the person with a view to preventing him from acting in a manner prejudicial to the defence of India, etc. In r. 30 the words are "so to do" while in the order they are "to make the following order". The two expressions in our opinion mean the same thing and we cannot 456 accept the argument that the satisfaction necessary under r. 30 of the Rules was not arrived at in these cases by the authority making the order. Then it is urged that as the State Government is equivalant to the Governor, it is the Governor who should. be satisfied and not the Home Minister as is the case according to the affidavit filed on behalf of the State Government. The State Government in this connection relies on the Rules of Business, copy of which has been made available to us. These rules have been framed by the Governor under article 166 of the Constitution for the more convenient transaction of the business of Government and for the allocation among Ministers of the said business. In the affidavit on behalf of the State Government reliance is placed on item 2 (b) of the First Schedule to the Rules of Business dealing with subjects allocated to the Home Department (Special), entry (7) which provides for preventive detention for reasons connected with the security of a State, the maintenance of public order or the maintenance of supplies and services essential to the community. During the hearing, our attention was drawn to item (1) of the First Schedule to the Rules of Business dealing with subjects allotted to General Administration Department, entry (44), which provides for preventive detention for reasons connected with defence, foreign affairs or the security of India. It is obvious from the Rules of Business that preventive detention has been divided into two parts and allocated to two different departments. Where preventive detention is for reasons connected with the security of a State, the maintenance of public order or the maintenance of supplies and services essential to the community, it can be dealt with by the Minister in charge of item 2 (b) dealing with subjects allocated to the Home Department (Special); but where the preventive detention is for reasons connected with defence, foreign affairs or the security of India, it can be dealt with by the Minister in charge of item 1 relating to subjects allotted to the General Administration Department. The detention order in the present cases states that it was made with a view to preventing the appellants from acting in a manner prejudicial to the defence of India, the public 457 safety and the maintenance of public order. As the deten tion order mentions both the defence of India and the maintenance of public order, such an order could only be made by a Minister who was in charge both of item 1 relating to subjects allotted to the General Administration Depart ment and of item 2(b) relating to subjects allotted to Home Department (Special). In the affidavit on behalf of the State the order was sought to be justified on the round that it was made by the Home Minister in charge of item 2 (b) relating to subjects allocated to the Home Department (Special). We are of opinion that as the detention order was for reasons connected with the defence of India also, it could not be dealt with under item 2 (b), entry (7) only which item deals with subjects allocated to the Home De partment (Special) and had to be dealt by a Minister who was in charge of both item 1 relating to subjects allotted to the General Administration Department and item 2 (b) relating to subjects allotted to Home Department (Special). In the original affidavit filed on behalf of the State it was however not clear whether the Minister who dealt with these orders was also in charge of the subjects allotted to the General Administration Department but it was stated at the bar that the Minister who dealt with the matter and passed the order on the basis of which the appellants were detained was in charge not only of item 2 (b) relating to subjects allocated to the Home Department (Special.) but was also in charge of item 1 relating to subjects allotted to the General Administration Department. We therefore called upon the State Government to file an affidavit to that effect and an affidavit was filed on December 21, 1963. That affidavit says that the order of November 10, 1962 was passed by the Chief Minister who was at the relevant time in charge both of the General Administration Department as well as the Home Department (Special). We have already referred to the terms of the order of detention. That order refers to three reasons as the basis for the order, namely, (i) the defence of India, (ii) the public safety, and (iii) the maintenance of public order. Now preventive detention connected with the defence of India could only be ordered under the Rules of Business by the Minister who was in charge of the General Administration Department. 458 while preventive detention for reasons connected with the maintenance of public order could only be ordered by the Minister in charge of subjects allocated to the Home Depart ment (Special). The order therefore in the present case could only be made by a Minister who was in charge both of subjects allotted to the General Administration Department and subjects allotted to the Home Department (Special). In view of the affidavit now filed it appears that the Chief Minister was in charge of both the departments and in the circumstances he could pass the order under challenge. The contention under this head must therefore fail. The next argument is that there is no order of allocation made by the Governor under article 166 of the Constitution after the passing of the Defence of India Ordinance and the Rules framed thereunder and therefore the allocation of business by the, Rules of Business which were enforced by an order of the Governor dated May 1, 1960 would not be of any effect in allocating the subject of preventive detention arising under the Defence of India Ordinance Act and the Rules to the Minister and the Governor should have passed the order of detention himself. We are of opinion that there is no force in this contention. Allocation of busi ness under article 166 (2) of the Constitution is not made with reference to particular laws which may be in force at the time the allocation is made; it is made with reference to the three lists of the Seventh Schedule to the Constitution, for the executive power of the Centre and the State together extends to matters with respect to which Parliament and the Legislature of a State may make laws. Therefore. when allocation of business is made it is made with reference to the three Lists in the Seventh Schedule and thus the allocation in the Rules of Business provides for all con tingencies which may arise for the exercise of the executive power. Such allocation may be made even in advance of legislation made by Parliament to be available when ever Parliament makes legislation conferring power on a State Government with respect to matters in List I of the Seventh Schedule. It was therefore in our opinion not necessary that there should have been an allocation made by the Governor under article 166 (3) of the power to detain under 459 the Defence of India Ordinance, Act and Rules after they were passed; it will be enough if the allocation of the sub ject to which the Defence of India Ordinance, Act and Rules refer has been made with reference to the three Lists in the Seventh Schedule and if such allocation already exists, it may be taken advantage of if and when laws are passed. Preventive detention is provided for in List 1, item 9, for reasons connected with defence, foreign affairs and the security of India, and in item 3 of List III for reasons connected with the security of a State, the maintenance of public order, or the maintenance of supplies and services essential to the community. The allocation of business made under article 166 is in pursuance of these entries in the three Lists in the Seventh Schedule and would be available to be used whenever any law relating to these entries is made and power is conferred on the State Government to act under that law. The contention of the appellants that fresh allocation should have been made under article 166 (3) by the Governor after the passing of the Defence of India Ordinance, Act and Rules must therefore fail. Lastly reliance is placed on sections 40 and 44 of the Defence of India Act. Section 40 gives power to the Central Government to delegate its powers under the Act or the Rules to any officer or authority subordinate to the Central Government or to any State Government or any officer or authority subordinate to such Government or to any other authority, and the argument is that before the State Government can exercise the power conferred by r. 30, there has to be a delegation by the Central Government. This argument in our opinion is misconceived. It is true that section 40 gives authority to the Central Government to delegate its powers under the Act or the Rules to the State Government and others. But no delegation under that section is required for the exercise of the power under r. 30 by the State Government, for r. 30 itself lays down that the power there in can be exercised by the Central Government or the State Government. No further delegation therefore was necessary in favour of the State Government in so far as the exercise of power under r. 30 is concerned. 460 Next it is urged that the order of detention does not show that section 44 was kept in mind when it was made. Section 44 lays down that "any authority or person acting in pursuance of this Act shall interfere with the ordinary avocations of life and the enjoyment of property as little as may be consonant with the purpose of ensuring the public safety and interest and the defence of India and civil defence". It is urged that an order of detention necessarily interferes completely with the ordinary avocation of life of the person detained and therefore before such an order could be made, section 44 should be borne in mind. Therefore the order of detention is to be made when it is the only way of carrying out the purposes of the Act, for section 44 provides that there should be as little interference with the ordinary avocations of life as possible under the Act. The argument further is that r. 30 (1) provides as many as eight clauses which provide for the regulation of conduct of an individual and cl. (b) relating to detention, which amounts to complete interference with the avocation of life of the detenu could only be resorted to in view of section 44 when it is shown that no other way of regulating the conduct of the person de tained as provided in the other clauses of r. 30 (1) would meet the needs of the situation. So it is urged that unless the order shows on the face of it that the State Government thought that the detention was the only mode in which the purposes of the Act and the Rules could be carried out, the order would be bad in view of section 44 of the Act. We are of opinion that there is no force in this contention. It is true that section 44 provides that there should be as little interference with the ordinary avocations of life as possible when orders are made under the Act or the Rules; but that does not mean that a detention order must show on the face of it that the State Government had considered the various clauses of r. 30 (1) and had come to the conclusion that the only way in which the purposes of the Act and the Rules could be carried out was by the use of cl. (b) of r. 30 (1). In our opinion when the order says that it is necessary to make an order of detention in order to restrain the prejudicial activities mentioned therein it means that that was the only way which the State Government thought was necessary to adopt in order to meet the situation. It will then 461 be for the detenu to show that the order had gone beyond the needs of the situation and was therefore contrary to section 44. No such thing has been shown in the present cases and we are satisfied that the orders in question cannot be said to go beyond the needs of the situation, even assuming that section 44 is mandatory as urged on behalf of the appellants and not merely directory as urged on behalf of the State. The appeals therefore fail and are hereby dismissed.

Appellants were first detained on November 7, 1962 under . That order was revoked by the Government and the appellants were released but re arrested under Rule 30 of the Defence of India Rules. The orders of detention were served on appellants in Jail. The appellants challenged those orders in the High Court by filing habeas corpus petitions under article 226 of the Constitution and section 491 of the Code of Criminal Procedure. The writ petitions were dismissed by the High Court and the appellants came to this Court under a certificate from the High Court. The contentions raised by the appellants were that their detention was illegal because the detention order was served on them when they were in jail, that the orders of detention were passed without the satisfaction of the authority concerned regarding their necessity, the satisfaction was to be that of the Governor and not of any Minister, that there should have been fresh allocation of business by the Governor under article 166(3) of the Constitution after the passing of the Defence of India Ordinance, Act and Rules, that before the State Government could exercise the power conferred by Rule 30, there had to be delegation by the Central Government that the order of detention did not show that section 44 of Defence of India Act was kept in mind when the order was made and that unless the order showed on the face of it that the State Government thought that detention was the only mode in which the purpose of the Act and Rules could be carried out, the order was bad. Dismissing the appeals. Held: The orders of detention passed by the State Government and their service on the appellants in jail were perfectly valid and did not make the detention illegal. The appellants were detained not as undertrials or as convicted persons but as detenus and hence the cases of Rameshwar Shaw and Makhan Singh Tarsikka did not apply in the present case. Reading the detention order as a whole, it was clear that it did Ray in substance that it was necessary to detain the appellants with a view to preventing them from acting in a manner prejudicial to the Defence of India, public safety and maintenance of public order. There was no difference between the words "so to do" in Rule 30 and the words "to make the following order ' in the detention order. As the detention order mentioned both the defence of India and maintenance of public order, such an order could be made on the satisfaction of a Minister who was incharge of both the subjects in view of the Rules of Business promulgated by the Governor. It was not necessary that fresh allocation of business should be made by the Governor under article 166(3) after the passing of the Defence of India Ordinance, Act and Rules. It Is enough if the allocation of the 448 subject to which the Defence of India Ordinance, Act and Rules refer has been made with reference to the three lists in the Seventh Schedule and if such allocation already exists, it may be taken advantage of if and when laws are passed. Rule 30 of the Defence of India Rules lays down that the power can be exercised by the Central Government or the State Government and hence no further delegation is necessary in favour of the State Government for the exercise of power under Rule 30. It is true that section 44 of the Defence of India Act provides that there should be as little interference with the ordinary avocation of life as possible when orders are made under the Act or the Rules, but that does not mean that a detention order must show on the face of it that the State Government had considered the various clauses of Rule 30(1) and had come to the conclusion that the only way in which the purpose of the Act and the Rules could be carried out was by the use of Rule 30(1) (b). When the order says that it is necessary to make an order of detention in order to restrain the prejudicial activities mentioned therein, it means that that was the only way which the State Government thought was necessary to adopt in order to meet the situation. It is for the detenu to show that the order had gone beyond the needs of the situation and was therefore contrary to section 44. Makhan Singh Tarsikka vs State of Punjab A.I.R. 1964 S.C: 381 Keshav Talpade vs King Emperor, , Rameshwar Shaw vs District Magistrate, Burdwan, ; , Alakhon Singh Tarasikka vs State of Punjab, A.I.R. , referred to

Civil Appeal No. 173 of 1983. PG NO 336 From the Judgment and Order dated 30.9.1982 of the Calcutta High Court in Suit No. 568 of 1979. Ajay Nath Ray, Surendra Dube and Mrs. Indira Sawhney for the Appellant. S.K. Kapur, Ranjan Deb, Gangadeb and B.P. Singh for the Respondent. The Judgment of the Court was delivered by RANGANATHAN, J. A somewhat important question as to the nature and scope of the rights available to a defendant whose "defence has been struck out" calls for determination in this appeal in the particular context of the West Bengal Premises Tenancy Act, 1956. The appeal arises from the judgment of a Full Bench of the Calcutta High Court constituted to resolve a conflict in the earlier decisions of the same court on this issue. The Full Bench, by a majority of two (P.K. Banerjee and Chittatosh Mookerjee, JJ) to one (Ramendra Mohan Datta, Acting C.J.) decided that in a matter where the defence against delivery of possession has been struck out under sub section 3 of section 17 of the West Bengal Premises Tenancy Act, 1956, (hereinafter referred to as the 'Act ') the defendant tenant cannot cross examine the witnesses called by the plaintiff, excepting on the point of notice under section 13(6) of the said Act. The correctness of the view taken by the majority is contested in this appeal. Though the learned Judges were of opinion that the issue decided on the reference raised substantial questions of law of general importance, they considered themselves unable to grant a certificate of fitness for appeal to this Court since the reference had arisen only on an interim order and the view expressed did not result in a judgment, order or decree against which leave to appeal could be granted. Thereupon the aggrieved party filed a petition for special leave to appeal before this Court, which was granted. It is in this manner that the issue has been brought up before this Court. A detailed factual background is not necessary since the question raised is purely one of law. It may, however, be mentioned that the respondent in this appeal filed a suit in 1979 on the original side of the Calcutta High Court praying for a decree directing the defendant (present appellant) to deliver up vacant and peaceful possession of certain premises in Calcutta and also for a decree for mesne profits or damages from February 1, 1978 till the date of PG NO 337 delivery of possession. The appellant, a company carrying on business at the premises in question, filed its written statement denying the averments in the plaint and the claims made therein. During the pendency of the suit several interlocutory applications were made from time to time in which orders were passed directing the present appellant (hereinafter referred to as the tenant) to deposit certain sums in court. At one stage it appears that the tenant made an application praying that he may be permitted to deposit the arrears of rent in monthly instalments along with the current rents. No orders were passed on this application on the ground that the application was out of time. However, it appears that subsequent to disposal of this application, the defence of the tenant had been struck off under the provisions of section 17(3) of the Act. The correctness of this order striking out the defence of the tenant has become final and is no longer in issue. It, however, appears that the tenant contended before the trial court (though the details are not available on record) that the order under section 17(3) could, at worst, preclude the tenant only from adducing evidence, oral or documentary, in support of the averments made in its written statement. It was claimed that it was open to the tenant to exercise his rights (a) of cross examining the plaintiff 's witnesses; (b) of pointing out to the court the factual and legal infirmities in the plaintiff 's case; and (c) of addressing arguments on the basis of evidence as adduced by the plaintiff and tested by the cross examination on behalf of the defendant. Learned counsel for the appellant also urged before us that though the defendant had conceded before the High Court that it will not be entitled to lead any evidence, the reference being of a general question regarding the consequences of a strike off, we should consider the question in all its aspects and lay down the principles governing such cases. We may start by referring to the provisions of section 17 of the Act. When a suit for eviction is filed under the Act agianst any tenant on any of the grounds specified in Section 13 of the Act, Section 17(1) imposes an obligation on the tenant to deposit into the Court or with the controller or pay to the landlord all arrears of rent due from him with interest within a specified period and also to PG NO 338 continue to deposit or pay the current rent thereafter regularly month after month. Sub section (2) provides a machinery for the determination of the amounts to be so paid or deposited, in case of dispute. Sub section (2A) and (2B) contain provisions enabling the Court, subject to certain restrictions, to extend the time for such deposit or payment or allow the deposit or payment to be made in instalments. If the tenant deposits or pays the amounts as above, he is protected from being evicted from the premises on the ground of non payment of rent: sub section (4). If, on the other hand, he fails to deposit any amount referred to above within the time permitted, the consequence set out in sub section (3) will follow. That sub section reads: "(3) If a tenant fails to deposit, or pay any amount referred to in sub section (1) or sub section (2) within the time specified therein or within such extended time as may be allowed under clause (a) of sub section (2A), or fails to deposit or pay any instalment permitted under clause (b) of sub section (2A) within the time fixed therefor, the Court shall order the defence against delivery of possession to be struck out and shall proceed with the hearing of the suit." (underlining ours) Before discussing the interpretation of the crucial words of the sub section, it may be useful to set out certain analogous provisions which have been the subject of judicial consideration: (a) The West Bengal Act XVII of 1950, which preceded the one under consideration, was somewhat different in its language. section 14(1) of that Act dealt with a case where the suit was based on the ground of non payment of rent. The Court could make an order calling upon the tenant to pay up the arrears of rent on or before a specified date. The sequitir was set out in sub sections (3) and (4) as follows: "(3) If within the time fixed in the order under sub section (1), the tenant deposits in the court the sum specified in the said order, the suit, so far as it is a suit for recovery of possession of the premises, shall be dismissed by the court. In default of such payment the court shall proceed with the hearing of the suit: Provided that the tenant shall not be entitled to the benefit of protection against eviction under this section if PG NO 339 he makes default in payment of the rent referred to in clause (i) of the proviso to sub section 1 of section 12 on three occasions within a period of eighteen months." "(4) If the tenant contests the suit, as regards claim for ejectment, the plaintiff landlord may make an application at any stage of the suit for order on the tenant defendant to deposit month by month rent at a rate at which it was last paid and also the arrears of rent, if any, and the court after giving an opportunity to the parties to be heard may make an order for deposit of rent at such rate month by month and the arrears of rent, if any, and on failure of the tenant to deposit the arrears of rent within fifteen days of the date of the order or the rent at such rate for any month by the fifteenth day of the next following month, the court shall order the defence against ejectment to be struck out and the tenant to be placed in the same position as if he had not defended the claim to ejectment. The landlord may also apply for permission to withdraw the deposited rent without prejudice to his right to claim decree for ejectment and the court may permit him to do so." (b) Our attention has been drawn to two provisions of the Rules framed by the Calcutta High Court governing proceedings on its Original Side. These rules read as follows: Chapter IX Rule 4: Suit heard ex parte against defendants in default Where one or more of several defendants has or have filed a written statement or written statements, but another or others has or have not, the suit shall, unless otherwise ordered, upon production of a certificate showing such default, be heard ex parte as against the defaulting defendant or defendants. Chapter XIV Rule 3: Where heard ex parte defendant may, in person, cross examine and address the Court Where a suit is heard ex parte against any defendant, such defendant may be allowed to cross examine, in person, the plaintiff 's witnesses, and to address the Court; but unless the Court otherwise specially orders, evidence will not be received on his behalf, nor will he be allowed the assistance of an Advocate or Attorney. PG NO 340 (c) Another provision that may be referred to in this context is the one in Order 11 rule 21 of the Code of Civil Procedure (C.P.C.) This rule reads thus: 21(1) Non compliance with order for discovery Where any party fails to comply with any order to answer interrogatories, or for discovery or inspection of documents, he shall, if a plaintiff, be liable to have his suit dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating or seeking discovery or inspection may apply to the Court for an order to that effect, and an order may be made on such application accordingly, after notice to the parties after giving them a reasonable opportunity of being heard. (2) Where an order is made under sub rule (1) dismissing any suit, the plaintiff, shall be precluded from bringing a fresh suit on the same cause of action. On behalf of the appellant learned counsel submits that a tenant or defendant whose "defence is struck out" is in the same position as if he had filed no written statement in the suit. It is pointed out that the Original Side Rules of the Calcutta High Court permit a defendant who is said to be ex parte, either by not filing a written statement or by non appearance, to cross examine the plaintiff 's witnesses and to address the court; not only that, the rules confer a discretion in the court to permit him to have the assistance of an advocate and even to adduce evidence on his behalf. This is based on the principle that the effect of an order striking out the defence can only be that the defendant should not, because of his default, be permitted to plead the positive case, which he had or could have put forward in his written statement or substantiate it by leading evidence on his side. This cannot preclude him from putting forward the plea that the plaintiff is not entitled to a decree as he has not proved his case. This, it is said, he is entitled to do either by cross examining the plaintiff 's witnesses and thus demolishing the plaintiff 's case or addressing arguments either on points of law or even on the facts in the light of the plaintiff 's evidence as tested by his cross examination. Even this cannot, it is urged, be an invariable rule and the Court should always have a discretion, as provided for in the Calcutta High Court Rules, to relax its rigidity depending upon the circumstances of each case. The position in an eviction Petition, it is said, cannot be much different. Learned counsel urges that is a well established principle, PG NO 341 particularly under the Rent Acts, that it is for the plaintiff to satisfy the court that the conditions set out in the statute to enable him to obtain an order of eviction are strictly fulfilled. Even where a defendant is said to be ex parte, the plaintiff is not absolved from this responsibility and it is also necessary for the Court, in such cases, to satisfy itself that the plaintiff is entitled, on the terms of the statute, to the relief prayed for: vide K.K. Chari vs R.M. Seshadri, AIR ; and Inder Mohan Lal vs Ramesh Khanna, ; In doing this the Court can and should take the help and assistance of the defendant and counsel. It should be open to the defendant/tenant, even if he cannot put up a positive case, to show to the Court that the plaintiff 's suit or petition should fail on its own inherent weaknesses. Learned counsel has relied on certain decisions and the observations therein in support of his submissions. These may be referred to: An early decision of this Court, Sangram Singh vs Election Tribunal, Kotah, Bhurey Lal Baya, ; , was concerned with the question whether a defendant who had been set ex parte at some of the hearings (after the first hearing) could be permitted to appear and take part in later hearings, without the ex parte order being set aside. The Court, after referring the terms of the Order XVII Rule 2 of the Code of Civil Procedure, observed thus: "The learned Judges who constituted a Full Bench of the Lucknow Chief Court (Tulsha Devi vs Sri Krishna, thought that if the original ex parte order did not ensure throughout all future hearings it would be necessary to make a fresh ex parte order at each succeeding hearing. But this proceeds on the mistaken assumption that an ex parte order is required. The order sheet, or minutes of the proceedings, has to show which of the parties were present and if a party is absent the Court records that fact and then records whether it will proceed ex parte against him, that is to say, proceed in his absence, or whether it will adjourn the hearing; and it must necessarily record this fact at every subsequent hearing because it has to record the presence and absence of the parties at each hearing. With all due deference to the learned Judges who hold this view, we do not think this is a grave or a sound objection. A much weightier consideration is that the plaintiff may be gravely prejudiced in a given case because, as the PG NO 342 learned Rajasthan Judges point out, and as O 'Sullivan, J. thought, when a case proceeds ex parte the plaintiff does not adduce as much evidence as he would have if it had been contested. He contents himself with leading just enough to establish a prima facie case. Therefore, if he is suddenly confronted with a contest after he has closed his case and the defendant then comes forward with an army of witnesses he would be taken by surprise and gravely prejudiced. That objection is, however, easily met by the wide discretion that is vested in the Court. If it has reason to believe that the defendant has by his conduct misled the plaintiff into doing what these learned Judges apprehend, then it might be a sound exercise of discretion to shut out cross examination and the adduction of evidence on the defendant 's part and to allow him only to argue at the stage when arguments are heard. On the other hand, cases may occur when the plaintiff is not, and ought not to be, misled. If these considerations are to weigh, then surely the sounder rule is to leave the Court with an unfettered discretion so that it can take every circumstances into consideration and do what seems best suited to meet the ends of justice in the case before it." M/s. Paradise Industrial Corpn. vs M/s. Kiln Plastics Products, ; was a case which arose under the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947. The trial Judge passed an order directing the tenant to deposit certain amounts in court, in default, making the notice absolute and directing that the defence would be struck off and the suit fixed for ex parte hearing. An ex parte decree followed. A single Judge of the Bombay High Court set aside the ex parte decree on the ground that the above order was illegal and without jurisdiction as it did not conform to the provisions contained in section 11(4) of the Act in question which only provided that, in case the directions of the court are not complied with, the defendant "shall not be entitled to appear in or defend the suit except with leave of the Court, which leave may be granted subject to such terms and conditions as the Court may specify. "It did not, in the view of the learned Judges, authorise the Court to strike off the defence straightaway. Reversing this order of the leared Judge, this Court observed: "We are afraid the learned Judge of the High Court has missed the substance and chased the shadow. The words "striking out the defence" are very commonly used by PG NO 343 lawyers. Indeed the application made on February 24, 1969 by the plaintiffs was for a direction to order the defences of the defendants to be struck off in default of payment of the amount ordered by the Court. The phrase "defence struck off ' or "defence struck out" is not unknown in the sphere of law. Indeed it finds a place in Order XI Rule 21 of the Code of Civil Procedure . . In effect; both mean the same thing. Nobody could have misunderstood what was meant. Indeed, one may even say that the phrase "the defence to be struck off" or "struck out" is more advantageous from the point of view of the defendants. Even when a defence is struck off the defendant is entitled to appear, cross examine the plaintiff 's witnesses and submit that even on the basis of the evidence on behalf of the plaintiff a decree cannot be passed against him, whereas if it is ordered in accordance with Section 11(4) that he shall not be entitled to appear in or defend the suit except with the leave of the court he is placed at a greater disadvantage. The use of the words 'defence struck off ' does not in any way affect the substance of the order and the learned Judge of the High Court was wholly in error in holding that because of the form of the order passed on June 2, 1969 the order was illegal and without jurisdiction. The order squarely falls within Section 11(4). What the law contemplates is not adoption or use of a formula; it looks at the substance. The order is not therefore one without jurisdiction. It is one which the Judge was competent to make. Somewhat similar in nature are the observations made in M/s. Babbar Sewing Machine Company vs Trilok Nath Mahajan, ; while dealing with the provisions of Order XI Rule 21 of the C.P.C. The court was of opinion that, for the nature of the default in the said case it was a travesty of justice that the trial court should have passed an order striking out the defence of the defendant and the High Court should have declined to set it aside. In this context, after discussing the scope of Order XI Rule 21 as to the manner in which the discretion of the court should he exercised, the Court made certain general observations towards the end of the judgment of the following effect: "It was further contended that the High Court was in error in observing that 'in view of the clear language of PG NO 344 Order XI, Rule 21 ' the defendant has no right to cross examine the plaintiff 's witnesses. A perusal of Order XI, Rule 21 shows that where a defence is to be struck off in the circumstances mentioned therein, the order would be that the defendant "be placed in the same position as if he has not defended". This indicates that once the defence is struck off under Order XI, Rule 21, the position would be as if the defendant had not defended and accordingly the suit would proceed ex parte. In Sangram Singh vs Election Tribunal, ; , it was held that if the court proceeds ex parte against the defendant under Order IX, Rule 6(a), the defendant is still entitled to cross examine the witnesses examined by the plaintiff. If the plaintiff makes out a prima facie case the court may pass a decree for the plaintiff. If the plaintiff fails to make out a prima facie case, the court may dismiss the plaintiff 's suit. Every Judge in dealing with an ex parte case has to take care that the plaintiff 's case is, at least, prima facie proved. But, as we set aside the order under Order XI Rule 21, this contention does not survive for our consideration. We, therefore, refrain from expressing any opinion on the question. " Our attention has also been invited to the incidental references by this Court to the aspect presently in issue before us while considering the questions, in the context of analogous provisions of the rent statutes, whether the Court has a discretion to extend the time for the deposits to be made by the tenant when there is no specific statutory provision to that effect and whether, where the tenant fails to make the deposit as directed, the Court is bound to strike out his defence or has a discretion to take or not to take this extreme step. In Ram Chand vs Delhi Cloth & General Mills Co. Ltd., ; , this Court, on the language of the Delhi Rent Control Act agreeing with the High court ILR 1972 2 Delhi 503 on this point held that the Rent Controller has no power to condone the tenant 's default by extending the time for payment. This Court, however, did not agree with the High Court 's view that the default of the tenant vested an indefeasible right in the landlord and entitled him to an order of eviction straightaway. The Court observed: "While we agree with the view of the High Court that the controller has no power to condone the failure of the tenant to pay arrears of rent as required under section 15(1), we PG NO 345 are satisfied that the Full Bench fell into an error in holding that the right to obtain an order for recovery of possession accrued to the landlord. As we have set out earlier, in the event of the tenant filing to comply with the order under section 15(1), the application will have to be heard giving an opportunity to the tenant if his defence is not struck out under section 15(7) and without hearing the tenant if his defence is struck out." (emphasis added) Shyamcharan Sharma vs Dharamdass, ; was a case under the Madhya Pradesh Accommodation Control Act. The tenant had not been able to deposit the rents as per the directions of Court and sought an extension of time. The landlord opposed the application for condonation of delay on the ground that the Court had no power to grant it. This contention was rejected by the first court and first appellate court but the High Court accepted the plea and decreed the suit for eviction. The Supreme Court allowed the tenant 's appeal. It observed: "It is true that in order to entitle a tenant to claim the protection of section 12(3), the tenant has to make a payment or deposit as required by section 13, that is to say, the arrears of rent should be paid or deposited within one month of the service of the writ of summons on the tenant or within such further time as may be allowed by the court, and should further deposit or pay every month by the 15th, a sum equivalent to the rent. It does not, however, follow that failure to pay or deposit a sum equivalent to the rent by the 15th of every month, subsequent to the filing 'of the suit for eviction, will entitle the landlord straightaway, to a decree for eviction. The consequences of the deposit or payment and non payment or non deposit are prescribed by subss. (5) and (6) of section 13. Since there is a statutory provision expressly prescribing the consequence of non deposit or non payment of the rent, we must look to and be guided by that provision only to determine what shall follow. section 13(6) does not clothe the landlord with an automatic right to a decree for eviction, nor does it visit the tenant with the penalty of a decree for eviction being straightaway passed against him. section 13(6) vests, in the court, the discretion to order the striking out of the defence against eviction. In other words, the Court, having regard to all the cir cumstances of the case, may or may not PG NO 346 strike out the defence. If section 13 were to be construed as mandatory and not as vesting a discretion in the Court, it might result in the situation that a tenant who has deposited the arrears of rent within the time stipulated by section 13(1) but who fails to deposit thereafter the monthly rent on a single occasion for a cause beyond his control may have his defence struck out and be liable to summary eviction. We think that section 13 quite clearly confers a discretion, on the court, to strike out not to strike out the defence, if default is made in deposit or payment of rent as required by section 13(1). If the Court has the discretion not to strike out the defence of a tenant committing default in payment or deposit as required by section 13(1), the court surely has the further discretion to condone the default and extend the time for payment or deposit. Such a discretion is a necessary implication of the discretion not to strike out the defence. " The apparent conflict between these cases camp up for consideration in Ram Murti vs Bhola Nath, After considering the two earlier decisions, the Court observed: "It would be incongruous to hold that even if the defence of the tenant is not to be struck out under Section 15(7), the tenant must still be visited with the punishment of being deprived of the protection under Section 14(2). In Hem Chand 's case the Court went to the extent of laying down that even if the defence of the tenant is struck out under Section l5(7), the Rent Controller could not straightaway make an order for eviction in favour of the landlord under Section 14(1)(a). The Court held that the High Court was wrong in its assumption that failure to comply with the requirements of section 15(1) vests in the landlord an 'indefeasible right ' to secure an order for the eviction of the tenant under Section 14(1)(a). The Court set aside the judgment of the High Court taking that view and remanded the matters to the Rent Controller observing that there was still an issue to be tried. If that be so, the question at once arises, "what is the issue to be tried?" If the landlord has still to make out a case before the Rent Controller that he was entitled to an order for eviction of the tenant under section 14(1)(a), surely the tenant has the right to participate in the proceedings and cross examine the landlord. It must logically follow as a necessary PG NO 347 corollary that if the defence is not to be struck out under Section 15(7) it means that the tenant has still the defences open to him under the Act. In the premises, the conclusion is irresistible that he has the right to claim protection under Section 14(2). What is of essence of Section 14(2) and of Section 15(6) is whether there has been a substantial compliance with the order passed under Section 15(1). The words "as required by section 15(1)" in these provisions must be construed in a reasonable manner. If the Rent Controller has the discretion under Section 15(7) not to strike out the defence of the tenant, he necessarily has the power to extend the time for payment of future rent under Section 15(1) where the failure of the tenant to make such payment or deposit was due to circumstances beyond his control. The previous decision in Hem Chand 's case interpreting Section 15(7) and Section 14(2) in the context of Section 15(7) of the Delhi Rent Control Act, 1958, although not expressly overruled, cannot stand with the subsequent decision in Shyamcharan case interpreting the analogous provisions of the Madhya Pradesh Accommodation Control Act, 1961 as it is of a larger Bench." ( Underlining ours) One more decision of this Court to which counsel for the respondents referred may also be touched upon here, viz. Bela Das and others vs Samarendra Nath Bose, [1975] 2 S.C.R. 1004. In that case, the respondent was a tenant of a certain premises in respect of which a suit for eviction had been filed. The tenant was directed to pay into court the arrears and future rent but he did not comply with the order and his defence was struck out. Thereafter, an ex parte decree of eviction was passed and confirmed by the first appellate court. In second appeal, the High Court remitted the case to the trial court on the ground that, since the respondent had not admitted the appellants to be full owners of the premises but contended that other co sharers of the appellant 's family had also shares therein, there was a denial of the relationship of landlord and tenant and that the order striking out the respondent 's defence qua tenant did not prevent him from contesting the suit on the question of title. The appeal against the High Court 's order was allowed by this Court. The Court observed: "The defendant had admitted that he was the tenant under the plaintiffs but was merely asserting that there were some more landlords of the premises in question. It was PG NO 348 not a case of denial of relationship of landlord and tenant between the parties. In the case of Mahabir Ram, AIR 1968 Patna 415, the tenant had denied the title of the plaintiffs and set up a title in himself. In the instant case the plea of the defendant has been that the plaintiffs being landlords of the suit premises for a moiety of share could not alone claim a decree for eviction against him. Such a plea set up by the defendant to resist the suit for eviction was a plea qua tenant and not de hors it. The striking out of the defence on 8.7.1964 had the effect of striking out all defence raised by the defendant qua tenant including his defence that the plaintiffs alone being co sharer landlords were not entitled to maintain the suit for eviction. It may also be added that the learned Munsif in his order dated 8.7.1964 striking out the defence, which order was confirmed by a Bench of the High Court in Civil Revision No. 824 of 1964 decided on 21.4.1964, had pointed out on the basis of the defendant 's statements in his written statement as also in his rejoinder to the plaintiff 's petition under section 11A of the Act that the defendant had admitted that he was paying rent to the plaintiffs and had recognised them to be their landlords. In that view of the matter also the plaintiffs were the landlords of the suit premises occupied by the defendant within the meaning of clause (d) of section 2 of the Act. In either view of the matter there is no escape for the defendant in this case that his entire defence in the suit was in his capacity as a tenant and on its striking out it was struck out as a whole. The hearing of the suit ex parte was, therefore, legal and valid. The contrary view taken by the High Court is erroneous in law. " A brief reference may now be made to the conflict of decisions in the Calcutta High Court which occasioned the reference to the Full Bench. The first two cases were under the original side rules and concerned the consequences of a defendant failing to enter appearance in a suit. In a very early decision in S.N. Banerjee vs H.S. Suhrawardy, AIR 1928 Cal. 772 Rankin, C.J. had observed, of the rights of a defendant who had not entered appearance, as follows: "If he does not enter appearance within the time limited the case will go into what is called the undefended list and when the case is on the undefended list it is not possible for the defendant without obtaining leave to enter PG NO 349 appearance. He has a limited right to cross examine witnesses adduced on behalf of the plaintiff if he appears at the time when the undefended case is down for hearing, out his position is that of a man who for not entering appearance in time is precluded from defending the suit whether he appears at the hearing or does not appear at the hearing. " Referring to these observations in Dabendra Nath Dutt vs Smt. Satyabala Dassi and others, AIR 1950 Cal. 217, P.B. Mukharji, J. said: "Thus then there are two consequences of not entering appearance under the Rules. One is that the suit is liable to be heard ex parte and the other is that no written statement can be filed. In that context, I am not inclined to impose more punishment than those two so explicitly stated by the Rules. Therefore I am of the opinion that a party subject to these handicaps imposed by the Rules can still appear, under the Civil Procedure Code when the suit is called on for hearing from the undefended list, not only to cross examine the witnesses of the plaintiff and demolish in such manner the plaintiffs case on evidence that the Court will not pass any decree in the plaintiff 's favour but also to make such arguments and submissions on law and on such evidence as the plaintiff may have brought to the Court. These are, in my opinion, valuable rights under the Code which are not taken away by any Rules of the original side. If that be so I fail to see why in such a case the terms of 0.9 Rr. 8 and 9 of the Code cannot be made applicable to the original side of this Court notwithstanding the technicalities of "entering appearance" as introduced by the Rules of the original side practice. It may be that when because of the default in "entering appearance" the suit is liable to be heard ex parte, the defendant may not know or have notice when the suit is going to be heard. But that is immaterial and that is a risk to which such a defendant makes himself open by such default. But should he by any means whatever know that the suit is being heard from the undefended list he can nevertheless appear at such hearing and exercise the rights I have mentioned. Rankin C.J. in the Court of appeal sees the possibility of cross examination in such a case by the defendant of plaintiff 's witnesses. PG NO 350 I have not been able to persuade myself to take the view that a suit can only be defended by filing a written statement or by "entering appearance" under the Rules. In my opinion filing of written statement is not the only way of defending a suit. A defendant in my judgment may ably and successfully defend a suit against him by cross examination and arguments. " In S.B. Trading Company Ltd. vs Olympia Trading Corpn. Ltd., AIR 1952 Calcutta 685 Sarkar, J. (as His Lordship then was) had to consider the effect of strike off of defence under section 14(4) of the 1950 Act. In that case, which was a suit for ejectment, the defence had been struck off as the defendants had not complied with an order made under section 14(4). When the plaintiff proceeded to prove its claim for ejectment the defendants claimed to take part in the proceedings to oppose the decree for ejectment. In the first place, they claimed that they were entitled to cross examine the plantiff 's witnesses and to address the court not as counsel but as agents of their clients. The learned Judge declined the request. He referred to the observations of P.B. Mukharji J. quoted earlier, that their rights were only aspects of the rights of defence and observed: "It seems to me that if I allow the defendants in this case to cross examine the plaintiff 's witnesses on their evidence as to the facts establishing the claim to ejectment and to address the Court with regard to that claim, I am really allowing the defendants to defend the claim against ejectment. Section 14(4) says that this the defendants cannot do. " The next question that arose was whether it was open to the defendants to contest the plaintiff 's claim that the defendant was not entitled to the benefit of the proviso to section 14(3). The learned Judge also negatived this right. He observed: "It would be a curious result and really would amount to annulling the provisions of sub section 4, if in spite of the defence being struck out, the defendants were in a position to contest the applicability of the proviso. In my view, this latter argument of learned counsel for the plaintiff is plainly sound. The proviso itself says that on certain things happening "the tenant shall not be entitled to the benefit of protection against eviction under this section. "So, the proviso really contemplates a defence to the claim for ejectment, and if that defence is struck out, PG NO 351 it must necessarily mean that it is no longer open to the defendants to contest the existence of the facts giving rise to the applicability of the proviso. I, therefore, reach the conclusion that the defendants will not be allowed to take any part in the proceedings for proof of the applicability of the proviso. " The effect of a strike off of defence was expressed in even more forcible language by Chakravartti C.J. In Gellatly vs Gannon, AIR 1953 Cal 409. The learned Judge observed: "The language of section 14(4) is in no way qualified. The policy of the section or, indeed, the whole Act seems to be that the Legislature is not minded to protect a tenant who will not even pay the monthly rent regularly. If the tenant, on being directed to pay the current rent month by month, does not do so, the Act quite clearly provides that he will such conduct forfeit the special protection which the Act confers on tenants and will be relegated to his position the general law. I do not find any justification in the language of section 14(4) to limit the defence against ejectment contemplated by it to defence against ejectment only on the ground mentioned in section 12(1)(i) of the Act. " The question next arose before a Full Bench, consisting of section P. Mitra, C.J., M.M. Dutt, J. and A.K. De, J. in Gurudas Biswas vs Char Panna . Seal, AIR 1977 Cal. 110 in the context of the 1956 Act. One of the questions before the Full Bench was whether, in a suit for ejectment where the defence as to delivery of possession had been struckout under section 17(3) of the Act, the defendant could take thedefence of the non existence or invalidity of a notice under section 13(6) in the court below and in the court of appeal. This question was answered in the affirmative, endorsing the conclusion reached in an of earlier decisions of the Court. The reasoning was that the strike off only deprived the tenant of the special protection given to him under section 13(1) of the Act but did not preclude the necessity of the landlord having to prove the service of notice under section 13(6) of the Act which was a step to be taken before the filing of the suit. The Court, however, observed: "To pass an ex parte decree in a suit for ejectment on or of the grounds in Section 13(1), the Court is required to decide, whether the suit is defended or not, (if the relation ship of landlord and tenant is not disputed as here PG NO 352 (a) whether the tenancy has been validly determined by a notice under Section 106, Transfer of Property Act, (b) whether a valid notice of suit was given before filing the suit (c) whether the ground alleged in the plaint to take away the tenant 's special protection conferred by Section 13(1), has been established on the evidence. This is the requirement of Order 20, Rule 4, Civil Procedure Code, whether the suit is contested or not. The Court cannot relieve itself of the necessity of complying with Order to, Rule 4 even if it strikes out the tenant s defence against delivery of possession or the written statement. That being the position in law, it would be wrong, not to permit the tenant to contend and show, if possible, on plaintiffs evidence and materials as are on record, both at tile trial and also at the appeal stage, that the plaintiff is not entitled to the decree prayed for, though he would not be permitted either to cross examine plaintiffs witnesses, when they give evidence, or to call his own witnesses at the trial, if his defence is struck out. ' ' The above observations came up for consideration in Daya Moyee Sadhukhan vs Dal Singer Singh, AIR 1979 Cal 332. In this case, on failure of the defendant to comply with the provisions of section l7(1) of the Act of 1956, his defence had been struck off. Thereafter, at the hearing of the suit, the defendant was allowed to cross examine the plaintiff s husband On all issues but the defendant examined himself only on the question whether notice to quit i1ad been served properly in terms of section 106 of the Transfer of Property Act. The landlord appellant argued before the High Court that as the defence had been struck out, the trial court was not justified in allowing the defendant to cross examine the plaintiff s witness and, in support of this contention reliance was placed on the observations in Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110. M.M. Dutt, J., delivering the judgment of the Bench, observed that, strictly speaking, the observations relied upon did not relate to the points that had been posed before the Full Bench for consideration and hence had no binding force. He proceeded to consider the question on general principles. He referred to Order 9, Rr. 6 and 7 of the C.P.C., the decision in Sangram Singh vs Election Tribunal, ; , Order I I Rule 21 of the C.P.C., the decisions in Paradise Industrial Corpn. vs M/s. Kiln plastics Products, (supra) and the observations in Babbar Sewing Machine Company vs Trilok Nath Mahajan, (supra) and concluded: PG NO 353 "It is true that the Supreme Court did not express, any opinion on the question, but it is apparent that the Supreme Court was inclined to hold that the defendant was, entitled to cross examine the witnesses of the plaintiff. The above decisions of the Supreme Court do not support the observations made in the Full Bench case referred to above, namely, that when the defence of the defendant has been struck out he would not be permitted to cross examine the plaintiff 's witnesses when they give evidence. In the circumstances we hold that in a case where the defence of the defendant is struck out under the provision of section 17(3) of the West Bengal Premises Tenancy Act, 1956, the defendant will be entitled to cross examine the plaintiff 's witnesses on all the points. There can be no doubt that his defence as to the service of the notice to quit and of suit will remain unaffected by the striking out of his defence against delivery of possession and he will be entitled to adduce evidence in support of that defence. In other words, the defendant will be entitled to participate in the proceedings and make his submissions against the plaintiff 's case for delivery of possession. The learned Judge was, therefore, justified in allowing the defendant to cross examine the plaintiff 's witness and to adduce evidence by examining himself on the point of notice. " This is the background against which the issue has to be considered by us. It would be useful for a proper appreciation of the two views if, at this stage, we summarise the pros and cons of the situation. The points urged for the plaintiff are (a) In a statute hedged in with all protection to a tenant against eviction, one important safeguard to the landlord is in this provision which seeks to assure him at least of the prompt payment of the rents lawfully due to him. The tenant is compelled to pay up the rent on pain of losing his right of defence against ejectment. This is a provision which should be strictly enforced and full effect given to this right of the landlord. (b) Defence being struk off does not merely mean the exclusion of the written statement or the positive case, if any. which the defendant wishes to plead. It means also the exclusion of all modes of his participation in the suit qua the plea of ejectment. Cross examination of the plaintiff 's witnesses and putting forth arguments demolishing the PG NO 354 plaintiff 's case are as crucial and vital parts of the defence as the putting in of a written statement or examination of his own witnesses. (c) In like situations any similar default on the part of the plaintiff will spell the dismissal of his suit. (Order 11 Rule 21 C.P.C.) On like analogy, the defendant in default should be made liable for ex parte eviction straightaway. Restrictions are already placed on this right of the plaintiff by requiring that he has to establish his case by leading evidence to substantiate the same. There is no justification for imposing on him further handicap of the defendant 's participation, even to a limited extent. (d) The concession that the defendant can cross examine the plaintiff 's witnesses or put forward arguments to demolish the plaintiff 's case will lead to confusion and practical difficulties. The pleas sought to be taken by the defence in section B. Trading Co. vs Olympia Trading Coprn. Ltd., AIR 1952 Cal. 685 and in Bela Das vs Samarendra Nath Bose, ; (e) Apart from the view of Sarkar, J. and the decision of the Full Bench in Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110, the Patna High Court in Ganesh Ram vs Smt. Ram Lakhan Devi, also has taken to similar view and held that such a defendant cannot be allowed to lead evidence in support of his pleas in defence. (f) Under Order 8 Rule 5 of the C.P.C., when there is no written statement, the averments in the plaint are to be taken as correct and, if they are sufficient under the terms of the statute, a decree has to follow as a matter of course. On the other hand, the aspects stressed by the defendant are: (a) The expression "defence being struck out" obviously relates to the consideration of a document being ruled out. PG NO 355 It suggests that the intention is only that the written statement should be excluded from consideration. Even treating the expression as equivalent to a direction that the court should proceed as if the defendant had not entered appearance at all, the tenant 's position cannot be worse than that of a similarly placed defendant under the Original Side Rules of the Calcutta High Court or under the C.P.C. (b) It is well established that mere absence of defence cannot make the plaintiff entitled to a decree straightaway. Defence or no defence, the plaintiff in a suit has to satisfy the court that he has a case which deserves to be decreed. In particular, in an eviction suit, under the rent laws, the court has to be satisfied that the statutory conditions justifying eviction are fulfilled. This the plaintiff can establish only by leading evidence and such evidence will not be worth anything unless tested by cross examination. The cross examination of the plaintiff 's witnesses is more an integral part of the plaintiff 's case than an aspect of defence. (c) The Calcutta High Court has uniformly held that, even in an undefended action, a challenge on ground of non issue or invalidity of the notice under section 13(6) would be available to the defendant. Though the notice has to be issued prior to the institution of a suit and, in this sense, is a pre condition to the filing of the suit, the non issue or invalidity is just one of the pleas that can be raised in defence. If a tenant whose defence is struck off can raise that plea, there is no reason why he should not be allowed to do other things to show that the plaintiff is not entitled to a decree. (d) The observations of this Court in Sangram Singh, Paradise Industrial Corpn. and Eabbar Sewing Machine Company, (supra) are categorical and directly on this aspect of procedural law and deserve to be followed in the context of like provisions of tenancy legislations as well. We have considered the contentions urged on behalf of both the parties and the respective view points of the two lines of decisions of the High Court. We have also perused the decisions of this Court to which reference has been made. Though none of them is a direct decision on the issue before us, the observations made, in so far as they enunciate general principles and relate to analogous statutory provisions are most helpful and instructive. After PG NO 356 giving careful thought to all the aspects, we have come to the conclusion that the view expressed in the case under appeal by Ramendra Mohan Dutta, Acting Chief Justice, is preferable to the view taken by the other two learned Judges. It is a more liberal and equitable view and also one consistent with the requirements of justice in such cases. We proceed now to set out the reasons for our conclusion. A provision like the one in section 17(4) is a provision in terrorem. It penalises the defendant for certain defaults of his. As pointed out by the decisions earlier referred to, the court will act with great circumspection before striking out the defence of a tenant under this provision. This Court has interpreted provisions like this in rent acts to say that striking off of defence is not obligatory on the court merely because there is a default and that it is a matter for exercise of great judicial restraint. But it does not necessarily follow that, once the defence is struck off, the defendant is completely helpless and that his conduct of the case should be so crippled as to render a decree against him inevitable. To hold so would be to impose on him a punishment disproportionate to his default. The observations made by this Court, while discussing the provisions of the Code of Civil Procedure, and the Original Side rules of the Calcutta High Court which deal with some what analogous situations, cannot be lightly brushed aside. I hose decisions have enunciated a general equitable principle. We are also of the same view that provisions of this type should be construed strictly and that the disabilities of a person in default should he limited to the minimum extent consistent with the requirements of justice. This should be all the more so in the context of a tenancy legislation. the main object of which is to confer protection on tenants against eviction by the landlord. unless certain statutory conditions are fulfilled. I he provisions should not be given any wider operation than could have been strictly intended by the legislature. It has already been noticed that, in the Calcutta High Court. there has been unanimity on the point that, even where defence is struck out, the validity of the notice under section 13(6) is challengeable. This has been the settled view of that court for several years now which it would be inequitable to disturb after such a long time. This type of cases, however, has been sought to be distinguished on the ground that such notice is a condition precedent to the institution of the suit and cannot perhaps be described as a defence to the suit. This, however, is too tenuous a distinction. For, in truth and substance the plea regarding the validity of the notice has invariably to be taken as a plea in defence in such suits. The rule, therefore, is PG NO 357 really an exception to the strict application of a rule that a tenant whose defence is struck off cannot be heard at all against the plea of ejectment. We agree that full effect should be given to the words that defence against ejectment is struck off. But does this really deprive the defendant tenant of further participation in the case in any manner? While it is true that, in a broad sense, the right of defence takes in, within its canvass, all aspects including the demolition of the plaintiff 's case by the cross examination of his witnesses, it would be equally correct to say that the cross examination of the plaintiff 's witnesses really constitutes a finishing touch which completes the plaintiff 's case. It is a well established proposition that no oral testimony can be considered satisfactory or valid unless it is tested by cross examination. The mere statement of the plaintiff 's witnesses cannot constitute the plaintiff 's evidence in the case unless and until it is tested by cross examination. The right of the defence to cross examine the plaintiff 's witnesses can, therefore, be looked upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff 's evidence cannot be acted upon. Looked at from this point of view it should be possible to take the view that, though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating to the court that the plaintiff 's witnesses are not speaking the truth or that the evidence put forward by the plaintiff is not sufficient to fulfill the terms of the statute. To us it appears that the basic principle that where a plaintiff comes to the court he must prove his case should not be whittled down even in a case where no defendant appears. It will at once be clear that to say that the Court can only do this by looking the plaintiff 's evidence and pleadings supplemented by such questions as the court may consider necessary and to completely eliminate any type of assistance from the defendant in this task will place the court under a great handicap in discovering the truth or otherwise of the plaintiff 's statements. For after all, the court on its own motion, can do very little to ascertain the truth or otherwise of the plaintiff 's averments and it is only the opposite party that will be more familiar with the detailed facts of a particular case and that can assist the court in pointing out defects, weaknesses, errors and inconsistencies of the plaintiff 's case. We, therefore, think that the defendant should be allowed his right of cross examination and arguments. But we are equally clear that this right should be subject to PG NO 358 certain important safeguards. The first of these is that the defendant cannot be allowed to lead his own evidence. None of the observations or decisions cited have gone to the extent of suggesting that, inspite of the fact that the defence has been struck off, the defendant can adduce evidence of his own or try to substantiate his own case. Secondly, there is force in the apprehension that if one permits cross examination of the plaintiff 's witnesses by the defendant whose defence is struck off, procedural chaos may result unless great case is exercised and that it may be very difficult to keep the cross examination within the limits of the principles discussed earlier. Under the guise of cross examination and purported demolition of the plaintiff 's case, the defendant may attempt to put forward pleas of his own. To perceive quickly the difference between questions put out to elicit a reply from the plaintiff which may derogate from his own case and questions put out to substantiate pleas in defence which the defendant may have in mind and to restrict the cross examination to its limits will be not easy task. We think, however, that this is a difficulty of procedure, rather than substance. As pointed out by Ramendra Mohan Dutta, J. this is a matter to be sorted out in practical application rather than by laying down a hard and fast rule of exclusion. A third safeguard which we would like to impose is based on the observations of this court in Sangram Singh 's case. As pointed out therein, the essence of the matter in all such cases is that the latitude that may be extended by the court to the defendant inspite of his not having filed a written statement, should not cause prejudice to the plaintiff. Where the defendant does not file a written statement or where he does not appear to contest the case the plaintiff proceeds on the basis that there is no real opposition and contents himself by letting in just enough evidence to establish a prima facie case. Therefore, the court should ensure that by permitting the defendant at a later stage either to cross examine the witnesses or to participate in the proceeding the plaintiff is not taken by surprise or gravely prejudiced. This difficulty however can be easily overcome in practice, because there is a wide discretion with the court and it is always open to the court, where it believes that the plaintiff has been misled, to exercise its discretion to shut out cross examination or to regulate it in such manner as to avoid any real prejudice to the interests of the plaintiff. An objection to our above conclusion has been raised on the basis of the provisions of Order VIII of the Code of Civil Procedure. Rules 1, 5 and 10 of this Order have been PG NO 359 recently amended by the Amendment Act of 1976. We find nothing in these rules which will support the contention urged on behalf of the respondents. Rule 1 merely requires that the defendant should present a written statement of his defence within the time permitted by the court. Under rule 5(2), where the defendant has not filed a pleading it shall be lawful for the court to pronounce judgment on the basis of the facts contained in the plaint except against a person under disability but the court may in its discretion require any such fact to be proved. Again under rule 10 when any party from whom a written statement is required fails to present the same within the time permitted or fixed by the court, the court "shall pronounce judgment against him or make such order in relation to the suit as it thinks fit. " It will be seen that these rules are only permissive in nature. They enable the court in an appropriate case to pronounce a decree straightaway on the basis of the plaint and the averments contained therein. Though the present language of rule 10 says that the court "shall" pronounce judgment against him, it is obvious from the language of the rule that there is still an option with the court either to pronounce judgment on the basis of the plaint against the defendant or to make such other appropriate order as the court may think fit. Therefore, there is nothing in these rules, which makes it mandatory for the court to pass a decree in favour of the plaintiff straightaway because a written statement has not been filed. Reference was made before us to sub rule 1 of rule 5. This sub rule, however, has application only in a case where a pleading is filed but does not contain a specific or implicit denial of the averments contained in the plaint or other document to which it is a reply. Rule 5(1) cannot be made use of to sustain the contention that where there is no written statement the court is bound to accept the statements contained in the plaint and pass a decree straightaway. These provisions of the Code of Civil Procedure, far from supporting the contentions of the plaintiff that a decree on the basis of the plaint should follow a failure to file the written statement. rather indicate a contrary position, namely, that even in such cases, it is a matter for the court to exercise a discretion as to the manner in which the further proceedings should take place. We, therefore, do not think that the terms of Order VIII in any way conflict with the conclusion reached by us. For the above reasons, we agree with the view of Ramendra Mohan Dutta, ACJ that, even in a case where the defence against delivery of possession of a tenant is struck off under section 17(4) of the Act, the defendant, subject to the exercise of an appropriate discretion by the court on the facts of a particular case, would generally be entitled: PG NO 360 (A) to cross examine the plaintiff 's witnesses; and (b) to address argument on the basis of the plaintiff 's case. We would like to make it clear that the defendant would not be entitled to lead any evidence of his own nor can his cross examination be permitted to travel beyond the very limited objective of pointing out the falsity or weaknesses of the plaintiff 's case. In no circumstances should the cross examination be permitted to travel beyond this legitimate scope and to convert itself virtually into a presentation of the defendant 's case either directly or in the form of suggestions put to the plaintiff 's witnesses. For reasons mentioned above, we allow the appeal and restore the suit before the trial Judge for being proceeded with in the light of the above conclusions. We direct that the costs of this appeal will form part of the costs in the suit and will abide by the result thereof. S.L. Appeal allowed.

The respondent flied a suit in the High Court for a decree directing the defendant (appellant) to deliver possession of certain premises. The appellant tenant filed its written statement. During the pendency of the suit, orders were passed directing the appellant tenant to deposit certain sums in Court. The tenant made an application for permission to deposit the arrears of rent in monthly instalments alongwith the current rents. No orders were passed on this application on the ground of its being out of time. Subsequent to the disposal of this application, the defence of the tenant was struck out under section 17 of the Act. The tenant/appellant moved this Court. Allowing the appeal, the Court, HELD: A provision as in section 17(4) is a provision in terrorem, The Court will act with circumspection before striking out the defence of a tenant under this provision. This Court has interpreted provisions like this in rent acts to say that striking out defence is not obligatory on the Court merely because there is a default and that it is a matter for exercise of great restraint. But it does not necessarily follow that once the defence is struck off, the defendant is completely helpless and his conduct of the case should be so crippled as to render a decree against him inevitable. To hold so would be to impose on him a punishment disproportionate to his default. [356B D] Provisions of this type should be construed strictly and the disabilities of a person in default should be limited to the minimum extent consistent with the requirements of justice. This should be all the more so in the context of tenancy legislation, the main purpose of which is to confer protection on the tenants against eviction by the landlord, unless certain statutory conditions are fulfilled. The provisions should not be given any wider wider operation than could have been strictly intended by the legislature. [356E F] PG NO 333 PG NO 334 In truth and substance, the plea regarding the validity of the notice has invariably to be taken as a plea in defence in such suits. The rule is really an exception to the strict application of a rule that a tenant whose defence is struck out cannot be heard at all against the plea of ejectment. [356H; 357A] Full effect should be given to the words that defence against ejectment is struck off. But while it is true that, in a broad sense, the right of defence takes in all aspects including the demolition of the plaintiff 's case by cross examination of his witnesses, it is equally correct that the cross examination of the plaintiff 's witnesses really constitutes a finishing touch which completes the plaintiff 's case. No oral testimony can be considered satisfactory or valid unless it is tested by cross examination. Mere statement of plaintiff 's witnesses cannot constitute plaintiff 's evidence unless it is tested by cross examination. The right of defence to cross examine plaintiff 's witnesses can be looked upon not as a part of its own strategy of defence but rather as a requirement without which the plaintiff 's evidence cannot be acted upon. Thus it should be possible to take the view that though the defence of the tenant has been struck out, there is nothing in law to preclude him from demonstrating that the plaintiff 's witnesses are not speaking the truth or that the evidence put forward by the plaintiff is not sufficient to fulfill the terms of the statute. [357B D] The basic principle that where a plaintiff comes to court he must prove his case should not be whittled down even in a case where no defendant appears. [357E] The defendant should be allowed his right of cross examination and arguments. This right should be subject to certain important safeguards. [357H; 358A] First. the defendant cannot be allowed to lead his own evidence. [358A] Secondly, if cross examination is permitted of the plaintiff 's witnesses by the defendant whose defence is struck off, procedural chaos may result unless great care is exercised and it may be very diffcult to keep the cross examination within limits. But this is a difficulty of procedure rather than substance. It is a matter to be sorted out in practical application rather than by laying down a hard and fast rule of exclusion. [358B D] Thirdly, the latitude that may be extended by the Court to the defendant inspite of his not having filed a written statement should not cause prejudice to the plaintiff. The PG NO 335 Court should ensure that by permitting the defendant at a later stage either to cross examine the witnesses or participate in the proceeding, the plaintiff is not taken by surprise or gravely prejudiced; there is a wide discretion with the court and it is open to the court where it believes that the plaintiff has been misled, to exercise its discretion to shut out cross examination or regulate it in such manner as to avoid any real prejudice to the interests of plaintiff. [358E; F G] Even in a case where the defence against delivery of possession of a tenant is struck off under section 17(4) of the Act, the defendant, subject to the exercise of an appropriate discretion by the court on the facts of a particular case, would generally be entitled to (a) cross examine the plaintiff 's witnesses, and (b) address argument on the basis of the plaintiff 's case. The defendant would not be entitled to lead any evidence of his own nor can his cross examination be permitted to travel beyond the very limited objective of pointing out the falsity or weaknesses of the plaintiff 's case. In no circumstances should the cross examination be permitted to convert itself virtually into a presentation of the defendant 's case either directly or in the form of suggestions put to the plaintiff 's witnesses. [359G H; 360B C] K.K. Chari vs R.H. Seshadri, AIR ; ; Inder Mohan Lal vs Ramesh Khanna, ; ; Sangram Singh vs Election Tribunal, Kotah, Bhuray Lal Bava, ; ; M/s. Paradise Industrial Corpn. vs M/s. Kiln Plastics Products, ; ; M/s. Babbar Sewing Machine Company vs Trilok Nath Mahajan, ; Ram Chand vs Delhi Cloth & General Mills Co. Ltd., ; ; Shyamcharan Sharma vs Dharamdass, ; ; Ram Murti vs Bhola Nath, ; Bela Das & Ors. vs Samarendra Nath Bose; , ; S.N. Banerjee vs H.S. Suhrawardy, AIR 1928 Cal. 772; Dabendra Nath Dutt vs Smt. Satyabala Dassi & Ors., AIR 1950 Cal. 217; S.B. Trading Company Ltd. vs Olympic Trading Corpn. Ltd., AIR 1952 Calcutta 685; Gellatty vs Cannon, AIR 1953 Cal. 409; Gurudas Biswas vs Charu Panna Seal, AIR 1977 Cal. 110; Daya Moyee Sadhukhan vs Dal Singer Singh, AIR 1979 Cal. 332; Sangram Singh vs Election Tribunal, ; and Ganesh Ram vs Smt. Ram Lakhan Devi, , referred to.

ivil Appeal No. 3586 of 1988. From the Judgments and Orders dated 18.8.1987 & 9.11.1987 of the Goa High Court in W.P. No. 92/1986 & Misc. Civil Application No. 334 of 1987. Dr. R.S. Kulkarni, S.K. Mehta, Aman Vachher and Atul Nanda for the Appellant. K.N. Bhat and Mukul Mudgal for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, CJ. The appellant was appointed as a Headmaster of a school which was being run by the Calangute Don Bosco Educational & Welfare Foundation in 1974 in the State of Goa (which was at the relevant time a Union Terri tory). Disciplinary proceedings were started against him in accordance with the Grant in aid Code which was in force at that time, since the school was a recipient of the grant as per the Code. The findings .of, the Dispute Settlement Committee were approved by the director of Education of the Government of Goa by his Order dated July 12, 1984 who permitted the termination of the services of the appellant: The Principal of the Don Bosco High School, therefore, terminated the services of the appellant 254 as Headmaster by his letter dated July 26, 1984 and the said order of termination was challenged by the appellant before the High Court of Bombay, Panaji Bench, Goa in Writ Petition No. 92 of 1986. The petition was dismissed by the High Court on the ground that the petition was not maintainable under Article 226 of the Constitution of India against the Manage ment of the school, which was a private body. Aggrieved by the decision of the High Court the appellant has filed this appeal by special leave. The school in question was a private school and was a recipient of the grant in aid under the Grant in aid Code issued by the Government in exercise of its executive power. The relevant rule of the Grantin aid Code, i.e., rule 74.2 on which the Management relied read thus: "74.2(1). The services of an employee appoint ed to a permanent post shall not be terminated except in accordance with the procedure pre scribed hereinunder. No order of termination, dismissal or imposition of any other penalty shall be passed against such employee unless he has been informed in writing of the grounds on which action is proposed to be taken and has been given an adequate opportunity to defend himself. The grounds on which the action is proposed to be taken shall be re duced to a form of a specific charge/charges which shall be communicated to the employee together with statement of allegation on which each charge is based. (iii) Management shall refer the case to the Director of Education in writing, stating the date of the effect of the intended termination with a copy endorsed to the em ployee concerned for his acknowledgement. The letter endorsed to the employee shall enclose a copy of allegation with complete substanti ating evidence and other documents relevant to the case. The letter be issued to the employee at least one calendar month prior to the date of effect of intended termination. The issue of the letter shall be subject to rule 74.1(3). (v) The Director shall refer the case to the Disputes Settlement Committee within seven days of the receipt of the letter in the Directorate of Education. The Disputes Settlement Committee shall give a hearing to both the 255 parties and also consider the written state ments, if any, submitted by either or both the parties, and give its decision within fifteen days from the date of reference. In case any party fails to present the case, the Disputes Settlement Committee shall take an ex parte decision. (vi) The decision of the Dispute settlement Commit ' tee shall be final and binding on both the parties provided that it shall be open to either party to prefer an appeal to the Administrative Tribunal estab lished under the Goa, Daman and Diu Adminis trative Tribunal Act, 1965 within thirty days of the date of receipt of the decision of the Disputes Settlement Committee. " Rule 74.2 provides that the service of an employee appointed to a permanent post shall not be terminated except in accordance with the procedure prescribed thereunder and no order of termination, dismissal or imposition of any other penalty shall be passed against such employee unless he has been informed in writing of the grounds on which action is proposed to be taken and has been given an ade quate opportunity to defend himself. The grounds on which the action is proposed to be taken shall be reduced to a form of a specific charge/charges which shall be communicat ed to the employee together with statement of allegation on which each charge is based. Then the Management is required to refer the case to the Director of Education in writing, stating the date of the effect of the intended termination with a copy endorsed to the employee concerned for his acknowledgement. The letter endorsed to the employee shall enclose a copy of allegation with complete substantiating evidence and other documents relevant to the case. The letter shall be issued to the employee at least one calendar month prior to the date of effect of intended termination. The issue of the letter shall be subject to rule 74.1(3). The Director is then required to refer the case to the Disputes Settlement Committee within seven days of the receipt of the letter in the Directorate of Education. The Dispute Settlement Committee shall give a heating to both the parties and also consider the written statements, if any, submitted by either or both the parties, and give its decision within fifteen days from the date of reference. In case any party fails to present the case, the Disputes Settlement Committee shall take an ex parte decision. The decision of the Dispute Settlement Committee shall be final and binding on the parties. The Dispute Settlement Committee acquires the jurisdiction to hear the case only on a refer ence made to it by the Director of Education. The order passed in this case by the 256 Director of Education on July 12, 1984 reads thus: "No. DE/Acad. I/BEZ. Bo/40/DBHS/Term. HM/Vol. III/82 Government of Goa, Daman and Diu, Directorate of Education, Panaji Goa. Dated: 12.7.1984. Read: 1. This office order No. DE/Acad I/BEZ Bo/40/ DBHS/PC15/Term. HM/Vol. III/82 3610, dt. 3.9.1982. Letter No. 17 1 5 82 AE/1115 dt. 26.3.1983 from the Convenor of the Dispute Settlement Committee and Asstt. Director of Education. ORDER Whereas a Dispute Settlement Commit tee was constituted to enquire into the pro posed case for Termination of Services of Shri Francis John, the Headmaster of Don Bosco High School, Calangute, Bardez, Goa, vide order referred to above; And whereas the accused Shri F. John participated in the deliberations of the Dispute Settlement Committee along with his nominee for some time and thereafter remained absent from the deliberation of the Committee inspite of all reasonable opportunities given to him by the Convenor; And whereas the said Committee, in majority, has decided that the termination of services of the said Shri F. John, Headmaster of Don Bosco High School, Calangute, is justi fiable. The undersigned is inclined to agree with the findings of the Dispute Settle ment Committee and it is hereby ordered that the finding of the majority report of the Committee is accepted and the Principal of the School is permit 257 ted to terminate the service of Shri F. John, as per Rule 74 (amended) of the Grant in aid Code and the vacancy so caused be filled up as per Rules. The Principal is further directed to revoke the order of suspension forthwith under intimation to the undersigned. Sd/ L. Khisngte Director of Education. " It was on the basis of the approval given by the Direc tor of. Education, as stated above, the services of the appellant were terminated. From a reading of the relevant rule of the Grant in aid Code which is a part of the Public Law of the land it be comes obvious that the reference of the dispute between the Management of the school and the appellant to the Dispute Settlement Committee was made by the Director of Education in exercise of the powers confened on him by the Grant in aid Code, which is issued by the Government in exercise of its executive power, even though it may not have been done under a statute. The Director of Education who is a public functionary has given his approval to the decision of the Dispute Settlement Committee before it was communicated to the School. While granting his aproval to the decision the Director of Education is discharging a governmental function as an authority constituted for the said purpose by the Government. It is obvious that the Management, in the cir cumstances could not have terminated the services of the appellant without the communication received by it from the Director of Education. In such circumstances it cannot be said that the decision is that of a just private management governed by private law. It is the part of the process of the public law which affects public exchequer. When the matter came up before the High Court a prelimi nary objection was taken by the Management regarding the maintainability of the Writ Petition under Article 226 of the Constitution. The appellant contended in the Writ Petition that the proceedings of the disciplinary Committee are in contraven tion of the principle of natural justice and fair play and the approval given by the Director of Education was unsus tainable. The appellant relied upon the decision of this Court in Tika Ram vs Mundikota Shikshan Prasarak Mandal & Ors., [1985] 1 SCR 339 and contended that he was not asking for any relief against the private body but he was challeng ing 258 the order of the Director of Education who had granted approval to his removal on the basis of a report submitted to him by the Dispute Settlement Committee and hence the Director of Education, who was a public authority and whose orders had been questioned before the Court was amenable to the jurisdiction of the High Court under Article 226 of the Constitution. The High Court distinguished the above case by observing in Para 11 of its judgment thus: ". Mr Kakodkar had placed reliance on Tika Ram vs Mundikota Shiksha Prasarak Mandal, AIR 1984 SC 1621 in support of his proposition that a writ petition would be maintanable in the case of a Headmaster of a private school who is dismissed by the management of a pri vate school. In Tika Ram 's case, the petition er was not seeking any relief against the management on the basis of the clauses in the Schools Code. But the Court has observed: 'In the instant case the appellant is seeking a relief not against a private body but against an officer of Government who is always amenable to the jurisdiction of the Court. ' Obviously, no decision of an Officer of the Government is being challenged in the present case and hence, Tika Ram 's case is easily distinguishable. " With great respect to the High Court we should say that we do not find any substantial difference at all between the facts of this case and the facts involved in the Tika Ram 's case (supra). In Tika Ram 's case (supra) the facts were these. The appellant in that case was also working as a Head master in a private school. On account of certain earlier events the Management instituted a disciplinary enquiry against the appellant and on July 7, 1975, the appellant was informed by the Management that it had imposed on him the punishment of reversion to the post of Assistant Teacher which according to the Management was the substantive post held by him. Aggrieved by that order of reversion, the appellant filed an appeal before the Deputy Director of Education, Nagpur Division, contending that the enquiry had been vitiated on account of violation of principles of natural justice and that he had never held the post of an Assistant Teacher to which he had been reverted. After hearing both the parties, the Deputy Director of Education passed an order 259 dated October 3, 1975 setting aside the decision of the Management and remanding the case to the Management for fresh decision on the ground that the enquiry had been vitiated on account of violation of principles of natural justice. Instead of filing an appeal against that order, the Management filed a review petition before the Deputy Direc tor himself on October 17, 1975. That was rejected by the Deputy Director by his order dated November 11, 1975 on the ground that no such review could be filed before him. Against that order the Management filed an appeal before the Director of Education and that was dismissed on May 12, 1976 affirming the order of remand passed by the Deputy Director of Education to reconsider the case. The Management again filed a petition before the Director of Education to recon sider the case. This petition for review was allowed by the Director of Education on November 26, 1976 and the order passed by the Deputy Director on October 3, 1975 remanding the case to the Management for a fresh decision was set aside. Aggrieved by the said order dated November 26, 1976, the appellant filed a writ petition before the High Court of Bombay on the principal ground that the Director had no jurisdiction to review his earlier order May 12, 1976 by which he had dismissed the appeal against the order of the Deputy Director. The High Court dismissed that writ petition holding that the appellant could not file a writ petition under Article 226 of the Constitution against the order passed by the Director on the ground that the teachers working in private schools could not enforce their right under clause 77 and connected clauses of the School Code which were not statutory rules. It was against that order the appellant in that case had filed the appeal before the SUpreme Court under Article 136 of the Constitution. Allow ing the said appeal this Court observed thus: "In the writ petition the appellant was not seeking any relief directly against the man agement on the basis of the clauses in the School Code. If the management does not obey the order passed by the Deputy Director or the Director, it is open to the State Government to take such action under the School Code as may be permissible. In such an event, the recognition accorded to the school may be withdrawn or the grant in aid may be stopped. In the instant case the appellant is seking a relief not against a private body but against an officer of Government who is always amena ble to the jurisdiction of the Court. The appellant has merely sought the quashing of the impugned order dated November 26, 1976 passed by the Director on review setting aside the order of the Deputy Director. What . 260 consequences follow from the quashing of the above said order in so far as the management is concerned is an entirely different issue. In the circumstances, the High Court was wrong in holding that a petition under Article 226 of the Constitution did not lie against the impugned order passed by the director. We are aware of some of the decisions in which it is observed that no teacher could enforce. a fight under the School Code which is non statutory m character against the management. But since this petition is principally direct ed against the order passed in a quasijudicial proceeding by the Director, though in a case arising under the School Code and since the Director had assumed a jurisdiction to review his own orders not conferred on him, we hold that the appellant was entitled to maintain the petition under Article 226 of the Consti tution. " In the instant case also we are concerned with the Grant in aid Code. The decision which was challenged before the High Court was the order of the Director of Education dated July 12, 1984 which is fully extracted above. It is further seen that a copy of the above order has been commu nicated by the Director of Education not merely to the Management of the School but also to the Zonal Officer, North Education Zone, Mapsa and the Grant in aid Section of the Directorate of Education. If the impugned orders of the director of Education and of the Dispute Settlement Commit tee to which he had referred the case are set aside then the order of termination of service of the appellant, which is pursuant to them would also have to fall. Any private school which receives aid from the Government under the Grant inaid Code, which is promulgated not merely for the benefit of the Management but also for the benefit of the employees in the School for whose salary and allowances the Government was contributing from the public funds under the Grant in aid Code cannot escape from the consequences flowing from the breach of the Code and particularly where the Director of Education who is an instrumentality of the State is partici pating in the decision making process. Under these circum stances we find that the High Court was wrong in upholding that the orders of the Director of Education and of the Dispute Settlement Committee were not amenable to the juris diction of the High Court under Article 226 of the Constitu tion since the matter squarely falls within the principles laid down by this Court in Tika Ram 's case (supra). 261 We, therefore, set aside the judgment of the High Court holding that the writ petition was not maintainable before it. Since the High Court has not gone into the merits of the case we remand the case to the High Court and direct it to hear the writ petition on merits in accordance with law. The appeal is accordingly allowed, but there shall be no order as to costs. R.N.J. Appeal al lowed.

Disciplinary proceedings were started against the appel lant who was a headmaster in a private school in accordance with the Rule 74.2 of the Grant in aid Code since the school was a recipient of grant as per the code. The Director of Education approved the findings of the Dispute Settlement Committee and permitted the termination of the appellant by the Principal of the School. The said order of termination was challenged by the appellant before the High Court of Bombay, Panaji Bench, in a Writ Petition. The petition was dismissed by the High Court upholding the preliminary objec tion that the petition was not maintainable under Article 226 of the Constitution of India against the management of the School which was a private body. Aggrieved by the deci sion of the High Court the appellant fried this appeal by special leave. According to the relevant rule of the Grant in aid Code the management could not have terminated the services of the appellant without the communication received by it from the Director of Education who was a public functionary and was discharging a governmental function as an authority consti tuted for the said purpose by the government. Obviously in such circumstances it cannot be said that the decision is just that of a private management governed by private law. The High Court erred in not properly following the ratio of the decision of this Court in Tika Ram 's case the facts of which were not substantially different from the facts of the present case. This Court while setting aside the judgment of the High Court and remanding the case to the High Court to hear the Writ Petition on merits, 253 HELD: Any private school which receives aid from the government under the Grant in aid Code, which is promulgated not merely for the benefit of the management but also for the benefit of the employees in the school for whose salary and allowances the government was contributing from public funds under the Grant in aid Code cannot escape from the consequences flowing from the breach of the Code and partic ularly where the Director of Education who is an instrumen tality of the State is participating in the decision making process. [260F G] The High Court was wrong in upholding that the orders of the Director of Education and of the Dispute Settlement Committee were not amenable to the jurisdiction of the High Court under Article 226 of the Constitution of India. [260G] Tika Ram vs Mundikota Shikshan Prasarak Mandal & Ors., [1985] 1 SCR 339, referred to.

22 of 1960. Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. H.J. Umrigar and B. P. Maheshwari, for the petitioner. A.C. Mitra, B. Das and P. K. Bose, for the respondents Nos. 1 and 2. P. K. Mukherjee, for respondent No. 3. 1960, December 9. The Judgment of Kapur, Gajendragadkar and Wanchoo, JJ., was delivered by Wanchoo, J., and that of Sinha, C.J., and Subba Rao, J., was delivered by Subba Rao, J. WANCHOO, J. This petition under article 32 of the Constitution challenges the constitutionality of section 39 of the Calcutta Police Act, No. IV of 1866, (hereinafter called the Act). The facts necessary for our purpose are these. On August 11, 1954, the petitioner entered into an agreement with one Haripada Bhowmick, who is respondent No. 3 with respect to an eating house named 'Kalpatoru Cafeteria ', situate in No. 2 Chowranghee Road, Calcutta. The petitioner was appointed a contractor by this agreement and was given the exclusive use and occupation of the said eating house upon certain terms and conditions. A licence has to be taken out with respect to an eating house under section 39 of the Act. It appears that originally the licence was in the name of Bhowmick, and one of the conditions of the licence was that the eating house should not be sublet 139 without permission of the Commissioner of Police (hereinafter referred to as the Commissioner). On the date of the agreement, Bhowmick held a licence for the eating house, which was to expire on March 31, 1955. It is said that under the agreement the licence was to remain in the name of Bhowmick while the petitioner was to carry on the business as a contractor. The petitioner carried on the business from after the date of the agreement and no application for a fresh licence was made by him before March 31, 1955, when the licence in the name of Bhowmick was to expire. It was only on August 8, 1955, that an application for licence was made by the petitioner on behalf and in the name of Bhowmick, though the business was continued to be run by him all the time after March 31, 1955. It appears that the application made in the name of Bhowmick was rejected on December 27, 1956; but in the meantime Bhowmick was prosecuted on September 10, 1955, for running the eating house without a licence and was fined on December 12, 1955. Thereafter a notice was issued to Bhowmick on September 7, 1956, to show cause why his application for licence should not be refused inasmuch as he had not applied in time and violated the condition of the licence by sub letting the eating house to the petitioner. Thereafter the petitioner applied on September 21, 1956, for the issue of a licence in his own name. It may be mentioned that in the meantime there had been disputes between Bhowmick and the petitioner and a suit had been filed by Bhowmick against the petitioner in October 1956 in that connection. It may also be mentioned that though the petitioner applied for the first time on September 21, 1956, for licence he had already been prosecuted in October, 1955, for keeping an eating house without a licence and convicted in November 1955. The application made by the petitioner on September 21, 1956, was eventually rejected on March 30, 1958, though in the meantime the petitioner was all along continuing the business of the eating house without having obtained a licence. After the rejection of his application the petitioner applied to the High 140 Court under article 226 of the Constitution challenging the constitutionality of section 39 and also challenging the order of the Commissioner rejecting his licence on various grounds. This application was dismissed on August 7, 1958. Thereupon the petitioner went up in appeal to a Division Bench of the High Court which was disposed of on March 4, 1959. The Division Bench held section 39 to be constitutional. It further held that as extraneous matters had been taken into account in rejecting the application of the petitioner for a licence the rejection was not in accordance with law. However, as the period of one year for which a licence is valid under section 39 had expired in September 1957, and the judgment was being delivered in March 1959, the appeal was dismissed on the ground that application could not be considered in 1959. Thereupon the petitioner made another application to the Commissioner on March 30, 1959, for the period from April 1, 1959 to March 31, 1960. During all this time the petitioner was carrying on his business as a keeper of the eating house without a licence. This application was found defective and another application was made on May 14, 1959. In the meantime, the petitioner again applied to the High Court on or about May 8, 1959, under article 226 of the Constitution in order to compel the Commissioner to issue him a licence or in the alternative to compel him not to prosecute him for keeping an eating house without a licence and for such other orders as the High Court might deem fit to pass. It may be mentioned that day to day prosecution of the petitioner had begun from February 1956 under section 40 of the Act for continuing to keep an eating house without a licence. This writ application filed in the High Court was withdrawn by the petitioner on May 13, 1959, as his application to the Commissioner of March 30, was defective. On May 30, 1959, the Commissioner rejected the application of the petitioner for a licence on the ground that his antecedents and his present conduct showed that he would not keep good behavior and further that he would not be able to prevent drunkenness or disorder among the persons frequenting or using the eating 141 house ' The petitioner 's complaint is that he was not heard before the order rejecting his application was passed. Then on June 15, 1959, the petitioner again applied under article 226 of the Constitution to the High Court against the rejection of his application on May 30. On February 11, 1960, the High Court allowed the petitioner to withdraw the application with liberty to move such application as he may be advised before, this Court, in case such liberty was necessary. Thereafter the petitioner moved this Court by his present application on February 15, 1960. His main contention before us is that section 39 of the Act confers naked and uncanalised powers on the Commissioner to grant or refuse a licence and that no criteria have been laid down anywhere in the Act to guide the discretion of the Commissioner. Further, no opportunity is provided to an applicant for a licence to be heard either orally or in writing before passing orders on an application for licence; in consequence, the Commissioner has been given completely arbitrary powers either to grant or to refuse a licence and this amounts to an unreasonable restriction on the fundamental right of the petitioner to carry on the trade of eating house keeper. Besides this attack on the constitutionality of section 39 the petitioner also contends that the order is mala fide and should be struck down on this ground. There are some other grounds in the petition but they have not been pressed before us and it will not be necessary to consider them. The first question therefore that falls for consideration is whether section 39 of the Act is a reasonable restriction within the meaning of article 19(6) on the fundamental right to practise any profession or to carry on any occupation, trade or business contained in article 19 (1)(g). 39 is in these terms: "The Commissioner of Police, may, at his discretion, from time to time, grant licences to the keepers of such houses or places of public resort and entertainment as aforesaid for which no licence as is specified in the Bengal Excise Act, 1909, is required upon such conditions, to be inserted in every such 142 licence, as he, with the sanction of the said State Government from time to time shall order, for securing the good behaviour of the keepers of the said houses or places of public resort or entertainment, and the prevention of drunkenness and disorder among the persons frequenting or using the same; and the said licences may be granted by the said Commissioner, for any time not exceeding one year. " Learned counsel for the petitioner contends that the language of section 39 shows that an absolute discretion; untrammelled by any considerations, is conferred on the Commissioner by this section and there is nothing either in the section or anywhere in the Act to guide the discretion of the Commissioner in the matter of granting such licences. Therefore, according to learned counsel, the power conferred on the Commissioner is arbitrary and unguided and such power is necessarily to be struck down on the ground that it cannot be a reasonable restriction on the fundamental right to carry on trade. There is no doubt that if the section empowers the Commissioner to grant or refuse a licence without any criteria to guide him, it would be an unreasonable restriction on the right to carry on trade. We have therefore to see whether there is any guidance either in the section or in the Act to regulate the exercise of discretion of the Commissioner in the matter of granting such licences. In this connection it must be remembered that the Act was passed in 1866 when there were no fundamental rights and we cannot expect that meticulousness of language which should be found in statutes passed after January 26, 1950. It may also be mentioned that the Act replaced two earlier Acts, namely, Act XIII of 1856 and XLVIII of 1860. The Act of 1860 also contained provisions for licences for eating houses in sections II and 12 thereof, though the language of those sections was somewhat different. 11 laid down that in the towns of Calcutta, Madras and Bombay no eating house shall be kept without licence and provided for a penalty for the same. 12 then laid down that the Commissioner shall from time to time grant licences to 143 keepers of such houses upon conditions for securing the good behaviour of the keepers of the said houses and for the prevention of drunkenness and disorder among the persons frequenting or using the same. The language of section 39, however, is different inasmuch as it provides that the Commissioner may at his discretion from time to time grant licences. The Act of 1860 was interpreted by the Bombay High Court in Rustom J. Irani vs H. Kennedy (1) as giving no discretion to the Commissioner to refuse a licence if the person applying for the licence was willing to fulfil the conditions imposed thereunder. In the case of Calcutta, however, section 39 made a change in the language contained in the earlier Act giving discretion to the Commissioner in the matter of grant of licences. The question therefore is whether the word "discretion" introduced by section 39 means an absolute and unguided discretion and would therefore now become an unreasonable restriction on the fundamental right of a citizen to carry on the trade of keeping an eating house. There is no doubt, as we have already indicated, that the section does not say as many of the provisions of laws passed after January 26, 1950, do that the Commissioner would grant licence on certain specified considerations. The contention on behalf of the petitioner is that the first part of section 39 confers an absolute discretion on the Commissioner to grant or to refuse a licence just as he pleases and that the second part of the section merely provides for certain conditions to be imposed in case the Commissioner pleases to grant a licence. We are however of opinion that when we are judging a law passed in 1866 to decide whether it satisfies the test of constitutionality based on article 19(1)(g) and article 19(6), we should take the section as a whole and see whether on a fair reading of the section it can be said that there is no guidance for the Commissioner in the matter of granting or refusing licences and his power is arbitrary. If such guidance can be found on a fair reading of the section, there would be no reason for striking it down simply because it has not been worded in a manner which (1) Bom. 144 would show immediately that considerations arising from the provisions of article 19(1)(g) and article 19(6) were in mind naturally those considerations could not be in the mind of the legislature in 1866. We have therefore to see whether an Act passed before the Constitution came into force can be reasonably and fairly read as containing guidance in the matter of licensing, as in this case. If it can be fairly and reasonably read to contain guidance it should not be struck down. If, on the other hand, on a fair and reasonable construction of the section as a whole, we come to the conclusion that there is no guidance in it and the discretion vested in the Commissioner is absolute and arbitrary it will have be struck down. What then does the section provide? It certainly gives powers to the Commissioner to grant licences at his discretion. Those words, however, by themselves do not necessarily mean that the Commissioner has the power to act arbitrarily and grant licences where he pleases and refuse where he does not please to do so. The section provides further that the licence has to be granted upon certain conditions and those conditions have to satisfy two objects, namely, (i) securing of the good behaviour of the keepers of the said houses or places of public resort and entertainment and (ii) the prevention of drunkenness and disorder among the persons frequenting or using the same. Of course, it is implicit in the section that a licence will only be granted to a person who is the keeper of an eating house. We cannot read the section as laying down that the discretion is absolute and that the im. posing of conditions for the aforesaid two objects only arises after that absolute discretion has been exercised in favour of the grant of licences. We see no unfairness or unreasonableness in reading the section to mean that the Commissioner shall satisfy himself (i) that the person applying for a licence is the keeper of an eating house, meaning thereby that he has a place where he can carry on the business or trade and that he actually and effectively has control and possession of that place, (ii) that the keeper is a person of good behaviour so that the eating house may not become 145 a resort of criminals and persons of ill repute, and (iii) that the keeper is in a position to prevent drunkenness and disorder among those who come to the eating house. This section appears in the Police Act, the purpose of which is to maintain law and order and that is why we find that the two objects to be secured when granting licences are the good behaviour of the keeper himself and the prevention of drunkenness and disorder among those who frequent the eating house. It seems therefore to us that section 39 clearly provides that the Commissioner will use his discretion in deciding whether the person applying for a licence is in actual and effective control and possession of the place where the eating house is to be kept and is thus the keeper thereof. He will also satisfy himself that the keeper is a person of good behaviour and further that he is able to prevent drunkenness and disorder in the eating house. If he is satisfied on these three matters, it seems to us that the section contemplates that the discretion will be exercised in favour of the grant of a licence. We cannot accept that even though the Commissioner may be satisfied that the person applying for a licence has actual and effective control of the place where he is going to keep the eating house, is a person of good behaviour and can prevent drunkenness and disorder among the clientele, he will still go on to refuse the licence. The discretion that is given to him is to satisfy himself on these three points and if he is satisfied about them he has to grant the licence. On the other hand if he is not satisfied on any one or more of these points he will exercise the discretion by refusing the licence. As for the conditions which will be inserted in the licence, they are only for the purpose of carrying on the two objects specified in the section. They will naturally be more detailed in order to carry out the two objects aforesaid. But these two objects in our opinion along with the obvious implication in the section that the person applying must have actual and effective control of the place where he is going to keep the eating house are the criteria which will govern the exercise 146 of discretion by the Commissioner in the matter of granting or refusing a licence. We cannot agree with the learned counsel for the petitioner that the two parts of section 39 should be read separately, as if one has no effect on the other. Reading them together, it is in our opinion fair and reasonable to come to the conclusion that the discretion of the Commissioner in this matter is guided by the two objects mentioned in the section and by the necessary implication contained in it that the person applying must be in actual and effective control and possession of the place where he is going to keep the eating house. The argument therefore that section 39 confers an arbitrary and uncanalised power Without any criteria for guiding the discretion of the licensing authority must fail and the section cannot be held to be an unreasonable restriction on the right to carry on trade on this ground. Then it is urged that even if there is guidance in the section it provides for no hearing either oral or written of the person applying for a licence. Further it provides for no grounds to be given for refusing a licence. Therefore, though there may be some guiding principle in the matter of granting licences, the absence of a provision for hearing and for giving reasons for refusal would also make the provision unconstitutional as an unreasonable restriction on a fundamental right. Reference in this connection was made to State of Madras vs V. G. Row (1) where it was observed that "In considering the reasonableness of laws imposing restrictions on fundamental right, both the substantive and procedural aspects of the impugned law should be examined from the point of view of reasonableness and the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases. " There is no doubt that procedural provisions of a statute also enter into the verdict as to its reasonableness; but at the same time there can be no abstract or 147 general principles which would govern the matter and each statute has to be examined in its own setting. It is undoubtedly correct that no provision has been made for giving a hearing to a person applying for a licence and the Commissioner has not to give reasons when refusing the licence; but it cannot be laid down as a general proposition that where in the case of licensing statute no provision is made for hearing and there is no provision for giving reasons for refusal the statute must be struck down as necessarily an unreasonable restriction on a fundamental right. No case has been cited before us which lays down such a general proposition. We have therefore to examine the section in its setting to decide whether the absence of a provision for hearing and for requiring the Commissioner to give reasons for refusal would make this section unconstitutional. The section appears in the Police Act, which deals generally with matters of law and order and the two objects specified in the section are also for the same purpose. The discretion is vested in a high police officer who, one would expect, would use it reasonably. There is no provision for appeal and there is no lis as between the person applying for a licence and the Commissioner; the exercise of the discretion depends upon the subjective satisfaction of the Commissioner as to whether the person applying for a licence satisfies the three conditions mentioned above. It is true that the order when made one way or the other affects the fundamental right of carrying on trade, but in the circumstances it cannot but be an administrative order (see, Nagendra Nath Bora vs The Commissioner of Hills Division and Appeals, Assam (1)), and though the Commissioner is expected to act reasonably there is no duty cast on him to act judicially. In Nakkuda Ali vs M. F. De section Jayaratne (2), the Privy Council pointed out that it was Quite possible to act reasonably without necessarily actinG judicially and that it was a long step in the argument to say that because a man is expected to act reasonably he cannot do so without a course of conduct analogous to the judicial process. The compulsion of hearing before (1) ; ,1253. (2) 148 passing the order implied in the maxim 'audi alteram partem ' applies only to judicial or quasi judicial proceedings: (see, Express Newspapers (P.) Ltd. vs The, Union of India (1)). Therefore, the fact that no hearing is required to be given by the Commissioner before he decides to grant or refuse a licence would not make the provisions as to licensing in the circumstances of this case unreasonable restrictions on the fundamental right of carrying on a trade. For the same reasons it cannot be said that because the reasons for refusal are not communicated to the person applying that would make the licensing provision unconstitutional. The person applying knows that under the law there are three conditions (already set out above) which the Commissioner has to consider in granting or refusing the licence. If he thinks that he fulfills the three conditions and the Commissioner has acted unreasonably in rejecting his application he is not without a remedy; he can apply to the High Court under article 226 and compel the Commissioner to disclose the reasons for refusal before the Court and if those reasons are extraneous or are not germane to the three matters arising under section 39, the High Court will compel the Commissioner to act within the scope of section 39. We are therefore of opinion that in the circumstances of this case and in the setting in which section 39 appears the mere absence of a provision for a hearing or a provision for communicating the reasons for refusal to the person applying, does not make section 39 unconstitutional as an unreasonable restriction on a fundamental right. The attack therefore on the constitutionality of section 39 must fail. Then we turn to the question of mala fides. It is not the case of the petitioner that the Commissioner has any personal animus against him or that he is favouring Bhowmick. What he says in ground 41 of his petition in this connection is that the reasons given by the Commissioner in his order dated May 30, 1959, for refusing the licence are not correct and that the Commissioner is annoyed with him because he went to the High Court by means of a writ application. (1) 106. 149 These in our opinion are no grounds for holding that the order of the Commissioner passed in this case on May 30, 1959, is malafide. The petition therefore fails and is hereby dismissed with costs. SUBBA RAO, J. We regret our inability to agree with Wanchoo, J. Our learned brother in his judgment has stated the facts fully and it is not necessary to restate them here. The petitioner applied to the Commissioner of Police, Calcutta, for a licence to enable him to carry on the business of an eating house known as "Kalpatoru Cafeteria". The Commissioner by his order dated May 30, 1959, rejected the application made by the petitioner for a licence on two grounds, namely, that he was not satisfied that from "the antecedents and resent conduct" of the petitioner it would be reasonable to think that the petitioner would keep good behaviour and would be able to prevent drunkenness or disorder among the persons frequenting the eating house. The application was rejected under section 39 of the Calcutta Police Act, No. IV of 1866 (hereinafter called the Act). The short question raised is whether section 39 of the Act is constitutionally valid. Section 39 of the Act reads: "The COMMISSIONER of Police, may, at his. discretion, from time to time, grant licenses to the keepers of such houses or places of public resort and entertainment as aforesaid for which no license as is specified in the Bengal Excise Act, 1909, is required upon such conditions, to be inserted in every such license, as he, with the sanction of the said State Government from time to time shall order, for securing the good behaviour of the keepers of the said houses or places of public resort or entertainment, and the prevention of drunkenness and disorder among the persons frequenting or using the same; and the said licenses may be granted by the said Commissioner, for any time not exceeding one year. " Learned counsel for the petitioner contends that 150 the petitioner has under article 19(1)(g) of the Constitution a fundamental right to carry on the business of an eating house and that the provisions of section 39 of the Act impose unreasonable restrictions on the exercise of his right and, therefore, the said section is void. Before scrutinising the provisions of that section it would be convenient at the outset to notice the relevant aspects of the law vis a vis the concept of reasonable restrictions on a fundamental right. The concept of reasonableness has been clearly defined by Patanjali Sastri, C. J., in State af Madras vs V. G. Row (1) thus: "It is important in this context to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern, of reasonablenes s can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions 'imposed, the extent and urgency of the evil sought Co be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict". There the constitutional validity of section 15(2)(b) of the Indian Criminal Law Amendment Act, 1908, was impugned on the ground that it fell outside the scope of authorized restrictions in article 19(4) of the Constitution. The issue of a notification by the State Government declaring an association unlawful was made to depend upon its subjective satisfaction of certain objective factors. The Act also provided for an enquiry before an Advisory Board and the subsequent review of the order by the Government on the basis of the said enquiry. It was pressed upon this Court to hold that the said restriction passed the test laid down in article 19(4) of the Constitution. In rejecting the con tention, Patanjali Sastri, C. J., observed thus: "The formula of subjective satisfaction of the Government or of its officers, with an Advisory (1)[1952] S.C.R. 597, 607, 608. 151 Board thrown in to review the materials on which the Government seeks to override a basic freedom guaranteed to the citizen, may be viewed as reasonable only in very exceptional circumstances and within the narrowest limits, and cannot receive judicial approval as a general pattern of reasonable restrictions on fundamental rights. " The learned Chief Justice adverting to the procedural aspect of the restriction criticised the absence of a provision in the impugned Act for personal service on the association and thus depriving its members of the opportunity to make their representations. Compared with section 39 of the Act, the impugned provisions of the Criminal Law Amendment Act impose more stringent control on the exercise of the discretionary power by the Government. Yet the Court struck down the provisions. The attempt made to distinguish that decision on the ground that it related to the fundamental right of freedom of speech cannot be justified as the freedom to do business is also one of the important fundamental rights under the Constitution, The case of Thakur Raghubir Singh vs Court of Wards, Ajmer (1) was concerned with the question of the reasonableness of the provisions of section 112 of the Ajmer Tenancy and Land Records Act (XLII of 1950) which provided that "if a landlord habitually infringes the rights of a tenant under this Act, he shall, notwithstanding anything in section 7 of the Ajmer Government Wards Regulation, 1888 (1 of 1888), be deemed to be a 'landlord who is disqualified to manage his own property ' within the meaning of section 6 of the said Regulation and his property shall be liable to be taken under the superintendence of the Court of Wards. " The determination of the question whether a landlord habitually infringed the rights of a tenant was left to the Court of Wards. This Court held that section was void as being unreasonable restriction on the right in property as the restriction made the enjoyment of that right to depend upon the mere discretion of the (1)[1953] S.C.R. 1049, 1055. 152 executive. Mahajan, J., as he then was, observed as under: "When a law deprives a person of his possession of his property for an indefinite period of time merely on the subjective determination of an executive officer, such a law can, on no construction of the word "reasonable" be described as coming within that expression, because it completely negatives the fundamental right by making its enjoyment depend on the mere pleasure and discretion of the executive, the citizen affected having no right to have recourse for establishing the contrary in a, civil court. " Though section 112 of the Ajmer Tenancy and Land Records Act laid down an objective test, namely,"a landlord habitually infringing the rights of tenants under that Act", and, therefore, may be said to have laid down some policy for the exercise of the discretion by the Court of Wards, the section was struck down as the discretion was uncanalised and no effective procedure was prescribed to remedy the grievance of an aggrieved party. It cannot be said that the Commissioner of Police has a higher status than the Court of Wards or that the taking over of the management of an estate affects a larger right than preventing a person from doing his business. The decision in Messrs. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh (1) dealt with cl. 4(3) of the Uttar Pradesh Coal Control Order, 1953, whereunder the licensing authority was given absolute power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any licence under the said Order and the only thing he had to do was to record reasons for the action he took. Under the clause the State Coal Controller could delegate power to any other officer. This Court held that the said Order was void as it imposed unreasonable restrictions on the freedom of trade and business guaranteed under article 19(1)(g) of the Constitution and not coming within the protection afforded (1)[1954] S.C.R. 803, 811. 153 by cl. (6) of the Article. Mukherjea, J., as he then was, observed to the following effect: "The power of granting or withholding licences or of fixing the prices of the goods would necessarily have to be vested in certain public officers or bodies and they would certainly have to be left with some amount of discretion in these matters. So far no exception can be taken; but the mischief arises when the power conferred on such officers is an arbitrary power unregulated by any rule or principle and it is left entirely to the discretion of particular persons to do anything they like without any check or control by any higher authority. " We shall now notice some of the decisions cited at the Bar on behalf of the Commissioner in support of the validity of the impugned provisions. In Babul Chandra vs Chief Justice and Judges, High Court of Patna (1) it was held that the proviso to s ub section (1) of section 9 of the Indian Bar Councils Act was not void as being an unreasonable restriction upon the freedom to practise a profession, or to carry on an occupation, trade or calling. The proviso to section 9(1) states expressly that the rules "shall not limit or in any way affect the power of the High Court to refuse admission to any person at its discretion". Under section 8 of the Indian Bar Councils Act, no person is entitled as of right to practise in any High Court, unless his name is entered in the roll of the Advocates of that Court maintained under the Act. Under section 9 of that Act, the Bar Council can frame rules with the sanction of the High Court to regulate the admission of persons as Advocates. The proviso saves the overriding power of the High Court to refuse admission in its discretion. It was contendedthat an unfettered and uncontrolled discretion wasgiven to the High Court and that was unreasonable. This Court pointed out that there could not be a better authority than the High Court in that State to which the discretion could be entrusted. This decision turned upon three considerations, namely, (1) no person was entitled as of right to practise; (2) the discretion to refuse was vested in the (1)A.I.R. 20 154 highest judicial body in the State; and (3) it was implicit in the power of discretion that the High Court would give notice before rejecting an application. On that basis this Court held that the restrictions imposed by the proviso to section 9(1) were reasonable. Nor does the decision in Harishankar Bagla vs The State of Madhya Pradesh (1) lay down any different principle. There this Court was concerned with cl. 3 of the Cotton Textile (Control of Movement) Order, 1948, promulgated by the Central Government under section 3 of the Essential Supplies (Temporary Powers) Act, 1946, which required a citizen to take a permit from the Textile Commissioner to enable him to transport cotton textiles purchased by him. It was contended in that case that the requirement of a permit was an unreasonable restriction on the citizen 's right under sub cls. (f) and (g) of article 19(1) of the Constitution. This Court rejected the contention and affirmed the validity of the law. Mahajan, C. J., speaking for this Court gave four reasons in support of his conclusion and they were: (1) the Legislature passed the Essential Supplies (Temporary Powers) Act during a period of emergency when it was necessary to impose control on the production, supply and distribution of commodities essential to the life of the community; (2) cl. 3 of the Control Order did not deprive a citizen of the right to dispose of or transport cotton textiles purchased by him, but only required him to take a permit from the Textile Commissioner to enable him to transport them; (3) if transport of essential commodities by rail or other means of conveyance was left uncontrolled, it might well have seriously hampered the supply of these commodities to the public; and (4) the policy underlying the Order was clearly enunciated by the provisions therein and that policy governed the exercise of the discretion by the Textile Commissioner. On these considerations this Court maintained the validity of that Order. The said decision has no analogy to the provisions of section 39 of the Act in question. The decision in Union of India vs Bhana Mal Gulzarimal Ltd. (2) related to the question of validity of (1) (2) ; , 641. 155 cl. 11B of the Iron and Steel (Control of Production and Distribution) Order, 1941. This Court held, having regard to the provisions of that Order and those of the Essential Supplies (Temporary Powers) Act, 1946, that the Legislature had clearly enunciated its legislative policy and that cl. 11B of the Order laid down the object which was intended to be achieved. Gajendragadkar, J., delivering the judgment of the Court, observed thus: "Therefore reading cl. 11B by itself we do not see how it would be possible to hold that the said clause is violative of article 19. In fact, if sections 3 and 4 are valid and cl. 11B does nothing more than prescribe conditions for the exercise of the delegate 's authority which are consistent with section 3 it is only the actual price structure fixed by the Controller which in a given case can be successfully challenged as violative of article 19." The learned Judge considered the price structure fixed by the notification and observed that the respondents therein did not seriously challenge the validity of the notification in respect of price structure and, that apart, it was not proved that the notification adversely affected a large class of dealers taken as a whole. The judgment, therefore, does not help the respondents. Nor is the decision of this Court in Mineral Development Ltd. vs State of Bihar (1) of any help to the respondents. There the constitutional validity of section 25(1) of the Bihar Mica Act (10 of 1948) was impugned as violating the petitioners ' fundamental right under article 19(1)(f) and (g), of the Constitution. Under section 25(1)(c) of that Act discretion was given to cancel a licence to the State Government, but cl. (c) was hedged in by two important restrictions, namely, (i) the failure to comply with the provisions of that Act or the rules made thereunder should be a repeated failure and not a mere sporadic one, i.e., the defaulter must be a recalcitrant one; (ii) before canceling the licence the State Government should afford reasonable opportunity to the licensee to show cause why his license (1) , 619. 156 should not be cancelled. This Court in upholding the validity of the said section observed thus: "The power given to the State Government is only to achieve the object of the Act, i.e., to enforce the said provisions, which have been enacted in the a interest of the public; and that power, as we have indicated, is exercisable on the basis of objective tests and in accordance with the principles of natural justice. We cannot, therefore, hold that section 25(1)(c) of the Act imposes an unreasonable restriction on the petitioner 's fundamental rights under article 19(1)(f) and (g) of the Constitution. " This decision far from helping the respondents is, to some extent, against their contention. The result of the discussion may briefly be summarized in the form of the following propositions: A fundamental right to do business can be controlled by the State only by making a law imposing in the interest of the general public reasonable restrictions on the exercise of the said right; restrictions on the exercise of a fundamental right shall not be arbitrary or excessive or beyond what is required in the interest of the general public; the reasonableness of a restriction shall be tested both from substantive and proce dural aspects; an uncontrolled and uncanalised power conferred on an officer is an unreasonable restriction on such right; though a legislative policy may have been clearly expressed in a statute, it must also pro. vide a suitable machinery for implementing that policy in accordance with the principles of natural justice; whether a restriction is reasonable or not is a justiciable concept and it is for the Court to come to one conclusion or the other having regard to the considerations laid down by Patanjali Sastri, C.J., in State of Madras vs V. G. Row (1).and similar others; in taking an overall picture of the relevant circumstances, the Court may legitimately take into consideration the fact that the discretion is entrusted to a State Government or a highly placed officer, but that in it self is of minor importance for the simple reason that the fundamental right itself is guaranteed against the (1)[1952] S.C.R. 597. 157 action of the State, which is defined to include not only the Union or the State Governments but also Parliament, Legislatures and all local or other authorities within the territory of India; the distinction between an administrative authority and a judicial authority is not of much relevance in the context of a reasonable restriction, except perhaps a Court may more readily be inclined to uphold a restriction if a matter is entrusted to an impartial judicial authority than to an executive authority. Bearing the aforesaid principles in mind, let us look at the impugned provisions of the Act. The section has been extracted supra. The first part of the section confers a free and unqualified discretion on the Commissioner to grant a licence. A discretionary power to issue a licence necessarily implies a power to refuse to issue a licence. The word "may" is an enabling one and in its ordinary sense means "Permissible". When coupled with the words "at his discretion" it emphasises the clear intention of the legis lature to confer on the Commissioner an unrestrained freedom to act according to his own judgment and conscience. If the section stops there, it is common case that the power of the Commissioner is.uncontrolled and uncanalised. The second part of the section deals with the nature of the conditions to be inserted in the licence. The conditions to be imposed are for securing the good behaviour of keepers of public resort and for the prevention of drunkenness and disorder among the persons frequenting or using such places. No doubt the said conditions must have the sanction of the State Government. This part, therefore, ensures the peaceful and orderly conduct of business. The section is clear and unambiguous in terms and it is not disputed that the plain terms of the section will not enable the conditions of a licence to be projected into the matter of the exercise of the discretion. But what is contended is that the conditions laid down a precise policy for guiding the discretion of the Commissioner to give or not to give a licence. There are many objections to this approach 158 to the problem. Firstly, it is to rewrite the section. If the legislature intended to guide the discretion by laying down objective criteria it would have stated so in express terms; it would not have left the matter to the absolute discretion of the Commissioner. Secondly, if the two conditions only of the licence control the exercise of the discretion, the Commissioner cannot travel beyond the said two conditions. As a result the amplitude of the discretion is drastically cut down. The Commissioner would be able to refuse a licence only if he was satisfied that the applicant could not be relied upon to comply with the said conditions; if he was so satisfied, he could not refuse a licence in spite of the fact that there were many other good and relevant reasons for doing so. Thirdly, if the conditions are not exhaustive but only illustrative, the section would continue to suffer from the same vice, as it would still be open to the Commissioner to refuse a licence for any other reason. Fourthly, discretion based upon an anticipatory breach of conditions will be as arbitrary as in the case of absolute discretion, particularly in the case of new applicants, as more often than not it will have to be exercised on the basis of surmises, gossip or information, which may be false or at any rate untested. Lastly, by this unwarranted search for an undisclosed policy in the crevices of the statute, this Court will not only be finding an excuse to resuscitate an invalid law but also be encouraging the making of laws by appropriate authorities in derogation of fundamental rights. The provisions of sections 47 and 48(3) of the (IV of 1939), bring out in bold relief the distinction between the exercise of a discretion to issue a licence and the imposition of conditions in a licence. Section 47 enjoins on the Regional Transport Authority in considering an application for a stage carriage permit to have regard to the matters enunciated in that section. Section 48(3) enables the Regional Transport Authority to attach to the permit the conditions detailed in that sub section. While the former section regulates the exercise 159 of the discretion of the Regional Transport Authority issuing a permit, the latter describes the nature of the conditions to be inserted in the permit. These provisions no doubt cannot be invoked to construe the provisions of section 39 of the Act, but we are referring to them only to show the legislative practice in such matters and to emphasize the fact that the scope of the discretion to issue a licence and that of the power to impose conditions in a licence are different. Therefore, on a true construction of the plain words of the statute we cannot hold that any policy reasonably capable of controlling the discretion of the Commissioner has been laid down. Even if the two conditions can be read into the first part of section 39, the arbitrariness is writ large in the manner of exercising the so called guided discretion. In this context it is not necessary to come to a definite conclusion on the question whether the discretion is judicial or executive, for whatever be the nature of the discretion it must be tested from the standpoint of reasonableness of the restrictions imposed on a person 's right to do business. A citizen of India, for the purpose of eking out his livelihood, seeking to do an extensive business of an eating house, applies to the Commissioner for a licence, for without that licence he cannot do business, and if he does he will be liable to prosecution. The Commissioner can reject the application on two grounds, namely, (1) from his antecedents and present conduct it would be unreasonable to think that the petitioner would keep good behaviour, and (2) the Commissioner is not satisfied that the petitioner would be able to prevent drunkenness and disorder among the persons frequenting or using the eating house. Admittedly this order is made without giving any opportunity to an applicant to prove that he would satisfy both the tests laid down by section 39 of the Act. The Commissioner is not legally bound to give any reasons for his refusal to give a licence. Even if reasons are given, there is no machinery for getting such an order revoked or vacated. The section does not impose a duty on the Commissioner to give reasonable opportunity to an 160 applicant to clear his character or to disprove any un warranted allegations made against him or to prove that he would satisfy both the tests laid down by section 39 of the Act. Nor does the section provide for an appeal against the order of the Commissioner to an appropriate authority. The suggestion that the authority is a high officer in the police department and that he can be relied upon to exercise his discretion properly does not appeal to us for two reasons, namely, (1) as we have already pointed out, the Constitution gives a guarantee for the fundamental right against the State and other authorities; and (2) the status of an officer is not an absolute guarantee that the power will never be abused. Fundamental rights cannot be made to depend solely upon such presumed fairness and integrity of officers of State, though it may be a minor element in considering the question of the reasonableness of a restriction. Therefore, it is clear to our mind that the exercise of the power also suffers from a statutory defect as it is not channelled through an appropriate machinery. We have, therefore, no hesitation to hold that section 39 of the Act infringes the fundamental right of the petitioner under article 19(1)(g) of the Constitution both from substantive and procedural aspects. The next question is whether a mandamus will issue against the Commissioner. The Commissioner admittedly has launched criminal proceedings against the petitioner under the provisions of the Act for not taking out a licence under section 39 of the Act. As we have held that section 39 of the Act is constitutionally void, a writ of mandamus will issue against the Commissioner of Police, Calcutta, directing him not to take any further proceedings against the petitioner for not taking out a licence under the provisions of the Act. BY COURT. In accordance with the opinion of the majority, this Petition is dismissed with costs.

By section 39 of the Calcutta Police Act, 1866, "The Commissioner of Police, may, at his discretion from time to time, grant licenses to the keepers of such houses or places of public resort and entertainment as aforesaid for which no licence as is specified in the Bengal Excise Act, 1909 is required upon such conditions, (1) (1934) L.R. 61 I.A. 398. 136 to be inserted in every such license, as he, with the sanction of the said State Government from time to time shall order, for securing the good behaviour of the keepers of the said houses or places of public resort or entertainment, and the prevention of drunkenness and disorder among the persons frequenting or using the same; and the said licenses may be granted by the said Commissioner, for any time not exceeding one year". The petitioner, whose application for a license in respect of an eating house was refused by the Commissioner of Police, Calcutta, under the section, challenged its constitutional validity on the ground that it conferred arbitrary and unguided powers on the Commissioner to grant or refuse a license without hearing the applicant and was, therefore, an unreasonable restriction on his fundamental right to carry on his trade guaranteed by article 19(1)(g) of the Constitution. Held, (per Kapur, Gajendragadkar and Wanchoo, JJ.), that in order to decide whether a provision in a pre Constitution statute, like the one in question, satisfies. the test of constitutionality laid down by article 19(i)(g) read with article 19(6) of the Constitution, the impugned section has to be read as a whole in a fair and reasonable manner and it should not be declared void simply because the considerations relevant to those Articles are not immediately apparent from its language. It is not correct to say that the discretion conferred on the Commissioner by the first part of the section is absolute and that the question of imposing the two conditions mentioned by the second part can arise only after the grant of the license. The two parts, read together, can lead only to the conclusion that the discretion vested in the Commissioner is guided by the two conditions mentioned in the section, namely, the securing of good behaviour and the prevention of drunkenness and disorder and a third by necessary impli cation, that the applicant must have actual and effective control and possession of the place where he keeps the eating house. Section 39 of the Calcutta Police Act, 1866, therefore, con fers no arbitrary or uncanalised discretion on the Commissioner, unguided by any criteria, and does not constitute an unreasonable restriction on the fundamental right to carry on trade under article 19(i)(g) of the Constitution. Rustom jamshed Irani vs Harley Kennedy, Bom. 386, inapplicable. Although there can be no doubt that procedural provisions of a statute also enter into the verdict as to its reasonableness, it cannot be laid down as a general proposition that if a licensing statute omits to provide for a hearing or for the giving of reasons for refusal, such omission must necessarily constitute an unreasonable restriction on a fundamental right. The Commissioner in passing an order under the section acts administratively and although he must act reasonably, there is no duty cast on him 137 to act judicially. Regard being had to the setting in which the impugned section appears in the Act and the circumstances of ,.this case, it could not be said that section 39 of the Act was such a restriction. State of Madras vs V. G. Row, ; , Nagendra Nath Bora vs The Commissioner of Hills Division and Appeals, Assam, ; , Nakkuda Ali vs M. F. De section jayaratne, and Express Newspapers (P.) Ltd. vs The Union of India, , relied on. If an applicant thinks that he has fulfilled the three con ditions and the Commissioner has unreasonably rejected his application, he has his remedy under article 226 of the Constitution. Per Subba Rao, J. It is well settled that restrictions on fundamental rights must not be arbitrary or excessive or beyond what is required in the interest of the general public. Such restrictions have to be tested both from the substantive and the procedural aspects. An uncontrolled or uncanalised power constitutes an unreasonable restriction. Even though the statute may clearly express the legislative policy that cannot be enough unless it provides a suitable machinery for implementation of that policy in accordance with the principles of natural justice. Restrictions are justifiable and in deciding whether a restriction is reasonable or not, the Court cannot attach much importance to the fact that the impugned statute vests discretion in the State Government or a high officer. Nor can the distinction between an administrative authority and a judicial one have much relevance except that the Court may be more inclined to uphold the discretion if vested in an impartial judicial authority rather than in an administrative one. State of Madras vs V. G. Row, ; , Thakur Raghubir Singh vs Court of Wards, Ajmer, ; and M/s. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh, ; , relied on. Babulal Chandra vs Chief justice and judges, High Court of Patna, A.I.R. 1954 S.C. 524, Harishankar Bagla vs The State Of Madhya Pradesh, , Union of India vs Bhana Mal Gulzarimal Ltd.; , and Mineral Development Ltd., State of Bihar, considered. Thus viewed, the plain words of the impugned section cannot be said to lay down any policy reasonably capable of controlling the discretion vested in the Commissioner. The word 'may ' coupled with the words 'at his discretion ' in the first part of the section clearly emphasises the intention of the Legislature to confer absolute power on the Commissioner. The second part deals with the nature of the conditions to be inserted in the license. But the scope of the discretion to issue 18 138 the license and the power to impose conditions in a license are two different matters. Even if the two conditions mentioned in the second part could be read into the first, the discretion conferred by the section would still be arbitrary since the section neither requires that the Commissioner should give reasonable opportunity to the applicant to prove that he satisfies both the tests prescribed by it nor that he should give reasons for refusing the license and no appeal is provided for. Consequently , from the substantive as much as the proce dural aspect, section 39 of the Act infringes the fundamental right of the petitioner guaranteed by article 19(i)(g) of the Constitution.

Appeal No. 1121 of 1966. Appeal by special leave from the judgment and order dated August 17, 1965 of the Punjab High Court, in Letters Patent Appeal No. I 10 of 1965. 203 Janardan Sharma and R. N. Sachthey, for the appellant. The respondent did not appear. The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Punjab accepting the petition filed by the rate payers of Municipal Committee, Rohtak, respondents before us, and ordering that the State Government shall not proceed with the constitution of the Rohtak Improvement Trust under the notification of August 30, 1961. The High Court allowed the petition because it held (1) that sub section (3) of section I of the Punjab Town Improvement Act (Punjab Act IV of 1922) here in after referred to as the Act only envisages the creation 'of a Trust in a Municipal area where a Committee is functioning and so is in a position to hold a special meeting to decide whether or not it considers the creation of a trust desirable, and (2) that once a trust ceases to exist under section 103(l) of the Act in order to recreate the trust, the Act has to be applied again, and as the Municipal Committee had at a special meeting held on November 9, 1962, decided unanimously that the Act should not be applied the Government was bound to give effect to that decision. The learned counsel for the appellant, Mr. Sachthey, contends that the High Court has placed a wrong interpretation on the two provisions mentioned above and somehow section 4 A of the Act was not noticed by the High Court. Before we deal with the interpretation of the provisions mentioned above it is necessary to state a few facts. The Rohtak Municipal Committee was superseded on August 2, 1954. The Government purported to extend the provisions of the Act to the whole of the area of the Municipality on May 21, 1958. The notification to this effect reads "In pursuance of the provisions of sub section of Section I of the Punjab Town Improvement Act 1922 (Punjab Act No. IV of 1922), the Governor of Punjab proposes to apply the provisions of the said Act to the whole of the area of the municipalities specified below with effect from 9th June, 1958 1. . 2. . 3. Rohtak,. " Sub section (3) of section 1 of the Act reads as follows "1. (3) This section and section 66 shall come into force at once. The State Government may by notification propose to apply the rest of the Act to the whole or any part of any municipality and to any locality adjacent 204 thereto, on such date as may be specified in such notification; and the Act shall come into operation after the, lapse of three months unless within that period the municipal committee concerned at meeting convened for the purpose of considering the application of the Act resolve by a majority of two thirds that the Act should not be so applied. " In pursuance of this notification a trust was set up. But on August 30, 1961, the Government issued a notification in exercise of its powers under sub section (1) of section 103 of the Act and declared that the Rohtak Improvement Trust shall be dissolved with effect from August 30, 1961 from which the Chairman and the trustees of the aforesaid Trust ceased to function. Section 103(1) of the Act reads as follows : "103. (1) When all schemes sanctioned under this Act have been executed or have been so far executed as to render the continued existence of the trust, in the opinion of the State Government, unnecessary, or when in the opinion of the State Government it is expedient that the trust shall cease to exist, the State Government may by notification declare that the trust shall be dissolved from such date as may be specified in this behalf in such notification; and the trust shall be deemed to be dissolved accordingly. " It appears that on the supersession of the Municipality of Rohtak in 1954 an Administration was appointed under section 238 of the Punjab Municipal Act, 191 1. This section, inter alia, provides: "238. (1) . (2) When a committee is so superseeded. the following consequences shall ensue (a). (b) all powers and duties of the committee may, until the committee is reconstituted, be exercised and performed by such persons as the State Government may appoint in that behalf;" Fresh elections of the Municipal Committee, Rohtak, were held in July 1961, and the Municipal Committee reconstituted on January 10, 1962. On October 23, 1962, the Government informed the Deputy Commissioner, Rohtak, that it had decided to reconstitute Rohtak Improvement Trust immediately and asked the Deputy Commissioner to recommend a panel of six names of suitable persons for appointment as trustees and the Government also asked him to call upon the Municipal Committee, Rohtak, to elect its representatives as trustees. 205 This was not to the liking of the Municipal Committee and the Municipal Committee unanimously passed a resolution on November 9, 1962, strongly opposing the reconstitution of the Improvement Trust, Rohtak. The Government by notification dated January 10, 1963, in exercise of powers conferred 'by sub section (2) of section 4 of the Act appointed one Major section K.Mehta as Chairman, Rohtak Improvement Trust. The Municipal Committee was again requested to send two names of three members of the Municipal Committee to be appointed as trustees as required by cl. (b) of sub section ( 1) of section 4 of the Act. Thereupon 32 rate payers filed the petition under article 226 of the Constitution challenging the reconstitution of the Rohtak Improvement Trust. Coming to the first point decided by the High Court, it seems to us that section 4 A to the Act was not brought to its notice and if it had been brought to its notice the High Court may well have come to the contrary conclusion. Section 4 A which, was inserted by Punjab Act VIII of 1936 reads : "4 A. During the period of supersession of a Municipal Committee under section 238 of the Punjab Municipal Act, 191 1, the three seats allotted to the Municipal Committee on the trust under clause (b) of sub section (1) of section 4 shall be filled by the State Government by appointing any three persons by notification in the Official Gazette. The term of office of every trustee so appointed shall be three years or until the Trust is dissolved, whichever period is less, provided that if the Municipal Committee is reconstituted three members of the Municipal Committee shall be elected or appointed in accordance with the provisions of section 4, and on their election or appointment the three trustees appointed by the State Government under this section shall cease to be members of the Trust. " Reading section 1(3) and section 4A of the Act, and section 238 of the Punjab Municipal Act, 191 1, together, it seems to us that the true meaning of the latter portion of sub section (3) of section 1 is that when the Government applies the section and the Municipal Committee has been superseded before that date, it is the Administrator who would exercise the powers given under the latter part of that sub section; in other words, the Administrator would be competent to say to the Government that the Act shall not come into operation. The words of section 238 of the Punjab Municipal Act are very wide and it is difficult to limit the expression "all powers and duties of the committee" in any manner. The Municipality exercised powers by resolution passed by majority and the fact that this particular resolution had to be by two third majority does not lead 206 to the conclusion that the power to oppose the application of the Act vesting in the Municipal Committee cannot be exercised by the Administrator under section 238, Punjab Municipal Act. Section 4A of the Act clearly proceeds on the basis that while the Municipal Committee stands superseded the appointment of trustees which was originally to be made by the Municipal Committee would be made 'by the State Government. As the High Court did not have section 4 A before it had relied on the anomaly that where a Municipal Committee was suspended the Government could nominate some members of the suspended Committee as members of the Trust or otherwise fill these vacancies, and the High Court felt that it could not believe that it was the intention of the Legislature. Coming to the second point. made by the High Court, it seems that the High Court has wrongly,, held that once the Act has been applied it is necessary that it should be applied again when the Municipal Committee is reconstituted. There is nothing in the words of sub section (3) of section I to 'warrant this conclusion. Once the Act has come into operation in accordance with the provisions of sub section (3) of section 1 there is no provision by which the Act can cease to apply. The only point that remains is,: when a trust has been dis solved under section 103 of the Act, can it be reconstituted under the Act ? The only provisions under which a trust can be reconstituted under the Act are sections 3 and 4. Section 3 reads : "3. The duty of carrying out the provisions of this ' Act in any local area shall, subject to the conditions and limitations hereinafter contained, be vested in a board to be called "The (name of town) Improvement Trust" hereinafter referred to as the 'The Trust"; and every such board shall be a body corporate and have perpetual succession and common seal, and shall by the said name sue and be sued. " Section 4 reads; "4. (1) The trust shall consist of seven trustees, namely The other sub sections of section 4 provide how the trustees are to be appointed. It seems to us that if the trust could originally be created under sections 3 and 4, reading sections 3 and 4 and section 12 of the General Clauses Act, the Government has the power to create a view trust or reconstitute a new trust. We may mention that section 12 of the Gene 207 ral Clauses (Punjab.) Act, 1898, provides that "where by any Punjab Act any power is conferred then that power may be exercised from time to time as occasion requires. " In the result the judgment of the High Court is set aside, the appeal allowed and the writ petition dismissed. There, will be no order as to costs throughout. Y.P. Appeal allowed.

The Rohtak Municipal Committee was superseded in August 1954, and an Administrator was appointed under section 238 of the Punjab Municipal Act, 1911. In June 1958 the provisions of the Punjab Town Improvement Act, 1922, were extended to the Municipality and the Rohtak Improvement Trust was set up under the Act. In August 1961, the Government issued a notification under section 103 (1) of the 1922 Act dissolving the Trust. The Municipal Committee was reconstituted in January 1962 and in October 1962 the Government decided to reconstitute the Trust. The Municipal Committee thereupon passed a resolution opposing the reconstitution of the Trust. In January 1963, however, the Government re constituted the Trust and the Municipal Committee was asked to name its representatives to be appointed as trustees. The rate payers filed a writ petition challenging the reconstitution of the trust and the High Court allowed the petition. In appeal to this Court, HELD : (1) The attention of the High Court was not drawn to section 4A of the 1922 Act and therefore it erred in holding that the Trust could not be set up in 1958 because, under section 1(3) of the 1922 Act a Trust cannot be created in a Municipal area unless the committee was functioning. Under section 4A, where the Municipal Committee was superseded the State ,Government could appoint the trustees, and there was no anomaly in the Government nominating the trustees, because, the Administrator who had all the powers and duties of the Committee under section 238 of the 1911 Act was competent to say to the Government that the 1922 Act should not be applied to the Municipality. [205 C D 206 B] (2) Once the 1922 Act had come into operation under section 1(3), it ,continues to apply and it was not necessary to apply it again when the Municipal Committee was reconstituted in 1962. [206 D] (3) Under sections 3 and 4 of the 1922 Act and the General Clauses (Punjab) Act, 1898, Government has the power to create a new trust or reconstitute a Trust which was dissolved. [206 H]

In the matter of Petition for Special Leave to Appeal No. 230 of 1953. Rajinder Narain for the Respondents. N. C. Chatterjee (Sukumar Ghose with him) for the Appellants. April 5. The Order of the Court was delivered by MUKHERJEA C.J. This is an application by the respondents in Special Leave Petition No. 230 of 1953, praying for summons to the appellants to show cause why the special leave obtained by the latter should not be rescinded in accordance with the provision of Order XIII, rule 13 of the Supreme Court Rules. The appeal is directed against a judgment of a Division Bench of the Calcutta High Court affirming, on appeal, a decision of a single Judge sitting on the Original Side of that Court. The appellants, having been refused certificate by the High Court, presented before us an application under article 136 of the Constitution and special leave to appeal was granted to them by an order of this Court dated the 25th May 1954. By that order the appellants were required to furnish security for costs amounting to Rs. 2,500 within six weeks and the enforcement of the award, which was the subject matter of the appeal, was stayed on condition that the appellants deposited in Court a sum of Rs. 28,000 within four weeks from the date of the order. On the 15th of June 1954 the Registrar of this Court transmitted to the Original Side of the Calcutta High Court certified copies of the order granting special leave and also of the special leave petition with a request that these documents might be included in the printed records of the case. It is not disputed that in pursuance of the directions given 246 by this Court the appellants did deposit the amount required as security for costs and also the sum of Rs. 28,000 within the time mentioned in the order. On the 29th November 1954 the respondents ' Solicitors in Calcutta wrote a letter to the Registrar of the Original Side of the Calcutta High Court complaining of delay on the part of the appellants in prosecuting the appeal. It was stated inter alia that although six months had elapsed since special leave was granted by this Court, the respondents were not served with notice of the admission of the appeal and no steps were taken by the appellants to get the records printed or transmitted to this Court. In reply to this letter the Registrar informed the respondents ' Solicitors that according to the practice of the Calcutta High Court it was incumbent on the appellants to make a formal application to the Appellate Bench of the Court for declaring the appeal finally admitted, and this was to be done on notice to the other parties under Order XLV, rule 8 of the Civil Procedure Code and on filing in Court a copy of the order of the Supreme Court granting special leave to appeal as well as the application upon which such order was made. Unless and until an order was made by the High Court declaring the appeal to be admitted, no action could be taken by the office in the matter. Thereupon on the 11th of January 1955 an application was filed by the appellants praying that leave might be given to them to file the certified copy of the special leave petition and also that of the order passed upon it and that the appeal might be finally admitted. This application came up for hearing before the learned Chief Justice and Lahiri, J. of the Calcutta High Court and on the 20th of January 1955 the learned Judges made the following order: "In this matter special leave to appeal to the Supreme Court was granted by that Court on the 25th May 1954. On the 21st June following, the Appellant furnished the necessary security. It was then the duty of the Appellant to take the necessary steps for the final admission of the appeal in order that the preparation of the Paper Book might thereafter be 247 undertaken. Under the Rules and practice of this Court the step to be taken is that the Appellant to the Supreme Court should make an application for leave to file the certified copy of the petition for Special Leave and also a certified copy of the order granting Special Leave which have been filed along with the present application. . . . ." When the matter came up for hearing on the last occasion we enquired whether the Appellants had any explanation to give for the delay which bad occurred. It was said that the certified copy of the application for Special Leave had been obtained only recently. It was however not explained why when an application for a certified copy of the order was made a similar application for a certified copy of the petition also could not be made. In all the circumstances we consider it right that the disposal of the present application should stand over for a month in order that the respondents may take such steps as they desire to take before the Supreme Court". The above facts and order of the High Court were communicated to the Registrar of this Court by Shri Rajinder Narain, Advocate for the respondents, by his letters dated the 17th and 31st of January 1965 and on the basis of the facts stated above, he requested that action should be initiated by the Registrar against the appellants for non prosecution of the appeal. The Registrar told the learned Advocate that he had not received any report from the High Court regarding any laches on the part of the appellants and without any such report, it was not possible for him to take any action in the matter. The Advocate himself, it was said, was quite at liberty to make a formal application to the Court in such way as he considered proper. The views thus expressed by the Registrar of this Court were communicated by him to the Registrar of the High Court, Original Side, Calcutta. On the 4th March 1955 Shri Rajinder Narain filed a formal petition addressed to the Registrar alleging inordinate delay on the part of the ap pellants in filing in the High Court certified copies of 248 the Special Leave petition and the order made by this Court thereupon and praying that summons might be issued to the appellants to show cause why the appeal should not be dismissed for non prosecution. Before the Registrar could take any further steps in the matter, the application of the appellants for final admission of the appeal made in the High Court came up for further consideration before the Appellate Bench consisting of the Chief Justice and Mr. Justice Lahiri and on the 7th March, 1955 the learned Judges made an order directing, for the reasons given therein, adjournment of the application for admission of the appeal before them, sine die pending orders which this Court might pass on the application of the respondents. The application of the respondents which purports to have been made under Order XIII, rule 13 of the Supreme Court Rules was referred by the Registrar for orders to the Court and it has now come up for hearing before us. Shri Rajinder Narain appearing in support of the petition has Contended before us that the appellants were guilty of serious laches inasmuch as they did not file in the High Court, till 8 months after the special leave was granted, copies of the special leave petition as well as of the order passed upon it; nor did they make an application to the Appellate Bench for admission of the appeal without which no further steps could be taken in the matter of printing and transmission of the record. As the appellants could not give any satisfactory explanation for this inordinate delay on their part, the special leave, it is argued, should be rescinded. Mr. Chatterjee, who appeared for the appellants, has contended @n the other hand that in a case like the one before us where the appeal has come up to this Court by special leave and not by a certificate granted by the High Court, there was no duty cast upon the appellants to make a formal application in the High Court for final admission of the appeal or to file therein certified copies of the special leave petition and the order made thereupon. His argument is that under Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court, a 249 Supreme Court appeal must be deemed to have been admitted by the very order of this Court granting special leave and as soon as the appellants have carried out the directions of the Supreme Court regarding furnishing of security or making of other deposits as the case may be, it is incumbent upon the Registrar to issue a notice of the admission of the appeal for service upon the respondents. Such notice indeed has got to be served by the appellants ' attorney; but as no notice was at all issued by the Registrar in the present case as is contemplated by rule 9 of Order XXXII of the Original Side Rules of the Calcutta High Court, no blame could attach to the appellants for not taking further steps in the matter. The contention of Mr. Chatterjee appears to us to be wellfounded and as it seems to us that doubts have arisen at times regarding the precise procedure to be followed in cases where an appeal comes to this Court by special leave granted under article 136 of the Constitution, it is necessary to examine the provisions bearing upon it as are contained in the Rules of the Supreme Court or of the High Court concerned read along with the relevant provisions of the Civil Procedure Code. Ordinarily when a High Court grants a certificate giving leave to a party to appeal to this Court, it is ,that Court which retains full control and jurisdiction over the subsequent proceedings relating to the prosecution of the appeal till the appeal is finally admitted. It is for the High Court to see that its directions are carried out regarding the furnishing of security or the making of deposit and when these conditions are fulfilled, it has then to declare the appeal finally admitted under Order XLV,rule 8 of the Civil Procedure Code. The jurisdiction of the Supreme Court begins after the appeal is finally admitted. When however the appeal comes to this Court on the strength of a special leave ' granted by it, the position is different. In such cases the order of the Supreme Court granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to fur 250 nishing of security or making of a deposit are complied with. That this is the true position will be clear from the procedural provisions contained in the Rules of the Supreme Court as well as of the Original Side of the Calcutta High Court. Order XIII, rule 8 of the Supreme Court Rules lays down: "After the grant of special leave to appeal by the Court, the Registrar shall transmit a certified copy of the order to the court or tribunal appealed from". Rule 9 then says: "On receipt of the said order, the court or tribunal appealed from shall, in the absence of any special directions in the order, act in accordance with the provisions contained in Order XLV of the Code, so far as applicable". It is to be noted here that although this rule does refer to the provisions of the Order XLV of the Civil Procedure Code, these provisions are to be followed only so far as they are applicable. It is surely the duty of the High Court to see that security is furnished or a deposit is made in accordance with the directions of the Supreme Court and these directions are to be found in the order of the Supreme Court which the Registrar is bound to transmit to the High Court under Order XIII, rule 8 of our Rules. We do not think it is necessary for the appellants to file afresh a copy of the Supreme Court order or the petition upon which it was made in order that they may form part of the record of the Supreme Court appeal. They would come in the record as soon as they are transmitted by the Registrar in accordance with the rule of our Court mentioned above and would have to be included in the Paper Book when it is printed. The Registrar of the High Court undoubtedly took these orders as part of the record without the appellants ' filing them afresh, for he accepted the security and deposit of other moneys from the appellants on the basis of these orders. If there was any failure on the part of the appellants to furnish the security or to make the deposit in the way indicated in the order of the Supreme Court, it would have been the duty of the Registrar of the High Court to intimate these 251 facts to the Registrar of the Supreme Court and the latter thereupon could take steps for revoking the special leave as is contemplated by Order XIII, rule 12 of our Rules. In our opinion, it is also not necessary for the appellants to make a formal application for admission of the appeal in cases where special leave has been granted by the Supreme Court; and this appears clear from the provision of Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court which runs as follows: "9. On the admission of an appeal to the Supreme Court whether by the order of this Court under Order XLV, rule 8 of the Code, or by an order of the Supreme Court giving the appellant Special Leave to Appeal, but subject in the latter case to the carrying out of the directions of the Supreme Court as to the security and the deposit of the amount re quired by rule 5, notice of such admission shall be issued by the Registrar for service on the respondent on the record, whether be shall have appeared on the hearing of the application for a certificate under Order XLV, rule 3 of the Code, or not. Such notice shall be served by the attorney for the appellant and an affidavit of due service thereof shall be filed by such attorney immediately after such service". The opening words of this rule plainly indicate that there could be admission of appeal either by order of the High Court under Order XLV, rule 8 of the Civil Procedure Code or by the order of the Supreme Court itself giving special leave to appeal. (As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents). This notice is to be served by the attorney for the appel lants and an affidavit of due service shall be filed by him immediately after the service is effected. In the present case the Registrar, Original Side of the, Calcutta High Court should have issued a notice of 252. the admission of the appeal to be served upon the respondents as soon as the security for costs and other deposits of money were made by the appellants. This was not done as the procedure to be followed was not correctly appreciated. It is true that the appellants remained idle for a considerable period of time even after they furnished security and did not take any steps towards printing of the record. But as there was an initial irregularity in the matter of issuing a notice under. Order XXXII, rule 9 of the Original Side Rules of the Calcutta High Court, we are unable to hold that the appellants were guilty of any laches for which the special leave deserves to be rescinded. The result is that the application of the respondents is dismissed. The Registrar, Original Side of the Calcutta High Court, will now issue a notice under Order XXXII, rule 9 of the Original Side Rules and prompt steps should be taken by the appellants towards printing and transmission of the record to this Court. We make no order as to costs of this application.

By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta. In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order. The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955. The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules. The application in the High Court was therefore kept pending. Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable. Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court. Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution. In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted. The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with. Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself. In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code. Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code. And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents. In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal. As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents. In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.

Civil Appeal No. 682 of 1981. From the Judgment and Order dated the 21st June, 1980 of the High Court of Bombay in Special Civil Application No. 2039 of 1975. V.M. Tarkunde, P.H. Parekh and R.N. Karanjawala for the Appellant. Soli J. Sorabjee, V.N. Ganpule and Mrs V.D. Khanna for the Respondents. The Judgment of the Court was delivered by PATHAK, J. This appeal by special leave arises out of a suit for a declaration and injunction and aises questions concerning the interpretation and application of certain provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. 566 Peerbhoy Mansion is a building situated at Vithalbhai Patel Road in the city of Bombay. It was let to a partnership firm, Gold Field Leather Works. Gold Field sublet a portion of a shop on the ground floor to Manekchand Bhikabhai. The sub tenant Manekchand sublet it further to Sardar Tota Singh in 1952. Gold Field filed a suit in 1962 against Manekchand for possession of the premises on the ground of unlawful subletting and carrying out unauthorised structural alterations. Manekchand resisted the suit and filed a written statement During the pendency of the suit Tota Singh applied to the Court for being added as a defendant, but the application was opposed by Gold Field and was rejected. Gold Field 's suit was ultimately decreed for possession in accordance with a compromise between the parties. Tota Singh then filed Suit No. 2454 of 1966 for a declaration that he was a lawful tenant in possession of the premises and for an injunction restraining Gold Field from executing the decree which that firm had obtained against Manekchand It was pleaded that he was in occupation and exclusive possession as a lawful sub tenant for more than fifteen years to the knowledge of Gold Field, that the decree in Gold Field 's suit was a collusive decree, that as the decree had been passed against Manekchand he, Tota Singh, had become a direct tenant of Gold Field under section 14 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (the "Bombay Rent Act") and that therefore he was entitled to the declaration and injunction sought in the suit. Gold Field filed a written statement in the suit and pleaded that they were tenants of the entire building and had sublet the premises to Manekchand, that Manekchand as sub tenant could not sub let the premises further to Tota Singh, and therefore Tota Singh 's sub tenancy was invalid. The Court of Small Causes tried the suit and decreed it on April 17, 1973. Gold Field appealed. The Appellate Bench of the Court of Small Causes dismissed the appeal on April 30, 1975. The Appellate Bench affirmed the trial Judge 's finding that the premises had been sublet by Manekchand to Tota Singh in 1952, and that on May 21, 1959, when the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance 1959 was promulgated and sub section (2) of section 15 was introduced into the Bombay Act, Manekchand was not in possession. In the attempt to prove that he was a lawful 567 sub tenant, Tota Singh urged before the Appellate Bench that Gold A Field had permitted Manekchand to sublet the premises to him, but this contention was not entertained by the appellate Bench as there was neither any plea nor any evidence to support it. The Appellate Bench also rejected the submissions of Tota Singh that he had paid rent directly to Gold Field and therefore had been accepted as a tenant by them. It found that no rent had paid by Tota Singh to Gold Field after Manekchand 's statutory tenancy, which followed the termination of this contractual tenancy by service of notice had itself been terminated by the decree for possession in Gold Field 's suit One road seemed still open to Tota Singh to establish the validity of his tenancy. fore the Appellate Bench a concession had been made by counsel for Gold Field. It was conceded on behalf of Gold Field that Manekchand was their lawful sub tenant. On that Tota Singh urged that if Manekchand, although a sub tenant, was regarded as a "tenant" by reason of sub section (11) of section 5 of the Bombay Rent Act, then the benefit of sub section (2) of section 15 should be extended to him. He was in possession on May 21, 1959 as the sub tenant of a lawful tenant and, therefore, the submission proceeded, his subtenancy would be deemed to be valid This contention found favor with the Appellate Bench. It held that as Tota Singh was undisputedly in possession on May 21, 1959, the sub tenancy in his favor by Manekchand must be deemed to be a valid sub tenancy. At this point a debate was raised whether the benefit of sub section (2) of section 15 had to be confined to a sub tenancy created by a tenant or could be extended to a sub tenancy created by a sub tenant. Following the view taken by the Bombay High Court in Josephy Santa Vincent v Ambico Industries.(1) the Appellate Bench answered that question in favor of Tota Singh and dismissed Gold Field 's appeal. Gold Field filed a Special Civil Application in the High Court against the order of the Appellate Bench of the Court of Small Causes and on June 21, 1980 the High Court set aside the decree passed by the Appellate Bench and dismissed Tota Singh 's suit. The High Court took the view that having regard to certain observations made by this Court in Jai Singh Morarji and Ors. vs M/s Sovani Pvt. Ltd. and Ors.(2) an extended construction of sub section (2) of section 15 of the Bombay Rent Act so as to include a sub tenancy created by a sub tenant was not justified. (1) 70 Bombay Law Reporter 224. (2) ; 568 Tota Singh died during the pendency of the appeal in the High Court, and accordingly this appeal has been preferred by his legal representatives. The material question before us is whether Tota Singh could rightly claim tenancy rights in the premises and therefore nullify the enforcement as against him of the decree in Gold Field 's suit. It appears that sub section (I) of section 15 of the Bombay Rent Act as originally enacted prohibited the sub letting by a tenant of premises let to him, except in the particular cases notified by the State Government under the proviso to that sub section. A sub letting by the tenant constituted a ground for his eviction under clause (e) of sub . (1) of section 13. The rigour of the provision was relaxed by the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance 1959, which was brought into force on May 21, 1959. The Ordinance was replaced by the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Act 1959 In consequence, sub section (1) of section 15 of the Act stood amended from the inception of the Bombay Rent Act so that the prohibition against sub letting incorporated in it operated 'subject to any contract to the contrary". Simultaneously, sub section (2) was inserted in section 15. That provision was subsequently substituted by Maharashtra Act 38 of 1962 by the following provision with effect from May 21, 1959: "15 (2) The prohibition against the sub letting of the whole or any part of the premises which have been let to any tenant, and against the assignment or transfer in any other manner of the interest of the tenant therein, contained in sub section (1), shall, subject to the provisions of this sub section, be deemed to have had no effect before the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance, 1959, in any area in which this Act was in operation before such commencement; and accordingly, notwithstanding anything contained in any contract or in the judgment, decree or order of a court, any such sub lease assignment or transfer or any such purported sub lease, assignment or transfer in favor of any person who has entered into possession despite the prohibition in sub section (1), as a purported sub lease, assignee or transferee and has continued in possession at the commencement of the said Ordinance, shall be deemed to be valid and effectual for all purposes, and any tenant 569 who has sub let any premises or part thereof, assigned or A transferred any interest therein, shall not be liable to eviction under clause (e) of sub section (1) of section 13". It is contended for the appellant that as the respondent conceded before the Court of Small Causes that Manekchand was a lawful sub tenant, the High Court should have held that a sub tenancy created by such sub tenant must be deemed valid by reason of sub section (2) of section 15 of the Bombay Rent Act. It is urged that the High Court erred in construing Jai Singh Morarji (supra) as laying down the contrary. The case for the respondent is that sub section (2) of section 15 benefits a sub tenancy created by the original tenant only and does not extend to a sub tenancy created by a sub tenant. There can be no doubt that upon the amendment of sub section (1) of section 15 by the Ordinance and by its related Act the prohibition against sub letting did not operate in those cases where the sub letting was permitted by contract between the landlord and tenant. In all such cases, if the landlord had permitted the tenant under a contract between them to sublet the premises, no question would arise of a need to validate those sub tenancies. The relevant amendment in subs. (1) of section 15 was deemed to have always been part of the sub section. It is in this light that we must determine the scope of sub section (2) of section 15. Sub section (2) of section 15 raises the ban from all sub letting effected before May 21, 1959, the date of commencement of the Ordinance, provided the provisions of that sub section are fulfilled. Any such sub lease shall be deemed to be valid provided the sub lessee has entered into possession before the date of commencement of the Ordinance and has continued in possession on such date. This is an especial provision and marks a departure from the general law. It does not refer to sub tenancies which are permitted by contract between the landlord and the tenant, but relates to sub tenancies which are not so protected. It will be noted that the removal by sub section (2) of section 15 of the prohibition is limited only to those sub tenancies which were created before May 21, 1959. Such a limitation would be inappropriate to sub tenancies permitted by contract which could be created regardless of whether they were brought into existence before May 2l, 1959 or after that date. Also, the sub tenancies covered by sub s (2) of section 15 would be regarded as valid only if the sub tenant had entered into possession before May 21, l959 and was continued in possession on that date. Such a requirement would be wholly inconsistent in the case of sub tenancies permitted by contract. Inasmuch as sub s.(2) of section 15 specifically attaches the condition that the 570 sub tenant should have been in possession before the commencement of the Ordinance and should have continued in possession on that date, it is apparent that such a provision could be related only to illegal sub tenants, that is to say sub tenants who were let in and given possession without any contractual right conferred by the land lord on the tenant to do so. The protection conferred by sub section (1) of section 15 is necessary for such tenancies only, and not for a sub tenancy which is permitted by the terms of the contract and which therefore falls altogether outside the prohibition embodied in sub s.(l) of section 15. The result, therefore, is that sub section (2) of section 15 relates to sub tenancies not permitted by contract between the landlord and tenant and which would. but for the said sub section (2), fall within the prohibition enacted in the amended sub section (1) of section 15. In the present case, it was conceded on behalf of Gold Field before the Appellate Bench of the Court. Of Small Causes that Manekchand was a lawful sub tenant He could not have been a lawful sub tenant by virtue of sub section (2) of section 15 because on May 21, 1959 he was not in possession of the premises, which in fact had already passed as early as 1952 into the possession of Tota Singh. Manek chand could have been lawful sub tenant only on the assumption that the sub tenancy was permitted under the contract between Gold Gold Field and their landlord. As the existence of such a term in the contract would be a question of fact, the concession by counsel for Gold Field must be regarded as binding in this case on Gold Field. It is urged for the respondent that the concession made by counsel for Field can be of no avail because any agreement by a tenant creating a sub tenancy, being directly opposed to sub section (I) of section 15 as originally enacted, would be void The submission, it seems to us, is without force. It must be remembered that sub section (I) of section 15 was amended by inserting the words "but subject to any contract to the contrary" in 1959 retrospectively, the words being deemed always to have been inserted in that sub section. We must take it by reason of the legal fiction employed that those words were already part of the sub section when Gold Field agreed to sub let the premises to Manekchand. The cases, P.D. Aswani vs Kavashah Dinshah Mulla(l) and Waman Shriniwas Kini vs Ratilal Bhagwandas and Co.,(2) on which learned counsel for the respondent relies, were decided before sub section (1) of section 15 was amended and therefore did not take into account the effect of such amendment. (1) [1953] 56 Bombay Law Reporter 467. (2) [1969] supp. 2 S.C.R. 217. 571 Therefore, the present case is one where Gold Field is a tenant, A Manekbhai is a lawful sub tenant and the latter has created a further sub tenancy in favor of Tota Singh. The question is whether the further sub tenancy can fall within the scope of sub section (2) of section 15. Now, if regard be had to clause (I) of sub s (l l) of section 5, it is apparent that in respect of the subsequent subtenancy Manekbhai could be described as a tenant and Tota Singh as his sub tenant And if that is so, there is no reason why Tota Singh 's sub tenancy should not be regarded as a valid sub tenancy in as much as it was created before May 21, 1959 and he had entered into possession of the premises before that date and was continuing possession on that date. But it is urged on behalf of Gold Field that this Court has held in Jai Singh Morarji (supra) that sub s (2) of section 15 does not validate a sub tenancy created by a sub tenant. That was a case where the original landlord filed a suit against the tenant Ochhavlal for possession on the ground, inter alia, of illegal subletting by Ochhavlal. The suit was decreed, and the plaintiff obtained possession. Ochhavlal had sub l t the premises to Sovani and Sovani had sub let them to a private limited company. On application by the Company against dispossession in the execution proceedings, the trial court upheld the Company 's claim to possession, but this Court ultimately rejected the Company 's claim and upheld the right of the original landlord to possession. The facts of that case disclose that there were two prohibited" sub tenancies, the first was created by Ochhavlal in favor of Sovani and the subsequent was created by Sovani in favor of the Company. The benefit of sub section (2) of s 15 could have been extended to Sovani only if the conditions of the sub section were satisfied If they were satisfied in the case of Sovani, the benefit could not be extended again in favor of the Company. That would obviously be so because the condition as to possession on May 21, 1959 could not possibly be satisfied by the subsequent sub tenant if the original subtenant was in possession on that date. If, however, the subsequent sub tenant was in possession on May 21, 1959, then clearly neither sub tenancy can be regarded as valid. To be valid, the first subtenancy had to satisfy the condition of possession by that sub tenant on May 21, 1959, which ex hypothesi was not possible. And if the original sub tenancy was invalid the subsequent sub tenancy would also be invalid. The subsequent sub tenancy would be valid only if the original sub tenant had legal interest to transfer to the subsequent sub tenant. It is in the light of this analysis that the decision of this Court in Jai Singh Morarji (supra) needs to be appreciated, in particular the passage on page 607 of the Report which reads: 572 "The answer to the question is whether the respondent Private Company was a sub tenant prior to 1959 and continued in possession at the commencement of the Ordinance in 1959. Ochhavlal in the present case gave the sub lease to Sovani before the Ordinance. It is an indisputable feature in the present case that Sovani did not continue in possession at the commencement of the Ordinance of 1959. Sovani became a Director of the Private Company. It is the Private Company which claims to be a sub lessee. The Private Company was in the first place not a sub lessee of the tenant but a subsequent assignee from the sub lessee. Secondly, SOvani who was the sub lessee not in possession on the date of the Ordinance on 21 May, 1959. It was the Private Company which was in possession. Therefore, the Private Company is not within the protection of section 15 (2) of the Act " The learned Judges were not unaware of the terms of sub section ( 1) of section 5, as is evident from the passage on page 608 of the Report. It is then urged by learned counsel for the respondent that clause (a) of sub section (11) of section S of the Bombay Rent Act cannot be called in aid by the appellant as sub section (1) of section 15 applies to contractual tenants only. We are referred to Anand Nivas (P) Ltd. vs Anandji,(1) where this Court laid down that the expression "tenant" in sub section (1) of section 15 of the Bombay Rent Act means a contractual tenant and not a statutory tenant. The submission can be of no assistance to the respondent. Having regard to the concession made by counsel for Gold Field in the court below that Manekchand was a lawful tenant, which position, as we have discussed earlier, necessarily implies a valid contract of tenancy between Gold Field and Manekchand the latter must be regarded as a contractual tenant when he sublet the premises to Tota Singh. No question arises of a statutory tenant purporting to sub let his interest to a sub tenant. Upon the aforesaid considerations, in our judgment the appeal must succeed. The appeal is allowed with costs. N.V.K. Appeal allowed. (1) [196414 S.C.R. 892.

The respondent filed a suit in 1962 against the subtenant for possession of the premises on the ground of unlawful subletting and carrying out unauthorised structural alterations. The sub tenant resisted the suit and filed a written statement. During the pendency of the suit the appellant applied to the Court for being added as a defendant but the application was opposed by the respondent and was rejected. The respondent 's suit was ultimately decreed for possession in accordance with a compromise between the parties. The appellant thereafter filed a suit in 1966 for a declaration that he was a lawful tenant in possession of the premises and for an injunction the restraining respondent from executing the decree he had obtained against the sub tenant. It was pleaded that he was in occupation and exclusive possession as a lawful subtenant for more than fifteen years to the knowledge of the respondent and that the decree in the respondent 's suit was a collusive one and that he had become a direct tenant of the respondent under section 14 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. The respondent filed a written statement and pleaded that they were tenants of the entire building and that they had sublet a portion of the premises to a sub tenant who could not sub let the premises further to the appellant and therefore the appellant 's subtenancy was invalid. 564 The Court of Small Causes decreed the suit. The respondent filed an appeal before the Appellate Bench of the Court of Small Causes which dismissed the appeal and affirmed the trial judge 's finding that the premises had been sublet by Manekchand to the appellant, and that on May 21, 1959 when the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance 1959 was promulgated and sub s.(2) of section 15 was introduced into the Bombay Rent Act the subtenant was not in possession. the Appellate Bench rejected the submission of the appellant that he had paid rent directly to the respondent and therefore had been accepted as a tenant. It found that no rent had been paid by the appellant to the respondent after Manek Chand statutory tenancy which followed the termination of his contractual tenancy by service of notice had itself been terminated by the decree for possession in the respondent 's suit. It further held that as the appellant was undisputably in possession on May 21, 1959, the sub tenancy in his favor by Maneck Chand must be deemed to be a valid sub tenancy and followed the view in Josephy Santa Vincent vs Ambico Industries. 70 Bombay LR 224 while dismissing the respondent 's appeal. The respondent filed a Special Civil Application in the High Court and the High Court set aside the order of the Appellate Bench and dismissed the appellant 's suit, taking the view that having regard to certain observations made in Jai Singh Moraji & Ors vs M/s. Sovani Pvt Ltd. & Ors ; , an extended construction of sub section (2) of section 15 of the Bombay Rent Act so as to include a sub tenancy created by a sub tenant was not justified. In the appeal to this Court, on the question whether the appellant could rightly claim tenancy rights in the premises and therefore nullify the enforcement as against him of the decree in the respondent 's suit. Allowing the Appeal, ^ HELD: 1. There can be no doubt that upon the amendment of sub section (I) of s.l5 by the Bombay Rents, Hotel and Lodging House Rates Control Amendment Ordinance 1959, which was brought into force on May 21, 1959 and by its related Act, the prohibition against sub letting did not operate in those cases, where the sub letting was permitted by contract between the landlord and tenant. In all such cases, if the landlord had permitted the tenant under a contract between them to sub let the premises, no question would arise of a need to validate those subtenancies. The relevant amendment in sub section (1) of s.15 was deemed to have always been part of the sub section. [569C D] 2. Sub section (2) of s.l5 raises the ban from all sub letting effected before May 21, 1959, the date of commencement of the Ordinance, provided the provisions of that sub section are fulfilled. Any such sublease shall be deemed to be valid provided the sublessee has entered into possession before the date of commencement of the Ordinance and has continued in possession on such date. This is an special provision and marks a departure from the general law. It does not refer to sub tenancies which are permitted by contract between the landlord and the tenant, but relates to sub tenancies which are not so protected. [569F F] 565 3. Sub section (2) of s.15 relates to sub tenancies not permitted by contract A between the landlord and tenant and which would, but for the said sub section (2), fall within the prohibition enacted in the amended sub section (I) of section 15. [570C] 4. In the instant case, the respondent Goldfiled was a Tenant, Manik Chand was a lawful sub tenant and the latter had created a further sub tenancy in favor of the appellant. If regard be had to clause (a) of sub section (ii) of section 5 it is apparent that in respect of the subsequent sub tenancy Manek Chand could be described as a tenant and the appellant as his sub tenant. And if that is so, there is no reason why the appellant 's sub tenancy should not be regarded as a valid sub tenancy inasmuch as it was created before May 21, 1959 and he entered into possession of the premises before that date and was continuing in possession on that date. [571A B] Jai Singh Morarji & Ors. vs M/s Sovani Pvt. Ltd. & Ors, [197312 S.C.R. 603, referred to. P.D. Awani vs Kavashah Dinshah Mulla, (1953) 56 Bombay Law Reporter 467 and Woman Shrinivas Kini vs Ratilal Bhagwandas & Co., [1959] Supp. 2 S.C.R. 217, held inapplicable. [572F] In the instant case, having regard to the concession made on behalf of the respondent in the Court below that Manekchand was a lawful tenant, which necessarily implies a valid contract of tenancy between the respondent and Manek Chand, the latter was to be regarded as a contractual tenant when he sub let the premises to the appellant. No question, therefore arises of a statutory tenant purporting to sub let his interest to a sub tenant. [572F] Anand Nivas (P) Ltd. vs Anandji, ; , referred to.

Civil Appeal No. 1682 of 1984. From the Judgment and order dated 23.12.1983 of the Punjab and Haryana High Court in Civil Revision No. 959 of 1979 V.M. Tarkunde, A.D. Sikri for the Appellant. Hardev Singh and R.S. Sodhi for the Respondents. The judgment of the Court was delivered by NATARAJAN, J. What falls for consideration in this appeal by special leave by a tenant against the judgment of the High Court of Punjab and Haryana in a Civil Revision is whether the High Court had transgressed its revisional powers in interfering with the concurrent findings rendered by the Rent Controller and the Appellate Authority and ordering the eviction of the appellant herein from the leased premises and secondly whether the High Court had erred in holding that the leased premises had become unsafe and unfit for human habitation as envisaged in Section 13(3)(a)(iii) of the East Punjab Urban Rent Eviction Act, 1949 (hereinafter the Act). 205 The respondent 's petition for eviction was originally based on other grounds such as bona fide requirement of the premises for own use and change of user of the premises by the tenant. As he failed before the Rent Controller, the respondent preferred an appeal and during the pendency of the appeal he obtained orders and amended the petition and raised an additional ground under Section 13(3)(a)(iii) for seeking the eviction of the appellant viz. the leased premises had become unsafe and unfit for human habitation. The Appellate Authority called for a finding on the additional ground from the Rent Controller and the finding went against the respondent. The Appellate Authority concurred with the Rent Controller on the said finding and dismissed the appeal. Before the appellate Authority the respondent did not seriously press the original grounds on which eviction was sought for and laid stress only upon the ground under Section 13(3)(a)(iii) of the Act. The respondent then preferred a Civil Revision wherein the High Court sustained his case and ordered the eviction of the appellant under Section 13(3)(a)(iii) and hence the present appeal by the appellant tenant. Section 13(3)(a)(iii) was resorted to for seeking eviction of the tenant on the footing that one room in the rear side of the leased premises had fallen down. We may state, even at this juncture that the High Court had wrongly assumed that besides the falling down of the roof, one of the walls had also crumbled. This assumption was a mistaken one because the expert witnesses examined during the trial by the parties have spoken about the good condition of three walls alone of the room and not the fourth because they are the outer walls of the room while the fourth wall was a common wall for the room in question and the adjoining room and hence there was no need to certify its good condition. It was therefore wrong for the High Court to have assumed that only three walls of the room were in good condition and not the fourth wall. The High Court deemed it necessary to allow the Revision and set aside the order of the Rent Controller and the Appellate Authority because of its view that the falling down of the roof of one of the rooms afforded by itself a cause of action to the landlord to seek eviction of the tenant under Section 13(3)(a)(iii) and the said cause of action would subsist even if the tenant had repaired the roof under orders of the Rent Controller, under Section 12 of the Act. It is necessary to mention here that during the pendency of the proceedings before the Rent Controller, the appellant obtained the permission of the Rent Controller under Section 12 to replace the roof fallen down and re 206 cover the cost from the respondent since the respondent had failed to do the work himself. The High Court relied upon two decision Balbir Singh vs Hari Ram, AIR 1983 Punjab and Haryana 132 and Chander Mohini vs Jiva Singh, for holding that once a cause of action ensued under Section 13(3)(a)(iii), it would subsist inspite of any repairs effected by the tenant. It also relied on another decision Sardarni Sampurna Kaur vs Sant Singh & Anr., for holding that even if the rest of the building was in good condition, the falling down of the roof of one room would constitute sufficient material to sustain a landlord 's claim under Section 13(3)(a)(iii) of the Act for seeking the tenant 's eviction. A few facts may now be set out. The leased portion comprises of four rooms in the ground floor where the appellant is running his office. There is a room in the first floor in the possession of the respondent himself but we are not concerned with it. It is common ground that the roof of one room in the rear side of the leased portion had fallen down and it had been replaced by the appellant after obtaining orders of the Rent Controller under Section 12. The appellant 's contention is that the falling down of the roof in one of the four rooms would not by itself render the entire building unsafe and unfit for human habitation as envisaged under Section 13(3)(a)(iii) of the Act and, as such, the High Court had erred in ordering eviction under the said provision. It was further urged that the Rent Controller and the Appellate Authority had concurrently found that the building was neither unsafe nor unfit for human habitation and as such the High Court was not justified in interfering with those findings especially when they were findings of fact. In reply to the above said contentions, the learned counsel for the respondent argued that the falling down of the roof in a room was indicative of the damaged condition of the building and, therefore, the High Court was fully justified in ordering the eviction of the appellant under Section 13(3)(a)(iii) of the Act. It was further urged that the replacement of the roof by the appellant would not extinguish the right which had accrued to the respondent under Section 13(3)(a)(iii) to seek recovery of possession of the leased premises and the High Court had rightly adverted to this aspect of the matter also while allowing the revision filed by the respondent. On a careful consideration of the matter with reference to the contentions put forth by the learned counsel for the parties, we are clearly of opinion that the High Court was not justified in allowing the revision and directing the eviction of the appellant under Section 13(3)(a)(iii). It is true that a roof of one of the rooms on the rear side 207 had fallen down and required replacement but there was no evidence whatever that the entire building or a substantial portion of it was in a damaged condition and consequently the building as a whole had become unfit and unsafe for human habitation. Unless the evidence warranted an inference that the falling down of the roof in one room was fully indicative of the damaged and weak condition of the entire building and that the collapse of the roof was not a localised event, we fail to see how the High Court could have concluded that the entire building had become unsafe and unfit for human habitation. In fact, the appellant had replaced the roof only at a cost of about Rs.200 and this would independently show that the damage that had occurred could not have been of a serious or disquieting nature. The High Court has failed to notice two factors of relevance, viz., (1) that the respondent had given his consent to the Rent Controller granting permission under Section 12 of the Act to the appellant to replace the roof and (2) that inspite of the alleged cause of action having arisen due to the falling down of the,roof, the respondent did not immediately seek amendment of the petition so as to seek eviction of the appellant on the additional ground under Section 13(3)(a)(iii) but instead he chose to prosecute his petition only on the original grounds for eviction set forth therein and only after failing before the Rent Controller and preferring an appeal to the Appellate Authority, he deemed it necessary to amend the petition and ask for eviction of the appellant or the additional ground under Section 13(3)(a)(iii). The above said conduct of the respondent would clearly reveal that he himself had not attached any significance to the falling down of the roof in one of the rooms and had not seriously considered that a sustainable cause of action had accrued to him under Section 13(3)(a)(iii) for seeking the eviction of the appellant. The High Court has not only failed to appreciate these factors but has also proceeded on the erroneous assumption that the falling down of the roof in one room was by itself sufficient to warrant a finding that the entire building had become unfit and unsafe for human habitation and called for a declaration to that effect. It is this basic error which has affected the reasoning of the High Court lead the High Court to apply the ratio laid down in certain cases where the facts and circumstances were entirely different. What arose for consideration in Balbir Singh 's case (supra) was whether a tenant would stand deprived of his right under Section 12 to carry out repairs of the tenanted premises by reason of an application filed by a landlord under Section 13(3)(c) of the Haryana Urban Control on Rent and Eviction Act (Corresponding to Section 13(3)(a)(iii) of the East Punjab Urban Rent Restriction 'Act, 1949) and con 208 versely whether a landlord would stand deprived of his right to seek eviction of his tenant under Section 13(3)(c) by reason of an order passed under Section 12 empowering the tenant to carry out repairs to the tenanted premises. It was in that context, the High Court held that the two sections operated in their respective spheres and they were not mutually destructive of each other and consequently, when a right accrued to a landlord under Section 13(3)(c) of the Haryana Act to seek eviction of a tenant, the right would not get extinguished on account of an order passed under Section 12 of the Act. In other words, it was held that once a cause of action had arisen for a landlord to seek eviction under Section 13(3)(c) of the Haryana Act that the said cause of action would ensure to the benefit of the landlord in spite of the tenant effecting repairs to the building for his benefit in pursuance of permission obtained under Section 12 of the Act. The decision does not lay down that each and every damage to a building, without reference to the seriousness of its nature or to the condition of the building as a whole would by itself entitle a landlord to invoke Section 13(3)(a)(iii) to seek eviction of the tenant. In Chander Mohini 's case (supra) wherein Balbir Singh 's case (supra) was followed, it was held that if the tenants had pulled down the roof of one of the rooms under their tenancy and replaced the same, obviously for their own convenience and for pre empting the landlord from filing a petition for eviction under Section 13(3)(a)(iii), the landlord would undoubtedly, acquire a cause of action under Section 13(3)(a)(iii) as soon as the tenants had pulled down the roof of the room and his rights could not be defeated by the tenants by the replacement of the roof of their own volition. The other decision in Sardarni Sampurna Kaur vs Sant Singh has also no relevance because it was found in that case that even though the portion under the ocupation of the tenant was in a sound condition, a substantial portion of the composite building had become unfit and unsafe for human habitation. In that situation, the High Court held that what was relevant for consideration for passing an order of eviction under Section 13(3)(a)(iii) was the condition of the building viewed as a whole and not in parts or blocks. In the instant case, the admitted position is that except for the roof in one of the rooms falling down, no other damage to the building was noticed and in such circumstances, there is no scope for holding that a substantial or major part of the building had become unfit and unsafe for human habitation and hence an order of eviction was called for. It is therefore obvious that the ratio laid down in the earlier decisions were not at all attracted to the facts of the case and the High Court had wrongly applied them because of its erroneous assumptions. 209 Learned counsel for the respondent tried to contend that apart from the building having become unsafe and unfit for human habitation, the respondent had also sought eviction on the ground he was genuinely in need of additional accommodation but the Appellant Court had unjustly rejected the plea by saying that since the respondent was jointly living with his son, he can secure additional accommodation from out of the portion in his son 's occupation. We do not find any merit in this contention because the requirement of the building on this ground was not canvassed before the High Court. Even the Appellant Authority has observed that the only ground pressed for seeking eviction of the tenant was under Section 13(3)(a)(iii) and the other grounds were not pressed seriously and only incidentally a halfhearted argument was advanced regarding the requirement of the leased premises by way of additional accommodation. In the result, the appeal is allowed and the judgment of the High Court is set aside. The respondent 's application for eviction of the appellant will stand dismissed as ordered by the Rent Controller and the Appellate Authority. The parties are, however, directed to pay and bear their respective costs. N.V.K. Appeal allowed.

The suit premises consisted of four rooms in the ground floor where the appellant tenant was running his office. One room in the first floor was in the possession of the landlord respondent. The roof of one room in the rear side of the leased portion had fallen down, and it has been replaced by the appellant after obtaining orders of the Rent Controller under Section 12 of the East Punjab Urban Rent Restriction Act, 1949. The landlord filed a petition for eviction on the ground of bona fide requirement of the premises for his own use and occupation, and change of user of the premises by the tenant. As he failed before the Rent Controller, he preferred an appeal and during the pendency of the appeal he obtained the court 's order and amended the petition and raised an additional ground under Section 13(3)(a)(iii) of the Act, seeking eviction of the tenant on the ground that the leased premises had become unsafe and unfit for human habitation. The Appellate Authority called for a findings on this additional ground from the Rent Controller and the finding went against the landlord. The Appellate Authority concurred with the Rent Controller on the said finding and dismissed the appeal. The respondent preferred a Civil Revision Petition before the High Court which sustained the case, and ordered the eviction of the appellant under Section 13(3)(a)(iii) of the Act. The High Court came to the finding that the falling down of the roof of one of the rooms afforded by itself a cause of action to the landlord to seek eviction of the tenant under the said section, and the said cause of action would subsist even if the tenant had repaired the roof under orders of the Rent Controller under Section 12 of the Act. 203 In the appeal to this Court by the tenant it was contended that the Rent Controller and the Appellate Authority had concurrently found that the building was neither unsafe nor unfit for human habitation and as such the High Court was not justified in interferring with those findings especially when they were findings of fact. On behalf of the respondent, the appeal was contested on the ground that the falling down of the roof in a room was indicative of the damage condition of the building and, therefore, the High Court was fully justified in ordering eviction, and that the replacement of the roof by the appellant would not extinguish the right which had accrued to the respondent under Section 13(3)(a)(iii) to seek recovery of the possession of the leased premises. Allowing the appeal, ^ HELD: 1. The High Court was not justified in allowing the revision and directing eviction of the appellant under Section 13(3)(a)(iii). [206H] 2. The High Court proceeded on the erroneous assumption that the falling down of the roof in one room was itself sufficient to warrant a finding that the entire building had become unfit and unsafe for human habitation and called for a declaration to that effect. [207F] In the instant case, the admitted position was except for the roof in one of the rooms falling down, no other damage to the building was noticed and in such circumstances, there is no scope for holding that a substantial or major part of the building had become unfit and unsafe for human habitation and hence an order of eviction was called for. [208G H] 3. The High Court had wrongly assumed that besides the falling down of the roof, one of the walls has also crumbled. This assumption was a mistaken one because the expert witnesses examined during the trial by the parties have spoken about the good condition of three walls alone of the room and not the fourth because they are the outer walls of the room while the fourth wall was a common wall for the room in question, and the adjoining room and hence there was no need to certify its good condition. [205E F] 4. The High Court had also failed to notice two factors of relevance: viz. (1) that the respondent had given his consent to the Rent Controller granting permission under Section 12 of the Act to the appel 204 lant to replace the roof, and (2) that in spite of the alleged cause of action having arisen due to the falling down of the roof, the respondent did not seek amendment of the petition so as to seek eviction of the appellant on the additional ground under Section 13(3)(a)(iii) but instead he chose to prosecute his petition only on the original ground for eviction set forth therein and only after falling before the Rent Controller and preferring an appeal to the Appellate Authority, he deemed it necessary to amend the petition and ask for eviction of the appellant on the additional ground. [207C E] 5. The aforesaid conduct of the respondent clearly reveals that he himself has not attached any significance to the falling down of the roof in one of the rooms and has not seriously considered the sustainable cause of action that had arisen to him under Section 13(3)(a)(iii) for seeking eviction of the appellant. [207E F] Balbir Singh vs Hari Ram, AIR 1983 Punjab and Haryana 132; Chander Mohini vs Jiva Singh, and Sardarni Sampurna Kaur vs Sant Singh & Anr., , distinguished.

ON: Criminal Appeal No. 214 of 1971. (Appeal by Special Leave from the judgment and Order dated 27 7. 1970 of the Andhra Pradesh High. Court in Criminal Appeals Nos. 26 and 27/69). 7 1234SCI/76 604 P. Parmeswara Rao and G. Narayana Rao for the Appellant. A. Subba Rao for the Respondents. This appeal by special leave is directed against a judgment of the High Court of Andhra Pradesh. It arises out of these facts. In Rompicherla village, there were factions belonging to three major communities viz., Reddys, Kammas and Bhatrajus. Rayavarapu (Respondent No. 1 herein) was the leader of Kamma faction, while Chopparapu Subbareddi was the leader of the Reddys. In politics, the Reddys were supporting the Con gress Party, while Kammas were supporters of Swatantra Party. There was bad blood between the two factions which. were proceeded against under section 107, Cr. In the Panchyat elections of 1954, a clash took place between the two parties. A member of the Kamma faction was murdered. Consequently, nine persons belonging to the Reddy faction were prosecuted for that murder. Other incidents also ' took place in which these warring factions were involved. So much so, a punitive police force was stationed in this village to keep the peace during the period from March 1966 to September 1967. Sarikonda Kotamraju, the deceased person in the instant case, was the leader of Bhatrajus. In order to devise protective measures against the onslaughts of their opponents, the Bhatrajus held a meeting at the house of the deceased, wherein they resolved to defend themselves against the aggressive actions of the respondents and their party men. PW 1, a member of Bhatrajus faction has a cattle shed. The passage to this cattle shed was blocked by the other party. The deceased took PW 1 to Police Station Nekar ikal and got a report lodged there. On July 22, 1968, the Sub Inspector of Police came to the village and inspected the disputed wail in the presence of the parties. The Sub Inspector went away directing both the parties to come to the Police Station on the following morning so that a com promise might be effected. Another case arising out of a report made to the police by one Kallam Kotireddi against Accused 2 and 3 and another in respect of offences under sections 324, 323 and 325, Penal Code was pending before a Magistrate at Narasaraopet and the next date for hearing fixed in that case was July 23, 1968. On the morning of July 23, 1968, at about 6 30 a.m., PWs 1, 2 and the deceased boarded Bus No. AP 22607 at Rompicher la for going to Nekarikal. Some minutes later, Accused 1 to 5 (hereinafter referred to as A1, A2, A3, A4 and A5) also got into the same bus. The accused had obtained tickets for proceeding to Narasaraopet. When the bus stopped at Nekar ikal Cross Roads, at about 7 30 a.m., the deceased and his companions alighted for going to the Police Station. The five accused also got down. The deceased and PW 1 went towards a Choultry run by PW 4, While PW 2 went to the roadside to ease himself. A1 and A2 went towards the Coffee Hotel situate near the Choultry. From there, they picked up heavy sticks and went after the deceased into the Choultry. On seeing the accused. P W 1 ran away towards a hut nearby. The deceased stood up. 605 He was an old man of 55 years. He was not allowed to run. Despite the entreaties made by the deceased with folded hands, A 1 and A 2 indiscriminately pounded the legs and arms of the deceased. One of the by standers, PW 6, asked the assailants as to why they were mercilessly beating a human being, as if he were a buffalo. The assailants angri ly retorted that the witness was nobody to question them and continued the beating till the deceased became unconscious. The accused then threw their sticks at the spot, boarded another vehicle, and went away. occurrence was witnessed by PWs 1 to 7. The victim was removed by PW 8 to Narasaraopet Hospital in a temporar. There, at about 8.45 a.m., Doctor Konda Reddy examined him and found 19 in juries, out of which, no less than 9 were (internally) found to be grievous. They were: 1. Dislocation of distal end of proximal phalanx of left middle finger. Fracture of right radius in its middle. Dislocation of lower end of right ulna. Fracture of lower end of right femur. Fracture of medial malleolus of right tibia. Fracture. of lower 1/3 of right fibula. Dislocation of lower end of left ulna. Fracture of upper end of left tibia. Fracture of right patella. Finding the condition of the injured serious, the Doctor sent information to the Judicial Magistrate for getting his dying declaration recorded. On Dr. K. Reddy 's advice, the deceased was immediately removed to the Guntur Hospital where he was examined and given medical aid by Dr. Sastri. His dying declaration, exhibit P 5, was also recorded there by a Magistrate (PW 10) at about 8.05 p.m. The de ceased, however, succumbed to his injuries at about 4.40 a.m. on July 24, 1968, despite medical aid. The autopsy was conducted by Dr. P.S. Sarojini (PW 12) in whose opinion, the injuries found on the deceased were cummulatively sufficient to cause death in the ordinary course of nature. The cause of death, according to the Doctor, was shock and haemorrhage resulting from multiple injuries. The trial Judge convicted A 1 and A 2 under section 302 as well as under section 302 read with section 34, Penal Code and sen tenced each of them to imprisonment for life. On appeal by the convicts, the High Court altered their conviction to one under section 304, Pt. II, Penal Code and reduced their sentence to 'five years rigorous imprison ment, each. Aggrieved by the judgment of the High Court, the State has come in appeal to this Court after obtaining special leave. A 1, Rayavarappu Punnayya (Respondent 1) has, as reported by his Counsel, died during the pendency of this appeal. This information is not contradicted by the Counsel appearing for the State. This 606 appeal therefore, in so far as it relates to A , abates. The appeal ' against A 2 (Respondent 2), however, survives for decision. 'The principal question that falls to be considered in this appeal is, whether the offence disclosed by the facts and circumstances established by the prosecution against the respondent, is 'murder ' or 'culpable homicide not amounting to murder '. In the scheme of the Penal Code, 'culpable homicide ' is genus and 'murder ' its specie. All 'murder ' is 'culpable homicide ' but not viceversa. Speaking generally, 'culpable homicide ' sans 'special characteristics of murder ', is 'culpable homicide not amounting to. murder '. For the pur pose of fixing punishment, proportionate to the gravity of this generic offence, the Code practically recognises three degress of culpable homicide. The first is, what may be called, culpable homicide of the first degree. This is the gravest form of culpable homicide which is defined in section 300 as 'murder '. The second may be termed as 'culpable homicide of the second degree '. This is punishable under the l st part of section 304. Then, there is 'culpable homicide of the third degree. ' This is the lowest type of culpable homicide and the punishment provided for it is, also, the lowest among the punishments provided for the three grades. Culpa ble homicide of this degree is punishable under the second Part of section 304. The academic distinction between 'murder ' and 'culpable homicide not amounting to murder ' has vexed the courts for more than a century. The confusion is caused, if courts losing sight of the true scope and meaning of the terms used by the legislature in these sections, allow themselves to be drawn into minutae abstractions. The safest way of approach to the interpretation and application of these provisions seems to be to keep in focus the key words used in the various clauses of sections 299 and 300. The following comparative table will be helpful in appreciating the points of distinction between the two offences. Section 299 Section 300 A person commits culpable homicide Subject to certain if the act by which the death exceptions culpable is caused is done homicide is murder if the act by which the death caused is done INTENTION (a) with the intention of causing death: (1) with the intention of causing death; or or (b) with the intention of (2) with the intention of causing such bodily injury causing such bodily inju as is likely to cause death; ry as the offender knows to or be likely to cause the death of person to whom the harm is caused; or (3) with the intention of causing bodily injury to any person and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death; or 607 KNOWLEDGE (c) with the knowledge that (4) with the knowledge that the act likely to cause death. the act is so imminently dangerous that it must in all probability cause death or such bodily injury as is likely to cause death, and without any excuse for incurring the risk of using death or such injury as is mentioned above. Clause (b) of section 299 corresponds with cls. (2) and (3) of section 300. The distinguishing feature of the mens rea requi site under cl. (2) is the knowledge possessed by the offend er regarding the particular victim being in such a peculiar condition or state of health that the intentional harm caused to him is likely to be fatal, notwithstanding the fact that ' such harm would not in the ordinary way of nature be sufficient to cause death of a person in normal health or condition. It is noteworthy that the 'intention to cause death ' is not an essential requirement of el. Only the intention of causing the bodily injury coupled with the offender 's knowledge of the likelihood of such injury caus ing the death of the particular victim, is sufficient to bring the killing within the ambit of this clause. This aspect of cl. (2) is borne out by illustration (b) appended to section 300. Clause (b) of section 299 does not postulate any such knowl edge on the part of the offender. Instances of cases falling under cl. (2) of section 300 can be where the assailant causes death by a fist blow intentionally given knowing that the victim is suffering from an enlarged liver, or enlarged spleen or diseased heart and such blow is likely to cause death of that particular person as a result of the rupture of the liver, or spleen or the failure of the he,art, as the case may be. If the assailant had no such knowledge about the disease or special frailty of the victim, nor an inten tion to. cause death or bodily injury sufficient 'in the ordinary course of nature to cause death, the offence will not be murder, even if the injury which caused the death, was intentionally given. In clause (3) of section 300, instead of the words 'likely to cause death ' occurring in the corresponding el. (b) of section 299, the words "sufficient in the ordinary course of nature" have been used. Obviously, the distinction lies between a bodily injury likely to cause death and a bodily injury sufficient in the ordinary course of nature to cause death. The distinction is fine but real, and, if over looked, may result 'in miscarriage of justice. The differ ence between cl. (b) of section 299 and cl. (3) of section 300 is one of the degree of probability of death resulting from the intended bodily injury. To put it more broadly, it is the degree of probability of death which determines whether a culpable homicide is of the gravest, medium or the lowest degree. The word "likely" in cl. (b) of section 299 conveys the sense of 'probable ' as distinguished from a mere possibili ty. The words "bodily injury. sufficient in the ordinary course of nature to cause death" mean that 608 death will be the "most probable" result of the injury having regard to the ordinary course of nature. For cases to fall within cl. (3), it is not necessary that the offender intended to cause death, So long as death ensues from the intentional. bodily injury or injuries sufficient to cause death in the ordinary course of nature. Rajwant and anr. vs State of Kerala(2) is an apt illustra tion of this point. In Virsa Singh vs The State of Punjab, (2) Vivian Bose j. speaking for this Court, explained the meaning ' and scope of Clause (3), thus (at p. 1500): "The prosecution must prove the following facts before it can bring a case under section 300, 3rdly '. First, it must establish, quite objective ly, that a bodily injury is present;. secondly the nature of the injury must be proved. These are purely objective investigations. It must be proved that there was an intention to inflict that particular injury, that is to say,. that it was not accidental or unintentional or that some other kind of injury was intended. Once these three elements are proved to be present, the enquiry proceeds further, and, fourthly it must be ,proved that the injury of the type just described made up of the three elements set out above was suffi cient to cause death in the ordinary course of nature. This part of the enquiry is purely objec tive and inferential and has nothing to do with the intention of the offender." Thus according to the rule laid down in Virsa Singh 's case (supra) even if the intention of accused was limited to the infliction of a bodily injury sufficient to cause death in the ordinary course of nature and did not extend to the intention of causing death, the offence would be murder. Illustration (c) appended to section 300 clearly brings out this point. Clause (c) of section 299 and cl. (4) of section 300 both require knowledge of the probability of the causing death. It is not necessary for the purpose of this case to dilate much on the distinction between these corresponding clauses. It will be sufficient to say that cl. (4) of section 300 would be applicable where the knowledge of the offender as to the probability of death of a person or persons in general as distinguished from a particular person or persons being caused from his imminently dangerous act, approximates to a practical certainty. Such knowledge on the part of the offender must be of the highest degree of probability, the act having been committed by the offender without any excuse for incurring the risk of causing death or such injury as aforesaid. From the above conspectus, it emerges that whenever a court is confronted with the question whether the offence is 'murder ' or 'culpable homicide not. amounting to murder, ' on ,the facts of a case, it will ' (1) A.I.R. 1966 S.C. 1874. (2) ; 609 be convenient for it to approach the problem in three stages. The question to be considered at the first stage would be, whether the accused has done an act by doing which he has caused the death of another. Proof of such causal connection between the act of the accused and the death, leads to the second stage for considering whether that act of the accused amounts to "culpable homicide" as defined in section 299. If the answer to this question is prima facie found in the affirmative, the stage for considering the operation of section 300, Penal Code is reached. This is the stage at which the Court should determine whether the facts proved by the prosecution bring the case within the ambit of any of the four Clauses of the definition of murder ' contained in section 300. If the answer to this question is in the negative the offence would be 'culpable homicide not amounting to murder ', punishable under the first or the second part of section 304, depending. respectively, on whether the second or the third Clause of section 299 is applicable. If this question is found in the positive, but the case comes, within any of the Exceptions enumerated in section 300, the offence would still be 'culpable homicide not amounting to murder ' punishable under the First Part of section 304, Penal Code. The above are only broad guidelines and not cast iron imperatives. In most cases, their observance will facilitate the task of the court. But sometimes the facts are so inter twined and the second and the third stages so tele scoped into each other, that it may not be convenient,to give a separate treatment to the matters involved in the second and third stages. Now let us consider the problem before us in the light of the above enunciation. It is not disputed that the death of the deceased was caused by the accused, there being a direct causal connec tion between the beating administered by A 1 and A 2 to the deceased and his death. The accused confined the beating to. the legs and arms of the deceased, and therefore, it can be said that they perhaps had no "intention to cause death" within the contemplation clause (a) of section 299 or cl. (1) of section 300. It is nobody 's case that the instant case falls within el. (4) of section 300. This clause, as already noticed, is designed for that class of cases where the act of the offender is not directed against any particular individual but there is in his act that recklessness and risk of immi nent danger, knowingly and unjustifiably incurred, which is directed against the man in general, and places the lives of many in jeopardy. Indeed, in all fairness, Counsel for the appellant has not contended that the case would fall under el. (4) of section 300. His sole contention is that even if the accused had no intention to cause death, the facts estab lished fully bring the case within the purview of cl. (3) of section 300 and as such the offence committed is murder and nothing less. In support of this contention reference has been made to Andhra vs State of Rajasthan(1) and Rajwant Singh vs State of Kerala (supra). As against this, Counsel for the respondent submits that since the accused selected only non vital parts of the body of the deceased, for (1) A.I.R. 1966 S.C. 148. 610 inflicting the injuries, they could not be attributed the mens rea requisite for bringing the case under clause (3) of section 300; at the most, it could be said that they had knowl edge that the injuries inflicted by them were likely to cause death and as such the case falls within the third clause of section 299, and the offence committed was only "culpa ble homicide not amounting to murder", punishable under section 304, Part 11. Counsel has thus tried to support the reason ing of the High Court. The trial Court, 'as 'already noticed, had convicted the respondent of the offence of murder. It applied the rule in Virsa Singh 's case (supra). and the ratio of Anda vs State and held that the case was clearly covered by clause Thirdly of section 300. The High Court has disagreed with the trail Court and held that the offence was not murder but one under section 304, Pt. The High Court reached this conclusion on the following reasoning: (a) "There was no premeditation in the attack. It was almost an impulsive act". (b) "Though there were 21 injuries, they were all on the arms and legs and not on the head or other vital parts the body." (c) "There was no compound fracture to result in heavy haemorrhage; there must have been some bleeding". (which) "according to PWI might have stopped with in about half an hour to one hour." (d) "Death that had occurred 21 hours later, could have been only due to shock and not due to haemorrhage also, as stated by PW 12. who conducted the autopsy. This reference is strengthened by the evidence of PW 26 who says that the patient was under shock and he was treating him for shock by sending fluids through his vein. From the injuries inflicted the accused therefore could not have intended to cause death. " (e) "A1 and A2 had beaten the deceased with heavy sticks. These beatings had resulted in fracture of the right radius, right femur, right tibia, right fibula, right patalla and left tibia and dislocation of. , therefore considerable force must have been used while inflicting the blows. Accused 1 and 2 should have therefore inflicted these injuries with the knowledge that they are likely, by so beating, to cause the death of the deceased, though they might not have had the knowledge that they were so imminent ly dangerous that in all probability their acts would result in such injuries as are likely to cause the death. The offence . is therefore culpable homicide falling under . section 299, I.P.C. punishable under section 304 Part II and not murder. " 611 With respect we are unable to appreciate and accept this reasoning. With respect, to be inconsistent, erroneous and largely speculative,It appears to us To say that the attack was not premeditated or pre planned is not only factually incorrect but also at war with High Court 's own finding that the injuries were caused to the deceased in furtherance of the common intention of A 1 and A 2 and therefore, section 34, I.P.C. was applicable. Fur ther, the finding that there was no compound fracture, no heavy haemorrhage and the cause of the death was shock, only, is not in accord with the evidence on the record. The best person to speak about haemorrhage and the cause of the death was Dr. P. section Sarojini (PW 12) who had conducted the autopsy. She testified that ,the cause of death of the deceased was "shock and haemorrhage due to multiple in juries". This categorical opinion of the Doctor was not assailed in cross examination. In the post mortem examina tion report exhibit P 8, the Doctor noted that the heart of the deceased was found full of clotted blood. Again in injury No. 6, which also was an internal fracture, the bone was visible through the wound. Dr. D.A. Sastri, PW 26, had testified that he was treating Kotamraju injured of shock, not only by sending fluids through his vein, but also blood. This part of his statement wherein he spoke about the giving of blood transfusion to the deceased, appears to have been overlooked by the High Court. Dr. Kondareddy, PW 11, who was the first Medical Officer to examine the injuries of the deceased, had noted that there was bleeding and swelling around injury No. 6 which was located on the left leg 3 inches above the ankle. Dr. Sarojini, PW 12, found fracture of the left tibia underneath this injury. There could therefore, be no doubt that this was a compound fracture. P.W. 11 found bleeding from the other abraded injuries, also. He however found the condition of the injured grave and immediately sent an information to the Magistrate for recording his dying declaration. PW 11 also advised immediate removal of the deceased to the bigger Hospital at Guntur. There, also, Dr. Sastri finding that life in the patient was ebbing fast, took immediate two fold action. First, he put the patient on blood transfusion. Second, he sent an intimation for recording his dying declaration. A Magistrate (PW 10) came there and recorded the statement. These are all tell tale circumstances which unerring by show that there was substantial haemorrhage from some of the injuries involving compound fractures. This being the case, there was absolutely no reason to doubt the sworn word of the Doctor, (PW 12) that the cause of the death was shock and haemorrhage. Although the learned Judges of the High Court have not specifically referred to the quotation from page 289, of Modi 's book on Medical Jurisprudence and Toxicology (1961 Edn.) which was put to Dr. Sarojini in cross examination, they appear to have derived support from the same for the argument that fractures of such bones "are not ordinarily dangerous"; therefore, the accused could not have intended cause death but had only knowledge that they were likely by such beating to cause the death of the deceased. It will be worthwhile to extract that quotation from Mody, as a reference to the same was made by Mr. Subba Rao before us, also. 612 According to Mody: "Fractures are not ordinarily dangerous unless they are compound, when death may occur from ,loss of blood, if a big vessel is wounded by the split end of a fractured bone. " It may be noted, in the first place, that this opinion of the learned author is couched in too general and wide language. Fractures of some vital bones, such as those of the skull and the vertebral column are generally known to be dangerous to life. Secondly, even this general statement has been qualified by the learned author, by saying that compound fractures involving haemorrhage, are ordinarily dangerous. We have seen, that some of the fractures under neath the injuries of the deceased, were compound fractures accompanied by substantial haemorrhage. In the face of this finding, Mody 's opinion, far from advancing the conten tion of the defence, discounts it. The High Court has held that the accused had no inten tion to cause death because they deliberately avoided to hit any vital part of the body, and confined the beating to the legs and arms of the deceased. There is much that can be said in support of this particular finding. But that find ing assuming it to be correct does not necessarily take the case out of the definition of 'murder '. The crux of the matter is, whether the facts established bring the case within Clause Thirdly of section 300. This question further narrows down into a consideration of the two fold issue :. (i) Whether the bodily injuries found on the deceased were intentionally inflicted by the accused ? (ii) If so, were they sufficient to cause death in the ordinary course of nature ? If both these elements are satisfactorily established, the offence will be 'murder ', irrespective of the fact whether an intention on the part of the accused to cause death, had or had not been proved. In the instant case, the existence of both these ele ments was clearly established by the prosecution. There was bitter hostility between the warring factions to which the accused and the deceased belonged. Criminal litigation was going on between these factions since long. Both the factions had been proceeded against under section 107, Cr. The accused had therefore a motive to beat the deceased. The attack was premeditated and pre planned, although the interval between the conception and execution of the plan was not very long. The accused had purchased tickets for going further to Narasaraopet, but on seeing the deceased, their bete noir, alighting at Nekarikal, they designedly got down there and trailed him. They selected heavy sticks about 3 inches in diameter, each, and with those lethal weapons, despite the entreaties of the deceased, mercilessly pounded his legs and arms causing no less than 19 or 20 injuries, smashing at least seven bones. mostly major bones, and dislocating two more. The beating was administered in a brutal and reckless manner. It was pressed home with an unusually fierce, cruel and sadistic determination. When the human conscience of one of the shocked bystanders spontaneously cried out in protest as to why the accused were beating a human being as if he were a buffalo, the only echo it could draw from the assailants, 613 a minacious retort, who callously continued their malevolent action, and did not stop the beating till the deceased became unconscious. May be, the intention of the accused was to cause death and they stopped the beating under the impression that the deceased was dead. But this lone circumstance cannot take this possible inference to the plane of positive proof. Nevertheless, the formidable weapons used by the accused in the beating, the savage manner of its execution, the helpless state of the unarmed victim, the intensity of the violence caused, the callous conduct of the accused in persisting in the assault even against the protest of feeling bystanders all, viewed against the background of previous animosity between the parties, irresistibly lead to the conclusion that the in juries caused by the accused to the deceased were intention ally inflicted, and were not accidental. Thus the presence of the first element of Clause Thirdly of section 300 had been cogently and convincingly established. This takes us to the second element of Clause (3). Dr. Sarojini, PW 12, testified that the injuries of the deceased were cumulatively sufficient in the ordinary course of nature to cause death. In her opinion which we have found to be entirely trustworthy the cause of the death was shock and haemorrhage due to the multiple injuries. Dr. Sarojini had conducted the post mortem examination of the deadbody of the deceased. She had dissected the body and examined the injuries to the internal organs. She was therefore the best informed expert who could opine with authority as to the cause of the death and as to the suffi ciency or otherwise of the injuries from which the death ensued. Dr. Sarojini 's evidence on this point stood on a better footing than that of the Doctors (PWs. 11 and 26) who had externally examined the deceased in his life time. Despite this position, the High Court has not specifically considered the evidence of Dr. Sarojini with regard to the sufficiency of the injuries to cause death in the ordinary course of nature. There is no reason why Dr. Sarojini 's evidence with regard to the second element of Clause (3) of section 300 be not accepted. Dr. Sarojini 's evidence satisfacto rily establishes the presence of the second element of this clause. There is therefore, no escape from the conclusion, that the offence committed by the accused was 'murder ', notwith standing the fact that the intention of the accused to cause death has not been shown beyond doubt. In Anda vs State of Rajasthan (supra), this Court had to deal with a very similar situation. In that case, several accused beat the victim with sticks after dragging him into a house and caused multiple injuries including 16 lacerated wounds on the arms and legs, a hematoma on the forhead and a bruise on the chest. Under these injuries to the arms and legs lay fractures of the right and left ulnas, second and third metacarpal bones on the right hand and second metacar pal bone of the left hand, compound fractures of the right tibia and right fibula. There was loss of blood from the injuries. The Medical Officer who conducted the autopsy opined that the cause of the death was shock and syncope due to multiple injuries; that all the injuries collectively could be sufficient to cause death in the ordinary course of nature, but individually none of them was so sufficient. 614 Question arose whether in such a case when no signifi cant injury had been inflicted on a vital art of the body, and the weapons used were ordinary lathis, and the accused could not be said to have the intention of causing death, the offence would be 'murder ' or merely 'culpable homicide not amounting to murder '. This Court speaking through Hidayatullah J. (as he then was), after explaining the comparative scope of and the distinction between sections 299 and 300, answered the question in these terms: "The injuries were not on a vital part of the body and no weapon was used which can be described as specially dangerous. Only lathis were used. It cannot, therefore, be said safely that there was an intention to cause the death of Bherun within the first clause of section 300. At the same time, it is obvious that his hands and legs were smashed and numerous bruises and lacerated wounds were caused. The number of injuries shows that every one joined in beating him. It is also clear that the assailants aimed at breaking his arms and legs. Looking at the injuries caused to Bherun in furtherance of the common intention of all it is clear that the injuries intended to be caused were sufficient to cause death in the ordinary course of nature, even if it cannot be said that his death was intended. This is suffi cient to bring the, case within 3rdly of section 300." The ratio of Anda vs State of Rajasthan (supra) applies in full force to the facts of the present case. Here, a direct causal connection between the act of the accused and the death was established. The injuries were the direct cause of the death. No secondary factor such as gangrene, tetanus etc., supervened. There was no doubt whatever that the beating was premeditated and calculated. Just as in Anda 's case, here also, the aim of the asailants was to smash the arms and legs of the deceased, and they succeeded in that design. causing no less than 19 injuries, including fractures of most of the bones of the legs and the arms. While in Anda 's case, the sticks used by the assailants were not specially dangerous, in the instant case they were unusually heavy, lethal weapons. All these acts of the accused were pre planned and intentional, which, considered objectively in the light of the medical evidence. were sufficient in the ordinary course of nature to cause death. The mere fact that the beating was designedly con fined by the assailants to the legs and arms, or that none of the multiple injuries inflicted was individually suffi cient in the ordinary course of nature to cause death, will not exclude the application of Clause 3rdly of section 300. The expression "bodily injury" in Clause 3rdly includes also its plural, so that the clause would cover a case where all the injuries intentionally, caused by the accused are cumula tively sufficient to cause the death in the ordinary course of nature, even if none of those injuries individually measures upto such sufficiency. The sufficiency spoken of in this clause. as a|ready noticed, is the high probability of death in the ordinary course of nature, and if such suffi ciency exists and death is caused and the injury causing it is intentional, the case would fail under Clause 3rdly of section 300. All the conditions which are a pre requisite for the applicability of this clause have been established and the offence committed by the accused in the instant case was 'murder '. 615 For all the foregoing reasons, we are of opinion that the High Court was in error in altering the conviction of the accused respondent from one under section 302, 302/34, to that under section 304, Part II, Penal Code. Accordingly we allow this appeal and restore the order of the trial Court convicting the accused (Respondent 2 herein) for the offence of murder, with a sentence of imprisonment for life. Respondent 2, if he is not already in jail shall be arrested and committed to prison to serve out the sentence inflicted on him. P.B.R. Appeal allowed.

In the scheme of the Penal Code, 'culpable homicide ' is genus and 'murder ' its specie. All 'murder ' is 'culpable homicide ' but not vice versa. Speaking generally, 'culpable homicide ' sans 'special characteristics of murder ', is 'culpable homicide not amounting to murder '. For the purpose of fixing punishment, proportionate to the gravity of this generic offence, the Code practically recognises three degrees of culpable homicide. The first is, what may be called, culpable homicide of the first degree. This is the gravest form of culpable homicide, which is defined in section 300 as 'murder '. The second may be termed as 'culpable homicide of the second degree '. This is punishable under the 1st part of section 304. Then there is 'culpable homicide of the third degree '. This is the lowest type of culpable homicide and the punishment provided for it is, also, the lowest among the punishments provided for the three grades. Culpable homicide of this degree is punishable under the second Part of section 304. [606B D] Clause (b) of section 299 corresponds with cll. (2) and (3) of section 300. The distinguishing feature of the mens rea requisite under clause (2) is the knowledge possessed by the offender regarding the particular victim being in such a peculiar condition or state of health that the intentional harm caused to him is likely to be fatal, notwithstanding the fact that such harm would not in the ordinary way of nature be sufficient to cause death of a person in normal health or condition. The 'intention to cause death ' is not an essential requirement of clause (2). Only the intention of causing the bodily injury coupled with the offender 's knowledge of the likelihood of such injury causing the death of the particular victim, is sufficient to bring the killing within the ambit of this clause This aspect of clause (2) is borne out by illustration (b) appended to section 300. [607C D] Instances of cases failing under clause (2) of section 300 can be where the assailant causes death by a first blow intentionally given knowing that the victim is suffering from an enlarged liver, or enlarged spleen or diseased heart and such blow is likely to cause death of that particular person as a result of the rupture of the liver, or spleen or the failure of the heart, as the case may be. If the as sailant had no such knowledge about the disease or special frailty of the victim, nor an intention to cause death or bodily injury sufficient in the ordinary course of nature to cause death, the offence will not be murder, even if the injury which caused the death, was intentionally given. Clause (b) of section 299 does not postulate any such knowledge on the part of the offender. [607E F] In Clause (3) of section 300, instead of the words 'likely to cause death ' occurring in the corresponding clause (b) of section 299, the words "sufficient in the ordinary course of nature" have been used. The distinc tion between a bodily injury likely to cause death and a bodily injury sufficient in the ordinary course of nature to cause death, is fine but real, and, if overlooked, may result in miscarriage of justice. The difference is one of the degree of probability of death resulting from the intended bodily injury. The word "likely" in section 299(b) conveys the sense of of 'probable ' as distinguished from a mere possibility. The words bodily injury . sufficient in the ordinary course of nature to cause death ' mean that death will be the 'most proba ble ' result of the injury, having regard to the ordinary course of nature. [607G H] 602 For cases to fail within clause (3), it is not necessary that the offender intended to cause death, so long as death ensues from the intentional bodily injury or injuries suffi cient to cause death in the ordinary course of nature. [608B] Clause (c) of section 299 and clause (4) of section 300 both require knowledge of the probability of the act causing death. Clause (4) of section 300 would be applicable where the knowledge of the offender as to the probability of death of a person or persons in general as distinguished from a particular person or persons being caused from his immi nently dangerous act, approximates to a practical certainty. Such knowledge on the part of the offender must be of the highest degree of probability, the act having been committed by the offender without any excuse for incurring the risk of causing death or such injury as aforesaid. [608F G] Whenever a court is confronted with the question whether the offence is 'murder ' or 'culpable homicide not amounting to murder ', on the facts of a case, it will be convenient for it to approach the problem in three stages. The question to be considered at the first stage would be, whether the accused has done an act by doing which he has caused the death of another. Proof of such casual connection between the act of the accused and the death, leads to the, second stage for, considering whether that act of the accused amounts to culpable homicide as defined in section 299. If the answer to this. question is prima facie found in the affirm ative, the stage for considering the operation of section 300, Penal Code, is reached. This is the stage at which the Court should determine whether the facts proved by the prosecution bring the case within the ambit of any of the four clauses of the definition of 'murder ' containd in section 300. If the answer to this question is in the negative the offence would be 'culpable homicide not amounting to mur der ', punishable under the first or the second part of section 304, depending, respectively, on whether the second or the third clause of section 299 is applicable. If this question is found in the positive, but the case comes within any of the Exceptions enumerated in section 300, the offence would still be 'culpable homicide not mounting to murder ', punishable under the First Part of section 304, Penal Code. [608H; 609A C] Rajwant and anr. vs State of Kerala AIR 1966 SC 1874, Virsa Singh vs The State of Punjab ; and Andhra vs State of Rajasthan AIR 1966 S.C. 148 followed. In the instant case the prosecution alleged that in furtherance of political feuds of the village the accused followed the deceased in the bus when he went to a neigh bouring place, chased him when he got off the bus, and indiscriminately pounded the legs and arms of the deceased, who was 55 years old, with heavy sticks. The deceased succumbed to his injuries on the following morning. The trial court held that the case was covered by clause 'thirdly ' of section 300 and convicted them under section 302 and section 302 read with section 34. Indian Penal Code. In appeal, the High Court altered the conviction to one under section 304 Part II; on ' the grounds that (i) there was no premeditation in the attack; (ii) injuries were not on any vital part of the body; (iii) there was no compound fracture resulting in heavy haemorrhage; (iv) death occurred due to shock and not due to haemorrhage and (v) though the accused had knowledge while inflicting injuries that they were likely to cause death, they might no( have had the knowledge that they were so imminently dangerous that in ' all probability their acts would ' result in such injuries as are likely to came the death. In appeal to this Court the appellant State contended that the case fell under section 300(3) I.P.C., while the accused sought to support the judgment ' of the High Court. 603 Allowing the appeal. HELD: (1) It is not correct to say that the attack was not premeditated or preplanned. The High Court itself found that the injuries were caused in furtherance of the common intention of the respondents, and that therefore section 34 was applicable. [611B] (2) The High Court may be right in its finding that since the injuries were not on vital parts, the accused had no intention to cause death but that finding assuming it to be correct does not necessarily take the case out of the definition of 'murder '. The crux of the matter is whether the facts established bring the case within clause 'thirdly ' of section 300. This question further narrows down into a con sideration of the two fold issue; (i) whether the bodily injuries found on the deceased were intentionally inflicted by the accused ? and (ii) If so, were they sufficient to cause death in the ordinary course of nature ? If both these elements are satisfactorily established, the offence will be 'murder ', irrespective of the fact whether an reten tion on the part of the accused to cause death, had or had not been proved. [612 C E] In the instant case, the formidable weapons used by the accused in the beating the savage manner of its execution, the helpless state of the unarmed victim, the intensity of the violence caused, the callous conduct of the accused in persisting in the assault even against the protest of feeling by standersall, viewed against the background of previous animosity between the parties, irresistibly lead to the conclusion that the injuries caused by the accused to the deceased were intentionally inflicted, and were not accidental. Thus the presence of the first element of clause 'thirdly ' of section 300 had been cogently and convincing ly established. [613 B C] (3) The medical evidence shows that there were compound fractures and that there was heavy haemorrhage requiring blood transfusion. Such injuries are ordinarily dangerous. [613D] (4) The medical evidence clearly establishes that the cause of death was shock and haemorrhage due to multiple injuries which were cumulatively sufficient to cause death in the ordinary course of nature. [612B C] (5) The mere fact that the beating was designedly con fined by the assailants to the legs and arms or that none of the multiple injuries inflicted was individually sufficient in the ordinary course of nature to cause death, will not exclude the application of clause 'thirdly ' of section 300. The expression 'bodily injury ' in clause 'thirdly ' includes also its plural, so that the clause would cover a case where all the injuries intentionally caused by the accused are cumula tively sufficient to cause the death in the ordinary course of nature. even if none of those injuries individually measures upto such sufficiency. The sufficiency spoken of in this clause, is the high probability of death in the ordinary course of nature, and if such sufficiency exists and death is caused and the injury causing it is intention al, the case would fail under clause 'thirdly ' of section 300. All the conditions which are a pre requisite for the ap plicability of this clause have been established and the offence committed by accused in the instant case was 'mur der '. [614G H] There is no escape from the conclusion that the offence committed by the accused was murder notwithstanding the fact that the intention of the accused to cause death has not been shown beyond doubt. [613F]

Civil Appeal Nos. 1286 1291 of 1973. Appeals by certificate from the judgment and order dated the 30th June, 1972 of the Andhra Pradesh High Court at Hyderabad in Referred Case No. 5 of 1971. 507 A. Subba Rao for the Appellant. S.C. Manchanda, and Miss A. Subhashini, for the Respondent. The Judgment of the Court was delivered by VENKATARAMIAH, J. The only question which arises for consideration in these six appeals by certificate is whether an order of assessment passed under the Indian Income tax Act, 1922 (hereinafter referred to as 'the Act ') by the Income tax Officer in the case of a Hindu undivided family without holding an inquiry into the validity of the claim made within a reasonable time by a member of the Hindu family that a partition had taken place among the family is liable to be merely cancelled in appeal by the Income tax Appellate Tribunal (for short, 'the Tribunal ') without a further direction to the assessing authority either to modify the assessment suitably or to pass a fresh order of assessment in accordance with law. The assessee is a Hindu undivided family and the assessment years are 1955 56 and 1957 58 to 1961 62. An assessment order made on May 30, 1959 in respect of the assessment year 1955 56 had been set aside by the Appellate Assistant Commissioner on February 24, 1962 with a direction to make a fresh assessment. When fresh assessment proceedings were commenced pursuant to the above said direction in respect of the assessment year 1955 56,, the assessment proceedings for the assessment years 1957 58 and 1958 59 were also taken up. Earlier a letter had been addressed on October, 10, 1960 by Kapurchand Shrimal to the Income tax Officer in connection with a notice received by the assessee under section 18A (1) of the Act in respect of the assessment year 1961 62 stating that all the movable and immovable properties of the assessee had been partitioned by metes and bounds under partition deeds and that the Hindu undivided family (the assessee) was no longer receiving any income as such and there was therefore no question of payment of any advance tax by it. The second para of that letter contained a specific request to record the factum of the partition for the purpose of the Act. Again on June 16, 1961 M/s S.G. Dastagir and Co. addressed a letter on behalf of the assessee in connection with advance tax demanded for the assessment year 1962 63, the second para of which contained a similar request for recording the factum of partition. Before the fresh assessments were completed for the three years referred to above a third letter dated March 11, 1962 was addressed to the same 508 officer who received it on the next day itself in which again there was a claim made regarding the partition. But this letter however was written specifically in respect of the assessment year 1957 58. On March 21, 1962, M/s S.G. Dastagir too addressed a further letter to the Income tax Officer reminding him of the earlier letters of October 10, 1960 and June 16, 1961 and that letter stated: "Apart from these letters the matter has been discussed with you on a number of occasions personally during the course of the assessment proceedings of the year 1957 58 and your attention has already been drawn to the facts that an order under section 25A has to be passed before the completion of the assessment for the year 1957 58. The letter dated 11th March, 1962 was addressed to you by the assessee only when it was gathered that you were going to pass the assessment order for the year 1957 58 without making the contemplated enquiry under section 25A." The assessments for the years 1955 56 to 1958 59 were however completed between August 31, 1962 and March 27, 1963 without holding an inquiry as contemplated by section 25A of the Act regarding the factum of partition. The Income tax Officer, thereafter started an inquiry under section 25A and by his order dated March 30, 1965 refused to record the partition. On appeal the Appellate Assistant Commissioner by his order dated November 8, 1967 set aside the said order and directed the Income tax Officer to record the partition under section 25A as on July 10, 1960. That order became final as no appeal was filed against it by the Department. It should be stated here that the Income tax Officer passed assessment orders against the assessee for the assessment years 1959 60, 1960 61 and 1961 62 on March 26, 1964, March 30, 1965 and March 26, 1966 respectively before the Appellate Assistant Commissioner held that the partition had taken place on July 10, 1960. In the appeals filed before the Appellate Assistant Commissioner against the assessment orders for the years in question i.e. 1955 56 and 1957 58 to 1961 62 it was contended that the assessments were liable to be set aside on the ground that the inquiry into the claim of partition which was a condition precedent for making an order of assessment on the Hindu undivided family had not been made as required by section 25A of the Act. The Appellate Assistant Commissioner rejected the above contention. The assessee there upon filed appeals before the Tribunal against the orders of the 509 Appellate Assistant Commissioner and one question which was A common to all the appeals that was urged before the Tribunal was about the validity of the assessment made against the assessee (Hindu undivided family) without holding an inquiry regarding the claim of partition before the assessment proceedings were completed. While the assessee contended that the assessments were liable to be cancelled on account of the non compliance with the mandatory provisions of section 25A of the Act it was urged on behalf of the Department that in fact there was no violation at all of section 25A and even if it was held that there was any such violation the proper order to be passed was either to direct the Income tax officer to give effect to section 25A (2) of the Act without cancelling the assessments made on the assessee or to set aside the assessments with a direction to the Income tax Officer to pass fresh orders of assessment. On a consideration of the submissions made by the parties, the Tribunal came to the conclusion that the assessments which had been made without holding an inquiry into the claim of partition as required by section 25A of the Act were illegal and void Accordingly it cancelled the assessments and added 'We do not consider it necessary to direct fresh assessments. It would be open to the Income tax Officer to do so if the law otherwise so permits. ' Thereafter at the instance of the Revenue a reference was made by the Tribunal to the High Court of Andhra Pradesh under section 66(1) of the Act in all the cases for a decision on the following question: "Whether on the facts and in the circumstances of the case, the assessments made by the Income tax Officer on the Hindu undivided family of Shri Kapurchand Shrimal for the years under reference without passing an order under section 25A were valid ?" We are not concerned in these appeals with another question arising out of the assessment order made for the year 1958 59 which was also referred alongwith the above common question. The High Court after hearing the learned counsel for the parties answered the common question which arose in all the appeals stating that the assessment made by the Income tax Officer without passing the order under section 25A on the claim of partition were valid but only required modification and directed the Tribunal while giving effect to the order of the High Court to direct the Income tax Officer to modify the assessments in the light of section 25A (2) of 510 the Act. Aggrieved by the decision of the High Court the assessee has filed these appeals. Section 25A of the Act which arises for consideration in these cases reads thus: "25A. Assessment after partition of a Hindu undivided family (1) Where, at the time of making an assessment under section 23, it is claimed by or on behalf of any member of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income tax Officer shall make such inquiry thereinto as he may think fit, and, if he is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions he shall record an order to that effect: Provided that no such order shall be recorded until notices of the inquiry have been served on all the members of the family. (2) Where such an order has been passed, or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family whose joint family property has been partitioned on or after the last day on which it carried on such business, profession or vocation, the Income tax Officer shall make an assessment of the total income received by or on behalf of the joint family as such, as if no partition had taken place, and each member or group of members, shall in addition to any income tax for which he or it may be separately liable and notwithstanding anything contained in sub section (1) of section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it; and the Income tax Officer shall make assessments accordingly on the various members and groups of members in accordance with the provisions of section 23; Provided that all the members and groups of members whose joint family property has been partitioned shall be liable jointly and severally for the tax assessed on the total income received by or on behalf of the joint family as such. 511 (3) Where such an order has not been passed in respect A of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family. A Hindu undivided family is an entity which is treated as an assessee for the purposes of the Act. In the Act as it was originally passed there was no effective machinery to assess the income which was received by a Hindu undivided family during an accounting year but was no longer in existence as such at the time of assessment. By reason of section 14(1) of the Act which provided that no tax would be payable by an assessee in respect of any sum which he received as a member of a Hindu undivided family, there was further difficulty in subjecting such income tax. Section 25A was, therefore, enacted to get over these difficulties by providing for a special procedure to be followed in a case where a claim was made that there has been a partition satisfying the tests laid down in that section. Sub section (3) of section 25A of the Act provides that a Hindu undivided family which is being assessed as such shall be deemed for the purposes of the Act to continue to be a Hindu undivided family until an order is passed under sub section (1) of section 25A that a partition has taken place among the members of the family as stated therein. Sub section (1) of section 25A provides that if at the time of making as assessment a claim is made by or on behalf of any member of a Hindu undivided family which is being assessed till then as undivided that a partition has taken place among the members of such family, the Income tax officer shall make such inquiry there into as he may think fit and if he is satisfied that the joint family property has been partitioned among the various members groups of members in definite portions he shall record an order to that effect. Such order can however be made only after notices of the inquiry have been served on all the members of the family. It may be noted that sub section (I) of section 25A does not actually prescribe the form in which such a claim can be made. It does not also state the specific stage of the assessment proceedings when such claim should be made. Sub section (2) of section 25A of the Act provides that where an order is passed under sub section (1) thereof recording the partition or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family where joint family property has been partitioned on or after the last day on which it carried on such business, profession or vocation the Income tax officer shall make an assessment of the total income received by or on behalf of the 512 joint family as such as if no partition had taken place and each member or group of members shall, in addition to any income tax for which he or it may be separately liable and notwithstanding any thing contained in sub section (section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it. The Income tax officer is further authorised to make assessments accordingly on various members and groups of members in accordance with section 23 of the Act. By virtue of the proviso to sub section (2) of section 25A of the Act the liability which so long as an order was not recorded under sub section (I) of section 25A was restricted to the assets of ., the Hindu undivided family is transformed when such an order is recorded into the personal liability of the members for the amount of tax due by the family. In these appeals there is a finding of fact recorded by the Tribunal that a proper and valid request for recording a partition had been made as far back as October 10, 1960. The first of the assessment orders impugned in these appeals was passed on August 31, 1962 by the Income tax officer and the other assessment orders were passed subsequently. It is not shown that the Income tax officer before whom the claim of partition had been made on October 10, 1960 had not got reasonable time to inquire into the claim and then to make the assessment orders on the basis of the finding on the question of partition. Admittedly all the orders of assessment were passed against the assessee (Hindu undivided family) before holding an inquiry as required by section 25A (I) of the Act into the claim of partition. In fact the Income tax officer refused to record the partition only on March 30, 1965 but in appeal the Appellate Assistant Commissioner held that a partition had taken place as on July 10, 1960 by his order dated November 8, 1967 and that order had become final. The questions for consideration are whether under these circumstances the orders of assessment can be treated as valid orders and if they are not whether the Income tax officer can be directed by the appellate authority to pass fresh orders of assessment in accordance with law. The first decision relied on by the assessee is Kalwa Devadattam and two ors. vs The Union of. India and ors.(l) That was a case arising out of a suit in which the validity of certain assessment 513 Orders passed against a Hindu undivided family under the Act and A the proceedings instituted to recover the amounts payable under these assessment orders by sale of certain properties had been questioned. The plaintiffs in that suit were the sons of one Nagappa. Nagappa and the plaintiffs who formed a Hindu joint family had carried on business and the said family had been assessed to tax under the Act. When proceedings were instituted to recover the dues under the assessment orders for the sale of some properties, the plaintiffs filed the suit contending that some of the properties could not be sold as they were their separate properties and the remaining properties could not be sold as they had been allotted to them on partition of the joint family estate on March 14, 1947 before the orders of assessment were made by the income tax authorities. The claim of the plaintiffs based on the ground of non compliance with section 25A of the Act was rejected by this Court with these observations: "It may be assumed that by this statement within the meaning of section 25A it was claimed "by or on behalf of any member of a Hindu family hitherto assessed as undivided" that a partition had taken place among the members of his family and that the Income tax officer was bound to make an inquiry contemplated by section 25A. But no inquiry was in fact made and no order was recorded by the Income tax officer about the partition: by virtue of sub section (3) the Hindu family originally assessed as undivided had to be deemed for the purposes of the Act to continue to be a Hindu undivided family. If by the assessment of the family on the footing that it continued to remain undivided Nagappa or his sons were aggrieved their remedy was to take an appropriate appeal under section 30 of the Indian Income tax Act and not a suit challenging the assessment. The method of assessment and the procedure to be followed in that behalf are statutory, and any error or irregularity in the assessment may be rectified in the manner provided by the statute alone, for section 67 of the Indian Income tax Act bars a suit in any Civil Court to set aside or modify any assessment made under the Act. The Income tax officer made the assessment of tax under the Act. Granting that he committed an error in making the assessment without holding an inquiry into the partition alleged by Nagappa, the error could be rectified by resort to the machinery provided under the Act and not by a suit in a Civil Court. " 514 This Court dismissed the suit against the Revenue on three independent grounds: (1) the suit which was in substance one for setting aside an assessment was in law not maintainable because of section 67 of the Act; (2) that in the absence of an order under section 25A (1 assessment of the Hindu joint family was properly made; and (3) even if an order recording partition was made the liability of the plaintiffs to pay income tax assessed on the family could still be enforced against them jointly and severally under section 25A (2) proviso. The above case was not obviously one in which an order of assessment which had been passed contrary to section 25A of the Act had been challenged in an appeal under the Act. The next case relied on by the assessee is Additional Income tax officer, Cuddapah vs A. Thimmayya & Anr.(l) There again the question raised was a different one although some of the material facts were similar to the facts in these appeals. The facts there were those: Krishnappa and his two sons Thimmayya and Venkatanarsu constituted a Hindu undivided family which had carried on some business during the previous years corresponding to assessment years 1941 42 to 1946 47. When the assessment proceedings for these years were pending, on May 20, 1946 Venkatanarsu claimed before the 'Income tax officer that the property of the family had been partitioned among the members of the family in definite portions. The said claim was not disposed of till June 30, 1952. In the meanwhile assessments for the five years in question were completed between September 30, 1948 and November 30, 1950 resulting in a tax liability of Rs. 67,750/ in the aggregate for the five years. Appeals were preferred against the said orders of assessment but in the appeals it was not contended that the orders were illegal as no inquiry had been made as contemplated in section 25A (1). The appeals were unsuccessful. On June 30, 1952, the Income tax officer made an order under section 25A recording that a partition had taken place on November 2, 1946. As the tax due was not paid the Income tax officer made the order under section 46(S) of the Act on June 25, 1958 calling upon the managing director of a private limited company which had taken over the business of Krishnappa and his two sons not to pay the salaries payable to Thimmayya and Venkatanarsu by the company and to pay it to the credit of Government of India towards the payment of arrears of income tax referred to above. Thimmayya and 515 Venkatanarsu questioned that order before the High Court under A Article 226 of the Constitution. The High Court held that the order on the claim made under section 25A(I) on June 30, 1952, was given "a clear retrospective operation", and the Income tax officer was bound "to give effect to that order recognising the partition and to follow up the consequences which flowed from the order". In the view of the High Court, the petitioners were entitled to insist upon an order for apportionment under section 25A (2) and without such an order, proceedings for collection of tax could not be commenced against them under the proviso to sub section (2) of section 25A. On appeal this Court held that because prior to the orders of assessment there was no order recording that the property of the family had been partitioned among the members of the family no personal liability of the members arose under the proviso to section 25A (2) to pay the tax assessed thereunder and the remedy of income tax authorities was to proceed against the property, if any, of the Hindu undivided family. It was therefore held that the Income tax officer was not competent to make the order under section 46 (5) directing the company to withhold the tax from the salaries payable to Thimmayya and Venkatanarasu. The relevant observations of this Court are these: "In the present case no orders were recorded by the lncome tax officer at the time of making assessments in respect of the five years, and therefore no personal liability of the members of the family arose under the proviso to sub section (2). The Income tax officer does not seek to reach in the hands of Thimmayya and Venkatanarsu the property which was once the property of the Hindu undivided family: he seeks to reach the personal income of the two respondents. That the Income tax officer could do only if by virtue of the proviso to sub section (2) a personal liability has arisen against them. In the absence of an order under sub section (1), however, such a liability does not arise against the members of the Hindu undivided family, even if the family is disrupted. We are therefore of the view, but not for the reasons mentioned by the High Court, that because there has been before the orders of assessment no order recording that the property of the family has been partitioned among the members, the two respondents are not personally liable to satisfy the tax due by the joint family. The remedy of the income tax authorities, in the circumstances of the case, 516 was to proceed against the property, if any, of the Hindu undivided family. That admittedly they have not done. " It will be seen that in this case no question was raised as to whether the assessment orders were void as they were passed without holding an inquiry as required by section 25A (I) of the Act. The only question was whether in the absence of an order under section 25A (1), any personal liability can be enforced against the members of the joint family. Strong reliance is, however, placed on behalf of the assessee on the decision of the Andhra Pradesh High Court in Karri Ramakrishna Reddy vs Tax Recovery officer, Vijayawada( ') which involved the interpretation of section 171 of the Income tax Act, 1961, which, in so far as the question involved in these appeals is concerned, contains similar provisions. In that case a person who was a member of a Hindu undivided family questioned in a proceeding under Article 226 of the Constitution an assessment made against the Hindu undivided family after it had been partitioned without holding an inquiry as required by section 1.71 (2) of the Income tax Act, 1961 even when a claim of partition had been made by his father in the assessment proceedings. The petitioner therein con tended that such an order would not be binding upon the other members of the family. The High Court accepted the contention of the petitioner therein and held that the assessment order could not be enforced against him. This again is a case where the validity of the assessment order had been questioned not in an appeal filed against it but in a separate proceeding. The observations made therein may not, therefore, be of much assistance to the assessee because we are concerned in these appeals with the powers of the appellate authority where appeals are filed against the assessment orders themselves contending that there has been non compliance with section 25A(I). Moreover it appears that certain observations made in that case in respect of the decision of this Court in Additional Income tax officer, Cuddapah vs A. Thimmayya & Anr.(2) and the Full Bench decision of the Andhra Pradesh High Court in Commissioner of Income tax vs Tatavarthy Narayanamurthy (3) need further examination. We refrain from expressing any opinion on 517 the correctness of this decision which does not even appear to have been cited before the High Court when the reference out of which these appeals arise was argued. From a fair reading of section 25A of the Act it appears that the Income tax officer is bound to hold an inquiry into the claim of partition if it is made by or on behalf of any member of the Hindu undivided family which is being assessed hitherto as such and record a finding thereon If no such finding is recorded, sub section (3) of section 2SA of the Act becomes clearly attracted. When a claim is made in time and the assessment is made on the Hindu undivided family without holding an inquiry as contemplated by section 25A (1), the assessment is liable to be set aside in appeal as it is in clear violation of the procedure prescribed for that purpose. The Tribunal was, therefore, right in holding that the assessments in question were liable to be set aside as there was no compliance with section 25A (l) of the Act. It is, however, difficult to agree with the submission made on behalf of the assessee that the duty of the Tribunal ends with making a declaration that the assessments are illegal and it has no duty to issue any further direction. It is well known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute. The statute does not say that such a direction cannot be issued by the appellate authority in a case of this nature. In interpreting section 25A (l) we cannot also be oblivious to cases where there is a possibility of claims of partition being made almost at the end of the period within which assessments can be completed making it impossible for the Income tax officer to hold an inquiry as required by section 25A (1) of the Act by following the procedure prescribed therefor. We, however, do not propose to express any opinion on the consequence that may ensue in a case where the claim of partition is made at a very late stage where it may not be reasonably possible at all to complete the inquiry before the last date before which the assessment must be completed. In the instant case, however, since it is not established that the claim was a belated one the proper order to be passed is to set aside the assessments and to direct the Income tax officer to make fresh assessments in accordance with the procedure prescribed by law. The Tribunal, therefore, erred in merely cancelling the assessment orders and in not issuing further directions as stated above. 518 We do not, however, agree with the orders made by the High Court by which it upheld the assessments and directed the Income tax officer to make appropriate modifications. Such an order is clearly unwarranted in the circumstances of this case. The order of the High Court is, therefore, set aside. The question referred by the Tribunal to the High Court does not appear to be comprehensive enough to decide the matter satisfactorily. The question may have to be read as including a further question regarding the nature of the orders to be passed by the Tribunal if the orders of assessments are held to be contrary to law. In the light of the above, we hold that the orders of assessments are liable to be set aside but the Tribunal should direct the Income tax officer to make fresh assessments in accordance with law. The appeals are accordingly disposed of. There shall be no order as to costs. S.R. Appeals allowed.

The assessee is a Hindu undivided family and the assessment years are 1955 56 and 1957 58 to 1961 62. The assessee addressed on October 10, 1960 to the Income tax Officer in connection with a notice received under section 18A(1) of the Act in respect of the assessment year 1961 62 stating that all the movable and immovable properties of the assessee had been partitioned by metes and bounds under partition deeds and that the Hindu undivided family was no longer receiving any income as such and there was therefore no question of payment of any advance tax by it. A specific request to record the factum of the partition for that purpose of the Act effective from July 10, 1960 was also prayed for. This was followed by another letter on June 16, 1961 by M/s. S.G. Dastagir and Co. On behalf of the assessee in connection with advance tax demanded for the assessment year 1962 63 with a similar request. Before fresh assessments were completed for the years 1955 56, 1957 58 and 1958 59 as per the orders of the Appellate Assistant Commissioner dated February 24, 1962 a third letter dated March 11, 1962 was addressed to the same Income tax Officer with a similar request for recording the factum of partition. Another letter dated March 21, 1962 was addressed by M/s. S.G. Dastagir & Co. reminding the Income tax Officer of the earlier letters of October 10, 1960 and June 16, 1961. The assessment for the years 1955 56 to 1958 59 were, however, completed between August 21, 1962 and March 27, 1963 without holding any inquiry as contemplated by section 25A of the 1922 Act regarding the factum of partition. The Income tax Officer thereafter started an inquiry under section 25A and by his order dated March 30, 1965 refused to record the partition. On appeal against the refusal the Appellate Assistant Commissioner by his order dated November 8, 1967 set aside the said order and directed the Income tax Officer to record the partition under section 25A as on July 10, 1960. That order became final as an appeal was filed against it by the Revenue. In the appeals filed before the Assistant Appellate Commissioner against the assessment orders for the years in question, that is, 1955 56 and 1957 58 to 1961 62 the assessee con 506 tended that the assessments were liable to be set aside on the ground that the inquiry into the claim of partition which was a condition precedent for making an order of assessment on the Hindu undivided family had not been made as required by section 25A of the Act. The Appellate Assistant Commissioner rejected the said contention, but the appeals preferred before the Tribunal were allowed. The Tribunal cancelled the assessments without any directions to make fresh assessments. At the instance of the Revenue a reference was made by the Tribunal to the High Court of Andhra Pradesh under section 66(1) of the Act. The High Court answered the reference in favour of the Revenue and hence the appeals. Allowing the appeals, the Court ^ HELD: (1) Under section 25A of the 1922 Act the Income tax Officer was bound to hold an inquiry into the claim of partition if it is made by or on behalf of any member of the Hindu undivided family which is being assessed hitherto as such and record a finding thereon. If no such finding is recorded sub section (3) of section 25A of the Act becomes clearly attracted. When a claim is made in time and the assessment is made on the Hindu undivided family without holding an inquiry as contemplated by section 25A(1), the assessment is liable to be set aside in appeal as it is in clear violation of the procedure prescribed for that purpose, [517 A C] Kalwa Devadattam and two Ors. vs The Union of India and Ors., ; ; Additional Income tax Officer, Cuddapah vs A. Thimmayya & Anr., and Karri Ramkrishna Reddy vs Tax Recovery Officer, Vijayawada, , discussed and distinguished. (2) The duty of the Tribunal does not end with making declaration that the assessments are illegal and it is duty bound to issue further directions. The appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute. The statute does not say that such a direction cannot be issued by the appellate authority in a case of this nature. [517 D E] In the instant case, however, since it is not established that the claim was a belated one the proper order to be passed is to set aside the assessments and to direct the Income tax Officer to make fresh assessments in accordance with the procedure prescribed by law. The Tribunal, therefore, erred in merely cancelling the assessment orders and in not issuing further directions. [517 G H]

Appeal No. 1661 of 1990. From the Judgment and Order dated 26.10. 1989 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. CD/SB/A No. 424 of 1983(A) in Order No. 729/89 A. H.N. Salve, Ms. Meenakshi Arora, Ms. Ayesha Khatri, Ms. Shirin Jain and Ms. Indu Malhotra for the Appellant. KTS Tulsi, Additional Solicitor General, A.S. Rao and p. Parmeshwaran for the Respondent. The Judgment of the Court was delivered by FATHIMA BEEVI, J. The appellant is a federation of glass manufacturers in India. The Federation entered into a contract with M/s. Magadi Soda Company Ltd., Kenya, for supply of 5000 metric ' tomes of soda ash dense at the rate of US $ 155 per metric tome c.i.f. Bombay. The consignment arrived from Mombasa, Kenya on 23.12. 198 1. The goods were cleared on payment of customs duty of 516 Rs.32, 15,904.21 from Bombay. The appellant on distribution of the goods to various members of the federation, received complaints that the soda ash which had been supplied was of sub standard quality. 'The sellers M/s. Crescent Dyes & Chemicals as well as their agents were approached. They sent a team of experts to examine the goods. The inspection confirmed that the goods were defective. As per agreement dated 9.2. 1982, M/s. Crescent Dyes & Chemical sent a Credit note of US $ 2,40,000 as compensation on account of the defective goods sent by M/s. Magadi Soda Company Ltd. The amount remitted on account of the import made was only US $ 5,35,000 as against the earlier contracted amount of US $ 7,75,000. In view of such reduction, the appellant filed a refund application before the Customs Department to the tune of Rs.9.95,892.65. The Assistant Collector was not satisfied as to the extent of deterioration of the goods before clearance as provided by Section 22 of the and rejected the refund application vide order dated 19.7.1982. The appeal preferred against the order dated 19.7.1982 was rejected by the Collector of Customs on 23.12. 1982 on the reasoning that the damage was discovered after the goods were out of customs control. The further appeal to the Tribunal was also unsuccessful. The Tribunal by the order dated 26.10. 1989 held that the alleged inferior nature of goods was discovered after clearance. This appeal is filed under Section 130E of the against the order of the Tribunal dated 26.10. The question involved in the present appeal is whether the appellant is entitled to the refund of customs duty on account of the compensation given by the seller to the appellant on supply of goods?The appellant who imported the goods detected defects and the foreign supplier accepted the defects and damages and agreed for payment of compensation. According to the appellant, goods supplied were not in accordance with the contractual specification. The defects 'being inherent in nature resulted in diminution in the real value of the goods and what had been agreed upon by the foreign seller is reduction in price on account of these defects. The appellant claimed that it would be entitled to refund of customs duty under Section 22 of the Act for reasons set out thus. The value to be assessed under Section 14 of the Act is the real price at which goods imported are ordinarily sold at the time and place of importation and not the price erroneously indicated 517 by the seller at the time of filling the bill of entry. The buyer who successfully sets up diminution of price on ac count of breach of warranty, which claim is accepted by the seller, can seek refund or adjustment in the customs duty payable where the duty has been paid erroneously on the full price prior to such diminution. The claim under Section 22 of the Act would be maintainable where imported goods were defective and had deteriorated in quality even prior to the import when the assessment has to be on the basis of the real value of goods. The contract dated 30.9.1981 is for the supply of 5000 metric tonnes of soda ash dense. The complaint was that the sodium carbonate content was less than the specified 97%, that there was moisture in the soda ash dense supplied and hence it had turned lumpy. M/s. Crescent Dyes & Chemicals Ltd. was the agent of the seller M/s. Magadi Soda Company Ltd. The consignment. arrived in Bombay sometime in Decem ber, 1981. The appellants filed their bill of entry with the customs and the goods were cleared on payment of customs duty of Rs.32,15,904.21, on 28.12. the complaint about damage and deterioration was made long after clearance. The team of experts examined the goods and confirmed the de fects. The customs authorities were not associated with such inspection. It is maintained by the appellant that the credit received was recorded in the letter dated 15.3. 1982 and the letter indicated that the amount remitted on account of the import made was only US $ 5,35,000. The reduction in the amount remitted was to the extent of US $ 2,40,000. The appellant claimed that on account of the reduction in the value of the consignment, the appellant is entitled to refund of customs duty proportionately. The Collector of Customs pointed out that: "The duty is leviable on the basis of the value of the such or like goods at the time of clearance. It has not been proved that the alleged defect on account of which the price has been reduced was present in the goods at the time 01 clearance. At least some of the defects of the type pointed out, viz., the lumpy character, are such as could develop due to exposure to moisture etc. during the period the goods were out of customs. In any case, the customs were not associated even with the post clearance examination. Any alleged reduc tion in value on the basis of a postclearance agreement between the buyer and the supplier or 518 some alleged grounds which the customs had no chance to verify ' prior to clearance is fraught with great risks to Revenue. (emphasis supplied) According to the appellant, this reasoning is wrong. The appellant stated that most of the defects were due to non adherence to specification provided under the contract. The defects being inherent in character, the appellant could not have known about the same at the time of clearance of the consignment from customs. The ground of deterioration of goods was not relevant as the claim for refund was based on the ground of diminution in value of the goods as the same were not as per the standard contracted for. The assessable value of the goods under Section 14 of the Act is the price at which such goods were actually sold in the course of international trade. It is the real price of the goods actually imported which is ordinarily the basis for assessa ble value. Where goods do not conform to the description or stipulation as to quality or fitness, it is open to the buyer to treat the defect as a breach of warranty. It is also open to the buyer to set up against the seller the breach of warranty in diminution of the price. It is the diminished price which will be the real price of the goods and not the price claimed by the buyer initially which is reflected as c.i.f. value on the invoice. Customs duty paid on the c.i.f. value is a duty paid under mistake of fact. At the time of clearance of goods, the buyer did not have any knowledge of the defects in the goods. Where defect which constitutes a breach of warranty and which the buyer elects to treat as a breach of warranty became apparent and ulti mately culminated in diminution of price, it would be open to the buyer to claim refund of the customs duty paid under mistake of fact. It is not relevant as to when the defect became apparent to the buyer. The fact that the documents proving the true and real value of the goods were not in existence at the time when the goods were cleared from the customes is wholly irrelevant This in short, is the argu ment advanced on behalf of the appellant. Duties of customs shall be levied under Section 12 at such rate as may be specified under the Customs Tariff Act or any other law for the time being in force on goods im ported into or exported from India. Section 14 of the Cus toms Act provides that value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade. Such price shall be calculated with reference to the rate of exchange as in force on the date on which 519 a bill of entry is presented under Section 46. The duty is ordinarily chargeable with reference to the tariff value in the case of goods entered for home consumption on the date on which the bill of entry in respect of such goods is presented. Section 22 provides for payment of duty on damaged or deteriorated goods. It reads thus: "22. Abatement of duty on damaged or deterio rated goods. (1) Where it is shown to the satisfaction of the Assistant Collector of Customs (a) that any imported goods had been damaged or had deteriorated at any time before or during the unloading of the goods in India; or (b) that any imported goods, other than ware housed goods, had been damaged at any time after the unloading thereof in India but before their examination under Section 17, on account of any accident not due to any wilful act, negligence or default of the importer, his employee or agent; or (c) that any warehoused goods had been damaged at any time before clearance for home consump tion on account of any accident not due to any wilful act, negligence or default of the owner, his employee or agent; such goods shall be chargeable to duty in accordance with the provisions of sub section (2). (2) The duty to be charged on the goods re ferred to in sub section (1) shall bear the same proportion to the duty chargeable on the goods before the damage or deterioration which the value of the damaged or deteriorated goods bears to the value of the goods before the damage or deterioration. " Where it is shown to the satisfaction of the Assistant Collector that any imported goods have been lost or de stroyed at any time before clearance for home consumption. the Assistant Collector of 520 Customs shall remit the duty on such goods. The period of six months has been prescribed under Section 27 to claim refund of duty paid with protest. Refund is allowed when the Assistant Collector of Customs is satisfied that the whole or any part of the duty paid should be refunded. No claim for refund of any duty shall be entertained except in ac cordance with the provisions of Section 27. Chapter VII of the deals with the clearance of imported goods. The imported goods unloaded in a customs area remain in the custody of the approved person until they are cleared for home consumption. Without permission in writing of the appropriate officer, such goods are not removed or otherwise dealt with. The importer shall give a declaration as to the truth of the contents of the bill of entry supported by the invoice. The order permitting clear ance of the goods for home consumption is made on payment of the import duty, if any, assessed. Thus, under the scheme of the Act, the importer is entitled to clear the goods on payment of duty assessed and such assessment is to be made with reference to the tariff value of the goods where tariff values are fixed. In other cases, the price at which the goods are ordinarily sold for delivery at the time and place of importation represents the tariff value for the purpose of the assessment. When the value is assessed on the basis of the invoice and the goods are cleared, the implication is that no remission is allowed and no abatement has been occasioned. There is no express provision which enables the proper officer to make a re assessment for the purpose of remission on the ground that the goods at the time of their importation or at the time of the clearance was sub standard or damaged and the invoice price does not represent the real value. Even if it is assumed that in view of the provisions contained in Section 28(a) enabling the proper office to determine the amount of duty due in cases where duty has not been levied or has been short levied or erroneously refunded after issuing show cause notice, there is a corresponding right on the importer to claim refund of the excess duty levied, it is necessary for the importer to prove to the satisfaction of the proper officer that the goods at the time of the clearance was chargeable to a lesser or lower duty for anyone of the reasons contained in Section 22 which alone provides for abatement of duty. Any error in the assessment of the value by itself does not enable the importer to claim re assess ment or refund. It has necessarily to be shown that on account of the damaged or deteriorated condition of the imported goods before or during the unloading the goods in India, the duty to be charged on the goods was propor 521 tionate to the value of the damaged or deteriorated goods. The question of redetermining the value of the imported goods can arise only in a case where such damage or deterio ration before the clearance is proved to the Satisfaction of the proper officer. When there had been no indication of any such condition and the duty has been assessed on the basis of the invoice value and duty is paid, the assessment would be binding. The importer on finding the goods cleared and distributed not to his entire satisfaction may have a claim in contract against the seller for providing sub standard, damaged or deteriorated goods for the value in the invoice, and it may be open to the buyer to realize from the seller such damages as he would in law be entitled to. That claim for damages cannot have any bearing to the assessment at the time of the clearance. The price at which the goods had been sold is represented by the invoice price and whatever amount is realized on subsequent agreement is only by way of com pensation as damages. It cannot be said that the damages thus received represents the difference in price that had been paid and that ought to have been paid. When the seller had agreed to compensate the buyer for the quality of the goods imported, the buyer does not get the right to claim abatement of duty on the assumption that the real price was some thing less than what has been indicated in the invoice. Learned counsel for the appellant referred para 574 at page 12 1, Vol. Halsbury 's Laws of England: "574. Goods not in accordance with contract. Where it is shown to the satisfaction of the Commissioners of Customs and Excise that goods were imported in pursuance of a contract of sale and that their description, quality, state or condition was not in accordance with the contract, or that they were damaged in transit, and also that the importer, with the consent of the seller, either returned the goods to him or destroyed them unused, the importer is entitled to obtain from the Com missioners repayment of any customs duty paid on their importation. The foregoing, however, does not apply to the goods imported on ap proval, or on sale or return, or on other similar terms. " It deals with the returning of goods or destroying the goods unused without acceptance and not where the goods have been accepted and used and the importer had been compensated for the reduction in 522 standard. The learned counsel also referred to the decision in Biggin & Co. Ltd. vs Premanite, LD., Berry Wiggins & Co. LD. ; Cehave NV vs Bremer, ; Ford Motor Company of India vs Secretary of State for India, [1937] 381 L.R. 65 I.A. 32 and vacuum Oil Co. vs Secretary of State for India, [1932] L.R. 59 I.A.258. On the basis of these decisions, the learned counsel for the appellant contended that when the seller has allowed the reduction, the real price of the goods is that which has been accepted by the seller and that the assessment made on a higher value on the basis of the invoice price is in excess and such excess is refundable to the appellant. It is not necessary to elaborate on the principle stated in the decisions on the facts of the present case. It is admitted case of the appellants that the alleged inferior nature of goods was discovered by the appellant after clearance. Until the refund application was made, no requisition appears to have been made to the customs author ities to have the value of the goods determined for the purpose of Section 22. The correspondence between the appel lants and the sellers ,red their agents could only reveal that the appellant put forward a claim for compensation on the ground that the goods imported had become lumpy and was also of inferior standard. Ultimately the sellers agreed to reimburse the appellants and pay compensation to the tune of US $ 2,40,000. What appellants have received from the sell ers is compensation for the damage for breach of warranty. It does not appear that the value was reduced or amount remitted by the appellant was the reduced value of tire goods. The amount was the total compensation extended by the sellers to the appellants. From that fact of payment of compensation or reimbursement by the sellers it cannot be taken that at the time and place of importation the goods imported was worth only the amount stated in the invoice less the compensation paid. In other words, there is no proof that the real value of the goods at the time and place of importation was less than that what had been entered in the invoice and stated in the Bill of Entry. So long as examination of the goods had not been made or its value re assessed to the satisfaction of the assessing authorities, it cannot be said that duty was charged not on the real value of the goods but on a higher amount. The contention that the inherent defect in the supply of goods resulted in the diminution of the value of the goods cannot be counte nanced when it is conceded that what had been paid by the seller is only compensation for the breach of war 523 ranty. Furthermore, there is no material on record to show that even by the team of experts there had been a re assess ment of the value of the goods. What had been estimated is only quantum of damages sustained by the buyers and to that extent they had been compensated. That arrangement between the buyer and the seller cannot be linked with the assess ment of duty and no claim for abatement of duty under the provisions of Section 22 or a claim for refund under Section 27 could be legitimately entertained. For the reasons given above, the appeal must fail. The appeal is dismissed with no order as to costs. V.P.R. Appeal dismissed.

The appellant Federation entered into a contract with a Soda Company of Kenya, for supply of 5000 metric tonnes of soda ash dense and the consignment arrived at Bombay on 23.12.1981. The goods were cleared on payment of customs duty of Rs.32,15,904.21. The appellant on distribution of the goods to various members of the Federation, received complaints that the soda ash which had been supplied was of sub standard quality. When the sellers as well as their agents were approached, they sent a team of experts to examine the goods and on inspection the goods were found defective. As per agreement dated 9.2.1982, the sellers sent a credit note of US $ 2,40,000 as compensation on account of the defective goods. The amount remitted on account of the import made was only US $ 5,35,000 as against the earlier contracted amount of US $ 7,75,000. In view of such reduction, the appellant filed a refund application before the Customs Department to the tune of Rs.9.95,892 65. The Assistant Collector rejected the refund application as he was not satisfied to the extent of deterioration of the goods before clearance as provided by Section 22 of the . The appeal preferred was rejected by the Collector of Customs on the reasoning that the damage wad discovered after the goods were out of customs control. The further appeal to the Tribunal was rejected hold ing that the alleged inferior nature of goods was discovered after clearance. 514 Under Section 130E of the , present appeal was made to this Court, contending that the goods supplied were not in accordance with the contractual speci fication, the defects being inherent in nature resulted in diminution in the real value of the goods and what had been agreed upon by the foreign seller was reduction in price on account of the defects, and claimed that it would be enti tled to refund of customs duty under Section 22 of the Act. On the question, whether the appellant was entitled to the refund of customs duty on account of the compensation given by the seller to the appellant on supply of goods, dismissing the appeal, this Court, HELD: 1.01. When the value is assessed on the basis of the invoice and the goods are cleared, the implication is that no remission is allowed and no abatement has been occasioned. There is no express provision which enables the proper officer to make a re assessment for the purpose of remission on the ground that the goods at the time of their importation or at the time of the clearance was sub standard or damaged and the invoice price does not represent the real value. [520E F] 1.02. Any error in the assessment of the value by itself does not enable the importer to claim re assessment or refund. It has necessarily to be shown that on account of the damaged or deteriorated condition of the imported goods before or during the unloading of the goods in India, the duty to be charged on the goods was proportionate to the value of the damaged or deteriorated goods. [520G 521A] 1.03. The question of redetermining the value of the imported goods can arise only in a case where such damage or deterioration before the clearance is proved to the satis faction of the proper officer. When there had been no indi cation of any such condition and the duty has been assessed on the basis of the invoice value and duty is paid, the assessment would be binding. The importer on finding the goods cleared and distributed not to his entire satisfaction may have a claim in contract against the seller for provid ing sub standard, damaged or deteriorated goods for the value in the invoice, and it may be open to the buyer to realize from the seller such damages as he would in law be entitled to. That claim for damages cannot have any bearing to the assessment at the time of the clearance. The price at which the goods has been sold is represented by the invoice price and whatever amount is realized on subsequent agree ment is only by way of compensation as damages. It cannot be said that the damages thus received represents the differ ence in price that had been paid and that ought to have been 515 paid. When the seller had agreed to compensate the buyer for the quality of the goods imported, the buyer does not get the right to claim abatement of duty on the assumption that the real price was something less than what has been indi cated in the invoice. [521A D] 1.04. There is no material on record to show that there had been a re assessment of the value of the goods. What had been estimated is only quantum of damages sustained by the buyers and to that extent they had been compensated. That arrangement between the buyer and the seller cannot be linked with the assessment of duty and no claim for abate ment of duty under the provisions of Section 22 or a claim for refund under Section 27 could be legitimately enter tained. [523A B] Biggin & Co. Ltd. vs Premanite, LD., Berry Wiggins & L.D., ; Cehave NV vs Bremer, ; Ford Motor Company of India vs Secretary ' of State for India, [1937 8] L.R. 659. A. 32 and Vaccum Oil Co. vs Secretary of State for India, [1932] L.R. 59, IA 258, referred to. Halsbury 's Laws of England, para 574 at page 121, Vol. 12; referred to.

minal Appeal No. 827 of 1981. From the Judgment and Order dated 22.7.81 of the Allahabad High Court in Government Appeal No. 1861 of 1975. P.K. Dey, Rakesh Goswami and Ms. Rani Jethmalani (N.P.) for the Appellant. R.C. Verma for the Respondent. The Judgment of the Court was delivered by N.P. SINGH, J. The appellant was acquitted of the charges under sections 302 and 307 read with section 34 of the Penal Code by the Trial Court. On appeal being filed on behalf of the State of Uttar Pradesh he has been convicted under section 302 of the Penal Code by the High Court and sentenced to undergo rigorous imprisonment for life. It is the case of the prosecution that on 25.2.1974 at about 6.00 P.M. Chandrapal (PW 2) along with Jagdish (hereinafter referred to as "the deceased") were returning after answering the call of nature. It is said that at that time this appellant along with co accussed Ramesh came from the side of the village; seeing Chandrapal (PW 2) and the deceased, the appellant and Ramesh rushed towards them with knives. After some chase the appellant gave a knife blow on the chest of the victim. The co accused Ramesh gave a knife blow to Chandrapal (PW 2). Thereafter the appellant and Ramesh fled away. The victim while being taken to Debai, died on the way, Chandrapal (PW 2) lodged the first information report at the Police Station Debai at about 11.30 P.M. the same night. 75 The motive of the occurrence, according to the prosecution, is that about 10 or 12 days before the date of the aforesaid occurrence, there was some altercation between Chandrapal (PW 2) and the deceased on the one side and this appellant on the other, in which the appellant is said to have abused them. Chandrapal (P.W 2) and the deceased had given two/three slaps to the appellant. The defence of the appellant was that the prosecution has suppressed the real manner of occurrence. According to the appellant,. for last two days prior to the date of occurrence the crop of his grand father Sohan Lal was being damaged. Because of that he was keeping a watch on the said field. During night Chandrapal (PW 2) and the deceased came to the field. The appellant raised an alarm chor chor. Thereafter Chandrapal (PW 2) and the deceased started running. The appellant chased them to catch them. But soon they turned back and started assaulting the appellant with lathies. To save his life the appellant attacked with a 'ballam ' (spear). The injuries on the person of the appellant were examined the next morning. He also filed an application before the Superintendent of Police, giving his version of the occurrence in which he admitted that when he was being assaulted by Chandrapal (PW 2) and the deceased, he bad used a ballam. A case was registered by the Police at about 10.25 A.M. on 26.2.1974, on the basis of the petition filed on behalf of the appellant. The injuries on the person of the appellant were examined by Dr. R.P. Rastogi at the District Hospital, Bullandshahar, on 26.2.1974. He found the following injuries on his person: "(1) Faint contusion 2 cm x 1/2 cm back of left shoulder upper part. (2) Faint contusion 10 cm x 2 cm on outer side left back at the lower angle of scapula. (3) Faint contusion 4 1/2 cm x 1 cm on back of upper part 1/3rd left forearm. (4) Faint contusion 12 cm x 1 cm on the back and inner aspect left forearm upper 1/3rd. " During the post mortem examination of the deceased which was also held on 26.2.1974, the following injury was found on his person: 76 "Stab wound 1" x 1/2" x 1.3/4". On probing, on left side front of chest, 2.1/2" inner to left nipple at 10 O ' clock position pointing the onwards and downwards. " The Doctor (PW 1), who held the post mortem examination, ad mitted that the aforesaid injury could be caused by ballam. So far Chandrapal (PW 2) is concerned, the Doctor noted the following injury on 26.2.1974: "Abrasion 1 1/2 x 1/3" on the left side front of chest, horizontally with shallow edge, medically, 7" below ancillary pit. The wound was not bleeding afresh, but had got clotted blood over it. " The Doctor in Court stated that possibility of self infliction of that injury could not be ruled out. According to the State, even if the version disclosed by the appellant is accepted, it will amount to a case of free fight between the prosecution party and the accused, both being armed and when there is a free fight there is no question of right of private defence accruing to any side. A free fight is that when both sides mean to fight a pitched battle. The question of who attacks and who defends in such a fight is wholly immaterial and depends on the tactics adopted by the rival party. In such cases of mutual fights, both sides can be convicted for their individual acts. This position has been settled by this Court in the cases of Gajanand vs State of Uttar Pradesh, AIR 1954 SC 695; Kanbi Nanji Virji vs State of Gujarat AIR 1970 SC 219; Puran vs State of Rajasthan, AIR 1976 SC 912 and Vishvas Aba Kurane vs State of Maharashtra, AIR 1978 SC 414. As such once it is established by the prosecution that the occurrence in question is result of a free fight then normally no right of private defence is available to either party and they will be guilty of their respective acts. But so far the facts of the present case are concerned, if the version disclosed by the accused can be held to be a probable version of the occurrence then it cannot be held to be a case of free fight. According to the appellant, the crops of the field of his grand father were being damaged for last two days prior to the date of the occurrence; because of that appellant claims that he was watching the said field. During the night the 77 deceased and Chandrapal (PW 2) came to the same field and the appellant chased them. But soon they turned back and started assaulting the appellant with lathies. At this stage the appellant wielded his ballam (spear) which caused an injury to the deceased which ultimately proved fatal. It is an admitted position that the appellant filed a petition before the Superintendent of Police giving his version of the occurrence in the morning of 'basis of that a case was registered at about 10.25 A.M. on 26.2.1974, the occurrence having taken place during the night of 25.2.1974. This fact has been admitted by Shri Manohar Singh (PW 6) who has proved the first information report lodged on behalf of the prosecution. On the examination, Dr. R.P. Rastogi (PW 3) of the District Hospital, Bullandshahar, did find four injuries including one on the scapula of the appellant. It is true that injuries were simple in nature. But even on the deceased only one injury 1" x 1/2 1.3/4" was found on the left side front of the chest, which according to the Doctor who held the post mortem examination, could have been caused by a weapon like ballam (spear). In the statement under section 313 of the Code of Criminal Procedure (hereinafter referred to as "the Code") given by the appellant, it was stated by the appellant in detail as to how the standing crops on the land of his grand father were being damaged and on the night of the occurrence he was guarding the field when he saw the deceased and Chandrapal (PW 2) destroying the crops in the field. He also stated that he shouted chor chor and then chased them to catch them. But soon they turned round and started giving lathies blows and in self defence the appellant used a ballam. It appears that all this happened in the aforesaid field which the apppellant was guarding. From time to time this Court has pointed out that merely because some injuries are found on the accused, which have not been explained by the prosecution, by itself shall not be a ground for rejecting the whole prosecution case. It will depend on facts of each case what inference should be drawn by the Court. In the case of The State of Gujarat vs Bai Fatima; , , it was said that when the prosecution fails to explain the injuries on the person of an accused, depending on the facts of each case, any of the three results may follow : "(1) That the accused had inflicted the injuries on the members of the prosecution party in exercise of the right of self defence. 78 (2) It makes the prosecution version of the occurrence doubtful and the charge against the accused cannot be held to have been proved beyond reasonable doubt. (3) It does not affect the prosecution case at all. " The aforesaid three inferences drawn on basis of the nature of injuries were reiterated in the case of Lakshmi Singh vs State of Bihar, AIR 1976 SC 2263, and it was further observed: "It seems to us that in a murder case, the non explanation of the injuries sustained by the accused at about the time of the occurrence or in the course of altercation is a very important circumstance from which the Court can draw the following inferences: (1) that the prosecution has suppressed the genesis and the origin of the occurrence and has thus not presented the true version: (2) that the witnesses who have denied the presence of the injuries on the person of the accused are lying on a most material point and therefore their evidence is unreliable; (3) that in case there is a defence version which explains the injuries on the person of the accused it is rendered probable so as to throw doubt on the prosecution case. The omission on the part of the prosecution to explain the injuries on the person of the accused assumes much greater importance where the evidence consists of interested or inimical witnesses or where the defence gives a version which competes in probability with that of the prosecution one. " A three Judge Bench in yet another case of Bliaba Nanda Sarma vs The State of Assam, ; , said: "The prosecution is not obliged to explain the injuries on the person of an accused in all cases and in all circumstances. This is not the law. It all depends upon the facts and 79 circumstances of each case whether the prosecution case becomes reasonably doubtful for its failure to explain the injuries on the accused. " In the case of Hare Krishna Singh vs State of Bihar, ; , it was said: "If the witnesses examined on behalf of the prosecution are believed by the Court in proof of the guilt of the accused beyond any reasonable doubt, the question of the obligation of the prosecution to explain the injuries sustained by the accused will not arise. When the prosecution comes with a definite case that the offence has been committed by the accused and proves its case beyond any reasonable doubt, it becomes hardly necessary for the prosecution to again explain how and in what circumstances injuries have been inflicted on the person of the accused. " But in the case of State of Rajasthan vs Madho, AIR 1991 SC 1065, it was held: "If the prosecution witnesses shy away from the reality and do not explain the injuries caused to the respondents herein it casts a doubt on the genesis of the prosecution case since the evidence shows that these injuries were sustained in the course of the same incident. It gives the impression that the witnesses are suppressing some part of the incident. The High Court was, therefore, of the opinion that having regard to the fact that they have failed to explain the injuries sustained by the two respondents in the course of the same transaction, the respondents were entitled to the benefit of the doubt." As first impression there appears to be some conflict in the views expressed in the different judgments of this Court referred to above. But on proper reading with reference to the facts of each case, there is no basic difference and according to us this Court rightly in the case of The State of Gujarat vs Bai Fatima (supra) put in three categories the result which may follow from the facts of each case. It is well known that guilt of the 80 accused is to be judged on the basis of the facts and circumstances of the particular case. In any particular case the injuries found on the person of the accused being serious in nature may assume importance in respect of the genesis and manner of occurrence alleged by the prosecution. In other case the injuries being superficial, by themselves may not affect the prosecution case; the version disclosed by the prosecution having been proved by witnesses who are independent, reliable and trustworthy, supported by the circumstances of that particular case, including the prompt ness with which the first information report was lodged on behalf of the prosecution. But if the first information report has not been lodged promptly and there is no reasonable explanation for the delay; the witnesses who support the version of the prosecution are not only inimical but even their evidence is not consistent with the circumstances found during the course of investigation, then in that situation, injuries on the person of the accused which are not very serious in nature assume importance for the purpose of consideration as to whether the defence of the right of private defence pleaded by the accused should be accepted. It is well known that accused pleading the right of private defence need not prove it beyond reasonable doubt. It is enough if on the basis of the circumstances of a particular case, applying the test of preponderance or probabilities the version becomes acceptable. There are not two parallel versions before the Court, one on behalf of the prosecution and other on behalf of the accused and the Court is required to choose as to which of the two versions is the correct version of the occurrence. The burden placed on the accused is discharged no sooner he creates a doubt in the mind of the Court and satisfies the Court that the version disclosed by him in the facts and circumstances of that particular case is more probable. The onus of the accused under section 105 of the Evidence Act has been examined by this Court in the cases of Partap vs The State of U.P., ; ; Mohan Singh vs State of Punjab, AIR 1975 SC 2161; Seriyal Udayar vs State of Tamil Nadu, AIR 1987 SC 1289; Vijayee Singh vs State of U.P., ; and Buta Singh vs State of Punjab, So far the present case is concerned the injuries found on the person of the appellant are not serious in nature and merely on the ground that prosecution has suppressed those injuries, the appellant is not entitled to the acquittal. But those injuries can certainly be taken into consideration 81 while judging whether the defence version of the accused is probable. The motive disclosed on behalf of the prosecution for the occurrence is not acceptable. Even if it is assumed that because of some altercation 10/12 days before the date of occurrence, the appellant had decided to cause the murder of Jagdish then more injuries would have been caused on the person of the victim by the appellant instead of an injury 1" x 1/2 x 1 3/4". The prosecution case regarding assault by Ramesh with a knife on Chandrapal (PW 2) has been disbelieved by the Trial Court as well as the High Court. The delay in lodging the first information report by Chandrapal (PW 2) has not at all been explained. The occurrence according to prosecution took place at 6.00 P.M. in the evening. The victim while being taken to Debai which is at a distance of five kilometers expired on the way. Then why first information report was lodged at 11.30 P.M., there is no explanation. On the other hand the appellant 's case is that the occurrence did not take place at 6.00 P.M. in the evening but at later part in the night. That appears to be more probable. The appellant appeared before the Superintendent of Police, the next morning and disclosed his version of the occurrence on basis of which a case was registered. His injuries were also examined only the next morning. He also took a firm stand during his statement under section 313 that he give a ballam blow when the deceased and Chandrapal (PW 2) started assaulting him with lathies. Out of the four injuries one was on the scapula,. The doctor has not opined that they were manufactured or self inflicted. Those injuries, according to the doctor, had been caused by a blunt weapon which is consistent with the defence version of the occurrence. The injury found on the chest of the deceased is inconsistent with the prosecution case that appellant chased the deceased and then gave a blow by knife. But it is consistent with the defence version that soon the deceased and Chandrapal (PW 2) returned and started assaulting the appellant when the appellant gave a ballam blow in the chest of the deceased. If the appellant had given the ballam blow while chasing the deceased, in that event it would have caused injury on the back of the deceased. The High Court has not disbelieved 'the version disclosed by the appellant. The High Court on consideration of the evidence and the circumstances of the case has observed: "It is true that this respondent gave a different time of the occurrence and his version of the occurrence was also 82 different and it has been disbelieved by the learned Sessions Judge, obviously on cogent grounds. But this cannot wash out the effect of his clear stand all through that there was a marpit between him and the informant and the deceased in which he had wielded a spear on them. This part of this respondent 's version was clearly severable from the rest of his version and it was not at all necessary that if the learned Sessions Judge disbelieved his version regarding the manner of the occurrence, he was bound to rule out of consideration this admission of the respondent which was clearly separate and severable from the rest of his story. " The High Court has used a part of the statement of the appellant as an admission. According to us, that part of the statement made by the accused under section 313 of the Code cannot be used as an admission, supporting the prosecution case. It is well known that an admission has to be taken as a whole. It was not open to the High Court to reject one part so far the aggression and assault by the prosecution party which according to the appellant preceded giving of the ballam blow, and to accept only the later part of the statement that appellant gave a ballam blow, for the purpose of convicting the appellant. In the case of Hanumant Govind Nargunadkar vs State of Madhya Pradesh, AIR 1952 SC 343. it was said: "It is settled law that an admission made by a person whether amounting to a confession or not cannot be split up and part of it used against him. An admission must be used either as a whole or not at all. " The High Court should have taken the whole statement made by the appellant as an admission and then should have examined what shall be the effect thereof on the prosecution case. According to us, taking all facts and circumstances into consideration the version of the accused of the occurrence appears to be probable and acceptable. The next question is as to whether in the circumstances of the case appellant could have caused the death of Jagdish. While accepting the plea of right of private defence it has been said that if the right is available, while judging the question whether the accused has exceeded such right, should not be weighed in a golden scale. But the right of private defence 83 does not extend to infliction of more harm than is necessary for the purpose of defence. When the appellant caused the injury with a ballam (spear) in the chest of the victim which resulted in his death, certainly he exceeded his right of private defence. Accordingly, the conviction of the appellant under section 302 of the Penal Code is set aside. But the appellant is convicted under section 304, Part 1, and sentenced to rigorous imprisonment for seven years which according to us shall meet the ends of justice. The appeal is allowed in part to the extent indicated above. V.P.R. Appeal allowed partly.

The prosecution 's case was that on the date of occurrence, the pw.2 and the deceased were returning after answering the call of nature at about 6 P.M. At that time the appellant along with co accused came there. Seeing the p.w.2 and the deceased the accused came rushed towards them with knives. Appellant chased the deceased and gave a knife blow on his chest. The P.W.2 received a knife blow from the co accused. Thereafter the accused fled away. The victim died on the way while he was being taken to Debai. The P.W. 2. lodged the first information report on the same night at about 11.30 P.M. The motive for the occurrence was that about 10 or 12 days before the date of occurrence, the appellant abused the P.W.2 and the deceased. They gave two/three slaps to the appellant The appellant accused 's case was that for last two days prior to the date of occurrence the crop of his grand father was being damaged. Therefore, he was keeping a watch on the field. During night the P.W.2 and the deceased came to the field. Seeing them, the appellant raised an alarm Chor Chor. They started running. The appellant chased them to catch 71 them. But they turned back and started assaulting the appellant with lathies. The appellant attacked them with a 'ballam ' to save his life. The injuries on the person of the appellant were examined, in the next morning. He filed an application before the Superintendent of Police and a case was registered at about 10.25 A.M. on the next day of the date of occurrence on the basis of appellant 's petition. The trial Court acquitted the appellant of the charges under sections 302 and 307 read with section 34 of the penal Code. The State 's appeal was allowed by the High Court and the present appellant was convicted under section 302 of the Penal Code and was sentenced to undergo rigorous imprisonment for life. Present appeal was filed by the accused against the High Court 's judgment. The State contended that if the version of appellant was accepted, it would amount to a case of free fight between the prosecution party and the accused, both being armed and that in a case of free right no party could claim right of private defence. Partly allowing the appeal, this court, HELD: 1.01. A free right is that when both sides mean to right a pitched battle. The question of who attacks and who defends in such a fight is wholly immaterial and depends on the tactics adopted by the rival party. In such cases of mutual rights, both sides can be convicted for their individual acts, [76E] 1.02. So far the facts of the present case are concerned, if the version disclosed by the accused can be held to be a probable version of the occurrence then it cannot be held to be a case of free fight. [76G] 1.03. In any particular case the injuries found on the person of the accused being serious in nature may assume importance in respect of the genesis and manner of occurrence alleged by the prosecution. In other case the injuries being superficial, by themselves may not affect the prosecution case; the version disclosed by the prosecution having been proved by witnesses who are independent, reliable and trustworthy, supported by the circumstances of that particular case, including the promptness with 72 which the first information report was lodged on behalf of the prosecution. But if the first information report has not been lodged promptly and there is no reasonable explanation for the delay , the witnesses who support the version of the prosecution are not only inimical but even their evidence is not consistent with the circumstances found during the course of investigation, then in that situation, injuries on the person of the accused which are not very serious in nature assume importance for the purpose of consideration as to whether the defence of the right of private defence pleaded by the accused should be accepted. [80B D] 1.04. So far the present case is concerned the injuries found on the person of the appellant are not serious in nature and merely on the ground that prosecution has suppressed those injuries, the appellant is not entitled to the acquittal. But those injuries can certainly be taken into consideration while judging whether the defence version of the accused is probable. [80H] 1.05. The motive disclosed on behalf of the prosecution for the occurrence is not acceptable. Even if it is assumed that because of some altercation 10/12 days before the date of occurrence, the appellant had decided to cause the murder of the deceased, then more injuries would have been caused on the person of the victim by the appellant. [81B] 1.06. The delay in lodging the first information report by PW 2 has not at all been explained. The occurrence according to prosecution took place at 6.00 P.M. in the evening. The victim while being taken to Debai which is at a distance of five kilometers expired on the way. Then why first information report was lodged at 11.30 P.M., there is no explanation. On the other hand the appellant 's case is that the occurrence did not take place at 6.00 P.M. in the evening but at later part in the night. That appears to be more probable. [81C] 1.07. The injury found on the chest of the deceased is inconsistent with the prosecution case that appellant chased the deceased and then gave a blow by knife. But it is consistent with the defence version that soon the deceased and PW.2 returned and started assaulting the appellant when the appellant gave a ballam blow in the chest of the deceased. If the appellant had given the ballam blow while chasing the deceased, in that event it would have caused injury on the back of the deceased. [81F] 73 1.08. Taking all facts and circumstances into consideration the version of the accused of the occurrence appears to be probable and acceptable. [82G] Gajanandv. State of Uttar Pradesh, AIR1954SC 695;Kanbi Nanji Virji vs State of Gujarat AIR 1970 SC 219; Puran vs State of Rajasthan, AIR 1976 SC 912; Vishvas Aba Kurane vs State of Maharashtra, AIR 1978 SC 414; The State of Gujarat vs Bai Fatima, ; ; Lakshman Singh vs State of Bihar, AIR 1976 SC 2263; Bhaba Nanda Sarma vs The State of Assam, ; ; Hare Krishna Singh vs State of Bihar, ; and State of Rajasthan vs Madho, AIR 1991 SC 1065, referred to. [76F] 2.01. Once it is established by the prosecution that the occurrence in question is result of a free fight then normally no right of private defence is available to either party and they will be guilty of their respective acts. [76G] 2.02. Accused pleading the right of private defence need not prove it beyond reasonable doubt. It is enough if on the basis of the circumstances of a particular case, applying the test of preponderance or probabilities the version becomes acceptable. [80E] 2.03. There are no two parallel versions before the Court, one on behalf of the prosecution and other on behalf of the accused and the Court is required to choose as to which of the two versions is the correct version of the occurrence. The burden placed on the accused is discharged no sooner he creates a doubt in the mind of the Court and satisfies the Court that the version disclosed by him in the facts and circumstances of that particular case is more probable. [80E F] 2.04. If the right of private defence is available. While judging the question whether the accused has exceeded such right, should not be weighed in a golden scale. But the right of private defence does not extend to the infliction of more harm than is necessary for the purpose of defence. When the appellant caused the injury with a ballani (spear) in the chest of the victim which resulted in his death, certainly he exceeded his right of private defence. [82H, 83A] Partap vs )le State of U.P., ; Mohan Singh vs State of Punjab, AIR 1975 SC 2161; Seniyal Udayar vs State of Tamil Nadu, AIR 1987 SC 1289; Vijayee Singh vs State of U.P.; , and Buta 74 Singh vs State of Punjab, , referred to. [80G] 3. An admission has to be taken as a whole. It was not open to the High Court to reject one part so far the aggression and assault by the prosecution party which according to the appellant preceded giving of the ballam blow, and to accept only the later part of the statement that appellant gave a ballam blow, for the purpose of convicting the appellant [82D]. Hanumant Govind Nargundkar vs State of Madhya Pradesh, AIR 1952 SC 343, referred to.

ivil Appeal Nos. 1639 40 of 1987. From the Judgment and order dated 20.12.1984 of the Madras High Court in W.P. No. 349 of 1979. A.K. Sen and A.V. Rangam for the Appellants. section Rangarajan, Ms. Asha Rani, Sanjay Parikh and Sanjiv Madan for the Respondents. The Judgment of the Court was delivered by SEN, J. These appeals by special leave are directed against a judgment of a Division Bench of the Madras High Court dated December 20, 1984 reversing the judgment and order of a learned Single Judge dated March 27, 1979 and allowing the writ petition filed by respondent No. 1 herein Thiru Chaturvedi Badrinath, a senior member of the Indian Administrative Service, and directing the issuance of a writ of mandamus ordaining the State Government of Tamil Nadu from granting the requisite permission of the Government under r. 17 of the All India Services (Conduct) Rules, 1968 for the institution of a suit for damages for defamation by him against respondent No. 2 Thiru V. Karthikeyan, the then Chief Secretary to the State Government of Tamil Nadu by a defamatory statement that he. 493 allegedly, made to a correspondent of the Indian Express against him. A The facts. At the relevant time, respondent No. 1 Thiru Badrinath was the Commissioner of Archives & Historical Research, Tamil Nadu. On September 7,1973 he delivered a speech at a function held by the History Association of the Presidency College, Madras criticising the time capsule buried in the precincts of the Red Fort at Delhi and said that it was full of distortions of historical facts describing it as 'neither history nor fiction '. This led to a furore both in Parliament as well as in the national press. The Government feeling greatly embarrassed by the controversy created about the authenticity of the time capsule, started disciplinary inquiry against respondent No. 1 under rr. 6 and 7 of the All India Services (Conduct) Rules on the view that being a civil servant it was not desirable that he should have participated in a public discussion on the time capsule. However, the State Government by a G.O. dated August 25, 1977 dropped the disciplinary proceedings. Just a day before i.e. On August 24, 1977 a signed news item appeared in all the editions of the Indian Express about the controversy regarding the time capsule stating that a Government spokesman charged respondent No. 1 as trying to 'sabotage the civil services from within '. Taking umbrage at the offending utterance, respondent No. 1 addressed a letter dated August 25, 1977 expressing his anguish that such a statement was made by a Government spokesman, and desired to know as to who that Government spokesman was; and whether he indeed uttered the words and if so, whether that reflected the views of the Government. On the same day, respondent No. 2 in his capacity as the Chief Secretary replied that he had no information to communicate to him on the subject. On December 5, 1977 respondent No. 1 addressed another letter to respondent No. 2 in the form of a representation complaining of the defamatory attack on him, demanding that the Government should issue a contradiction through the press. The Government did not accede to the demand. In the meanwhile, respondent No. 1 apparently addressed a letter to a certain Shastri Ramachandran, the press correspondent of the Indian Express, asking him to disclose the name of the Government spokesman. The correspondent by his letter dated December 14, 1977 informed that the Government spokesman was respondent No. 2 who during a telephonic conversation with him had made the offending utterance. There were certain other utterances attributed to respondent No. 2 with which we are not concerned. Upon this, respondent No. 1 by his letter dated December 19, 1977 sought permission to meet the Chief Minister and personally place before him his grievance set out in his aforesaid representation. The grievance of 494 respondent No. 1 is that the letter was never replied to. Eventually, on December 28, 1977 respondent No. 1 applied for sanction of the Government under r. 17 of the Rules seeking permission to institute a suit against respondent No. 2 for damages for defamation. This was sought on the ground that in an interview with Thiru Shastri Ramachandran, the corresondent of the Indian Express, respondent No. 2 had charged him with trying to sabotage the civil services from within and that the charge was per se defamatory and was made with intent to bring disrepute to his career as a scholar and historian and caused irreparable damage to his reputation as a civil servant. By the impugned G.O. dated February 7, 1978 the Government refused to grant the permission applied for to respondent No. 1. Against the refusal respondent No. 1 moved the High Court under article 226 of the Constitution for the issuance of a writ of mandamus and other appropriate writs, directions and orders. A learned Single Judge (V. Ramaswami, J.) by his judgment and order dated January 23, 1979 dismissed the writ petition on the ground that respondent No. 1 was not entitled to grant of the requisite permission under r. 17 of the Rules as a matter of course and it could not be said that the refusal of the Government to grant such permission was arbitrary, capricious or on irrelevant consideration. On the contrary, he held that the Government refusal was based on proper grounds inasmuch as the Government had taken into account all the relevant considerations including public interest and the interest of maintenance of discipline in the civil service. The learned Single Judge further observed that public interest was certainly a proper ground on which the Government could refuse the permission, if they were of the view that grant of such permission would expose another officer to unnecessary harassment through vexatious proceedings or encourage feud among civil servants and that had to be prevented. Aggrieved, respondent No. 2 preferred an appeal under cl. 15 of the Letters Patent. A Division Bench (M.M. Chandurkar, CJ and Sathiadev, J.) by its judgment and order dated December 20, 1984 allowed the appeal holding that the refusal of the State Government to grant the requisite permission under r. 17 of the Rules could not be justified on the ground of public interest. The entire judgment of the Division Bench proceeds on the wrongful hypothesis that the obtaining of prior permission of the Government under r. 17 was a condition precedent for the maintainability of a suit for damages. It also manifestly erred in its view that the speech delivered by respondent No. 1 at the function was in his official capacity as the Commissioner of Archives & Historical Research and therefore the intended suit fell within the ambit of r. 17 of the Rules in 495 asmuch as it was a suit for the vindication of an official act. We are afraid, it is difficult to sustain the judgment of the Division Bench. In exercise of the powers conferred by sub section (1) of section 3 of the All India Services Act, 1951, the Central Government after consultation with the Government of the States concerned framed the All India Services (Conduct) Rules. The Rules are a complete code in itself, obviously designed to frame a Code of Conduct for the members of the Service to ensure absolute integrity and devotion to duty and responsibility, in order that there is a fearless and impartial civil service in existence in the country. They form the bullwork of the executive power of the Union and the States and also form the instrumentality through which such powers have to be exercised. The key provision is the one contained in r. 3 which is spinal importance and reads: "3. General (1) Every member of the Service shall at all times maintain absolute integrity and devotion to duty and shall do nothing which is unbecoming of a member of the Service. (2) Every member of the Service shall take all possible steps to ensure integrity of, and devotion to duty by, all Government servants for the time being under his control and authority. (3) (i) No member of the Service shall, in the performance of his official duties, or in the exercise of powers conferred on him, act otherwise than in his own best judgment to be true and correct except when he is acting under the direction of his official superior. (ii) The direction of the official superior shall ordinarily be in writing. Where the issue of oral direction becomes unavoidable, the official superior shall confirm it in writing immediately thereafter. (iii) A member of the Service who has received oral direction from his official superior shall seek confirmation of the same in writing as early as possible and in such case,it shall be the duty of the official superior to confirm the direction in writing. 496 Explanation: Nothing in clause (i) of sub rule (3) shall be construed as empowering a Government servant to evade his responsibilities by seeking instructions from or approval of, a superior officer or authority when such instructions are not necessary under the scheme of distribution of powers and responsibilities." After laying down a rigorous code by framing r. 3 to ensure that members of such. service discharge their duties and functions with absolute integrity and do nothing which is unbecoming of a member of the Service, the Central Government has provided by rr. 4 to 20 the various constraints under which the members of the Service must function. These rules necessarily form part of their conditions of service under sub section (1) of section 3 of the All India Services Act. Rule 4 places a restraint on the use of position or influence to secure directly or indirectly employment of near relations in a private organisation, r. 5 on taking part in politics and contesting elections, r. 6 on having connection with the mass media, the press or the radio, r. 7 on engaging in criticism of Government, r. 8 on giving evidence before any committee, person or other authority except with the previous sanction of the Government, and where such sanction has been accorded, on giving evidence criticising the policy or any action of the Government, r. 9 on unauthorised communication of information, r. 10 on asking for or accepting contributions to or raising of public subscription, r. 11 on accepting gifts, r. 11A on giving or taking of dowry, r. 12 on taking part in public demonstration, r. 13 on private trade or employment, r. 14 on investment, lending and borrowing, r. 15 on insolvency and habitual indebtedness, r. 16 on acquisition of property, movable or immovable, r. 17 on having recourse to any Court or the press for the vindication of an official act or character, r. 18 on convassing for others, r. 19 on taking a second spouse and r. 20 on consumption of intoxicating drinks and drugs. A close analysis of these Rules clearly brings out that the provision contained in r. 17 is nothing but a restraint on a member of the Service. Rule 17 of the Rules read with the Explanation thereto provides as follows; " 17. Vindication of acts and character of members of the Service No member of the Service shall, except with the previous sanction of the Government have recourse to any court or to the press for the vindication of official act which has been the subject matter of adverse criticism or attack of a defamatory character. 497 Explanation Nothing in this rule shall be deemed to A prohibit a member of the Service from vindicating his private character or any act done by him in his private capacity. Provided that he shall submit a report to the Government regarding such action. " According to its plain terms, r. 17 is in the nature of a restraint on a member of the All India Services from bringing a suit for damages for defamation for an act done in the exercise of his official duties as a public servant or from going to the press in vindication of his official act or character. explanation to r. 17 seeks to restrict the scope and effect of the restraint placed by r. 17. No member of the Service is prohibited from vindicating his private character for any act done by him in his private capacity. Proviso thereto however casts on him a duty to report to the Government regarding such action. Analysing the provision of r. 17 Sri Asoke Sen, learned counsel for the appellants contends that to attract r. 17 three conditions must be fulfilled, namely: (1) The intending plaintiff must be a member of the Service. (2) The suit must be for the vindication of his official act or character. (3) The official act must be the subject of a defamatory statement. According to the learned counsel, though two of the conditions are fulfilled, namely: (1) that respondent No. 1 was a member of the Service and (2) the subject matter viz. the statement made by respondent No. 2 and alleged to be of a defamatory character was made by him in his official capacity as the Chief Secretary, there was non fulfilment of the third condition. He rightly urges that the speech delivered by respondent No. 1 criticising the authenticity of the time capsule was merely an expression of opinion on his private capacity. In substance, the contention is that r. 17 read with the Explanation thereto clearly places such private acts outside the purview of the restraint placed by r. 17. The contention to the contrary by respondent No. 1 Thiru Badrinath was that it was not open to the appellants to say that r. 17 was not attracted and he drew our attention to the concession made by the learned Advocate General as reflected in the judgment of the learned Single Judge: "The learned Advocate General also stated that the act complained of was an official act and, therefore, the intended suit was to vindicate an official act which was the subject matter of a defamatory criticism. Therefore, we H 498 have to proceed on the basis that the criticism which is A complained of as defamatory related to an official act of the petitioner. In view of this concession, he contends that it is now not open to the t appellants to say that r. 17 was not attracted. In dealing with these contentions, it is. rather pertinent to observe that the learned Single Judge did not record a finding that r. 17 of the Rules was not attracted in the facts and circumstances of the case. After setting out the provision contained in r. 17, he observes that the requirement of r. 17 are that (i) the act which has been the subject matter of adverse criticism should be an official act and (ii) the criticism of the attack must be defamatory in character. We are entirely in agreement with the view expressed by the learned Single Judge. No construction other than the one reached by him is possible. During the course of his judgment, the learned Single Judge adverts to paragraph 17 of the writ petition where respondent No. l has averred that his intended suit was to vindicate his private character and not to vindicate any official act. The case of respondent No. 1 therefore throughout has been that r. 17 of the Rules was not attracted to the suit and indeed he goes on to aver that he was entitled to file a suit even without the permission of the Government under r. 17. However, he goes on to say that if a suit were to be filed it might land him into trouble in that disciplinary proceedings might be taken against him for having instituted a suit without previous permission of the Government. On the assumption that such sanction was necessary under r. 17, he moved the High Court for grant of an appropriate writ under article 226 of the Constitution, apparently by way of ex abundanti cautela. The learned Single Judge did not deal with the scope and ambit of r. 17 in view of the concession made by the learned Advocate General. We have no manner of doubt that the appellants are not bound by the concession made by the learned Advocate General before the learned Single Judge. It is unfortunate that the State Government was not properly advised at the earlier stages of the proceedings in insisting upon the view that such permission was required under r. 17 and that it was justified in refusing to grant the permission prayed for. The concession made by the learned Advocate General being on a matter of law is not binding. That apart, Sri Ashoke Sen, learned counsel for the appellants has very fairly accepted the point of view put forth by respondent No. 1 in the writ petition that no such permission was required. 499 In the premises, the decision of the Division Bench appealed from suffers from a serious infirmity. In the instant case, respondent No. 1 Thiru Badrinath made a speech incidentally at a time when he was holding the post of the Commissioner of Archives & Historical Research, at a function organised by the History Association of the Presidency College, Madras. He was invited to make a speech on the occasion presumably for his attainments in the field. But the speech delivered by him on the occasion could not be treated to be an official act of his and therefore the suit brought by him against respondent No. 2 Thiru V. Karthikeyan, the then Chief Secretary of Tamil Nadu could not be treated to be a suit for the vindication of his official act. It is common knowledge that persons of erudition and eminence are often times asked to grace such occasions or make a speech and when they do so, undoubtedly they give expression to their personal views on various subjects. By no stretch of imagination can it be said that while doing so they act in the discharge of their official duties merely because they happen to hold public office. At the end of the day, we wish to mention that Thiru Badrinath stated before us that he had filed the suit in the High Court for damages for defamation against respondent No. 2 Thiru V. Karthikeyan without waiting for the prior permission of the State Government under r. 17 of the Rules and that the suit was filed before the expiry of the period of limitation of one year as provided for by article 75 of the . He further stated that the Registry of the High Court however returned the plaint with the endorsement that the same be presented after the decision in the writ petition. He drew our attention to the averment in paragraph 22 of his affidavit in reply to the effect: "I respectfully submit that, at the time I had filed W.P. No. 979/1978 against Go dated the 7th February, 1978, 1 had formally presented to the Registry of the Madras High Court a civil suit for defamation against the Chief Secretary. I was advised to do this in order to prevent the time limit for such suits from expiring, should the decision in the writ petition be that, the defamatory attack on me by Shri Karthikeyan being of a personal kind I was covered by the proviso in Rule 17 and would not, therefore, require government sanction under Rule 17. Quite correctly, after a note being made of the date on which the suit was presented, it was returned to me, saying that it would have to wait for a decision in the writ petition. Following the judg 500 ment in the writ appeal, setting aside the decision in W.P.979/1978, I have been waiting for government sanction. It also transpires that the suit was filed by respondent No. 1 without serving a notice as required under section 80 of the Code of Civil Procedure, 1908. We refrain from expressing any opinion as to whether the return of the plaint for representation after the decision of the writ petition would save the running of the time. The questions whether the suit is barred by limitation or not, or whether the same was competent without a notice under section 80 of the Code, are question to be determined by the High Court in the suit. Accordingly, the appeals must succeed and are allowed. The judgment and order passed by the Division Bench of the High Court are set aside and that of the learned Single Judge dismissing the writ petition restored. The High Court will now proceed with the suit brought by respondent No. 1 in accordance with law. The rights and n contentions of the parties are left open. There shall be no order as to costs. H.L.C. Appeals allowed.

Respondent No. 1 who was functioning at the relevant time as the commissioner of Archives and Historical Research, Tamil Nadu, delivered a speech at a function held by the History Association of the Presidency College, Madras criticising the time capsule buried in the precincts of the Red Fort at Delhi which led to a furore both in Parliament as well as in the national press. The Government, feeling greatly embarrassed by the controversy, started a disciplinary inquiry against him on the view that being a civil servant it was not desirable that he should have participated in a public discussion on the time capsule but later on dropped the same. However, just a day before that, a signed news item appeared in a newspaper about the controversy regarding the time capsule stating that a Government spokesman had charged respondent No. 1 as trying to 'sabotage the civil services from within '. Having failed in his efforts to ascertain from the Government the identity of its spokesman who had made this offending utterance against him or to induce it to issue a contradiction through the Press, respondent No. 1 addressed a letter to the correspondent of the newspaper asking him to disclose the name of the Government spokesman. The correspondent, in his reply, stated that the Government spokesman was respondent No. 2, the Chief Secretary to the Government, who, during a telephonic conversation with him, had made the offending utterance. Respondent No. 1 made a representation to the Government with regard to his grievance in this behalf but, finding that there was no response, applied for sanction of the Government under r. 17 of the All India Services (Conduct) Rules, 1968 seeking permission to institute a suit against respondent No. 2 for damages for defamation. The Government refused to grant the permission and respondent No. 1 moved the High Court under article 226 of the Constitution against the order of refusal. The writ petition was dismissed by a Single Judge, who inter alia in his judgment referred to a concession made by the Advocate 491 General appearing for the appellants that the act complained of was an official act and, therefore, the intended suit was to vindicate an official act which was the subject matter of a defamatory criticism. Respondent No. 1 preferred an appeal under cl. 15 of the Letters Patent and a Division Bench allowed the appeal holding that the refusal of the State Government to grant the requisite permission under r. 17 could not be justified on the ground of public interest. B Allowing the appeals, ^ HELD: According to its plain terms, r. 17 of the All India Services (Conduct) Rules, 1968 is in the nature of a restraint on a member of the All India Services from bringing a suit for damages for defamation for an act done in the exercise of his official duties as a public servant or from going to the press in vindication of his official act or character. Explanation to r. 17 seeks to restrict the scope and effect of the restraint placed by r. 17. No member of the Service is prohibited from vindicating his private character or any act done by him in his private capacity. Proviso thereto however casts on him a duty to report to the Government regarding such action. [497B c l In the instant case, respondent No. 1 made a speech incidentally at a time when he was holding the post of the commissioner of Archives & Historical Research, at a function organised by the History Association of the Presidency College, Madras. He was invited to make a speech on the occasion presumably for his attainments, in the field. But the speech delivered by him on the occasion could not be treated to be an official act of his and therefore the suit brought by him against respondent No. 2, the then Chief Secretary of Tamil Nadu could not be treated to be a suit for the vindication of his official act. It is common knowledge that persons of erudition and eminence are often times asked to grace such occasions or make a speech and when they do so, undoubtedly they give expression to their personal views on various subjects. By no stretch of imagination can it be said that while doing so they act in the discharge of their official duties merely because they happen to hold public office. [499A D] During the course of his judgment, the learned Single Judge adverts to paragraph 17 of the writ petition where respondent No. 1 has averred that his intended suit was to vindicate his private character and not to vindicate any official act. The case of respondent No. 1 therefore throughout has been that r. 17 of the Rules was not attracted to the suit and indeed he specifically aver that he was entitled to file a suit even 492 without the permission of the Government under r. 17. However, he goes on to say that if a suit were to be filed it might land him into trouble in that disciplinary proceedings might be taken against him for having instituted a suit without previous permission of the Government. On the assumption that such sanction was necessary under r. 17, he moved the High Court for grant of an appropriate writ under article 226 of the Constitution, apparently by way of ex abundanti cautela. The learned Single Judge did not deal with the scope and ambit of r. 17 in view of the concession made by the learned Advocate General. We have no manner of doubt that the appellants are not bound by the concession made by the learned Advocate General before the learned Single Judge that the act complained of was an official act. It is unfortunate that the State Government was not properly advised at the earlier stages of the proceedings in insisting upon the view that such permission was required under r. 17 and that it was justified in refusing to grant the permission prayed for. The concession made by the learned Advocate General being on a matter of law is not binding. [498D G]

ivil Appeal No. 1821 of 1991. From the Judgment and Order dated 17 4. 1990 of the Central Administrative Tribunal, Delhi in R.A. No. 117/88 in T.A. No. 351 of 1986. O.P. Saxena and Mukul Gupta for the Appellant. J.D. Jain, Kailash Vasudev, Ms. Sushma Suri and S.N. Terdal for the Respondents. 332 The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. This appeal is from an order of the Central Administrative Tribunal, New Delhi and concerns with the scope of Rule 10(4) of the Central Civil Service (CCA) Rules, 1965 ( 'the Rules ') The facts leading to the appeal are these: The appellant was a cash clerk in the establishment of Delhi Milk Scheme, New Delhi. There was some criminal case connected with the forgery of a cheque in which the appellant was arrayed as an accused. Pending investigation of the criminal case, he was placed under suspension. The order of suspension was made on March 27, 1976 under Rule 10(2) of the Rules. On January 10, 1976 his services were terminated under Rule 5(1) of the Central Civil Services (Temporary Service) Rules, 1965. On March 7, 1980, the appellant was acquitted in the criminal case. On January 5, 1981 the appellant filed a civil suit in the District Court, New Delhi, challenging the order of termination of his services. The suit was transferred to the Central Administrative Tribunal for disposal. The Tribunal has, by its judgment dated September 5, 1988 set aside the termination order with the following conditions: "(i) The impugned order of termination dated 10.1.1978 is quashed. Consequently, status quo ante as in regard to applicant being under suspension will continue from 10.1.1978. (ii) It will be open to the competent authori ty to take a final decision on the continuance or otherwise of the suspension in the light of the judgment of Chief Judicial Magistrate dated 7.3.80 in case No. 57/2. It will be open to the competent authority to revoke the order of suspension and reinstate the plaintiff into service as cash clerk. In that event, the pay and allowances of the plaintiff during the period of his actual suspension from 27.3. 1976 to 10.1.78 and deemed suspension thereaf ter shall be regulated in accordance with the provisions of F.R. 54 B. Necessary adjust ments, if any, should be made or in regard to the subsistence allowance already paid to him. The defendants shall also consider and decide whether the period of actual and deemed sus pension shall be treated as a period spent on duty or not. 333 (iii) It will also be open to the competent authority, if so advised, to continue the plaintiff on suspension if it is decided to initiate disciplinary proceedings against him based on his conduct which led to his prosecu tion before the criminal court. The discipli nary proceedings if initiated should be com pleted within a period of six months from the date of communication of this order. (iv) The competent authority shall take appro priate decision as regards (ii) and (iii) above within a period of two months from the date of communication of this order. " Pursuant to the decision of the Tribunal management made an order dated November 10, 1988 under Rule 10(4) of the Rules placing the petitioner under suspension w.e.f. January 10, 1978. The appellant shall be deemed to have been sus pended from the date of the original order of termination. The management also directed that there should be further enquiry ' against the appellant. The relevant portion of the order dated November 10, 1988 reads: "AND whereas the undersigned on a considera tion of the circumstances of the case, has also decided that a further enquiry should be held under the provision of CCS(CCA) Rules, 1965 against the said Shri Mohinder Singh, exhibit Cash Clerk on the allegation which led to his termination of service. NOW THEREFORE the undersigned hereby: (i) set aside the order of termination of services of Shri Mohinder Singh, exhibit Cash Clerk (ii) directs that further enquiry should be held under the provisions of CCS(CCA) Rules, 1965 against Shri Mohinder Singh on the alle gations of misappropriation of Govt. Money which led to the termination of service. (iii) directs that the said Shri Mohinder Singh, exhibit Cash Clerk shall under sub rule 4 of Rule 10 of the CCS(CCA) Rules, 1965 be deemed to have been placed under suspension w.e.f. 10.1. 1978 and shall continue to remain under suspension until further orders. (Baldev Chand) Disciplinary Authority Dy. General Manager (A)" 334 After holding the enquiry the appellant was again dis missed from service. That order was made on December 1, 1989. It is said that the dismissal has been challenged by the appellant before the Tribunal. From the above narration of facts it will be seen that the Tribunal while setting aside the termination order has directed that the appellant shall continue in suspension from January 10, 1978. The management while deciding to hold further enquiry has also directed that the appellant shall be deemed to have been placed under suspension w.e.f. Janu ary 10, 1978. The management made this order under Rule 10(4) which reads as follows: "Where a penalty of dismissal, removal or compulsory retirement from service imposed upon a Government servant is set aside or declared or rendered void in consequence of or by a decision of a court of law and the disci plinary authority on a consideration of the circumstances of the case, decides to hold a further inquiry against him on the allegations on which the penalty of dismissal, removal or compulsory retirement was originally imposed, the Government servant shall be deemed to have been placed under suspension by the Appointing Authority from the date of the original order of dismissal, removal or compulsory retirement and shall continue to remain under suspension until further orders: Provided that no such further inquiry shall be ordered unless it is intended to meet a situation where the Court has passed an order purely on technical grounds without going into the merits of the case. " There are three requirements for the application of Rule 10(4); (i) The Government servant is dismissed, removed or compulsorily retired as a measure of penalty; (ii) the penalty of dismissal, removal or compulsory retirement is set aside or declared or rendered void by a decision of a Court of Law; (iii) The disciplinary authority decides to hold a further inquiry against the Government servant on the allegations on which the original order of penalty was imposed. If these three requirements are satisfied then the Government servant ,shall be deemed to have been placed under suspension by the appointing authority from the date of original order of penalty of dismissal, removal or com pulsory retirements and he shall continue to remain under suspension until further orders. 335 The order of the Tribunal and the management as to the retrospective suspension of the appellant cannot be sus tained under Rule 10(4) of the Rules. It may be relevant to remember that the original order of termination was not passed against the appellant as a measure of punishment. It was a 'simpliciter termination ' of the appellants ' service under Rule 5(1) of the CCS (Temporary Service) Rules 1965. The Tribunal has set aside that order on the ground that it amounts to punishment and the order of punishment could not have been made without holding an inquiry against the appel lant. But that is not the same thing to state that the management made an order terminating the services of the appellant by way of penalty. The management treated the said order as a simpliciter discharge. Rule 10(4) therefore, has no application to the case of the appellant. Secondly, it would be misnomer to call it a further inquiry as contemplated under Rule 10(4). There was no question of the management deciding to hold a further in quiry since there was no earlier inquiry against the appel lant. The power to place delinquent officer under suspension from the date of the original order of dismissal, removal or compulsory retirement from service would be available pro vided if the original order of dismissal, removal or compul sory retirement from service was made by way of penalty and that order has been set aside by a Court of law. Since there was no inquiry leading to the removal of the appellant in the first instance, the decision to hold fresh inquiry does not attract Rule 10(4). The retrospective suspension of the appellant is therefore, unjustified and without authority of law. However, it may be stated that the order of suspension dated November 10, 1988 would operate prospectively and the appellant would be entitled to reinstatement with all back wages till that day since the original order of termination has been set aside by the Tribunal. The appeal is accordingly allowed modifying the impugned order. In the circumstances of the case, however, we make no order as to costs. N.P.V. Appeal allowed.

The appellant, a cash clerk in the establishment of Delhi Milk Scheme, was placed under suspension under Rule 10(2) of the Central Civil Service (Classification, Control and Appeal) Rules, 1965, pending investigation into a crimi nal case, connected with the forgery of a cheque, in which he was arrayed as an accused. Subsequently, his services were terminated under Rule 5(1) of the Central Civil Serv ices (Temporary Service) Rules, 1965. Though he was acquit ted in the criminal case, he was not re instated. However, the Central Administrative Tribunal set aside the termina tion order and directed that the appellant would continue to be under suspension from the original date of termination of service, and that it would be open to the competent authori ty, to revoke his suspension and re instate him in service or continue him under suspension, if it decided to initiate disciplinary proceedings against him. Pursuant to the decision of the Tribunal, the Management passed an order under Rule 10(4) of the Rules placing the appellant under suspension from the date of original order of termination and also directed that there should be fur ther enquiry against the appellant. Allowing the appeal preferred by the appellant and modifying the Tribunal 's order, HELD: 1.1 There are three requirements for the applica tion of Rule 10(4) of the Central Civil Services (Classifi cation, Control and Appeal) Rules, 1965. These are (i) the Government servant is dismissed, removed or compulsorily retired as a measure of penalty; (ii) the said 331 penalty is set aside or declared or rendered void by a decision of a Court of Law; and (iii) the disciplinary authority decides to hold a further inquiry against the Government servant on the allegations on which the original order of penalty was imposed. [334F G] 1.2 In the instant case, the original order of termina tion was not passed against the appellant as a measure of punishment. It was a 'simpliciter termination ' under Rule 5(1) of the CCS (Temporary Service) Rules, 1965. The Tribu nal has set aside that order on the ground that it amounts to punishment and the order of punishment could not have been made without holding an inquiry. But that is not the same thing to state that the Management made an order termi nating the services by way of penalty. It treated the said order as a simpliciter discharge. Hence Rule 10(4) has no application. Besides, there was no question of the Manage ment deciding to hold a further inquiry, since there was no earlier inquiry against the appellant and it would be misno mer to call it a further enquiry as contemplated under Rule 10(4). [335B C] 1.3 Thus, the power to place a delinquent officer under suspension from the date of the original order of dismissal, removal or compulsory retirement from service would be available provided the original order was made by way of penalty and that order has been set aside by a Court of Law. Since there was no inquiry leading to the removal of the appellant in the first instance, the decision to hold fresh inquiry does not attract Rule 10(4). The retrospective suspension of the appellant is, therefore, unjustified and without authority of law. However the order of suspension would operate prospectively and the appellant would be entitled to re instatement with all back wages till that day since the original order of termination has been set aside by the Tribunal. The Tribunal 's order is modified according ly. [335D G]

Appeal No. 243 of 1959. Appeal by special leave from the judgment and order dated April 24, 1958, of the Bombay High Court in Special Civil Application No. 874 of 1958. M. C. Setalvad, Attorney General for India, G. P. Vyas and I. N. Shroff, for the appellant Vithalbhai Patel, section section Shukla, C. T. Daru and E. Udayarathnam, for the respondent No. 1. 1960. December 12. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The principal question which this appeal by special leave raises for our decision relates to the nature and extent of the jurisdiction conferred on the authority by section 15 of the 223 (Act 4 of 1936) (hereafter called the Act). This question arises in this way. The appellant Shri Ambica Mills Co. Ltd., is a textile mill ' working at Ahmedabad. Three of its employees named Punamchand, Shamaldas and Vishnuprasad made an application to the authority under section 16 of the Act and prayed for an order against the appellant to pay them their delayed wages. In order to appreciate the( contentions raised by the appellant disputing the validity of the respondents ' claim it is necessary to set out the background of the dispute in some detail. It appears that an award called the Standardisation Award which covered the mill industry in Ahmedabad was pronounced by the Industrial Tribunal on April 21, 1948, in Industrial Reference No. 18 of 1947. This award fixed the wages for different categories of workers working in the textile mills at Ahmedabad, but left over the question of clerks for future decision. Amongst the operatives whose wages were determined by the award the case of hand folders was specifically argued before the Industrial Tribunal. The Labour Association urged that the rate of Rs. 36 9 0 awarded to them was too low and it was pointed out on their behalf that they did the same work as cut lookers did in Bombay where a head cut looker was given Rs. 52 and a cut looker Rs. 42 4 0. On the other hand the mill owners contended that the rate should have been fixed at Rs. 34 2 0 instead of Rs. 36 9 0. The Tribunal found it difficult to decide the point because enough evidence had not been produced before it to show the kind of work that hand folders were doing at Ahmedabad; that is why the Tribunal was unable to raise the wage of hand folders to that of out lookers in Bombay. However, it made a significant direction in that behalf in these words: "At the same time", it was observed, "we desire to make it clear that if there are persons who are doing cut looking as well as folding, they should be paid the rate earned by the out lookers in Bombay". This question has been considered by the Tribunal in paragraph 16 of its award. The question of clerks, the decision of which had been adjourned by the Tribunal was later considered 224 by it and an award pronounced in that behalf. However, the said award was later terminated by the clerks in 1949, and that led to an agreement between the Ahmedabad Mill Owners ' Association and the Textile Labour Association in the matter of wages payable to clerks. This agreement was reached on June 22, 1949. Clauses 2 and 5 of this agreement are material for the purpose of this appeal. Let us therefore read the two clauses: "2. That this agreement shall apply to all the Clerks employed in the local mills, i.e., persons doing clerical work, that is those who do routine work of writing, copying or making calculations and shall also include compounders and assistant compounders who are qualified and who are employed in the local mills. A separate scale for those of the employees who occupy the position lower than that of a full fledged Clerk but higher than that of an operative will be provided as under: Rs. 40 3 70 EB 4 90 5 105. This scale will be applicable in case of ticket boy, ticket checker, coupons seller, talley boy, scale boy, production checker, thread counter, cloth measurer or yard counter, fine reporter, cloth/yarn examiner, department store man, cut looker and those others who have not been included above but who can properly fall under the above category." After this agreement was thus reached persons doing the work of cut lookers began to feel that they were entitled to the benefit of cl. 5 and some claims were put forth on that basis against the employers. Vishnuprasad and Punamchand applied before the authority (Applications Nos. 39 and 40 of 1954) and claimed delayed wages against the appellant on the ground that they were entitled to higher wages under paragraph 16 of the award in Reference No. 18 of 1947. This claim was resisted by the appellant. The appellant urged that the applications were not maintainable under the Act, that they were barred in view of an arbitration award which was then in operation and that on the merits the applicants were not doing 225 the work of cut looking. All these contentions were rejected by the authority. It examined the duties performed by the applicants, and it came to the conclusion that both the applicants were folders doing cut looking, and consequently they were entitled each to Rs. 42 4 0 per month; in other words, the authority came to the conclusion that the applicants properly, fell under the category specified in paragraph 16 of the award referred to above and as such they were entitled to recover the difference between Rs. 36 9 0 per month which was paid to each one of them and Rs. 42 4 0 which was due to each one of them. This decision was announced on September 2, 1954. On July 11, 1955, the present respondents moved the authority under section 16 of the Act. They urged that they were semi clerks and occupied a position lower than that of a full fledged clerk and higher than that of an operative, and as such they were governed by cl. 5 of the agreement and were entitled to increment provided by the said clause. This claim was resisted by the appellant on several grounds. It was urged that the present applications were barred by res judicata, that the authority had no jurisdiction to entertain the applications, and that on the merits the respondents were not semi clerks as contemplated by cl. 5 of the agreement. On these contentions the authority raised four issues. It held against the respondents and in favour of the appellant on issues 1 and 2 which related to the plea of res judicata and the status of the respondents. In view of the said findings it thought it unnecessary to decide the two remaining issues which dealt with the quantum of amount claimed by the respondents. It appears that the question of jurisdiction, though urged in its pleading by the appellant, was not raised as an issue and has not been considered by the authority. The finding of res judicata was recorded against Punamchand and Vishnuprasad. Shamaldas had not made any previous application and so no question of res judicata arose against his application. His application was dismissed only on the ground that he could not claim the status of a 29 226 semi clerk. The same finding was recorded against the two other respondents. It appears that at the trial before the authority the parties filed a joint Pursis which enumerated the duties performed by the respondents in paragraphs 2 to 7. The authority took the view that "the duties performed by them cannot be said to be the duties of persons doing the routine work of writing, copying and making calculations". In the result it was held that the respondents were governed by the Standardisation Award and did not fall under the subsequent agreement. This decision was challenged by the respondents before the District Judge who was the appellate authority under the Act. The appellate authority also was asked to consider the question of jurisdiction. It examined the relevant provisions of the Act and held that the authority had jurisdiction to entertain the applications made before it by the respondents. On the question of res judicata it agreed with the finding of the authority, and held that the claims made by Punamchand and Vishnuprasad were barred by res judicata. Similarly, on the question of the status of the respondents it agreed that they were not semi clerks. It is clear from the judgment of the appellate authority that in determining the status of the respondents, the appellate authority applied the same test as was invoked by the authority, and it considered the question as to whether the duties performed by the respondents were similar to the duties performed by clerks. It is obvious that the tests applied are tests relevant to the employees falling under cl. 2 of the agreement, and since the application of the said tests led to the conclusion that the respondents did not fall under el. 2 the appellate authority held that el. 5 was inapplicable to them; in other words, the judgments of both the authority and the appellate authority clearly show that they took the view that el. 2 was wholly determinative of the issue, and that unless an. employee fell under cl. 2 he cannot claim to be covered by any part of the agreement including el. 5. That is why the appeals preferred by 227 the respondents were dismissed by the appellate authority on September 2, 1954. These appellate decisions were challenged by the respondents by filing a writ petition under articles 226 and 227 of the Constitution before the Bombay High Court. The Bombay High Court has held that the decision of the appellate authority was patently erroneous in law in that it proceeded on the assumption that unless cl. 2 of the agreement was satisfied cl. 5 would be inapplicable. It also held that the finding concurrently recorded by the authorities below on the question of res judicata against two of the respondents was manifestly erroneous. On these findings the High Court allowed the writ petition filed by the respondents, set aside the orders of the authorities below and sent the case back to the authority for dealing with it in accordance with law in the light of the judgment delivered by the High Court. It is against this decision that the appellant has preferred the present appeal by special leave. The first contention which the learned Attorney General has raised before us on behalf of the appellant is that the High Court has exceeded its jurisdiction under articles 226 and 227 in interfering with the decision of the appellate authority. He 'contends that at the highest the error committed by the appellate authority is one of law but it is not an error apparent on the face of the record, and he argues that it was not within the competence of the High Court to sit in appeal over the judgment of the appellate authority and examine meticulously the correctness or the propriety of the conclusions reached by it. The question about the nature and extent of the jurisdiction of the High Courts in issuing a writ of certiorari under article 226 has been the subject matter of several decisions of this Court. It is now well settled that the said writ can be issued not only in case,% of illegal exercise of jurisdiction but also to correct errors of law apparent on the face of the record. In this connection it may be pertinent to refer to the observations made by Denning, L.J., in Rex vs Northumberland Compensation Appeal Tribunal The (1) ; 228 writ has been supposed to be confined to the correction of excess of jurisdiction", observed Lord Justice Denning, "and not to extend to the correction of errors of law; and several judges have said as much. But the Lord Chief Justice has, in the present case, restored certiorari to its rightful position and shown that it can be used to correct errors of law which appear on the face of the record even though they do not go to jurisdiction". There is no doubt that it is only errors of law which are apparent on the face of the record that can be corrected, and errors of fact, though they may be apparent on the face of the record, cannot be corrected [Vide: Nagendra Nath Bora vs The Commissioner of Hills Division and Appeals, Assam (1)]. It is unnecessary for us to consider in the present appeal whether or not a certiorari can issue to correct an error of fact on the ground that the impugned finding of fact is not supported by any legal evidence. Thus it would be seen that the true legal position in regard to the extent of the Court 's jurisdiction to issue a writ of certiorari can be stated without much difficulty. Difficulty, however, arises when it is attempted to lay down tests for determining when an error of law can be said to be an error apparent on the face of the record. Sometimes it is said that it is only errors which are self evident, that is to say, which are evident without any elaborate examination of the merits that can be corrected, and not those which can be discovered only after an elaborate argument. In a sense it would be correct to say that an error of law which can be corrected by a writ of certiorari must be self evident; that is what is meant by saying it is an error apparent on the face of the record, and from that point of view, the test that the error should be self evident and should not need an elaborate examination of the record may be satisfactory as a working test in a large majority of cases; but,, as observed by Venkatarama Ayyar, J., in Hari Vishnu Kamath vs Syed Ahmad Ishaque, (2) "there must be cases in which even this test might break down because judicial opinions also differ, and an error that may be considered by one (1) ; (2) ; , 1123. 229 judge as self evident might not be so considered by another". Judicial experience, however, shows that, though it cannot be easy to lay down an unfailing test of general application it is usually not difficult to decide whether the impugned error of law is apparent. on the face of the record or not. What then is the error apparent on the face of the( record which the High Court has corrected by issuing a writ of certiorari in the present case? According to the High Court the construction placed by the appellate authority on cls. 2 and 5 of the agreement is patently and manifestly erroneous. The appellate authority held on a construction of the said two clauses that cl. 2 was the determinative clause, and that unless an employee satisfied the requirements of the said clause he could not claim the benefit of cl. 5. In deciding whether the High Court should have issued the writ or not it is necessary to examine the said two clauses. On looking at the two clauses it seems to us that the conclusion is inescapable that the error committed by the appellate authority is manifest and obvious. Clause 2 applies to clerks employed in the local mills, and as such it describes the nature of the work which is required to be done by persons falling under that clause. Clause 5, on the other hand, obviously provides for a separate scale for those employees who are not clerks nor operatives; these em ployees occupied a position higher than that of an operative and below that of a full fledged clerk. Therefore there is no doubt that persons falling under cl. 5 cannot fall under el. 2, and should not therefore be expected to satisfy the test prescribed by the said clause. A bare perusal of the list of employees specified by designation as falling under el. 5 will show that the application of the test which is relevant under el. 2 would in their case be wholly inappropriate and irrelevant. Therefore, in our opinion, the error committed by the appellate authority was of such a manifest character that the High Court was justified in correcting the said error by the issue of a writ of certiorari. The question involved in the decision of the dispute is not so much of construction of the document as of giving effect to the plain terms of the 230 document. If el. 5 expressly provides for employees ,,not falling under el. 2, and if that intention is clarified by the list of designations which fall under el. 5 and yet the appellate authority reads that clause as subject to cl. 2, that must be regarded as an error patent on the face of the record. It is not a case where two alternative conclusions are possible; it is a case of plain misreading of the two provisions ignoring altogether the very object with which the two separate provisions were made. In our opinion, therefore, the contention raised by the learned Attorney General that by issuing the writ the High Court has exceeded its jurisdiction is not well founded. That takes us to the second, and in fact the principal, contention which has been seriously argued before us by the learned Attorney General. He urged that the applications made by the respondents ' Union on behalf of the three employees were incompetent under section 15 of the Act and the authority exceeded its jurisdiction in entertaining them. It is true that this point was not specifically urged before the authority, but it appears to have been argued before the appellate authority and the High Court, and it is this contention which raises the problem of construing section 15 of the Act. The case for the appellant is that the jurisdiction conferred on the authority under section 15 is a limited jurisdiction, and it would be unreasonable to extend it on any inferential ground or by implication. The scheme of the Act is clear. The Act was intended to regulate the payment of wages to certain classes of persons employed in industry, and its object is to provide for a speedy and effective remedy to the employees in respect of their claims arising out. of illegal deductions or unjustified delay made in paying wages to them. With that object section 2(vi) of the Act has defined wages. Section 4 fixes the wage period. Section 5 prescribes the time of payment of wages; and section 7 allows certain specified deductions to be made. Section 15 confers jurisdiction on the authority appointed under the said section to hear and decide for any specified area claims arising out of deductions 231 from wages, or delay in payment of wages, of persons employed or paid in that area. It is thus clear that the only claims which can be entertained by the authority are claims arising out of deductions or delay made in payment of wages. The jurisdiction thus conferred on the authority to deal with these two categories of claims is exclusive; for section 22 of the Act provides that matters which lie within the jurisdiction ' of the authority are excluded from the jurisdiction of ordinary civil courts. Thus in one sense the jurisdiction conferred on the authority is limited by section 15, and in another sense it is exclusive as prescribed by section 22. In dealing with claims arising out of deductions or delay made in payment of wages the authority inevitably would have to consider questions incidental to the said matters. In determining the scope of these incidental questions care must be taken to see that under the guise of deciding incidental matters the limited jurisdiction is not unreasonably or unduly extended. Care must also be taken to see that the scope of these incidental questions is not unduly limited so as to affect or impair the limited jurisdiction conferred on the authority. While considering the question as to what could be reasonably regarded as incidental questions let us revert to the definition of wages prescribed by section 2(vi). Section 2(vi) as it then stood provided, inter alia, that 'wages ' means all remuneration capable of being expressed in terms of money which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and it includes any bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment. It also provided that the word "wages" did not include five kinds of payments specified in clauses (a) to (e). Now, if a claim is made by an employee on the ground of alleged illegal deduction or alleged delay in payment of wages several relevant facts would fall to be considered. Is the applicant an employee of the opponent?; 232 and that refers to the subsistence of the relation between the employer and the employee. If the said fact is admitted, then the next question would be: what are the terms of employment? Is there any contract of employment in writing or is the contract oral? If that is not a point of dispute between the parties then it would be necessary to enquire what are the terms of the admitted contract. In some cases a question may arise whether the contract which was subsisting at one time had ceased to subsist and the relationship of employer and employee had come to an end at the relevant period. In regard to an illegal deduction a question may arise whether the lock out declared by the employer is legal or illegal. In regard to contracts of service some times parties may be at variance and may set up rival contracts, and in such a case it may be necessary to enquire which contract was in existence at the relevant time. Some of these questions have in fact been the subject matter of judicial decisions. (Vide: A. R. Sarin vs B. C. Patil (1), Vishwanath Tukaram vs The General Manager, Central Railway, V. T. Bombay (2); and Maharaja Sri Umaid Mills, Ltd. vs Collector of Pali (5)); but we do not propose to consider these possible questions in the present appeal, because, in our opinion, it would be inexpedient to lay down any hard and fast or general rule which would afford a determining test to demarcate the field of incidental facts which can be legitimately considered by the authority and those which cannot be so considered. We propose to confine our decision to the facts in the present case. What are the facts in the present case? The relationship of employer and employee is not in dispute. It is admitted that the three workmen are employed by the appellant, and do the work of bleach folders. These folders are classified into Uttarnars and Chadhavnars. Indeed, the items of work assigned to these categories of folders are admitted. The appellant contends that the employment of the three workmen is governed by the Award which is in operation, (1) (2) (3) 233 whereas the respondent Union contends that they are governed by cl. 5 of the subsequent agreement. It is common ground that both the Award and the agreement are in operation in respect of the persons governed respectively by them, so that it is not disputed by the appellant that the persons who are specified by their designation under cl. 5 would be entitled to, the benefit of the said clause and would not be governed by the Award. If an employee is called a cut looker by any mill he would naturally fall under cl. 5; in other words, all the specified categories of employees named by designation in that clause would not be governed by the Award though at one stage they were treated as operatives but they would be governed by cl. 5 of the agreement; and if a person bearing that designation applied under section 15 of the Act his application would be competent. The appellant 's argument, however, is that when the last part of el. 5 refers to other employees "who have not been included above but who can properly fall under the above category" no designation is attached to that class, and in such a case it would be necessary to enquire whether a particular employee can properly fall under the said category, and that, it is urged, means that such an employee cannot apply under section 15 but must go to the industrial court under the ordinary industrial law. Thus the controversy between the parties lies within a very narrow compass. An employee designated as a cut looker can apply under section 15 and obtain relief from the authority; an employee not so designated but falling under the said category by virtue of the work assigned to him, it is said, cannot apply under section 15 because the authority cannot deal with the question as to whether the said employee properly falls under the said category or not. In our opinion, on these facts, the question as to whether a particular employee is an operative falling under the Award or one who is above an operative and below the clerk falling under cl. 5 is a question which is so intimately and integrally connected with the problem of wages as defined under section 2(vi) that it would be unreasonable 30 234 to exclude the decision of such a question from the jurisdiction of the authority under section 15. If a contract of employment is admitted and there is a dispute about the construction of its terms, that obviously falls within section 15 of the Act. If that is so, what is the difference in principle where a contract is admitted, its terms are not in dispute, and the only point in dispute is which of the two subsisting contracts applies to the particular employee in question. If the appellant 's argument were to prevail it would lead to this anomalous position that if a general contract of employment provides for payment of wages to different categories of employees and describes the said categories by reference to the duties discharged by them, none of the employees can ever avail himself of the speedy remedy provided by section 15 of the Act. In such a case every time a dispute may arise about the duties assigned to a particular employee before his wages are determined. In our opinion, to place such an artificial limitation on the limits of the jurisdiction conferred on the authority by section 15 is wholly unreasonable. That is the view taken by the High Court in the present case and we see no reason to differ from it. The question about the nature and scope of the limited jurisdiction conferred on the authority under section 15 has been considered by this Court in the case of A. V. D 'Costa vs B. C. Patel (1). In that case the scheme of the Act has been examined by Sinha, J., as he then was, who spoke for the majority view, and it has been held that "if an employee were to say that his wages were Rs. 100 per month which he actually received as and when they fell due but that he would be entitled to higher wages if his claims to be placed on the higher wages scheme had been recognised and given effect to, that would not be a matter within the ambit of the authority 's jurisdiction. The authority has the jurisdiction to decide what actually the terms of the contract between the parties were, that is to say, to determine the actual wages; but the authority has no jurisdiction to determine the question of potential wages". The Court took the view that the employee 's (1) ; 235 complaint in that case fell within the latter illustration. It would thus be seen that according to this, decision the authority has jurisdiction to determine what the terms of contract between the parties are, and if the terms of the contract are, admitted and the only dispute is whether or not a particular employee falls within one category or another, that would be( incidental to the decision of the main question as to what the terms of the contract are, and that precisely is the nature of the dispute between the parties in the present case. The learned Attorney General has relied very strongly on the decision of the Bombay High Court in Anthony Sabastin Almeda vs R. M. T. Taylor(1). In that case the employer and the employee went before the Court on the basis of different contracts and the Court held that it was not within the jurisdiction of the authority to decide which of the two contracts held the field, which of them was subsisting, and under which of them the employer was liable to pay wages. It would be clear from the facts in that case that two rival contract,% were pleaded by the parties, according to whom only one contract was subsisting and not the other, and so the question for decision was which contract was really subsisting. We do not propose to express any opinion on the correctness of the view taken by the Bombay High Court on this question. All we are concerned to point out is that in the present appeal the dispute is substantially different. Both contracts admittedly are subsisting. The only point of dispute is: do the three workmen fall within the category of cut lookers or do they not If they do then cl. 5 applies; if they do not the Award will come into operation. That being so, we do not see how the decision in Almeda 's case (1) can really assist the appellant. In this connection we may point out that it is common ground that in Ahmedabad textile mills do not have a class of employees called cut lookers as in Bombay. The work of cut looking along with other kind of work is done by bleach folders and other (1) 236 folders. That was the finding made by the authority on an earlier occasion when Punamchand and Vishnuprasad had moved the authority under section 15 of the Act. The learned Attorney General has strenuously contended that it is unfair to give the same pay to the three workmen who are doing the work of cut lookers only for a part of the time and were substantially doing the work of bleach folders; that, however, has no relevance in determining the present dispute. The only point which calls for decision is whether or not the work done by the three respondents takes them within the category of cut lookers specified under cl. 5, and as we have already pointed out, on an earlier occasion the authority has found in favour of two of the three respondents when it held that they were folders doing cut looking. If the said finding amounts to res judicata it is in favour of the two respondents and not in favour of the appellant; that is why the learned Attorney General did not seriously dispute the correctness of the decision of the High Court on the question of res judicata. In the result the appeal fails and is dismissed with costs. Appeal dismissed.

An award, called the Standardisation Award, fixing the wages for different categories of workers in the textile mills at Ahmedabad was made by the Industrial Tribunal. The wages of clerks were, however, settled by a subsequent agreement bet ween the Ahmedabad Mill Owners ' Association and the Textile 221 Labour Association. Clauses 2 and 5 of the said agreement were as follows, " 2. That this agreement shall apply to all the Clerks employed in the local mills, i. e., persons doing clerical work, that is those who do routine work of writing, copying or making calculations and shall also include compounders and assistant compounders who are qualified and who are employed in the local mills. A separate scale for those of the employees who occupy the position lower than that of a full fledged Clerk but higher than that of an operative will be provided as under: Rs. 40 3 70 EB 4 90 5 105 This scale will be applicable in case of ticket checker, coupons seller, tally boy, scale boy, production checker, third counter, cloth measurer or yard counter, fine reporter, cloth/ yarn examiner, department store man, cut looker and those others who have not been included above but who can properly fall under the above category. " The respondents moved the Authority under section 16 of the (4 of 1936), for an order against the appellant for payment of. their delayed wages. They claimed to be semi clerks, lower than full fledged clerks but higher than operatives, and as such governed by cl. 5 of the agreement. The Authority held against them and the appellate Authority affirmed its decision holding that Cl. 2 Of the agreement determined the applicability of cl. 5 and since the respondents did not come within Cl. 2 they could not maintain their claim under cl. 5. The High Court, on an application under article 226 and article 227 of the Constitution, took a contrary view and set aside the orders of the Authorities and directed a rehearing. In this Court the appellant mills urged that (1) the High Court had exceeded its jurisdiction under articles 226 and 227 in setting aside the order of the appellate Authority and (2) the Authority had itself exceeded its jurisdiction under section 15 of the Act in entertaining the applications of the respondents made under section 16 of the Act. Held, that both the contentions must be negatived. The High Court has power under article 226 of the Constitution to issue a writ of certiorari not only in cases of illegal exercise of jurisdiction but also to correct errors of law apparent on the face of the record, although not errors of fact even though so apparent. No unfailing test can, however, be laid down when an error of law is an error apparent on the face of the record and the rule that it must be self evident, requiring no elaborate examination of the record, is a satisfactory practical test in a large majority of cases. Rex vs Northumberland Compensation Appeal Tribunal, ; and Nagendra Nath Bora V. Commissioner of Hills Division and Appeals, Assam, ; , referred to. 222 Viswanath Tukaram vs The General Manager, Central Railway, V. T., Bombay, , considered. A look at the two clauses is enough to show that the appel late Authority in construing them in the way it did committed an obvious and manifest error of law. It was clear that the two clauses applied to two distinct categories of persons and persons falling under cl. 5 could not be governed by cl. 2 and were not expected to satisfy the test prescribed by it. Under section 15 of the , the Authority in exercising its jurisdiction, made exclusive by section 22 of the Act, has necessarily to consider various questions incidental to the claims falling thereunder and, although it would be inexpedient to lay down any hard and fast rule for determining the scope of such questions, care should be taken not to unduly extend or curtail its jurisdiction. Whether a particular employee was an operative or one above the rank of an operative and below that of clerk arid, therefore within cl. 5 of the agreement, was a question intimately and integrally connected with wages as defined by the Act and as such fell within the jurisdiction of the Authority under section 15 of the Act. There could, therefore, be no substance in the contention that an employee falling within the category of those others mentioned in the last part of cl. 5, to whom no designation was attached, could not apply under section 15 of the Act. A. V. D 'Costa vs B. C. Patel, ; , referred to. Anthony Sabastin Almeda vs R. M. T. Taylor, (1956) 58 Bom. L.R. 899, distinguished.

ivil Appeal No. 1552 of 1966. 735 Appeal by special leave from the judgment and order dated June 8, 1966 of the Mysore High Court in C.R.P. No. 1118 of 1964. M. C. Chagla and R. Gopalakrishnan, for the appellant. M. R. Ramamurthi, section section Javali and M. Veerappa, for the respondent. The Judgment of the Court was delivered by Vaidailyngam J. this appeal, by special leave, is against the judgment of the Mysore High Court, dated June 8, 1966 in Civil Revision Petition No. 1118 of 1964. The respondent land lord filed an application, dated July 6, 1962 under section 21 (1) (j) of the Mysore Rent Control Act, 1961 (Mysore Act XXII of 1961) (hereinafter called the Act) before the Rent Controller for eviction of the tenants (the appellants herein) on the ground that the premises were reasonably and bonafide required by him for the immediate purpose of demolishing and erecting of a new building. According to the respondent the premises were old and were (not suitable for continued occupation. The respondent had also stated in his application that he had obtained the necessary licence for erecting a new building after demolition of the existing building and that he had made all preparations for demolition and erection of new buildings on the site. The appellant tenant contested the claim of the landlord on several grounds. He pleaded that the premises were not old and that it was quite suitable for occupation and it does not require any re construction or remodelling. The allegations that the building was old and required to be reconstructed were not bona fide and had been made by the landlord only as a pretext for evicting the tenant. The tenant further pleaded that the requirement of the landlord was neither reasonable nor bona fide. In any event, the tenant claimed that he should be entitled to be paid the value of the improvements that had been effected by him. The Rent Controller, by his order dated January 22, 1964 accepted the claim of the respondent and ordered eviction of the appellant granting the tenant one month 's time for delivering vacant possession. Though the Consulting Engineer who gave evidence as P.W. 2 on behalf of the respondent had stated that the building was over 60 years old but nevertheless it could go co for about 15 years more, the Rent Controller actually found that the building was more than 50 years old and that it was an old fashioned one. He further found that when the landlord desired to pull it down and put up a modern building thereon, it could not under the circumstances, be said that his claim was not bona fide or reasonable 736 and that the intention of the landlord in pulling down the building and erecting a new one to get a better return was certainly understandable. The Rent Controller further found that the landlord had proved that he had sufficient means to construct the building and that he had also obtained the necessary sanction from the Municipality concerned for reconstruction of the building. In view of all these circumstances, the Rent Controller found that the requirement of the landlord was quite reasonable and bona fide. Regarding the claim of the tenant for payment of improvements before eviction is ordered, the Rent Controller found that such a claim, even if established, could not stand in the way of the landlord getting possession of the premises. Ultimately the application filed by the landlord was allowed. The findings recorded by the Rent Controller were confirmed by the learned District Judge, by his judgment dated October 19, 1964 in A.S. No. 43 of 1964 taken before him by the tenant. The revision filed by the appellant before the High Court was rejected by order dated June 8, 1966. Mr. Chagla, learned counsel appearing for the appellant, contended that the interpretation placed by all the Courts on section 21 (j) of the Act was erroneous. According to the learned counsel, unless the landlord was able to establish that the condition of the building was such that it required immediate demolition and re construction, no eviction of the tenant could be ordered under section 21 (1) (j) of the Act. On the findings of the Courts, based upon the evidence of the Engineer, that though the building was old it could continue to exist for another 15 years, it should have been held that the conditions mentioned in section 21 (I) (j) were not attracted to justify an order of eviction of the tenant. Mr. Ramamurthi, learned counsel for the respondent, pointed out that in order to attract section 21 (I) (j) it was not necessary that the landlord should establish that the condition of the building was such that it required to be demolished immediately. On the other hand, the sub section made it clear that the requirement contemplated was that of the landlord and once his requirement had been held by all the Courts to be reasonable and bona fide, the order passed for eviction of the tenant was fully justified. Having due regard to the scheme of the Act, we are satisfied that the interpretation placed upon section 21(1)(j) by the High Court is correct. Section 21 (1), while placing a general embargo against a landlord from evicting a tenant, recognises, in its. proviso the circumstances under which a landlord could seek recovery of 737 possession of a premises. The ground upon which the landlord asked for eviction, in the present case, was based on section 21 (1) (j). The material provision is as follows : "21. (1) Notwithstanding anything to the contrary contained in any other law or contract no order or decree for the recovery of possession of any premises shall be made by any court or other authority in favour of the landlord against the tenant: Provided that the court may on an application made to it, make an order for the recovery of possession of a premises on one or more of the following grounds only, namely: . . . . . (j) that the premises are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of erecting a new building in place of the premises sought to be demolished; . . . . . . According to Mr. Chagla, the words 'reasonably and bona fide required ', occurring in this clause, must be interpreted to have reference to the condition of the building, the demolition of which is sought to be made and those words have no reference to any intention entertained by the landlord. The mere fact that a landlord may bona fide and reasonably entertain an idea of demolishing the building and reconstructing the same with a view to putting the property to a more profitable use after construction, will not satisfy the requirements of the said clause. That is, according to the learned counsel, the condition of the building must be such that it is immediately necessary to demolish it, in which case alone eviction under cl. (j) could be ordered. We are not inclined to accept this construction sought to be placed by the appellant on the clause in question. The proviso to section 21 (1) enumerates the various circumstances under which a landlord may seek to recover possession of the property from his tenant. The requirement contemplated under clause (j) of the proviso to sub section ( 1 ) is that of the landlord and it does not have any reference to the condition of the building as such. What is necessary under that clause is that the landlord must satisfy the Court that he reasonably and bona fide requires the premises for the immediate purpose of demolishing it and the demolition is for the purpose of erecting a new building in the place of the old one. No doubt, as to whether the landlord 's requirement is reason 738 able and bona fide has to be judged by the surrounding circumstances, which will include his means for reconstruction of the. building, and other steps taken by him in that regard. In considering the reasonable and bona fide requirement of the landlord under this clause, the desire of the landlord to put the property to a more profitable use after demolition and reconstruction is also a factor that may be taken into account in favour of the landlord. In our opinion, it is not necessary that the landlord should go further and establish under this clause that the condition of the building is such that it requires immediate demolition. That the condition of the property may be such which requires immediate demolition is emphasized in cl. (k) of the proviso. When such a specific provision has been made in cl. (k), the condition of the building cannot come into the picture nor could it have been dealt with again in cl. So the requirement under cl. (j) is that of the landlord and cannot have any reference to the building. This Court, in Neta Ram vs Jiwan Lal (1) in interpreting no doubt a slightly differently worded provision in section 13(3)(a)(iii) of the Patiala and East Punjab States Union Urban Rent Restriction Ordinance, 2006 B.K. (8 of 2006 BK) held that one of the circumstances which could be taken into account in considering the requirements of the landlord with reference to the existing building is 'the possibility of its being put to a more profitable use after construction '. In the case 'before us all the Courts have concurrently held that the requirement of the landlord is reasonable and bona fide and that he had obtained the necessary sanction from the municipality concerned and that the landlord had also the means for reconstruction of the building. If the landlord does not commence demolition of the premises within the period specified in the order of the Court, the tenant is given a right under section 26(1) to issue a notice to the landlord of his intention to occupy the pre mises from which he had been evicted and also to apply to the Court for relief if the landlord does not comply with his request. Again under section 27, the tenant has got a right to occupy the new building on its completion provided he satisfies the requirements contained in that section. Under section 2 8 (I), the landlord is bound to intimate the tenant from whom he had received a notice under section 27 the date on which the erection of the new building will be completed from which date the tenant will be entitled to occupy the same. Mr. Chagla has referred us to a decision of the Madras High Court in Mehsin Bhai vs Hate & Company (2). The section which came up for consideration before the Madras High Court was section 14(3) of the Madras Buildings (Lease and Rent Control) Act, 1960 (Act XVIII of 1960) which was as follows: (1) [1962] Supp. 2 S.C.R. 623. (2) 739 14(1)(b) that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, pass an order directing the tenant to deliver possession of the building to the landlord before a specified date. " That clause is substantially similar to section 21(1)(j) of the Act. In the Madras case it is seen that the building from which the tenant was sought to be evicted was in good condition and there was no danger of its failing for another 20 years though the building was old. Under those circumstances when the landlord applied under section 14(1) (h) of the Madras Act for eviction on the ground that he wished to demolish the building for the purpose of erecting a new building thereon, the High Court affirmed the decision of the Subordinate Court declining relief to the landlord, Though the learned Judge states that landlords May bona fide require such buildings, particularly old buildings in their own interest for demolition and reconstruction, he holds that it is equally possible that the mere fact that a building is old may be taken advantage of by a landlord to put forth such pretext, his real object being ulterior and not bona fide ,for the purpose of reconstruction. We have no hesitation in agreeing with the learned Judge 's observation that the landlord must prove the reasonableness and bona fide nature of his requirement. But, if the learned Judge intended to Iay down a proposition of law that under section 14 ( I ) (b) of the Madras Act, similar to section 21 ( 1) (j) of the Act a landlord cannot recover possession of the property for the purpose of re construction so as to put the property to a more profitable use, we are of the view that the decision of the Madras High Court must be considered to be erroneous. There is absolutely no justification for putting such a narrow interpretation on the clause in question. Mr. Chagla further urged that before his client is evicted his, claim for compensation should have been considered by the Rent Controller. It is enough to say that, as pointed out by the High Court, that claim does not arise for consideration in these proceedings. We may also state that a further contention regarding them validity of the notice to quit issued by the landlord which was taken before the High Court and held against the appellant, has not been canvassed before us. In the result, the appeal fails and is dismissed with costs. The petitioner/appellant undertaken to vacate the premises within a month from today. Y.P. Appeal dismissed.

Under section 21 (1) (j) of the Mysore Rent Control Act, 1961 the court may on an application order the recovery of possession of any premises in favour of the landlord, if "the premises are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of enacting a new building in place of the premises sought to be demolished,". The respondent landlord applied under section 21(1)(j) for eviction of the tenants appellants, claiming that the premises were reasonably and bona fide required by him for the immediate purpose of demolishing and erecting of a new building, that the premises were old and were not suitable for continued occupation. The respondent claimed to have obtained the necessary licence and to have made all preparations for demolishing the existing., building and erecting new building. The appellants tenants contested the claim. The Rent Controller accepted the respondent landlord 's claim and ordered eviction, which in appeal, and further revision to the High Court was upheld. In appeal to this Court for the appellant tenant, it was contended that unless the landlord was able to establish that the condition of the building was such that it required immediate demolition and reconstruction, no eviction of the tenant could be ordered under section 21 (1) (j). Rejecting this contention and dismissing the appeal, HELD : The requirement contemplated under clause (j) of the proviso to sub section (1) is that of the landlord and it does not have any reference to the condition of the building as such. What is necessary under that clause is that the landlord must satisfy the Court that he reasonably and bona fide requires the premises for the immediate purpose of demolishing it and such demolition is for the purpose of erecting a new building in the place of the old one. No doubt, whether the landlord 's requirement is reasonable and bona fide has to be judged in the light of the surrounding circumstances, which will include his means for reconstruction of the building, and other steps taken by him in that regard. [737 G, H] In considering the reasonable and bona fide requirements of the landlord under this clause, the desire of the landlord to put the property to a more profitable use after demolition and reconstruction is also a factor that may be taken into account in favour of the landlord. It is not necessary that the landlord should go further and establish under this clause that the condition of the building is such that it requires immediate demolition. [738 D] Neta Ram vs Jiwan Lal, [1962] Supp. 2 S.C.R. 623, referred to. Mehsin Bhai vs Hale & Company, (1964) II M.L.J. 147, contra observation disapproved.

Appeal No. 26 of 1961. Appeal from the judgment and order dated July 26, 1961 of the Calcutta High Court in Appeal from original Order No. 67 of 1959. G. section Pathak, A. N. Sinha and P. K. Mukherjee for the appellants. Niren De, Additional Solicitor general N.C chatterjee S.Ghosh, J. B. Dadachanji and O. C. Mathur for the respondent. D. N. Mukherjee, for the intervener No. 1. Naunit Lal, for the intervener No. 2. The Judgment of SARKAR, RAGHUBAR DAYAL and MUDHOLKAR JJ. was delivered by SARKAR J. The dessenting Opinion of SUBBA RAO and AYYANGAR JJ. was delivered by AYYANGAR J. Sarkar J. The appellant Corporation was constituted by the Calcutta Municipal Act, 1951, an Act passed by the Legislature of the State of West Bengal. The Act was intended to consolidate and amend the law relating to the Municipal affairs of Calcutta and it defined the duties, powers and functions of the Corporation in whose charge those affairs were placed. The respondent is a firm owning a cinema house. and carrying on business of public cinema shows. Section 443 of the Act provides that no person shall without a licence granted by the Corporation keep open any cinemahouse for public amusement. It, however, does not say that any fee is to be paid for the licence. But sub section (2) of section 548 says that for every licence under the Act, a fee may, unless otherwise provided, be charged at such rate as may from time to time be provided. In 1948 the Corporation had fixed the scale of fees on the basis of the annual valuation of the cinema houses made by a method which does not appear on the record. The respondent had under these sections obtained a licence for its cinema house and had been paying a licence fee calculated on the aforesaid basis. The fee as calculated was Rs. 400 per year. By a resolution passed on March 14, 1958 the Corporation changed the basis of assessment of the licence fee with effect from April 1, 1958. Under the new method the fee was to be assessed at rates prescribed per show according to the sanctioned seating capacity of the cinema houses. The respondent 's cinema house,had 551 seats and under the changed method it became liable to a 482 fee of Rs. 5 per show. In the result it became liable to pay a fee of Rs. 6,000 per year. The respondent then moved the High Court at Calcutta under article 226 of the Constitution for a writ quashing the resolution. The application was first heard by Sinha J. who allowed it. This order was confirmed by an appellate Bench of the same Court consisting of Bose C. J. and C. K. Mitter J. on appeal by the Corporation. Hence the present appeal. In this Court the levy was challenged on three grounds the first of which may be disposed of at once. That ground was that the levy amounted to expropriation and was, therefore, invalid as violating cls. (f) and (g) of sub article (1) of article 19. Sinha J. rejected this contention as on the materials on the record it could not be said that the new rate was so high as to make it impossible for the respondent to carry on its business. The learned Judges of the appellate Bench do not appear to have taken a different view of the matter. It seems to us that a fee at the rate of Rs. 5 per show in a house with a seating capacity of 551 cannot in any sense be said to be unreasonably high. With that seating capacity the respondent would at a reasonable estimate be collecting about Rs. 1,000 per show and paying the sum of Rs. 5 per show. No doubt the increase in the rate of fee from Rs. 400 to Rs. 6,000 per year was large. But at the same time the circumstances obtaining in our country had undergone an immense change between 1948 when the fee was earlier fixed and 1958. The challenge to the levy on the ground that it amounted to expropriation is wholly unfounded and was rightly rejected in the High Court. Substantially the same argument was advanced from a different point of view. It was said that article 19(1), (f) and (g) were violated in any case as section 548 gave an arbitrary power of taxation. This contention found favour with the learned Judges of the High Court but, with respect to them, we are unable to agree. In our view, for reasons to be later stated, no arbitrary power of taxation was conferred by section 548. The second challenge to the levy was put in this way. The levy authorised by sections 443 and 548 was a fee in return for services to be rendered and not a tax and it had therefore to be commensurate with the costs incurred by the Corporation in providing those services. The present levy of Rs. 6,000 per year was far in excess of those costs and was for that reason invalid. The Corporation 's answer to this contention is that the levy was a tax and not a fee taken in return for services and no question of its 483 being proportionate to any costs for services arose. The Corporation does not dispute that if the levy was a fee in the sense mentioned, it would be invalid. The only question on this part of the case, therefore, is, was the levy a fee in return for services? Another subsidiary question is, what is the nature of the services which makes a levy in respect of them, a fee ? It is not disputed that a levy made in return for services rendered would be a fee. It is, therefore, unnecessary to consider what a fee is or the tests by which it is to be determined. Nor is it necessary to discuss whether in order that a levy may be a fee the statute imposing it must intend primarily to confer the benefits of the services on those who pay it and benefits received from those services by the public at large, if any, must be secondary. A discussion of these aspects of fees, will be unprofitable and will only cloud the point really in issue. Now, on the first question, that is, whether the levy is in return for services, it is said that it is so because section 548 uses the word "fee". But, surely, nothing turns on words used. The word "fee" cannot be said to have acquired a rigid technical meaning in the English language indicating only a levy in return for services. No authority for such a meaning of the word was cited. However that may be, it is conceded by the respondent that the Act uses the word "fee" indiscriminately. It is admitted that some of the levies authorised are taxes though called fees. Thus, for example, as Mitter J. pointed out, the levies authorised by sections 218, 222 and 229 are really taxes though called fees, for no services are required to be rendered in respect of them. The Act, therefore, did not intend to use the word fee as referring only to a levy in return for services. This contention is not really open to the respondent for section 548 does not use the word "fee"; it uses the words "licence fee" and those words do not necessarily mean a fee in return for services. In fact in our Constitution fee for licence and fee for services rendered are contemplated as different kinds of levy. The former is not intended to be a fee for services rendered. This is apparent from a consideration of article 110(2) and article 199(2) where both the expressions are used indicating thereby that they are not the same. In Shannon vs Lower Mainland Dairy Products Board(1) it was observed at pp. 721 722, "if licences are granted, it appears to be no objection that fees should be charged in order either to defray the costs of administering the local regulation or to increase (1) 484 the general funds of the Province or for both purposes It cannot, as their Lordships think, be an objection to a licence plus a fee that it is directed both to the regulation of trade and to the provision of revenue. " It would, therefore, appear that a provision for the imposition of a licence fee does not necessarily lead to the conclusion that the fee must be only for services rendered. It may also be stated that a statute has to be read so as to make it valid and, if possible, an interpretation leading to a contrary position should be avoided; it has to be construed ut res magis valeat quam pareat : see Broom 's Legal Maxims (10 ed.) p. 361, Craies on Statutes (6th ed.) p. 95 and Maxwell on Statutes (11th ed.) p. 221. Therefore again, the word "fee" in section 548 should be read as meaning a tax, for as we shall show later, it made no provision for services to be rendered; any other reading would make the section invalid. A construction producing that result has to be avoided. We do not also think that by reading the word as referring to a tax we would be doing any violence to the language used. If the word "fee" is not conclusive of the question that it must be in return for services, as we think it is not, then the question whether the fee contemplated in section 548 is a fee in return for services, can only be decided by reference to the terms of the section and for this purpose we have to consider that section along with section 443. We have earlier summarised the sections but now propose to set them out so far as material : section 443. No person shall, without or otherwise than in conformity with the terms of a licence granted. section 548. (1) Every licence granted under this Act shall specify, . . . . . (1) the tax or fee, if any, paid for the licence (2) Except when it isotherwise expressly provided, for every such licencea fee may be charged at such rate as may from time to time be fixed by the Corporation. . . . The sections do not refer to the rendering of any service by the Corporation. Looking at them we do not find anything to lead to the conclusion that they make it incumbent on the Corporation 485 to render any service in return for the fee imposed. Stopping here, therefore, there is no reason for saying that the levy is a fee in return for services. But it was said that the services to be provided for the levy of the fee are set out in the by laws made under section 527, item 43. Item 43 permits by laws to be framed regulating the inspection, supervision and control, among others, of cinema houses. It does not however make it obligatory on the Corporation to make any by law. If the by laws are not made, there would, ex hypothesis be no services to render. No doubt section 443 contemplates that the cinema shows shall be conducted in conformity with the terms of the licence but it again seems to us that it is optional for the Corporation to impose terms; it is not bound to do so. In any case, those terms need not be for rendering of services by the Corporation. They may, for example, provide that the shows will not be continued after a certain hour in the evening. In fact, however, certain by Laws, called Theatre By laws, were framed by the Corporation. Those by laws were not produced before us excepting one which states, "The Chairman may cause all such premises to be inspected at least twice yearly and if as the result of such inspection any defect or disorder be noticed in such premises in connection with and relating to any of the matters or things referred to in these by laws, the Chairman may by written notice require the owner or lessee of such premises to make good such defects. " It is quite clear that the words "the matters or things referred to in these by laws" occurring in the by law quoted, contemplate things to be done by the licensee and not by the Corporation. Those matters or things cannot be services which the Corporation is required to render. It would, therefore, appear that even the by laws the terms of which might have been incorporated in the licence do not contemplate the rendering of any service by the Corporation to the licensee. It may be stated that the licence granted to the respondent does not appear in the records of this case. It is however said that the by law earlier quoted requires inspection of the cinema houses by the Corporation and that was the service that the Corporation had to render in return for the licence fee. We are unable to accept this contention. The inspection was not certainly a service to the licensee; it was necessary only to make sure that he carried out the conditions on which the licence had been granted to him. It was something to 486 be done to control the licensee 's activities and to make him observe the conditions of the licence on pain of cancellation of the licence. This is clear from sub section (3) of section 548 which states that "any licence granted under this Act may at any time be suspended or revoked if any of its restrictions or conditions is infringed or evaded by the grantee. " This non observance of the conditions of the licence would expose the licensee to penalty under section 537 of the Act. The inspection was therefore necessary also for enforcing the conditions of the licence by penalising a breach of them by the licensee. We cannot imagine that an inspection by the Corporation for such purposes can at all be said to be rendering of service to the licensee. The nature of services to be rendered in return for a levy so as to make it a fee has been considered by this Court in several cases and in all of them it has been said that the services must confer some benefit on the person paying the fee. The earliest case on the subject appears to be The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(1), where it was said at p. 1042, 'a fee is a payment for a special benefit or privilege. Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives". It was again said at p. 1043, that in the case of fees for services "the Government does some positive work for the benefit of persons and the money is taken as the return for the work done or services rendered. " This case was concerned with a statute which imposed a levy on religious institutions expressly said to be in return for services. The services mentioned in the statute consisted among others in the Government supervising the management of the institutions, auditing their accounts and seeing that their income was duly appropriated to the purposes for which they were founded. Though it did not expressly say so. this Court was presumably of the view that these were services to the institutions making the levy a fee, for it declared the levy invalid on the ground that it was not correlated to the costs of those services and therefore was a tax which was beyond the competence of the Madras Legislature which had enacted the statute. It would appear that the services here considered were not for controlling the institutions but for doing work which secured to them their funds and the proper application of them. The statute might have involved a check on the conduct of the (1) ; 487 Mathadipatis who managed the institutions but that control also was for the benefit of the institutions. It has to be remembered as was said in another case to which we shall presently refer, that the Mathadipatis were in the position of trustees of the institutions. It would follow that control of their wrongful activities must result in special benefits to the institutions for their funds would not then be frittered away. After this judgment, the section imposing the levy was amended but the amended section was also challenged on similar grounds. The matter again came up to this Court in the case of H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore("). This time the validity of the section was upheld. The reasons for this decision are not relevant to the present discussion. As to the nature of services however, this Court reiterated the view stated in the earlier case. It said at p. 323, "If with a view to provide a specific service, levy is imposed by law and expenses for maintaining the service are met out of the amounts collected there being a reasonable relation between the levy and the expenses incurred for rendering the service, the levy would be in the nature of a fee and not in the nature of a tax. " It was further said, "A fee being a levy in consideration of rendering service of a particular type, correlation between the expenditure by the Government and the levy must undoubtedly exist." The act was the same as the earlier one in regard to the services to be rendered by the Government and the view expressed in the earlier judgment as to the nature of the services required by the statute to be performed was endorsed in this judgment. It was said at p. 312, that the Mathadipati "is by virtue of his office under an obligation to discharge the duties as a trustee and is answerable as such". It would follow that a service resulting in the control of the Mathadipati would confer special benefit on the institution which alone paid the levy. Both these cases discussed other tests besides the require ment of the rendering of services for determining whether a levy is a fee, but with these we are not concerned in the present case. These cases also discussed the correlation of the costs of the services to the levy but with that also we are not concerned as it is not sought to uphold the present levy on the ground of such correlation. We have referred to these cases only for showing that to make a levy a fee the services rendered in respect of it (1) [1965] Supp. 2 section C. R. 302 Supp./65 15 488 must benefit, or confer advantage on, the person who pays the levy. The other case to which we wish to refer in this connection is The Hingir Rampur Coal Co. Ltd. vs The State of Orissa and ors.(1). There the imposition by a certain statute of a levy on lessees of coal mines in a certain area and the creation of a fund with it, was called in question. It was held that the levy was a foe in return for services and was valid. It was there said at p. 549, "If the special service rendered is distinctly and primarily meant for the benefit of a specified class or area, the fact that in benefitting the specified class or area the State as a whole may ultimately and indirectly be benefitted would not detract from the character of the levy as a fee. " It may be mentioned that the levy there went to meet expenditure necessary or expedient for providing amenities like communication, water supply and electricity for the better development of the mining area and to meet the welfare of the labour employed and other persons residing or working in the area of the mines. Here again there is no element ,of control but the services resulted in real benefit specially accruing to the persons on whom the levy was imposed. These decisions of this Court clearly establish that in order to make a levy a fee for services rendered the levy must confer special benefit on the persons on whom it is imposed. No case has been brought to our notice in which it has been held that a mere control exercised on the activities of the persons on whom the levy is imposed so as to make these activities more onerous, is ,service rendered to them making the levy a fee. It was also contended that the levy under section 548 must be a tee and not a tax, for all provisions as, to taxation are contained in Part IV of the Act, while this section occurred in Chapter XXXVI headed "Procedure" in Part VIII which was without a heading. It was pointed out that Part V dealt with "Public Health, Safety and Convenience" and section 443 which was included in Chapter XXVI contained in this Part was headed "Inspection and Regulation of Premises, and of Factories, Trades and Places of Public Resort". A cinema house, it is not disputed, is included in the words "Places of public resort". It was, therefore, contended that a levy outside Part IV could not be a tax and hence must be a fee for services. This contention was sought to be supported by the argument that section 443 occurred in a Part concerning public health, safety and convenience and therefore the (1) ; 489 intention was that the levy authorised by the section would be in return for work done for securing public health, safety and convenience and was hence a fee. We are wholly unable to accept this contention. Whether a particular levy is a fee or tax has to be decided only by reference to the terms of the section as we have earlier stated. Its position in the Act cannot determint; its nature; an imposition which is by its terms a tax and not a fee, which in our opinion the present imposition is, cannot become a fee by reason of its having been placed in a certain part of the statute. The reference to the heading of Part V can at most indicate that the provisions in it were for conferring benefit on the public at large. The cinema house owners paying the levy would not as such owners be getting that benefit. We are not concerned with the benefit, if any, received by them as members of the public for that is not special benefit meant for them. We are clear in our mind that if looking at the terms of the provision authorising the levy, it appears that it is not for special services rendered to the person on whom the levy is imposed. it cannot be a fee wherever it may be placed in the statute. A consideration of where sections 443 and 548 are placed in the Act is irrelevant for determining whether the levy imposed by them is a fee or a tax. The last argument in this connection which we have to notice was based on sections 126 and 127 of the Act. Section 126 deals with the preparation by the Chief Executive Officer of the Corporation called Commissioner, of the annual budget. The budget has to include an estimate of receipts from all sources. These receipts would obviously include taxes, fees, licence fees and rents. Under section 127(3) the Corporation has to pass this budget and to determine, subject to Part IV of the Act, the levy of consolidated rates and taxes at such rates as are necessary to provide for the purposes mentioned in sub section Sub section (4) requires the Corporation to make adequate and suitable provision for such services as may be required for the fulfilment of the several duties imposed by the Act and for certain other things to which it is not necessary to refer. The first point made was that these sections showed that the Act made a distinction between fees and taxes. It does not seem to us that anything turns on this as the only question now is whether the levy under section 548 is a fee. The other point was that cls. (3) and (4) of section 127 showed that the Corporation could fix the consolidated rates and taxes and that the determination of rates for these had to be in accordance with the needs for carrying out the Corporation 's duties under the Act. 490 It was said that as the licence fee leviable under section 548 did not relate to any duty of the Corporation under the Act, it being optional for the Corporation to impose terms for grant of licences for cinema houses, the rate for that fee was not to be fixed in reference to anything except rendering of services. We are unable to accept this argument and it is enough to say in regard to it that it is not right that section 443 does not impose a duty on the Corporation. We think it does so, though in what manner and when it will be exercised it is for the Corporation to decide. It is impossible to call it a power, as the respondent wants to do, for it is not given to the Corporation for its own benefit. The Corporation has been set up only to perform municipal duties and its powers are for enabling it to perform those duties. Furthermore there is no doubt that an estimate of the licence fee has to be included in the budget and therefore the word "tax" in section 127(3) must be deemed to include the levy under section 548. The words " subject to the provisions of Part IV" in section 127(3)must be read with the addition of the words "where applicable". If that levy cannot be a fee because there is no provision forservice being rendered in respect of it, it would indisputably be a tax. As such again, its rate can be determined under section 127(3) to provide for the discharge of at least the other undisputed duties of the Corporation. We would, therefore, reject this last argument also. The conclusion to which we then arrive is that the levy under section 548 is not a fee as the Act does not provide for any services of special kind being rendered resulting in benefits to the person on whom it is imposed. The work of inspection done by the Corporation which is only to see that the terms of the licence are observed by the licensee is not a service to him. No question here arises of correlating the amount of the levy to the costs of any service. The levy is a tax. It is not disputed, it may be stated, that if the levy is not a fee, it must be a tax. It was then said that if section 548 authorised the levy of a tax as distinct from a fee in return for services rendered, it was invalid as it amounted to an illegal delegation of legislative functions to the Corporation because it left it entirely to the latter to fix the amount of the tax and provided no guidance for that purpose. We wish to point out here that the contention now is that the section is invalid while the contention that we have just dealt with proceeded on the basis that the section was valid as it provided for the levy of a fee in return for services and as this necessarily implied a limit of the levy, namely, that it had to be commensurate to the amount of the costs of the services, no guidance for 491 fixing the amount of the fee to be levied was required to be provided. That argument only challenged the resolution on the ground that it fixed the amount of the fee at a figure much in excess of the costs for the services rendered. Here again there is no dispute that a delegation of essential legislative power would be bad. It was so held by this Court first in In re The Delhi Laws Act.(1) The principle there laid down has been summarised by Bose J. in Rajnarain Singh vs The Chairman, Patna Administration Committee, Patna(2), in these terms: "In our opinion, the majority view was that an executive authority can be authorised to modify either existing or future laws but not in any essential feature. Exactly what constitutes an essential feature cannot be enunciated in general terms, and there was some divergence of view about this in the former case, but this much is clear from the opinions set out above: it cannot include a change of policy. " On the basis that section 548 is a piece of delegated legislation, it has been contended on behalf of the Corporation that the rate of a tax is not an essential feature of legislation and the power to fix it was properly delegated to the Corporation as sufficient guidance for that purpose was given in the Act. It is not in controversy, and this indeed has been held by this Court, that if that is so, the section would be unexceptionable. The question first is whether the power to fix the rate of a tax can be delegated by the legislature to another authority; whether it is of the essence of taxing legislation. The contention of the Corporation that fixation of rates is not an essential part of legislation would seem to be supported by several judgments of this Court to some of which we now proceed to refer. First, there is Pandit Benarsi Das Bhanot vs The State of Madhya Pradesh ( 3 ) . That case was concerned with a Sales Tax Act which by section 6(1) provided that no tax would be payable on any sale of goods specified in a schedule to it. Item 33 of that Schedule read, "goods sold to or by the State Government". Section 6(2) of the Act authorised the State Government to amend the schedule by a notification. In exercise of this power the Government duly substituted by a notification for item 33 the following: "Goods sold by the State Government". The amendment of the schedule by the notification was challenged on the round that section 6(2) was invalid as it was a delegation of the (1) ; (2) ; ,301. (3) ; 492 essential power of legislation to the State Government. Venkatarama Aiyar J. delivering the judgment of the majority of the Court sitting in a Constitution Bench, rejected this contention and after having read what we have earlier set out from the judgment of Bose J. in Rajnarain Singh 's case(1), observed at p. 435: "On these observations, the point for determination is whether the impugned notification relates to what may be said to be an essential feature of the law, and whether it involves any change of policy. Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like. " The Act was a statute imposing taxes for revenue purposes. This case would appear to be express authority for the proposition that fixation of rates of taxes may be legitimately left by a statute to a non legislative authority, for we see no distinction in principle between delegation of power to fix rates simpliciter; if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated. No doubt Pandit Banarsi Das 's case(1) was not concerned with fixation of rates of taxes; it was a case where the question was on what subject mater, and therefore on what persons, the tax could be imposed. Between the two we are unable to distinguish in principle, as to which is of the essence of legislation; if the power to decide who is to pay the tax is not an essential part of legislation, neither would the power to decide the rate of tax be so. Therefore we think that apart from the express observation made, this case on principle supports the contention that fixing of the rate of a tax is not of the essence of legislative power. In regard to the observations in Pandit Benarsi Das 's case(1) earlier quoted, it has been said that the authorities on which they appear to have been based do not support it. It has been contended that as the observations do not form part of the actual decision in the case, they need not be given that weight which they would otherwise have been entitled to. In the High Court this contention appears to have been accepted. The acceptance of the contention would result in by passing a judgment of this Court and that is something which cannot in any case be sup ported. We are furthermore of opinion that the authorities to (1) ; (2) ; , 493 which Venkatarama Aiyar J. referred fully support his observations. The first case relied upon by him was Powell vs Appollo CandleCo. Ltd.(1). That case upheld the validity of a statute passedby the legislature of New South Wales which conferred power on the Governor of that Province to impose duty on certain articles in the circumstances prescribed. The Governor under this power imposed the tax and this was challenged. The Judicial Committee rejected the contention that the tax had not been, imposed by the Legislature which alone could do it in the view that "the duties levied under the Order in Council are really levied by the authority of the Act" see p. 291. Here, therefore, a power conferred on the Governor by the Legislature to levy a tax was upheld. It would follow that a power conferred to fix rates of taxes has equally to be upheld. The next case was Syed Mohamed vs State of Madras(2). There a power to an authority to determine who shall pay the tax was upheld. On the same principle a power to determine at what rate he will have to pay the tax has to be upheld. The last case was Hampton Jr. & Co. vs United States(3), in which the power conferred by a statute on the President to make an increase or decrease in the rate of customs duty was upheld. There it was said at p. 630, "It is conceded by counsel that Congress may use executive officers in the application and enforcement of a policy declared in law by Congress and authorise such officers in the application of the Congressional declaration to enforce it by regulation equivalent to law. But it is said that this never has been permitted to be done where Congress has exercised the power to levy taxes and fix customs duties. The authorities make no such distinction. The same principle that permits Congress to exercise its rate making power in inter state commerce by declaring the rule which shall prevail in the legislative fixing of rates, and enables it to remit to a rate making body created in accordance with its provisions the fixing of such rates, justifies a similar provision for the fixing of customs duties on imported merchandise. " This therefore is clear authority that the fixing of rates may be left to a non legislative body. No doubt when the power to fix rates of taxes is left to another body, the legislature must provide guidance for such fixation. The question then is, was such guidance provided in the Act ? We first wish to observe that the validity of the guidance 1) (2) [1952] 3 section T. C 367 (3) [1927] 72 L. ed. 494 cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate. It is said that the delegation of power to fix rates of taxes authorised for meeting the needs of the delegate to be valid, must provide the maximum rate that can be fixed, or lay down rules indicating that maximum. We are unable to see how the specification of the maximum rate supplies any guidance as to how the amount of the tax which no doubt has to be below the maximum, is to be fixed. Provision for such maximum only sets out a limit of the rate to be imposed and a limit is only a limit and not a guidance. It seems to us that there are various decisions of this Court which support the proposition that for a statutory provision for raising revenue for the purposes of the delegate, as the section now under consideration is, the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid. We proceed now to refer to these cases. The Western India Theatres Ltd. vs Municipal Corporation of the City of Poona(1) was concerned with a statute under which the respondent Corporation had been set up and which gave that Corporation power to levy "any other tax". It was contended that such a power amounted to abdication of legislative function as there was no guidance provided. This contention was rejected. One of the grounds for this view was that the statute authorised the municipality to impose , taxes therein mentioned for the purposes of the Act and that this furnished sufficient guidance for the imposition of the tax. Again, no doubt, this was not a case dealing with rates of taxes, but if a power on the Corporation to impose any tax it liked subject to the guidance mentioned was valid, that would include in it the power to fix the rates of the tax, subject of course to the same guidance. Such a power has to be held to be good. It is true, as was pointed out by learned advocate for the respondent, that other ,,rounds were mentioned in support of the view taken in the Western India Theatres case(1) but that surely is irrelevant, for it cannot make the ground of the decision there which we have earlier set out devoid of all force. Then there is Vasantlal Manganbhai Sanjanwala vs The State of Bombay (2) . The provision of the statute there attacked (1) [1959] Supp. 2 section C. R. 71. (2) ; 49 5 gave the Government power to fix a lower rate of maximum rent payable by the tenants. The validity of this provision was upheld on the ground that the material provisions of the Act including its preamble were intended to give relief to tenants by fixing the maximum rent payable by them. It was in the light of this policy of the Act that the validity of the impugned provision was really upheld. The last case which we wish to notice in this connection is the Union of India vs Bhana Mal Gulzari Mal(1). Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 came up for consideration there. That section gave power to the Government to make necessary orders for maintaining or increasing supplies of any essential commodities or for securing their equitable distribution and availability at fair prices. In Harishankar Bagla vs The State of Madhya Pradesh(1) the validity of the delegation of power contained in that section had been upheld as it laid down the policy as to how that power was to be exercised by the delegates, that is, the Government. In Bhana Mal Gulzari Mal 's case(3) the validity of an order made under section 3 reducing the price at which steel could be sold was challenged. This challenge was rejected on the ground that the order fixing the price carried out the legislative objective prescribed in section 3. It was observed at p. 638, "It is not difficult to appreciate how and why the Legislature must have thought that it would be inexpedient either to define or describe in detail all the relevant factors which have to be considered in fixing the fair price of an essential commodity from time to time. In prescribing a schedule of maximum prices the Controller has to take into account the position in respect of production of the commodities in question, the demand for the said commodities, the availability of the said commodities from foreign sources and the anticipated increase or decrease in the said supply or demand. Foreign prices for the said commodities may also be not irrelevant. Having regard to the fact that the decision about the maximum prices in respect of iron and steel would depend on a rational evaluation from time to time of all these varied factors the Legislature may well have thought that this problem should be left to be tackled by the delegate with enough freedom, the policy of the Legislature having been clearly indicated by section 3 in that behalf. " Again it was said at P. 640, "In deciding the nature and extent of the guidance which should be given to the delegate Legislature must inevitably (1) ; (2) 496 take into account the special features of the object which it intends to achieve by a particular statute. Having regard to the nature of the problem which the Legislature wanted to attack it may have come to the conclusion that it would be inexpedient to limit the discretion of the delegate in fixing the maximum prices by reference to any basic price." The portions in the judgment in Bhana Mal Gulzari Mal 's case(1) quoted in the preceding paragraph will show that the validity of the guidance required to make delegation of power good cannot be judged by a stereotyped rule. With respect, we entirely be held to be agree with this view. The guidance furnished must good if it leads to the achievement of the object of the statute which delegated the power. The validity of the power to fix rates of taxes delegated to the Corporation by section 548 of the Act must be judged by the same standard. Now there is no dispute that all taxes, including the one under this section, can be collected and used by the Corporation only for discharging its functions under the Act. The Corporation, subject to certain controls with which we are not concerned, is an autonomous body. It has to perform various statutory functions. It is often given power to decide when and in what manner the functions are to be performed. For all this it needs money and its needs will vary from time to time with the prevailing exigencies. Its power to collect tax, however, is necessarily limited by the expenses required to discharge those functions. It has, therefore, where rates have not been specified in the statute, to fix such rates as may be necessary to meet its needs. That, we think, would be sufficient guidance to make the exercise of its power to fix the rates valid. The case is as if the statute had required the Corporation to perform duties A, B & C and given power to levy taxes to meet the costs to be incurred for the discharge of these duties and then said that, "provided, however, that the rates of the taxes shall be such is would bring into the Corporation 's hands the amount necessary to defray the costs of discharging the duties. " We should suppose, this would have been a valid guidance. We think the Act in the present case impliedly provides the same guidance see section 127 (3) & (4). It would be impracticable to insist on a more rigid guidance. In the case of a self governing body with taxing powers, a large amount of flexibility in the guidance to be provided for the exercise of that power must exist. It is hardly necessary to point out that, as in the cases under Essential Supplies (Temporary Powers) Act, 1946, so in the case of a big (1)[1960] 2 section C. R. 627. 497 municipality like that of Calcutta, its needs would depend on various and changing circumstances. There are epidemics, influx of refugees, labour strikes, new amenities to be provided, for such as hospitals, schools and various other such things may be mentioned which make it necessary for a colossal Municipal Corporation like that of Calcutta to have a large amount of flexibility in its taxing powers. These considerations lead us to the view that section 548 is valid legislation. There is sufficient guidance in the Act as to how the rate of the levy is to be fixed. We may point out at the end that entry 62 in List II of the Seventh Schedule to the Constitution gives power to the State Legislatures to impose taxes on entertainment and amusement and therefore on cinema shows. It was hence not said if the question was relevant that the State Legislature delegated a power to the Corporation which it itself did not possess. It remains now to notice an argument advanced by Mr. Pathak on behalf of the Corporation. It is that even if it be assumed that no guidance for the taxation has been prescribed, the provision for taxation in the Act would be valid. He said that the Act may be said to have been passed under entry 5 of List 11 in the Seventh Schedule to our Constitution. That entry authorises the passing of a law concerning the constitution and powers of a municipal corporation. Mr. Pathak contended that the powers of a corporation contemplated in this entry must necessarily in clude power to levy tax, for no municipal corporation could work without its own funds. He pointed out that this has been the case with the municipal corporations created before and after the Constitution. He, therefore, said that the present was not a case of delegation of taxing power which might be bad if no guidance to the exercise of that power had been furnished by the Act; it is a case where under the Constitution independent power to tax had been conferred on the Corporation. The conferment of such power did not require any guidance for its exercise to make it valid. He pointed out that delegation of power necessarily meant delegation of the power of the delegator. On such delegation the delegated power could only be exercised by the delegates for the use of the delegator. That was not the case of power conferred tinder entry 5. In such a case the power of taxation conferred was for the purpose of the corporation itself. The amount collected by taxation belonged to the corporation. This is what had happened here. As at present advised, we think that this contention of Mr. Pathak deserves consideration. It is unnecessary,, 498 however, for us to pronounce finally on it, for in either view the taxing power challenged must be held to be good. In the result we would allow the appeal with costs through out. Ayyangar, J. Section 443 of the Calcutta Municipal Act, 1951 (West Bengal Act XXXIII of 1951) which will hereafter be referred to as the Act enacts : "No person shall, without or otherwise than in conformity with the terms of a licence granted by the Commissioner in this behalf, keep open any theatre, circus, cinema house, dancing hall or other similar place of public resort, recreation or amusement : Provided that this section shall not apply to private performances in any such place." and section 548 (2) : "Except when it is in this Act or in any rule or byelaw made thereunder otherwise expressly provided, for every such licence or written permission a fee may be charged at such rate as may from time to time be fixed by the Corporation and such fee shall be payable by the person to whom the licence or written permission is granted. The respondent before us is the owner and licensee of a cinema theatre known as the Liberty Cinema situated in Calcutta within the Municipal limits of the city. Under the provisions of the Calcutta Municipal Act 1923 which had been repealed and reenacted with modifications by the Act of 1951, the respondent was paying for his theatre Rs. 800 per annum as licence fee under provisions corresponding to sections 443 and 548 (2) of the Act. While so, by a resolution of the Municipal Council dated March 14, 1958, the licence fee payable by theatres under section 443 was raised with the result that instead of Rs. 800 which the respondent was paying previously he was required to pay a sum of Rs. 6,000 per year. As the Corporation insisted upon the amount being paid and threatened to cancel the licence and take appro priate penal action in the event of the demand not being met, the respondent filed a petition before the High Court under article 226 of the Constitution praying for appropriate writs of certiorai, mandamus etc. to quash the said resolution and to prevent the Corporation from enforcing the said demand. It was stated in the petition that the respondent had been paying besides the consoli 499 dated rate for the property, a fee of Rs. 250 as profession tax for carrying on the trade or calling of cinema exhibitor as well as other taxes and fees. He characterised the licence fee which was. demanded from him as not in reality a fee which alone the Municipal Corporation was entitled to charge. Stating that it was out of all proportion to the service rendered or the costs involved in ensuring the observance of the conditions of the licence, he contended that the fee demanded from him was really a tax which the Corporation was not entitled to levy under the provisions quoted and therefore sought the relief which he prayed for in the petition. The learned Single Judge who heard the petition in the first instance held on an analysis of the provisions of the Calcutta Municipal Act that what the Municipality was entitled to levy under section 548 (2) read with section 443 was really "a licence fee" and not a tax and that viewed as a licence fee it did not pass the test of legality on account of there being no correlation between the amount charged on the theatre owners and the services rendered to them or the expenses incurred by the Municipality in regard to the issue of licences. Dealing with the alternative contention urged before him by the Corporation that section 548 (2) of the Act authodsed ' the Corporation to levy a tax, the learned Judge held that the section would be unconstitutional as suffering from the vice of excessive delegation in that it laid down no principle, indicated no policy and afforded no guidance for determining the basis or the rate on which the tax was to be levied and was therefore void. In consequence he allowed the petition saving however the right of the Corporation to recover the fee at the rate in force prior to March 14, 1958 on the ground that the levy at this rate was saved by article 277 of the Constitution. The Corporation preferred an appeal to a Division Bench and the learned Judges on practically the same line of reasoning as the learned Single Judge dismissed the appeal. Their conclusions were as follows : The imposition permitted to be made by section 548 (2) read with section 443 of the Act is charged was only a fee as distinguished from a tax. Regarded as a fee the levy was invalid as there was no quid pro quo. If, however, it be held that the provisions quoted authorised the levy of a tax, the provisions were unconstitutional because they involved an improper delegation of legislative power. They also held that the levy was not to any extent saved by article 277 of the Constitution. The Corporation desiring to prefer an appeal sought a certificate of fitness from the learned Judges and the same having been granted, the appeal is now before us. 500 As one of the questions involved in the appeal related to the ,constitutional validity of the provisions of a State enactment, notice of this appeal was served on the State. Mr. Pathak learned Counsel for the appellant Corporation did not contest the finding and decision of both the learned Single Judge as well as the learned Judges in appeal, that if what section 548 (2) of the Act authorised was only a fee in the technical sense, viz., a payment for service rendered as distinguished from a tax, the impugned levy was invalid in as much as there was admittedly no correlation between the amount of the levy and the cost of the service, if any rendered to the fee payer. His submissions in support of the validity of the impugned levy were : (1) An analysis of the several provisions of the Act showed that the Act employed the word "fee" and particularly in the context of a fee for licences granted for carrying on an activity, in the sense of a tax. , (2) the fee permitted to be charged for licences by section 548 (2) of the Act was not a fee but a tax as it was not a quid pro quo for services which the Corporation was required by or under the Act to render or did render to the licensee. , (3) A fee charged for a licence other than a fee for services rendered is in reality a tax and no quid pro quo is necessary to sustain its validity beyond the grant of the licence and a permission to carry on the activity which the licence authorises. , (4) If what was permitted to be charged by section 548 (2) were a tax, the provision is not unconstitutional for the reason that the rate of the fee was not specified in the Act. The non specification in the Act of the rate of the licence fee to be charged is not open to the objection of excessive delegation of legislative power for two reasons : (1) For considering whether there has been an excessive delegation, regard must be had not merely to the section conferring the power but to the other provisions of the Act as well which might throw light upon the topic and from which sufficient enunciation of principle or guidance could be gathered. In the present case there was sufficient guidance available and proper standards laid down in the other provisions of the Act as to uphold the validity of the delegation. , (2) When a delegation of legislative power including legislative power to impose a tax is conferred upon a Municipal Corporation, no question of excessive delegation arises as the Constitution itself permits and authorizes such devolution ,of legislative power. In view of these submissions it is necessary to consider and ascertain principally 4 matters : (1) the precise nature of a fee, 501 as distinguished from a tax. , (2) Whether on an examination of the several provisions of the Act the charge authorised to be levied by section 548 (2) read with section 443 of the Act, is a fee in that or is it a tax. , (3) If what is permitted to be levied by section 548(2) is not a fee out a tax whether the various provisions of the Act read independently or together enunciate the principles, prescribe the standards, and affords sufficient guidance to the Municipality to fix the rate so as to render the conferment of the power free the from the vice of excessive delegation; and (4) lastly, whether the rule as to excessive delegation of legislative power is inapplicable in those cases where the devolution or conferment of power is on a municipal corporation, or, in any event, whether the rule as to excessive delegation needs substantial modification before the same is applied to a case where the donee of the power is a municipal corporation entrusted with local self government. Weshall take up these questions in that order. 1.The Nature of a Fee as distinguished from a tax. Mr. Pathakdid not dispute that the Constitution had drawn a distinction between "fees" and "taxes", and that while "fees" could be charged as incidental to the exercise of legislative power on topics set up in the several entries in the three legislative lists in Schedule VII, the power taxation by the Union or by the State was confined to particular species or types of taxes distinctively specified as such in lists I or II respectively. In the context of such a distinction the question necessarily arose as to what were the ingredients or characteristics of a "fee" as distinguished from a "tax". Mr. Pathak submitted that "fees" as envisaged by the Constitution was the exaction of compensation permitted by a statute to be imposed for a special service rendered to the payer. In other words, unless by or under an enactment it was obligatory on an authority, be it a municipal authority or any other to render some special service to the payer of the fee as distinguished from the benefit conferred on every member of the general public by the performance of statutory duties, and the levy is permitted to be made for meeting the cost of such service, the charge imposed would not be a "fee". In all other cases, where no special service is directed to be or is rendered to a particular individual out of the ordinary, the fee imposed for the licence or permission granted for the carrying on of any activity is really in the nature of a tax in regard to which no question of quid pro quo arises. 502 It is common ground that the Constitution recognises a clear distinction between a tax and a fee. The several entries in the Lists in the Seventh Schedule which enumerate the legislative powers and distribute them between Parliament and the State Legislatures point to this distinction. The scheme underlying the Lists may shortly be summarised thus. Each of the Union and the State Lists which are Lists I and II start by enumerating first the Entries conferring general legislative powers as distinct from taxation powers. In other words, the taxation entries, that is entries conferring taxing power, are separately enumerated after entries conferring general legislative power. Thus items 1 to 81 of List I deal with the exclusive general legislative powers of Parliament while 82 to 92 enumerate the taxes which Parliament may impose. Item 96 empowers Parliament to legislate in respect of "fees in respect of any of the matters in this List, but not including fees taken in any Court. " This would clearly demonstrate that while "fees" may be levied in respect of or as incidental to legislation on the topics set out in the other entries in the list, the power to levy a tax is not to be taken as conferred by entries conferring general legislative power. Thus though a fee may be levied as incidental to legislation be it general as in respect of entries 1 to 81 or the entries conferring taxing powers entries 82 to 92, or in respect of the miscellaneous matters enumerated by such an entry like 94, no taxes may be imposed by virtue of the general legislative power under entries 1 to 81. This matter has been the subject of consideration by this Court though from a slightly different angle in M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh.(1) Venkatarama Aiyar, J.speaking for the Court said : "In List 1, Entries 1 to 81 mention the several matters over which Parliament has authority to legislate. Entries 82 to 92 enumerate the taxes which could be imposed by a law of Parliament. An examination of these two groups of Entries shows that while the main subject of legislation figures in the first group, a tax in relation thereto is separately mentioned in the second. Thus, Entry 22 in List I is "Railways", and Entry 89 is "Terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway fares and freights". If Entry 22 is to be construed as involving taxes to be imposed, then Entry 89 would be superfluous. Entry 41 mentions "Trade and commerce with foreign coun (1) ; ,1479 80. 503 tries; import and export across customs frontiers". If these expressions are to be interpreted as including duties to be levied in respect of that trade and commerce, then Entry 83 which is "Duties of customs including export duties" would be wholly redundant. Entries 43 and 44 relate to incorporation, regulation and winding up of corporations. Entry 85 provides separately for Corporation tax. Turning to List II, Entries 1 to 44 form one group mentioning the subjects on which the States could legislate. Entries 45 to 63 in that List form another group, and they deal with taxes. Entry 18, for example, is "Land" and Entry 45 is "Land revenue". Entry 23 is "Regulation of mines" and Entry 50 is "Taxes of mineral rights". The above analysis and it is not exhaustive of the Entries in the Lists leads to the inference that taxation is not intended to be comprised in the main subject in which it might on an extended construction be regarded as included, but is treated as a distinct matter for purposes of legislative competence. And this distinction is also manifest in the language of article 248, Cls. (1) and (2), and of Entry 97 in List I of the Constitution. " The same pattern of classification and conferment of general legislative as distinguished from taxing power is adopted in the State List, List II. Entries 1 to 44 of this List deal with general legislative power while items 45 to 63 deal with specific taxes which might be imposed exclusively by the State Legislatures. The last entry in this List is in the same terms as Entry 96 of List 1 and reads "fees taken in respect of any of the matters in this List but not including fees taken in any Court". So far as the Con current List is concerned, it contains no entry conferring the taxation power but by its last entry, Entry 47, it enables the Legislatures to impose "fees in respect of any of the matters in that List but not including fees taken in any Court" and this is in terms identical with Entries 96 of List 1 and 66 of List 11. It is, therefore, quite obvious that the Constitution proceeds on a basis of clear line of demarcation between the power to tax and the power to levy a fee. Before proceeding further, one other matter arising out of this scheme might also be noticed. When entries 96 of List 1 or 66 of List 11 speak of "any of the matters in this List" they necessarily include also the entries relating to taxation. In other words, a fee may be levied even under an enactment relating to the imposi 3Sup./65 16 504 tion of a tax. Merely by way of illustration of this type of fee we might refer to fees which are charged for licences which are required to be taken by dealers under the Sales Tax Act in the various States. The exact amount of the licence fees to be charged is most often left to the executive determination, the maximum being sometimes prescribed by the relevant sales tax enactment and sometimes even this maximum is not prescribed. These licences are issued in order to ensure the orderly administration of tax legislation and the proper collection of the tax imposed thereby. The distinction between the tax imposed under Entry 54 of List 11 "taxes on the sale or purchase of goods" and +the fees charged for the licences issued to dealers as a condition of their being permitted to carry on business of buying and selling goods is too obvious to need explanation. The significance of illustration of this kind and its impact upon the submissions of Mr. Pathak as regards the nature of a fee under the Constitution we shall reserve for consideration later. Recognising this well marked distinction which the Constitution makes as between a fee and a tax, the submission of Mr. Pathak was that "fees" in entry 66 of List II were fees for services specially rendered to the payer, and for this construction he relied on two separate lines of reasoning (1) that this had been the sense in which this Court had understood the content of the word "fee"; that this construction was required or reinforced by article 110 (2) [and the corresponding Article 199 (2)]. We shall first consider the decisions of this Court, which it is stated have thus interpreted the term "fee" as used in the Constitution. The first case referred to in this connection was The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirth Swamiar of Sri Shirur Mutt(1) where this Court had to consider the constitutional validity of certain provisions of the Madras Hindu Religious and Charitable Endowments Act, 1951 in its application to Mutts. Among the provisions considered in that context was a. 76 of that enactment, which directed every religious institution to "pay to the Government annually" such contribution not exceeding 5% of its income as might be prescribed. The validity of this provision was challenged on the ground that what was authorised to be levied was not a fee but a tax, and that as a tax it could not be brought within any of the particular taxes enumerated in List 11 which the State Legislature was empowered to impose. This Court agreed with this contention. and based its conclusion on the following circums (1) ; 505 tances. It recognised that a clear distinction existed between taxes and fees under the Constitution. As to what was meant by a tax, Mukherjea, J., who delivered the judgment of the Court adopted the definition of the term by Latham, C.J., in Mathews vs Chicory Marketing Board(1) : "a tax is a compulsory exaction of money by a public authority for public purposes enforceable by law and is not payment for services rendered". The learned Judge enumerated the characteristic of a tax from other forms of compulsory payments, and these were summarised thus : (1) that taxes were imposed by a statutory power without the tax payer 's consent the payment being enforced by law, (2) that a tax is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax (3) that a tax was levied for the purposes of general revenue which when collected formed part of the public revenues of the State. "As the object of a tax is not to confer any special benefit upon any particular individual there is no element of quid ' pro quo between the tax payer and the public authority". On the other hand, a fee was generally stated to be defined to be a charge for special service rendered to individuals by some governmental agency. "The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service though in many cases the costs are arbitrarily assessed". The learned Judge then went on to observe "the distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of a common burden while a fee is a payment for a special benefit or privilege. Fee confers a special capacity although the special advantage as for example in the case of registration fees for documents or marriage licences is secondary to the primary motive of regulation in the public interest. Public interest seems to be the basis of all impositions, but in a fee it is some special benefit which the individual receives". In holding that the contribution imposed by section 76(1) was really a tax and not a fee regard was also had to some other factors, viz., (1) the percentage of contribution leviable was graded according to the income derived by the institution, and(2)the entire collections went into the Consolidated Fund of the State and the expenses for the upkeep of the Board which was a statutory corporation created for the administration of religious endowments in the State was also directed to be met out of the monies in the Consolidated Fund. Reliance was also placed on similar observations of this Court, in other cases of (1)61) C.L.R. 263. 506 fees charged on religious endowments under other enactments which were heard along with the Shirur Mutt case,(1) already referred to, though in them the validity of the levy was upheld. The validity of a contribution levied under the Orissa Hindu Religious Endowments Act was considered by this Court in Mahant Sri Jagannath Ramanuj Das and Anr. vs The State of Orissa and Anr.(1) and of a similar levy under the Bombay Public Trust Act (Ratial Panchand Gandhi vs The State of Bombay and Ors.(2)). In these two cases, the validity of the contribution levied under their respective charging provisions was, as stated already, upheld. The ground on which section 76(1)of the Madras Act which was struck down in the Shirur Mutt case was distinguished was, that under the other two enactments, a special fund was created to which the collections were to be credited and that the expenses of the administration of the Act were directed to be met out of this fund. Though the concept of a fee as a quid pro quo for particular services rendered to the fee payer as explained in the Shirur Mutt case are also repeated in these two decisions, it is worth noticing that the service to be rendered to the Religious Endowment or public trust by the Orissa and the Bombay Acts were exactly similar to the service which was by way of supervision, regulation and control over the way in which the management by the trustees was conducted under the Madras Act. This consideration is highlighted when one examines the decision of this Court in the Udipi Mutt case H. H. Sudhundra, Thirtha Swamiar vs Commissioner for Hindu Religious and Charitable Endowments, Mysore(1)which was a sequel to the Shirur Mutt case,(1). After section 76(1) was struck down by this Court in the Shirur Mutt case(2) the Madras Legislature by Act 27 of 1954 effected certain amendments to that section with a view to rendering it constitutional. Section 76 had been held to be ultra vires of the legisture on the ground that what it imposed was not a fee which was the only thing permitted by Entry 66 but in reality of tax. This decision was based upon several grounds of which the principal were : (1) that no special service had been rendered to the Mutts and other religious institutions so as to justify its being a fee for services rendered,, (2) that it was graded according to the capacity of the payer based upon the annual income derived by the institution which rendered it somewhat like an income tax, and (3) that it was paid to the Government and became part of the Consolidated Fund of the State, the expenses incurred in administering the Act being paid (1) ; (2) ; (3)[1963] 2 Supp. S.C.R. 302. 507 out of the General Revenues. Section 76 as amended by Act 27 of 1954 was held to be intra vires and sustained as a fee. The changes that were effected by the Madras Legislature were : (1) the graded system was abolished and the maximum percentage of the contribution being fixed by the statute, (2) the contributions payable were collected by the Commissioner and not by the State, (3) that a separate Fund was created into which these collections were credited and moneys for meeting the expenditure for the administration of the Act were drawn from this Fund. One other point to be mentioned is that the services rendered to the institution, as set out in section 76 and the other relevant provisions of the Act remained exactly the same. This Court held the contribution to be a fee principally for the reason that the moneys that were being paid into a separate Fund were collected not by the Government and were being paid to a different Fund. If one proceeded on the footing that unless the service rendered was a specific service in the sense of a benefit conferred specially upon the payer, the charge levied would be a tax, the contribution levied under section 76 even after the amendment would have been held to be a tax. No doubt, the fact that a separate Fund is segregated from the Consolidated fund of the State and the moneys are received not by the Government as such but by a public authority might show that it is not a tax, still these are not decisive, for as was held by the Privy Council in Attorney General for British Columbia vs E. & N. Railway Co.(1) which has been approved by this Court in The Hingir Rampur Coal Co. Ltd. and Ors. vs The State of Orissa and ors. (2) to which we shall refer later the payments were credited to a Fund known as the Authorised Protection Fund to which advances were made from Consolidated revenues. Lord Greene after saying that the levy had the characteristics of taxation, observed : "It is suggested, however, that there are two circumstances which are sufficient to turn the levy into what is called a 'service charge '. They are, first, that the levy is on a defined class of interested individuals and, secondly, that the fund raised does not fall into the general mass of the proceeds of taxation but is applicable for a special and limited purpose. Neither of these considerations appears to their Lordships to have the weight which it is desired to attach to them. " The segregation of the Fund, therefore, could not have been a decisive factor for determining the nature of the levy. This (1) (2) ; 508 decision as well as the Orissa and the Bombay cases already cited are, therefore, authority for the position that the word 'services ' in this context may have to be understood in a wide sense as including supervision and control over the activity for the exercise of which the fee is charged. As contrasted with these three cases, Mr. Pathak submitted that when fees were levied for licences they were taxes. In support he referred to Cooverjee B. Bharucha vs The Excise Commissioner & the Commissioner, Ajmer and others.(1) Under the legislation before the Court viz. The Excise Regulation Act 1950 licences were granted to regulate the trade in liquor. The fee to be charged for the grant of the licence was not prescribed by the Act or the rules but the licence was sold in public auction, the highest bidder being granted the licence the amount of the licence fee thus being the amount of the highest bid. This Court held that the fee collected from the highest bidders to whom the licences were granted was really in the nature of a tax though described as a licence fee. It was held that the legislative power for enacting this legislation was to be traced to the Entries in the Seventh Schedule, List 11, of the Government of India Act, 1935, "for making laws regarding intoxicating liquors, i.e. the production, manufacture, possession, transport, purchase and sale of intoxicating liquors, and under the powers conferred for raising duties of excise on alcoholic liquors for human consumption; and the pith and substance of the regulation was that it raised excise revenue by imposing duties on liquors". Dealing with the contention that as it was described in the Excise Act as a licence fee the same was invalid as excessive was repelled in these terms : "The next contention that the charge of fee by public auction is excessive and is not in the nature of a fee but a tax ignores the fact that the licence fee described as a licence fee is more in the nature of a tax than a licence fee. One of the purpose of the Regulation is to raise revenue . The grantee is given a licence on payment of the auction price. The Regulation specifically authorizes this". We do not see how this decision helps the appellant. The description of the levy as a fee does not of course determine whether it is a fee or a tax. That taxes may be imposed for effectuating other purposes than raising revenue for protecting some activity which is not subject to tax or to inhibit one which is so subject or to regulate some activity cannot also be disputed. That fees for licences may be by way of taxes does not, however, mean that every fee for a licence is or must be a tax. (1) ; 509 Reference was next made to The Hingir Rampur Coal Co. Ltd. and others vs The State of Orissa and ors.(1) which consi dered the validity of a cess imposed on owners, among others, of coal mines by the Orissa Mining Areas Development Fund Act, 1952. The amount of cess was to be determined by the Government but it was not to exceed 5% of the value of the minerals extracted at the pits mouth which was to be paid into a fund out of which was to be derived the monies for providing the amenities to the mining areas. It was contended for the petitioner coal company who moved this Court under article 32 of the Constitution that this cess was really a duty of excise on coal within Entry 84 of List I of the Seventh Schedule. On the other hand, it was contended by the State who opposed the petition that the cess was a fee and not a duty of excise. This Court upheld the validity of the cess on the ground that it was really a fee, and in so holding observed "it is true that between a tax and a fee there is no generic difference. Both are compulsory exactions of money by public authorities; but whereas a tax is imposed for public purposes and is not, and need not, be supported by any consideration of service rendered in return, a fee is levied essentially for services rendered and as such there is an element of quid pro quo between the person who pays the fee and the public authority which imposes it. If specific services are rendered to a specific area or to specific class of persons or trade or persons in any local area and as a condition precedent for such service cess is levied against the said area or the said class of persons or trade or business the cess is distinguishable from a tax and is described as a fee. Tax recovered by public authority invariably goes into the consolidated fund which ultimately is utilised for all public purposes,whereas cess levied by way of fees is not intended to be, and doesnot become, a part of the consolidated fund. It is earmarked andset apart for the purpose of services for which it is lvied. In regard to fees there is, and must always be, co ordinaton between the fee collected and the service intended to be rendered. . The distinction between a tax and a fee is, however, important and it is recognised by the Constitution. Several Entries in the Three Lists empower the appropriate Legislatures to levy taxes, but apart from the power to levy taxes thus conferred each List specifically refers to the power to levy "fees in respect of any of the matters covered in the said List excluding of course fees taken in any Court". Reference was then (1)[1961] 2 S.C.R. 537. 510 made to the decisions in the Shirur Mutt case(1) the Orissa(1) and the Bombay(2) cases to which we have already adverted. Mr. Pathak placed considerable reliance on the reference in the Hingir Rampur Coal Co.(4) to the decision of the Privy Council in Attorney General for British Columbia vs Esquimalt and Nanaimo Railway Co.(3) and to the explanation of the rationale of those decisions of this Court : "It would thus appear that this decision proceeded on the basis that what was claimed to be a special service to the lands in question was in reality an item in public service itself and so the element of quid pro quo was absent. It is true that when the Legislature levies a fee for rendering specific services to a specified area or to a specified class of persons or trade or business, in the last analysis such services may indirectly form part of services to the public in general. If the special service rendered is distinctly and primarily meant for the benefit of a specific class or area the fact that in benefiting the specified class or area the State as a whole may ultimately and indirectly be benefited would not detract from the character of the levy as a fee. Where, however, the specific service is indistinguishable from public service and in essence is directly a part of it different considerations may arise". These decisions according to the learned counsel established (1) that a fee for a licence was prima facie a tax and was a mode of raising revenue, (2) the fact that under the licence the trade, business or other activity of the licensee is controlled and regulated where such control and regulation is imposed in the interest of the general public is not sufficient to negative the licence fee being a tax; (3) it was only in those cases where an impost was made either as an ad hoc cess or a fee for the grant of a licence as a charge for services rendered to the fee payer that the impost could be characterised technically as a fee which for being valid would have to stand the test of correlation with the costs entailed on the public body for rendering the service. Besides the requirement as to special service to the payer being required, the argument continued that on the authorities cited any fee would be tax if there was no segregation of its proceeds for the general revenues and a requirement of the law that the collections should be used only for the purpose of rendering the service. This last requirement, however, the learned counsel did not press seriously, seeing that even charges for services rendered, for instance, charges for (1) ; (2) (3) [1954] S.C.R. 1055. (4) ; (5) 511 extra water supply also went into the general municipal fund and figured in the consolidated annual budget prepared for the Corporation. Learned counsel is no doubt right in the submission that the impost described as a "fee" does not decisively determine that it is not a tax. He is also right in urging that the, fact that the fee is imposed for the grant of a licence, is equally not determinative of its true nature. It is common knowledge that in the United Kingdom duties of excise are often collected as licence fees and an illustration of a similar practice in India is seen in the Ajmere Excise Licence case.(1) As observed by Gwyer, C.J., in Re : Central Provinces and Berar Act 14 of 1938 (2) "The licence fees payable by persons who produced or sold excisable articles also became known (in U.K.) as duties of excise". In the context of the problem before us, however, the question is whether in order to constitute a fee in the strict sense it is not sufficient that it is imposed in order to raise funds for ensuring due compliance with the activity which it is the object of the licence, to place under supervision, inspection and control. In this connection reference may be made to paragraph 7 of the affidavit by the Corporation in answer to the Writ Petition filed by the respondent. There the appellant Corporation stated "the new scale of fees as fixed by the Corporation is reasonable for effective inspection, supervision and control of cinema houses in Calcutta at present numbering 75 in accordance with the provisions in the relative bye law framed under the Calcutta Municipal Act having regard to the public health, safety and convenience. I say that in order to effectively discharge the statutory duties imposed on the Corporation in regard to the inspection, regulation. supervision and control of cinema houses in Calcutta it is necessary to pro vide for a more suitable machinery and establishment involving employment of a much larger staff and consequently very large additional expenses in order to exercise a better, fuller and more effective control and supervision of the cinema houses, having regard to the additional burden imposed by the cinema business at present times and the ever growing needs of precautions regarding the health, safety and convenience of the public the new scale of fees is reasonable to cover necessary expenses involved in the said control and supervision of the cinema houses as hereinbefore stated". Mr. Pathak urged that the point that be was raising was one of law and therefore the appellant was not confined to sup (1) ; (2) 512 porting the levy as a fee in the strict sense. He is right there, but we are drawing attention to this defence only for the reason that this plea was taken because of the accepted position as to the concept of a fee on the authorities to which we shall refer presently and the elements of "service" needed the rendering of which would constitute a quid pro quo for the fee imposed. These authorities have taken the view that where a licence is granted, the fee to be charged for such a licence might bear a reasonable relation to the cost of providing the inspection, supervision and control imposed on the licensee both in his own interest as well as in the interest of the general public. In other words a fee in the strict sense as distinguished from a tax could be charged, for the cost involved in (a) the machinery employed for granting the licence, (b) the supervision, regulation and control to which the licensee renders himself liable under the licence, and subject to which he is granted the licence. Thus in The Municipal Corporation of Rangoon vs The Cooratee Bara Bazar Co. Ltd.(1) the validity of a licence fee imposed for keeping a private market was questioned by a suit filed on the original side of the High Court. Section 178(3) of the City of the Rangoon Municipal Act ran : "For every such licence or permission a fee may be charged at such rate as shall from time to time be fixed by the Corporation". Under this provision fees amounting to substantial sums were charged for licences granted for these private markets. This fee was challenged as unreasonable and ultra vires. Cunliffe, J. who tried the suit observed at pp. 219 and 220 : "A licence is merely a permission granted to a particular person to do a particular thing at a. fixed place during a determinate period. The fee attached to such a permit is a specific sum of money to be collected from the licensee for the purpose of covering the expenses of the licence, its registration, inspection and supervision. Fees levied on licenses of premises ought not to be greater than a sum to cover the costs of the regulation." A Similar view was taken by the Division Bench on appeal. They said at p. 228 : "Was it the intention to give the Corporation power to impose on the owners of private markets a charge for a licence which might extend to any amount for which (1) Rangoon 212. 513 the sanction of the Local Government could be obtained? Or was the intention merely to give power to charge a fee which would save the Corporation from being out of pocket by reason of the duties and liabilities imposed on it by the Act of the supervision and regulation of private markets ? As the amount charged bore no relationship to the expenses involved in the inspection, supervision and control which the Corporation might exercise over the licensed premises, the fee was held to be ultra vires. This decision was followed in Corporation of Madras vs Spencer & Co. (1). The licence fee for storing spirits levied under the Madras City Municipal Act was raised from Rs. 25 to 200 by a resolution of the Corporation after observing the necessary formalities. This was challenged as excessive because of want of correlation between the cost of inspection, supervision and control of holders of the licence and the total amount recovered as fees. The pattern of the Madras City Municipal Act was the same as the Act before us. The contention,urged before the Court was the same as that now urged viz. that what was permitted to be levied by section 365(2) of the Madras Act [corresponding to our section 548(2)] was a tax particularly seeing that what was being regulated and controlled was a noxious or dangerous trade or activity. The Court repelled it by pointing out that taxes were dealt with in Part 3 while the power to levy fees for licences was conferred by a section occurring in a part headed Miscellaneous and Procedure. Phillips J. observed at p. 57 : "Beasley, I., has held that the fees are leviable as compensation to the corporation for the expenses incurred in the issue of licenses and the general regulation of the trades and other occupations which are licenced and there must be some relation between these expenses and the amount of fees leviable. This was the view which was adopted by the Rangoon High Court in Municipal Corporation Rangoon vs Cooratee Barn Bazar Co. Ltd. (A.I.R. 1927 Rangoon 183 5 Rangoon 212). With all respect, I think this is a very reasonable view to take and, although possibly the above is not the sole consideration which may be taken into account in fixing the amount of fee, it is the main (1) A.I.R. 1939 Mad. 514 consideration. The license fees are in respect of what are called dangerous and offensive trades, that is to say, it is necessary in the interests of the city that the corporation shall know where such trades are being carried on and shall be in a position to see that they are carried on in a proper manner without causing unnecessary nuisance to other people or danger to the public generally. " Reilly, J., the other learned Judge, added at p. 59 "It is suggested that the fixing of fees for those licenses may be used by the council as method of taxation. Surely, if that was intended, that power would have been provided for in the part of the Act which deals with taxation. What could be the reason for bringing it in as a ' mere matter of procedure at the end of the Act ? . If we accept the proposition that the power of charging license fees cannot be used for taxation, then we must say that as a whole the fees charged by the corporation must not be very much in excess of what the duties cast upon them and their staff in connexion with the licenses cost them. There is the cost of issuing the licenses; there is the cost of inspecting the premises to see whether they are suitable for the purpose proposed; and there is the subsequent cost of inspecting the premises to see that they are being used properly and that the conditions and restrictions imposed by the Commissioner are observed. " These decisions were followed in Municipal Council of Kumba konam vs Ralli Bros.(1) where a fee for a Municipal licence granted for storing groundnut was increased and its validity was questioned. Section 321 (2) of the Madras District Municipalities Act was in terms identical with section 548(2) of the Act. Dealing with the nature of the fee permitted to be charged under that provision Curgenvan, J. said : "The wording undoubtedly suggested that the fee should be commensurate with the extra cost entailed by granting the licence and exercising such supervision as is necessary to see that its terms are complied with. It may be that in order to promote the health, etc., of the public, with which this part of the act specially (1) A.I.R. 1931 Mad. 515 deals, higher fees should be chargeable in the case of dangerous or offensive occupations. " The High Court of Orissa(1) followed these decisions and adopted the same construction of the fee permitted to be levied by section 321 of the Madras District Municipalities Act, whose provisions were also applicable to parts of the State of Orissa, besides decisions on the same lines by the High Court of Allahabad in Lala Rai Kishore vs District Board of Saharanpur(2). We have, therefore, to consider whether there is anything in the decisions of this Court referred to earlier and relied on by the learned counsel which militates against holding that the cost involved in the inspection, supervision and control of an industry, trade or activity is not a quid pro quo to the payer so as to constitute a fee levied for that purpose as always a tax. Reference may here be made to the terms of section 431 of the Act with which Chapter XXVI, in which section 443 occus, opens. " inspection and Regulation of Premises. Subject to the provisions of this Act, land and buildings shall respectively be inspected, cleansed, secured, repaired, drained or otherwise regulated in accordance with the rules contained in Schedule XVII. " It is, therefore, not as if powers or duties are not cast on the Corporation to be discharged for which the fee to be charged under section 548 (2) would be a quid pro quo. The placing of an activity, industrial or commercial, under regulation and control is no doubt done in furtherance of public interest, but so are most of the activities of public bodies. Nevertheless the supervision, inspection and regulation is from a long term point of view considered to be and is in the interest of the industry or the activity itself. To say that to enable a fee strictly so called to be levied, an immediate advantage measurable in terms of money should be conferred on the payer, is to take too narrow a view of the concept of a fee. We do not consider that the decisions of this Court in the Endowment cases lay down such a proposition or compel us to adopt this construction. On the other hand the Orissa Endowments Act and the Bombay Public Trusts Act cases, as also the Orissa Mining Area Development Fund case support a broader view of what constitutes service to the fee payer. (1) Sivaparvatamma vs Executive Officer, A.I.R. 1957 Orissa, 285. (2) A.I.R. 1954 All. 516 We are also satisfied that the narrow construction suggested would not accord with the scheme of the entries in the lists in Schedule VII to the Constitution. To illustrate the point, we would refer to a legislation like the Industries Development and Regulation Act, 1951 (Central Act 65 of 1951). It is an Act to provide for the Development and Regulation of certain industries. Under the provisions of section 11 of that enactment no new industrial undertaking could be established by any person or authority other than the Central Government after the commencement of the Act "except under and in accordance with the licence issued in that behalf by the Central Government". The inspection, supervision and control to be exercised over the licenses is provided for in detail by various sections of the enactment. Under section 30 (2) (j) the Central Government is empowered under the rules made under the Act to determine the fees to be levied in respect of licences and permissions issued under the Act. Now, let us see the constitutional power to empower the fee to be charged. Entry 52 of List I reads "industries, the control of which by the Union is declared by law to be expedient in the public interest", and section 2 of the enactment contains this declaration. Coming now to the entries relating to taxation it will be found that none of these entries, 82 to 92, would cover the fees charged for licences issued under the enactment. It is obvious. therefore, that the legislative power for charging fees is to be derived from Entry 96 of List 1, "fees in respect of any of the matters in this List". If the learned counsels submission that the expression quid pro quo should be read in the sense of a special and particular benefit conferred upon particular licensees (benefit again in the sense suggested) is correct ,he licence fees levied under the rules made under section 30 (2) (j) read with section II would be invalid as a fee and it could not be sustained as a tax either, for the tax there levied could not be brought within the rubric of any of the Entries, 82 to 92. It, therefore, appears to us that the word quid pro quo should be read not in the narrow and restricted sense submitted by the learned counsel for the appellant but in a somewhat wider sense as including cases where the function of the licence is to impose control upon an activity the cost incurred for effectuating that control, and this on the basis that the industry or activity is placed under regulation and control not merely in public interest but in the interest and for the benefit of the licensees as a whole as well. Coming nearer to the present case we might take another instance. Take the case of a licensing of factories and trades which are the other matters dealt with in the fasciculus of sections 517 of the Act in which section 443 is to be found. Section 436 runs, to quote the material words "no person shall, without the previous written permission of the Commissioner establish in any premises or materially alter, enlarge or extend any factory, workshop or workplace in which it is intended to employ some electricity, water or other mechanical power [436(1)] and section 437(1) reads : "No person shall use or Permit or suffer to be used any premises for any of the following purposes without or otherwise or in conformity with the term, of the licence granted by the Commissioner in this behalf, viz. (a) any of the purposes specified in Schedule 18,(b) any purpose which is in the opinion of the Corporation danger(us to health or property or. . Schedule 18 contains a list of the purposes for which premises may not be used without a licence and contains a long list of goods or articles which could not be packed, stored etc. in such premises. Under section 548(2) a fee might be charged both for a written permission as well is for the grant of a licence. It must be assumed that if the learned counsel is right in his submission as to what constitutes a fee, the fee charged for a written permission under section 436 and for licence under section 437 which we have extracted above would in reality be taxes though called fees. Now, lot us see whether there is any taxation entry in List 11 which could support the validity of the impost. The only Entry under which it could possibly be brought in if it all would be Entry 60, "taxes on professions, callings and employments". It is hardly possible lo sustain this interpretation because there is also Ch. 13 of Part IV headed "taxes on professions, trades, callings and the exact figure of the taxes which. might be imposed are laid down in Schedule 4. It cannot of course be said to be a tax on land buildings because it is not on the 'land or building that the tax is levied but on the activity Pursued therein, and besides "taxes on lands and buildings" are specially dealt with under Ch. 11 of Part IV where the permissible "consolidated rates" are laid down. The licence fee for the written permission and licence fee under sections 436 37 can only be supported as referable to legislation under Entries 5 constitution and powers of the municipal corporations" and 6public health and sanitation" and 24 "industries" read with Entry 66 of the State List. We have taken these two illustrative cases at random but an examination of the entire body of statute law in India would bear this out. We are not, therefore, disposed ' to read the judgments of this Court in the Shirur Mutt case(1) and the cases following as laying down that where an activity is regulated by licences the imposition of charges for the inspection, (1) ; 518 supervision and control of the activity to ensure compliance with the regulation is not a benefit conferred on the licensee so as to render the amount charged for such a licence not a fee in the real sense but a tax, whose constitutional validity could be sustained only by reference to the taxation entries in Lists I and II. Mr. Pathak submitted that so far as the fee charged with reference to entertainments in theaters under section 443 of the Act might be sustained with reference to Entry 62 of List 11, but that would hardly be an answer, because we are examining the entirety of the group of cases to which section 548(2) of the Act would apply. It will now be convenient to consider the argument of learned Counsel based on article 110(2) as supporting the narrow construction of the word "fee" as used in the entries in the legislative lists. Article 110(2) deals with the definition, of Money Bills for the purposes of that Chapter. Clause (1) defines in positive terms what shall be deemed to be a money bill and cl. (2) negatively defines what shall not be deemed to be a money bill. That provision reads "110. (2) A Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties, or for the demand or payment of fees for licences or fees for services rendered, or by reason that it provides for the imposition, abolition, remission,, alteration or regulation of any tax by any local authority or body for local purposes. " Learned Counsel pointed out that here a distinction was drawn between a payment of fees for licences and fees for services rendered, and so a payment for fees for licences was treated differently from fees for services rendered. The argument based upon it was that Entry 66 of List 11 and the similar Entries in Lists I & III were confined to fees for services rendered and that "a payment of fees for licences" were really not fees within those Entries. Re ferring to the present case he urged that as no special services for the benefit of the theatre owners had either been required to be rendered by the Act or the bye laws made thereunder or had actually been rendered, it could not fall under the category of "fees for services rendered". The Constitution, therefore, it was urged contemplated imposts by way of fees for licences which were not for services rendered and it was this category of impost that was per mitted to be charged by section 548(2) of the Act. We ire unable to agree in this construction of article 1 10(2). In the first place, all municipal taxation is outside the definition of a money bill, so that in regard to municipalities and the imposts made for purposes of local administration, no distinction is drawn 519 between taxes and fees. The "fees" therefore which are specifically excluded from the definition are fees imposed by the State Government or its administrative agencies other than by instruments of Local Self Government. The exclusion from the definition is as regards two categories : (1) fees for licences, and (2) fees for services rendered. It is obvious that a tax which is collected as a licence fee such as in the Ajmere Excise case considered earlier, would not fall outside this definition of a money bill merely because the tax was imposed and collected as a licence fee. If therefore pure taxation measures would be money bills then, it is obvious that the fees for licences which are outside the definition would be those fees which are imposed to meet the cost of regulation and supervision of an activity which is controlled by the requirement of a licence and compliance with its terms. Thus a contribution under section 76(1) of the Madras Religious Endowments Act as amended in 1954, would be a fee for services rendered because there is no question of licences being taken out in these cases and fees for regulating an activity such as the fees payable for licences under the Regulation of Industries Act, 1951 or for licences for trading in essential commodities under the would on the other hand fall tinder the bead "payment of fees for licences". Thus we consider that article 110(2) far from supporting Mr. Pathak, negatives the construction for which he contends. Any other construction of article 110(2) would hardly fit in with the scheme of the Article itself or even with the lists in Sch. Thus if every fee for a licence were outside the definition of a money bill, legislation for the levy of excise duties which are very often collected by adopting the machinery of licences and fees therefor, would not be money bills, and seeing that "excise duties" are a taxation entry in Lists I & II such a position cannot be reconciled. Besides, as already pointed out, Entry 66 itself would have to be read as a taxation entry in order to sustain the levy of licence fees on various activities which might form the subject of legislative control or regulation under the various non taxation entries in the lists. Such a construction would be contrary to the entire scheme on which the several entries in the lists are arranged and differentiated. As additional illustrations of the anomaly that would result if Mr. Pathak 's construction of entry 66 of List 11 were accepted we would refer to other sections of the Act which enable the issue of licences and the charging of fees therefor. We have already referred to section 436 and section 437 of the Act. Under Section 449 the Commissioner is empowered to license vendors in Sup./65 17 520 municipal markets, under section 451 he has power to license private markets, slaughter houses and stock yards, and under section 460 to license butchers and those who sell meat. We are not making an exhaustive list but are merely pointing out that in order to sustain these levies as fees, because they do not fall under any of the heads of taxation permitted to the State, the word 'fee ' has to be read as including fees charged for supervision, control and regulation of an activity which the legislature desires to control. On this part of the case we are clearly of the opinion that the legislative power as regards "fees" under Entry 66 as well as the corresponding entries in the other Lists is really in the nature of an incidental power to effectuate the main head of legislation empowered to be enacted by the other entries in the List. Item 66 is not an entry in relation to taxes which, on the scheme of the Constitution as we have analysed earlier, are grouped together serially in Lists I & II. This construction is confirmed by the fact that in the Concurrent List which contains only entries in relation to legislative power as distinguished from entries conferring taxing power, the last entry enables fees to be levied as ancillary to the legislative power conferred by the other entries in that list. Even assuming that learned Counsel is right in his submission regarding the manner in which the decisions of this Court in the Religious Endowment group of cases have to be understood, the appellant would be in no better position; in fact, its position would be worse, for if a fee within Entry 66 is confined to payments for particular and specific services rendered to the fee payer, the constitutional validity of section 548(2) of the Act would be open to challenge on the ground that it authorises the Municipal Corporation to impose taxes which are not within the State 's power to impose for its own purposes. This would be an additional reason for reading the word "fee" in Entry 66 in the sense which we have indicated earlier and which is in consonance with the uniform course of decisions already referred to rendered on the meaning of that word. (2)Is the fee permitted to be charged by section 548 (2) a fee or a tax ? This brings us to a consideration of the provisions of the Act for the purpose of determining whether the impost permitted to be charged by section 548(2) of the Act is a fee understood in the sense in which we have explained earlier as used in Entry 66 of List 11 or is it a tax. For this purpose it is necessary to examine the scheme of the Act. The Act contains 615 sections and these are 521 divided into 3 8 chapters each with a heading indicating the subject dealt with in it. These several chapters are themselves grouped under 8 Parts. Part 1 in which Ch. 1 alone occurs is preliminary and does not require mention. Part 11 which comprises Chapters 11 to VI deal with the constitution and government of the Municipal Corporation. The several chapters of this Part enumerate and specify the powers and functions of the several municipal authorities and the manner in which the business of the Corporation has to be transacted. This Part also is not relevant to the matter on hand and may be passed over. Part III deals with Finance and is made up of Chapters VII, VIII, IX and X. It is sufficient to refer to the headings of the several chapters which are Ch. The Municipal Fund, Ch. VIII Budget Estimates, Ch. IX Loans and Ch. X Accounts. We shall have to refer to some of the provisions of these chapters in dealing with certain arguments of Mr. Pathak relying on them for the purpose of showing that the legislature had laid down the principles and afforded sufficient guidance for determining the rate at which a fee should be levied, on the basis that such a fee was a tax. To these, however, we shall revert later. Part IV is headed 'Taxation ' and Chapters XI to XVII are in this Part and each of these chapters deal with separate heads of taxes which the Corporation is authorised to levy and collect. Section 165 of the Act with which Ch. XI opens empowers the Corporation to impose "a consolidated rate" on lands and buildings situated within the municipal area. The section prescribes the maximum percentages of the annual value at which the tax may be levied and grades them into several categories dependent on the total annual valuation. Section 166 prescribes the manner in which the particular percentage to be charged is to be determined by the Corporation. The percentages, subject to the maxima laid down in section 165, have to be fixed annually having regard to the requirements of the Corporation with reference to the obligations imposed upon it by the Act. Elaborate procedure is laid down by the other sections of this Chapter ending with section 207 for the manner in which the annual value of lands and buildings on which the specified percentages may be levied may be determined, with appeals provided to Civil Courts for the aggrieved tax payer in the event of the annual value as determined by the Corporation being disputed. The next Chapter Ch. XII comprising sections 208 to 217 is headed 'Taxes on Carriages and Animals '. When the tax leviable under this chapter whose rate is prescribed by the Sch. VI of the Act, is paid, a licence is issued to the owner of the Carriage or 522 Animal. Next, we get to Ch. XIII headed "Tax on professions, trades and callings" and comprises sections 218 to 221. Section 218 directs that "every person who exercises or carries on in Calcutta any profession, trade or calling indicated in Sch. IV shall annually take out a licence before the 1 st July each year. . and pay for the same such fee as is mentioned in that behalf in the said Schedule. Schedule IV, it might be mentioned, contains the rules as to the quantum of the profession etc. tax to be charged by the ,Corporation. The persons to be taxed under this head are divided into 10 classes depending upon the amount of business carried on and in the case of companies, their paid up capital and in the case of individuals, of their annual income and in respect of each class the fee to be levied is specified. Chapter XIV headed "Scavenging Tax" comprises sections 222 and 223. This tax is to be levied on per sons who exercise a calling. specified in Part 1 of Sch. VII and is dependent on either the average number of animals kept by the persons for the exercise of such calling, or in the case of the owner or occupier of a market, the average quantity of offensive matter and rubbish removed daily. A licence is to be taken by the person liable to pay the tax and the rates to be charged are to be those specified in Part 11 of Sch. Next, we have a tax on carts under Ch. The tax is to be imposed for the registration and the numbering of carts and by charging of a fee for such registration. Section 225 prescribes the fee that might be charged for the several varieties of vehicles which are classified under that section. Section 229 which is the first section in Ch. XVI provides for the imposition of a licence fee for advertisements. It is the only provision for taxation as regards which a rate is not specified or the maxima laid down by the Act. Chapter XVII which is the last chapter in this Part is concerned with making provision for the recovery of the consolidated rate and the other taxes and for certain supplementary provisions in relation to taxes permitted to be levied under this Part. The next Part Part V is headed the Public Health, Safety and Convenience and Chapters XVIII to XXXI are included in this Part. Chapter XVIII relates to water supply, XIX to drains, privies and other receptacles for filth, Chapter XX to licensed plumbers, XXI to Streets and Public places, XXII to buildings, XXIII to Bustees, XXIV to demolition, alteration and stopping of unlawful work, XXV to lighting and scavenging, and regulation of public bathing and washing, XXVI to inspection and regulation of premises, and of factories, trades and places of public resort and this is the chapter in which section 443 finds a place. Chapter XXVII 523 deals with markets and slaughter places, Ch. XXVIII with Food and Drugs, Ch. XXIX with milk supply, Ch. XXX with restraint of infection and Ch. XXXI with registration of births and deaths and disposal of the dead. The next chapter in this Part deals with acquisition, disposal and general improvement of land and buildings and the last oneCh. XXXIII with the special powers of the Corporation. The next part Part VII contains provisions for enabling the Municipal Corporation to make bye laws and rules. Part VIII which is the last Part has four chapters Ch. XXXV deals with penalties to be imposed for ensuring compliance with the provisions of the Act and the bye laws made by the Corporation, Ch. XXXVI is headed 'Procedure ', and section 548 is the first section in this Chapter, and the other sections deal with the incidental powers of the Corporation and with procedure. The next two chapters are headed "Supplemental provisions & Transitory provisions". Mr. De for the respondent urged that the scheme of the Muni cipal Act proceeded on a clear demarcation between taxes and fees, and that all the taxes which the Corporation was empowered to impose were grouped together under various heads in Part IV of the Act headed "Taxation". Section 443 occurs in the Chapter relating to the inspection of places of entertainment and public resort and section 548(2) in one headed "Procedure" and that the framers of the Act, therefore, could not, by these provisions, intend that the fee to be levied would be a tax. In other words, the argument was that all taxing power and the heads of taxation were to be exclusively found in Part IV of the Act. This argument deserves serious consideration, but before we proceed to do so, we might notice and dispose of an additional submission which was made to reinforce this argument based on the terms of section 127(3) read with section 127(4) of the Act. Section 127 occurs in Ch. VIII dealing with Budget estimates. Section 126 requires the Commissioner to prepare and submit to the Standing Finance Committee on or before December 15 each year, "the annual estimates of expenditure, receipts and balances and the statements of proposed taxes". Section 127 is concerned with requiring the Corporation to frame budget estimates of the year. Sub section (3) on which he relied reads "(3). The Budget Estimates prepared by the Standing Finance Committee shall be laid before the Corporation on the 15th February or as soon as possible thereafter and the Corporation shall consider the same. It may refer the estimates back to the Standing Finance Committee for further consideration and resubmission within a specified time and shall 524 (a) . . . . . . (b)determine, subject to the provisions of Part IV the levy of the consolidated rate and taxes for the said year at such rates as are necessary to provide for the purposes mentioned in sub section (4) . . . . and sub section (4) reads : "(4). In the Budget Estimates the Corporation shall among other things (a)make adequate and suitable provisions for such services as may be required for the fulfilment of the several duties imposed by this Act, (aa) make adequate provisions for depreciation of machinery belonging to the Corporation, as far as may be possible, (b)provide for the payment as they fall due of all instalments of the principal and interest for which the Corporation may be liable in respect of loans contracted by it, (c)allow for a cash balance at the end of the year of not less than twelve lakhs of rupees, and (d)allot sums of money to each Borough Committee to enable it to exercise and discharge its powers, duties and functions. " The argument was that in the budget estimates in section 127(3) what is to be considered is the levy of the consolidated rate and the taxes and these are subject to the provisions of Part IV and the obligatory expenditure imposed by sub section (4) is to be met out of the consolidated rates and taxes which are to be determined subject to the provisions of Part IV. It was, therefore, submitted that the rates and taxes had to be determined subject to the provisions of Part IV and as the expenditure under sub section (4) was to be correlated to the receipt from the rates and taxes it was an indication that all rates & taxes were only under Part IV. We consider that this argument proceeds upon a misconstruction of these provisions. Sub section (4) of section 127, of course, deals with obligatory expenditure but from this it does not follow that expenditure which the Corporation could lawfully incur for the optional amenities which it could provide for the citizens would not find a place in the budget. Sub section (4), it would be seen, opens with the words "shall among other things, make Under section 126 the budget 525 will cover all the expenditure which it is proposed to incur both that which is obligatory upon the Corporation under section 127(4) and those which it could lawfully incur. On the receipt side would be included also fees and all receipts from every other source. No doubt, section 127(3) would appear to suggest that so far as consolidated rates and taxes are concerned, it would be subject to the provisions of Part IV but that by its very nature can only apply to the rates and taxes listed in Part IV. If on a proper construc tion of the Act one reached the conclusion that Part IV was not exhaustive of the range of levies permitted by the Act and that the fees permitted to be levied by section 548(2) were also taxes, there would be nothing in section 127(3), either by itself or read with section 127(4), to militate against that construction. We do not, therefore, consider that these provisions advance the case of the respondent if on a construction of the Act one reached a different conclusion. We are thus left with the assistance afforded to us by the scheme underlying the provisions of the Act for determining whether the levy permitted by section 548(2) is of the nature of a tax. The submission of Mr. Pathak was that Part IV, no doubt, dealt with rates and taxes but merely on that account one cannot draw the conclusion that taxes are not dealt with or permitted to be imposed by other provisions of the Act. No doubt, if a power to make a levy occurred in a part outside Part IV and it clearly and unequivocally pointed to the imposition being a tax its effectiveness could not be denied merely because the provision did not appear in Part IV. But on the scheme of the Act we have at least to start with a presumption that Part IV is exhaustive of the taxes which are permitted to be levied by the Corporation. In this connection Mr. Pathak laid some stress on the fact that the nomenclature employed to designate taxes in Part IV was not uniform and that a tax was sometimes called a consolidated rate (vide section 165) and, though called a tax in the case of taxes on carriages and animals under sections 208 and 216, a licence was granted on the payment of a tax, it was called a fee under section 218 in the case of tax on professions, trades and callings, and, similarly, in the case of scavenging tax under section 222, was designated as a fee and a licence fee on advertisements by section 229. In the face of this difference in the terminology employed learned Counsel stressed that the framers of the Act did not proceed on the differentiation that every fee permitted to be imposed for the grant of a licence was always not a tax. Learned Counsel is, no doubt, right in the submission that Part IV headed 'Taxes ' uses the expression "fee" to designate taxes to be imposed upon particular articles or activities but the provisions of the Act and the way the relevant sections are framed make 526 it clear that what is permitted to be charged by these provisions in Part IV is really in the nature of a tax. Besides, in the case of all these imposts, whether called a tax or a fee, except in the case of a fee on advertisements under section 229 either the amount of the tax was prescribed or criteria laid down on the basis of which the rate of the levy was to be determined. In some cases, as the case of profession tax, tax on carts etc., the tax to be imposed is determined by the Act itself. In the case of others like the Consolidated rate the maximum percentages are fixed and what is left to be determined by the Municipal authorities are the fixation of the percentages within the maxima prescribed and the determination of the annual value of the premises for fixing which elaborate procedure is laid down which includes appeals to Courts where persons are aggrieved by action of the municipal authorities. One exception to this method of prescribing the tax or its permitted limits is, as already pointed out, section 229. It is called a licence fee on advertisements but, in the context, gives no room for controversy as to whether it is a tax or a fee. We are satisfied that an examination of the provisions to which we have referred makes three matters abundantly clear : (1) that it draws a sharp and clear distinction between taxes properly so called and fees, (2) the division into Parts and chapters is logical and clear cut and no matter which properly falls under a subject set out under a Part or chapter heading is dealt with in any other. Mr. Pathak was not able to point to any instance in which a subject which fell under one Part or even chapter was included in and dealt with in another, and (3) that taxes, by whatever designation they might be called, are all comprehended and dealt with by Part IV and by Part IV alone and that what is permitted to be imposed by section 548(2) is only a fee as distinguished from a tax. If one has reference to the entries in the legislative list in Sch. VII, what is permitted to be imposed under section 548 (2) is a fee "in respect of the matters in the list" viz., Entry 5, Entry 6 Public Health and Sanitation, 16 Prevention of cattle trespass, 24 Industries, 28 Markets and Fairs, 33Sports, entertainments and amusements. In this view as admittedly there is no correlation between the fee charged and the service rendered in the sense discussed earlier, we must hold that the impugned levy was not authorised and that the learned Judges of the High Court were right in granting relief to the respondent. (3)Assuming section 548 permits the levy of a far, is the provision Constitutional ? In this view no other question would arise. In view, however, of the elaborate arguments addressed to us by Mr. Pathak on the 527 other parts of the case and particularly since the learned Judges of the High Court have devoted considerable parts of their judgment to dealing with them we propose to examine the submissions of learned Counsel under that head also. On the footing that what was permitted to be levied by section 548(2) was a tax the submission of learned Counsel was, as already stated, two fold : (1) that in the case of devolution of legislative or quasi legislative power to a Municipal Corporation a different criteria for determining excessive delegation has to be adopted and that having regard to the terms of Entry 5 of List II no conferment of a power in favour of a municipality which is germane to municipal administration or local self government can be held to be beyond the legislative power of the State., and (2) *,bat even if the above were not accepted, the Act itself laid down in sufficiently definite terms the prin ciples upon which the rate of fee was to be determined and afforded ' sufficient guidance for its determination, that the provision did not suffer from the vice of excessive delegation. We shall deal with them in that order. For the submission, under the first head, Mr. Pathak relied on two lines of reasoning, based respectively on the terms of Entry 5 of List 11 of Sch. VII and on certain American decisions which he said supported such a view. Entry 5 reads "Local government, that is to say, the constitution and powers of municipal corporations, improvement trusts, district boards, mining settlement authorities and other local authorities for the purpose of local self government or village administration". On the terms of this entry emphasis was laid on the words "powers of municipal corporations" and "for the purpose of local self government" for which the municipal corporations and other bodies specified were to be constituted. Relying on the words underlined he urged: (1) that the Constitution empowered the devolution on municipal corporations of all powers which were needed for the purpose of local self government. If, therefore, a power of taxation was conferred upon a municipal corporation, that devolution of power was sanctioned by the Constitution and so was outside the rule against excessive delegation of Legislative power. The argument was even pitched higher and it was said that the expression "powers" occurring in the entry enabled the State Legislature to confer upon municipal corporations not merely 528 all the powers which the State Legislature itself could exercise under the several legislative entries in Lists II and 111, but even powers outside those Lists provided they were necessary for the purposes of local self government. It was suggested that having regard to the great object of decentralisation of power which was achieved by setting up institutions for the purpose of local self government the Constitution had vested in the State Legislatures complete and plenary powers necessary for effectuating the setting up of such bodies and endowing them with the capacity to achieve their object. If entry 5 was construed in this manner the conferment of power to tax by section 548 (2) of the Act could not be challenged as unconstitutional. To examine this argument closely it would be convenient to split it up into two parts : (1) whether by reason of a provision for legislation as regards the "power" of municipal corporation,$ the rule as to unconstitutionality arising from excessive delegation of legislative power becomes inapplicable, and (2) whether the powers which were permitted to be conferred on municipal corporations extend beyond those open to the State Legislatures themselves to exercise under the relevant entries in the Seventh Schedule. We shall take up the second question first. Learned Counsel was driven to put forward an argument in this form that powers to be conferred upon municipal corporations need not necessarily be confined to the legislative powers of the State Legislatures under other entries, because of the difficulty he experienced in sustaining the plea that every fee for a written permission or for licence permitted by section 548 (2) of the Act could be related to particular entries as to taxation which alone are permitted to the States by the distribution of legislative power under the Seventh Schedule. For instance, it was pointed out during the course of the argument that the purposes for which a written permission was necessary and a licence was required to be taken embraced a wide variety of subjects and if section 548 (2) were held to authorise the levy of a tax in respect of each of those activities for which a permission was needed or a licence was required to be taken, it would not be possible to relate such a tax to any of the taxation entries in List 11, that is, entries 45 to 63. Thus section 297 of the Act provides that without the written permission of the Commissioner no private streets shall be constructed and under section 548 (2) a fee may be charged for the granting of the written permission. It is not possible to relate the fee to be charged for this permission under any of the heads of taxation in List 11. Of course, if it were a fee under entry 66, it would fall under that entry read with entry 529 5, entry 6 public health and sanitation as well as entry 13 Communications, that is to say, roads, bridges etc. Very many more illustrations of this sort to some of which we have adverted earlier, were pointed out during the course of the argument and learned Counsel suggested that some of them might fall under the head of "lands and buildings". But the regulation of an activity for carrying on a business in certain premises and which are dealt with in Chapter XXVI of the Act "Inspection and Regulation of Premises, and of Factories" cannot be equated with the subject matter of a tax on land and buildings which are specifically dealt with by section 165 which reads : "A graduated consolidated rate on the annual valuation determined under this Chapter may be imposed by the Corporation upon all lands and buildings in Calcutta for the purpose of this Act. . Similarly, restrictions are imposed in the interest of public health and sanitation on the carrying on of certain trades which are specified in Schedule XVIII. The licence fee levied to secure permission to carry on such an activity could not, on the scheme of the Act, be called a tax on professions, trades, callings and employments referred to in entry 60 of List 11. It was by reason of these difficulties that learned Counsel was forced to make this submission relying on the words "powers" and "for the purpose of self government" in entry 5. We consider that this submission is entirely without force. In the first place, it could not be disputed, though learned counsel did so somewhat hesitantly at one stage, that the legislature cannot confer larger powers upon a body which it creates than what it itself possesses. We should have considered that this was too elementary for any elaborate exposition but for submission of counsel in this case. The position is really incontrovertible. In the Western India Theatres Ltd. vs Municipal Corporationof the City of Poona(1) the learned Chief Justice speaking for the court said : "In the first place, the power of the municipality cannot exceed the power of the provincial legislature itself and the municipality cannot impose any tax, e.g. income tax which the provincial legislature could not itself impose. " If the State Legislature cannot confer a power upon the State Government it is not easy to see how it could confer a wider power, (1) [1959] Supp. 2 S.C.R. 71, 75. 530 which it could not otherwise exercise, upon a municipality. Besides, it was not suggested that without a power being conferred by the legislature in the Municipal Act, by the mere constitution of a Municipality, the latter can lay claim to any inherent power either of local self government or as incidental thereto of a power to levy taxes and fees. If the powers of a municipality are derived from legislation and if the legislature has not, under article 246 of the Constitution read with the entries in the Legislative List which are relevant, the authority to confer such a power it appears to us to be self evident that the State Legislature can confer no higher powers on the municipality than it has itself. If Mr. Pathak is right it would mean that though a State cannot levy income tax or impose customs duties on imports and exports for the purpose of augmenting State Revenues, it can however confer power to levy these taxes on a municipality for the "purpose of local self government". The proposition has only to be stated to be rejected. Nothing, therefore, in our opinion depends upon the use of the " powers" in entry 5, as that expression can refer only to (a) such powers as are actually conferred by the enactment in question and (b) powers which the Legislature can by law confer on the executive Government of the State or on any other instrumentality of its creation. The answer on behalf of the respondent to this submission was based upon two grounds: (1) That section 548(2) is really an exercise of legislative power under entry 66 of List 11 and that under the power so conferred what the Corporation has a right to impose is not to impose a tax but to charge a fee correlated to the expenses involved in the administration of that law; (2) What the legislature can confer by a provision of the type found in section 548 (2) is merely a power to levy a fee and not a tax as otherwise, the tax itself which is permitted to be levied would be beyond the competence of the State Legislature. We consider this submission well founded. A stream can rise no higher than its source, and this is so self evident as not to need elaboration, it would follow that the State legislature cannot authorise a muni cipal body which it creates even though it be for the purpose of local self government a power higher than what it itself possesses. In this connection one cannot forget that the government of the entire territory forming the State is vested in the State and what the legislature cannot do for the purpose of the government of that area cannot obviously be done by conferring powers upon a municipal authority, whose jurisdiction extends to defined limits in that territory. 531 It was next urged that the terms of entry 5 were sufficient to the State Legislature with authority to endow municipal corporations at least with such powers as they possessed on the late the Constitution came into force. We do not see any legal basis for this argument. It would be noticed that entry 5 in List 11 reproduces in terms entry 13 of List 11 of the Provincial legislative List in Schedule VII to the Government of India Act, 1935. If the argument had any validity it would follow that one should go back not merely to the state of circumstances and the law as to distribution of legislative power which prevailed under the Government of India Act but to a period anterior thereto, namely before the 1st of April, 1937 when the Government of India Act, 1935 itself came into force. At that time there was no distribution of legislative power in the sense in which we have under the Government of India Act and the Constitution. India was then under a unitary form of Government;) the legislatures were not confined to enumerated powers and the distribution of legislative power between the provinces and the centre was determined with a view to administrative convenience and not on foot of an allocation of areas of exclusive legislative competence. No legislation of a State Government which trenched on a central subject was unconstitutional (See proviso to section 80A(3) introduced by the Government of India Act, 1919). No assistance therefore can be derived by reference to the powers exercised by local authorities and municipal corporations at a time when there was no distribution of legislative powers leading to unconstitutionality. It is precisely because the Government of India Act made a change in this respect that a provision was inserted in section 143(2) of that Act by which taxes, duties, cesses or fees which immediately before the commencement of the Government of India Act, 1935 were being lawfully levied by any Provincial Government, municipality or other local authority or body for the purposes of the province, municipality, district or other local area etc. may notwithstanding that those taxes, duties, cesses or fees mentioned in Federal Legislative List continue to be levied and to be applied to the same purposes until provision is made to the contrary by the Federal Legislature". In other words, the framers of the Government of India Act proceeded on the basis that the powers of the Provincial Legislatures as regards taxation were not the same and that it was, therefore, necessary for making a provision for continued realisation of those taxes subject to any central law on the topic and we have a provision exactly on the same lines with practically the same phraseology in article 277 of the Consti 532 tution. If the submission of the learned Counsel for the appellant is right, there would have been no need in article 277, for a reference to taxation by Municipal and other local bodies because or, the argument the State Legislature could validly confer upon a municipal corporation all powers which it had enjoyed before, including the power to impose taxes, nothwithstanding that power is not in the State Legislative List. As "Power" could be conferred on a Municipal Corporation only by law, we consider that the nature or quantum of power that could be vested by a law of the State Legislature, cannot transcend the limitations prescribed by the Constitution on the State legislature. In the context therefore of the law being one in relation to municipal corporations, the State legislature can confer on the corporation created only those powers which are within its legislative power and relevant to the topic. Pausing here, it would be convenient to refer to the submis sion of Mr. Naunit Lal appearing for the Intervenor who addressed us in further support of the appellant 's case. His argument was that entry 5 was to be understood in the light of the legislative practice which prevailed prior to the Constitution and he placed before us the report of the Local Finance Enquiry Committee published in 1951 in which the history of taxation powers exercised by municipal and other authorities from early times has been traced. He also referred us to the provisions in several pre and post Constitution enactments in which provision had been made enabling the municipal or other local authorities to levy and collect taxes some of which, he stated, did not fall within the State List or even within any of the three Lists. It is not necessary to examine the details of the instances referred to by learned Counsel. But assuming learned Counsel is right in the illustration it would not help him in the least. In the first place, so far as legislative practice is concerned, it cannot prevail over the limitations imposed by the distribution of legislative power in respect of post Constitution legislation such as the Act before us. What the legislature cannot do directly by legislating and conferring power upon the State Government or the instruments which it creates, it cannot obviously confer upon a municipal corporation merely because it has authority to confer power upon a municipality in express terms. The power to impose taxes which it cannot impose for the augmentation of the revenues of the State it cannot manifestly confer upon a municipality or other organ of a local self government. Besides, as pointed out by Lord Tomlin in dealing with a contention as to the meaning of 53.3 the word "fisheries" in "Sea coast and inland fisheries" in section 91 of the British North America Act, 1867 in Attorney General for Canada vs Attorney General for British Columbia and ors(1): "He (the appellant) supports his contention by referring to fishery legislation prior to 1867 affecting territories now part of the Dominion, pointing out that in this legislation there are to be found numerous provisions relating to the curing and marketing of fish, and he urges that the British North America Act, 1867, must be construed in the light of the earlier legislation, and that the word 'fisheries ' must be given such a meaning as is wide enough to include at any rate the operations affected by the impugned sections. Their Lordships are of opinion that the appellant 's contention in this respect is not well founded. The fact that in earlier fishery legislation raising no question of legislative competence matters are dealt with not strictly within any ordinary definition of "fishery" affords no ground for putting an unnatural construction upon the words "Sea coast and inland fisheries". Lastly, it may be pointed out that the territory of India now embraces what were formerly the territory of ruling princes in which there were no limitations on the powers which might be vested in Municipal bodies. It is not, therefore, possible to refer to an uniform legislative practice prevailing before the Constitution to serve as a guide for interpreting the legislative entries in the Constitution. That is so far as reliance was placed on legislative practice. We do not, therefore, consider that anything material turns on the use of the word "powers" in entry 5. Authority to confer power on institutions or bodies created by legislation, to enable them to fulfill their purposes and achieve their objects is implicit in every entry conferring legislative power. Thus, for instance under entry 47 of List I reading "Insurance" Parliament has created the Life Insurance Corporation under the Life Insurance Corporation Act and has clothed it with sufficient powers to enable it to function and carry out the purposes for which it was created. Similarly, by legislation under the head 'Banking ' the Reserve Bank Act has been enacted and the Reserve, Bank created with sufficient powers conferred upon it necessary to regulate (1)[1930] A.C. 111, 121. 534 the functioning of the Banking system in the country. By legislation under the entry "Future markets" (entry 48 List 1) the Forward Markets Commission has been created and powers and ,duties vested in it. From these examples it would be clear that the authority to confer power upon the bodies created by legislation is inherent in the power to legislate on the topic. The express mention of an authority to confer power on Municipal Corporations, therefore, introduces no novel principle or rule of construction as regards the conferment of powers. The quantum of the power which a law could bestow upon an institution or body of its creation is determined, firstly, by the view of the legislature as to what are necessary for achieving the purposes for which the institution or body is created and, secondly, by the over all limitations imposed by the Constitution by the distribution of legislative power. Nothing, therefore, turns on whether the authority to confer "power" is express or is a necessary incident of legislative power. If the very nature of a legislative power is such that the legislature cannot delegate essential legislative functions the fact that the authority to confer power is express & not implicit makes no difference to the application of the principle. In either event, as the law conferring power even when expressly authorised is a law, the rule against excessive delegation, applies to it as much to cases where the authority to confer power is implicit. The next head of argument on this point was based on invoking the principles stated to have been laid down by certain American decisions to which we were referred. The principal authority on which reliance was placed was the formulation of the law by Fuller C.J. in Soutenburgh vs Hennick(1) Speaking for the majority of the Court he said: "It is a cardinal principle of our system of government, that local affairs shall be managed by local authorities, and general affairs by the central authority; and hence while the rule is also fundamental that the power to make laws cannot be delegated, the creation of municipalities exercising local self government has never been held to trench upon that rule. Such legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to prescribe local regulations, according to immemorial practice, subject of course to the interposition of the superior in cases of necessity". (1) L.Ed. 535 there are similar passages in judgments in other cases to which also our attention was drawn. But we do not, however, see the appositeness of the American rule to the interpretation of the Indian Constitution, particularly in the context of the criteria there indicated. Besides the rule as to limits of delegation by the legislatures constituted in India by the Constitution has been the subject of elaborate consideration by this Court in the Delhi Laws Act cam,(1) and in the later decisions in Yasantlal Maganbhai Sanjanwala vs The State of Bombay and others (2); Jyoti Pershad vs The Administrator For the Union Territory of Delhi($) to mention a few and these decisions bind this Court. These decisions have not laid down that a different rule applies where the delegation of legislative power is in favour of municipal corporation. We, therefore, consider that the analogy of the American decisions affords no guidance for the application of a different rule as to what constitutes excessive delegation in the case of legislation creating municipal bodies. If then the same tests have to be applied to determine the limits of permissible delegation of quasi legislative power whether the same be in favour of Municipal bodies or in favour of other administrative agencies, the question next to be considered is whether the Act affords sufficient guidance to the municipal authority for the levying of the rate. The subject of the limits of the delegation of legislative power has been the subject of consideration in several decisions of this Court including the Delhi Laws Case(1) mentioned above. It is, however, sufficient to refer to a few of them. As regards the principle itself we do not understand that there is any controversy. In Vasant Lal Maganbhai Sanjanwala vs The State of Bombay and Ors.(2) Subba Rao. J. though he dissented from the judgment of the majority of the Court on the facts, summarised the decisions of this Court on this topic, which Mr. Pathak did not dispute correctly states the law. He said at pp. 356 357 of the report : "The law on the subject may be briefly stated thus: The Constitution confers a power and imposes a duty on the legislature to make laws. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously it cannot abdicate its functions in favour of another. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the (1) ; (2) ; (3) ; sup 65 18 536 details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of delegation. An overburdened legislature or one controlled by a powerful executive may unduly overstep the limits of delegation. It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation. It is for a court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities. It is the duty of this Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature". The same principle was expressed in slightly different language in jyoti Pershad vs The Administrator for the Union Territory of Delhi( ',) at p. 145 : "In the context of modern conditions and the variety and complexity of the situations which present themselves for solutions, it is not possible for the Legislature to envisage in detail every possibility and make provision for them. The Legislature therefore is forced to leave the authorities created by it an ample discretion limited, however, by the guidance afforded by the Act. This is the ratio of delegated legislation, and is a process which has come to stay, and which one may be permitted to observe is not without its advantages. So long therefore as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact (1) ; 537 that the legislation is skeletal, or the fact that a dis cretion is left to those entrusted with administering the law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminates The matter may possibly be stated more simply by adopting the language of Bose, J. in Rajnarain Singh vs The Chairman, Patna Administration Committee, Patna and another(1) 'is it the delegation of essential legislative power", or unessential details the principle being that if the legislature lays down a policy, prescribes the standards and affords sufficient guidance to the rule making or subordinate legislative authority it is a proper delegation, but not if the legislature confers on the subordinate law making authority powers to determine its own policy without any guidance in that regard. In the one case it would be a canalised power and in the other uncanalised and would amount, in effect, to transferring its basic power to another body. If the validity of section 548(2) of the Act be judged by this test the questions that arise are : (1) Whether the power to determine the rate of a tax is an essential legislative, function or is it merely a minor and incidental matter, (2). Assuming it is an essential legislative function, whether the Act has indicated with reasonable certainty the principles upon which that power has to be exercised or laid down the standards for the fixation of the rate. Now, on the first point as to whether it is an essential legislative function or not, the submission of Mr. Pathak was that it was not, and for this purpose he relied principally on three decisions of this Court. The first one Banarsi Das vs The State of Madhya Pradesh(1) was concerned with the constitutional validity of a provision in the C.P. & Berar Sales Tax Act, 1947 which conferred upon Government power to withdraw certain exemptions from the tax as levied by the Act. It was urged before the Court that the conferment of this power to withdraw the exemption on the Executive was unconstitutional as suffering from the vice of excessive delegation. This argument was repelled by this Court for more than one reason. The passage relied on in this connection is at p. 435 : "The point for determination is whether the impugned notification relates to what may be said to be (1) ; (2) ; 538 an essential feature of the law, and whether it involves any change of policy. The authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like". As to the meaning of the words "such as . the rates at which it is to be charged in respect of different classes of goods" there was controversy before us. Mr. Pathak submitted that this was an explicit decision holding that the determination of a rate at which a tax might be levied was not an essential legislative function. On the other hand, Mr. De urged that the emphasis in the passage was really on "different classes of goods" and not on the determination of a rate simpliciter and in support pointed out that the three decisions from which the principle underlying the passage quoted above was extracted did not support such a wide proposition. The three decisions relied on for the proposition were one of the Privy Council, one of this Court and one of the United States Supreme Court. In all those cases the amount of the rate had been prescribed by the legislature and the delegation to the external authority the Government or the President in the United Sates, was merely the determination of certain external facts for rendering the tax applicable to the commodity. Thus in Powell vs Apollo Candle Company, Limited(1) the rate of the custom duty was laid down by an enactment of the New South Wales Legislature. Section 133 of the Customs Act enacted: "Whenever any article possesses, in the opinion of the collector, properties in the whole or in part which can be used for a similar purpose as a dutiable article, the Governor is authorised to levy a duty upon such article at a rate to be fixed in proportion to the degree in which such unknown article approximates in its qualities or uses to such dutiable article". Candles were expressly named in the Act as subject to the rate of duty specified and on the application of the Collector the Governor, by an order in Council notified "stearine" as liable to a similar duty. It is in that context that the Privy Council stated in a passage which is extracted in the judgment of this Court (1) 10 A.C. 282, 539 "But the duties levied under the Order in Council are really levied by the authority of the Act under which the order is issued". The two other decisions do not lay down a wider principle. For this reason Mr. De submitted that the judgment of this Court should be understood in the context in which it occurs and with reference to the authorities cited in support and if so read the rates referred to are in relation to those "to be charged in respect of different classes of goods", as in Powell 's case. We see considerable force in this argument and as we shall show by a reference to later decisions of this Court, this passage has not been understood in the sense in which Mr. Pathak desires us to understand viz., that a legislation which leaves the rate of taxation entirely to the executive does not suffer from the vice of excessive delegation. If Mr. Pathak is right, in order to impose an income tax, it would be sufficient for the legislature to pass a single section empowering the executive to levy the tax at such rates as they might consider appropriate on the different classes of persons whom they consider proper and with reference to such income as they might choose to tax. This illustration of what his argument would lead to was put to Mr. Pathak but his only answer was that was not the case before us. The second case that Mr. Pathak referred to was the Western India Theatres Ltd. vs Municipal Corporation of the City of Poona.(1) Section 59 of the Bombay District Municipalities Act 1901 empowered municipalities to impose for the purpose of the Act certain taxes. By the first ten entries in sub section (1) particular taxes were specified and this was followed by a general head reading "any other tax". The second sub section of section 59 read : "Nothing in this section shall authorise the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution." The Municipal Corporation of Poona imposed a tax, after following the procedure prescribed by the Municipal Act on theatres within the city, of Rs. 2 per day as a licence fee. This tax was imposed from October 1, 1920 and there was enhancement of this tax in 1941 and 1948. It was the constitutional validity of this levy which came from pre Constitution times that was challenged by a civil suit filed in the Bombay High Court by the appellant company. Several points were urged in support of this conten (1) [1959] 2 Supp. S.C.R. 71. supp/65 19 540 tion. The first was that the Provincial Legislature under the Government of India Act, 1935 did not itself have the power to levy the said tax; (2) that the residuary category set forth in cl. 1 1 "any other tax" was unconstitutional, the point urged being that thereby "the legislature had completely abdicated its function and delegated essential legislative power to the municipality to determine the nature of the taxes to be imposed on the rate payers. Such omnibus delegation could not, on the authorities, be supported as constitutional". The grounds upon which this second argument was rejected was the main point on which Mr. Pathak relied in support of this case. These were: (1) that the taxes authorised to be imposed were taxes "for the purposes of the Act" i.e., taxes could be raised only for implementing the purposes for which the municipality was constituted and for no other purpose, (2) though strictly speaking the rule as to ejusdem generis could not be invoked, the kind and the nature of the tax which the municipality was authorised to impose were indicated by the specified items 1 to 10, (3) the taxing power of the municipality was made subject to the approval of the Governor in Council which, at the date when the Act was passed, viz. 1901, meant the Governor inlegislative Council, and (4) finally it was observed the impugned section did lay down a principle and fix a standard which the municipalities had to follow in imposing the tax and, in the circumstances, the legislature was held not to have abdicated its powers. No doubt, this decision does support learned counsel to some extent but a question in the form in which it arises now was not before the Court. The only point was whether there was sufficient formulation of policy for determining the nature of the tax which a municipality might impose. The answer was in the affirmative, based principally on two grounds: (1) that by sub section (2) of section 59 as well on general principles of law the power of the municipality to levy taxes was confined to those on which Provincial Legislature could legislate. In fact, from the arguments as reported it would appear that one of the points urged by learned counsel for the appellant was that under head II of section 5 9 (1) municipality might levy an income tax. It was this extreme contention that was answered and rejected by the learned Judges. This was, in a sense, negative as it merely prevented the municipality from levying particular kinds of taxes. Coming to the positive aspect, the learned Judges held that the other specified items of taxes coupled with the purposes for which tax was to be levied, indicated the nature of the tax that was to be levied. We 541 are unable to agree that this case decides that the fixation of a rate of tax is not an essential legislative function but a mere matter of detail which could be delegated to a subordinate law making body. The last of the decisions relied on in this connection was in Vasantlal vs The State of Bombay(1). It was not a case regarding the determination of a rate at which tax could be levied out of the rent which a tenant might be required to pay under the Bombay Tenancy and Agricultural Land Act, 1948. Section 6(2) of that Act enacted : "The Provincial Legislature may, by notification in the official Gazette, fix a lower rate of maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit." By a notification issued under that section the Government of Bombay prescribed the rate of rent and this was much lower than the one previously fixed. By petitions under article 226 filed in the High Court of Bombay the appellants who were landholders challenged the constitutionality of this fixation on the ground that the legislature had delegated its essential legislative function without laying down policy or principles affording guidance to the delegates for implementing the legislation. This Court, by a majority, answered this question in the negative. The decision proceeded on the basis that the fixation of rent was an essential legislative function. It was, however, held that the legislature had enunciated the principles subject to which the delegates could exercise its subsidiary powers. Gajendragadkar J. as he then was, observed : "The extent to which delegation is permissible is also now well settled. The legislature cannot delegate its essential legislative function in any case. It must lay down the legislative policy and principle and must afford guidance for carrying out the legislative policy laid down before it delegates its subsidiary power in that behalf. " The enunciation of the principle in this manner does not help Mr. Pathak. His contention, however, was that in section 6(2) extracted earlier, no policy had been laid down but that this Court had upheld the constitutional validity of that delegation. A close I examination of the decision, however, does not support this submission. The basic reasoning on which that decision rests is that (1)[1961] 1 S.C.R. 341. 542 for the fixation of a reasonable rent under section 12 by the Mamlatdar the necessary factors had all been specified and on a construction of the Act the learned Judges of the majority reached a conclusion that the exercise of powers under section 6(2) had to be effected on the same basis and with reference to the same factors which were specified in section 12(3) of the Act. It is precisely on this question of the construction of the Act and the correlation between the power to fix the rent conferred upon the State Government by section 6(2) and the power of fixation of fair rent, conferred on the Mamlatdar by section 12 that there was the difference of opinion between the learned Judges. It would, therefore, be seen that far from Vasantlal 's case being an authority for the position that the fixation of a rate of rent is not an essential legislative function but a mere matter of detail which could be left wholly to the executive or subordinate law making authority the decision clearly lays down that it is an essential legislative function and it could. not be delegated without sufficient guidance. There were a few other decisions which were referred to by the learned counsel on the question of excessive delegation but the principles laid down there are general ones and related to the particular point about the fixation of rates. We do not, therefore, consider it necessary to refer to or to deal with them. The final result of this analysis of the decisions as laying down the law so far as the Constitution is concerned, may be thus summarised : (1) Essential legislative functions cannot be delegated but where the law lays down the principles and affords guidance to the sub ordinate law making authority details may be left for being filled up by the executive or by other authorities vested with quasi legislative power, (2) The power to fix a rate of tax is an essential legislative function and therefore unless the subordinate lawmaking authority is afforded guidance by the policies being formulated, principles enunciated and standards laid down the legislation will suffer from the vice of excessive delegation and would be void as arbitrary or unconstitutional. This leads us to the last of the points urged by Mr. Pathak that the Act itself affords sufficient guidance and fixes standards by which it could determine the rate at which a tax could be levied. It is not, and cannot be disputed that the guidance could be afforded not merely by the provision enabling the tax to be levied but by other provisions of the Act including the preamble. But the question is whether there are any such provisions in the Act which could serve to determine the standard upon which the rate of tax to be levied is to be determined. Mr. Pathak first 543 referred us to the preamble where it is recited that the Act enacted was one relating to the municipal affairs of Calcutta. We are unable to see how this affords any assistance in this regard. He next referred us to section 24 reading, to quote the material words "Subject to the provisions of this Act and the rules, bye laws and regulations made thereunder the municipal government of Calcutta shall vest in the Corporation." and to sections 42 to 47 which deal with the supervision of the State Government over the affairs and activities of the Corporation. As regards section 24, we are unable to see how this helps learned counsel in the present argument. No doubt, the municipal government of Calcutta is vested in the Corporation but the question is what powers are vested in that government. If by describing the powers of administration of the city of Calcutta vested in the Corporation, as "a government" every power necessary to effectuate governmental functions was involved there would have been no necessity at all for the other provisions of the Act. It is not, therefore, as if the expression 'government ' gathers within its fold all powers necessary for administration or creates an independent sovereign body entitled to legislate in any manner it likes provided the same is necessary for the purpose of carrying on civic government. It is obvious that is not the sense in which the word 'government ' is employed in section 24. The Corporation is still a subordinate body which is the creature of the legislature and can only function within the framework of the powers conferred upon it by the Municipal Act. Nor are we able to appreciate bow any assistance is derived in this regard from the powers of supervision which the State Government has over municipal affairs under sections 42 to 47. The supervision is only by the Executive Government and the question relating to the vice of excessive delegation is as much applicable to powers exercisable by the Executive Government as to the Corporation. If no standards have been laid down by the Act for the Corporation to afford it a guidance for the fixation of a rate the fact that supervisory power is conferred upon the executive would not obviate that objection for the Government itself would have no guidance from the legislature as to the policy to be adopted in exercising the supervision. As was pointed out by this Court in Jyoti Pershad vs The Administrator for the Union Territory of Delhi(1) though in a slightly different context speaking of an appeal Provided against orders of an authority where it was complained that an arbitrary power had been vested in the original authority : (1) ; 5 4 4 "If learned counsel is right in his submission that the power of the 'competent authority ' is unguided and that he had an unfettered and arbitrary authority to exercise his discretion 'at his sweet will and pleasure ' the existence of a provision for appeals might not impart validity to such legislation. The reason for this is that the appellate power would be subject to the same vice as the power of the original authority and the imposition of one 's I sweet will and pleasure ' over another of a lower authority, would not prevent discrimination or render the restriction reasonable". Principal reliance, however, was placed by learned counsel on sections 115 and 117 of the Act as affording the requisite guidance. These read : Section 115 : "There shall be one Municipal Fund held by the Corporation in trust for the purposes of this Act to which all moneys realised or realisable under this Act (other than fine levied by Magistrates) and all moneys otherwise received by the Corporation shall be credited". Section 117 : "(1) The moneys from time to time credited to the Municipal Fund shall be applied in payment of all sums, charges and cost necessary for carrying out the purposes of this Act, or of which the payment is duly directed or sanctioned by or under any of the provisions of this Act. (2)Such moneys shall likewise be applied in payment of all sums payable out of the Municipal Fund under any other enactment for the time being in force. " Reference was also made in this connection to section 126 under which annual budget estimates have to be prepared for the Corporation in which a statement of the proposals as to taxation which would be necessary or expedient to impose in the said year and the expenditure to be incurred would all have to be set out. It was, therefore, submitted : (1) that there was a municipal fund into which all collections were deposited, & (2) the amount of the collection was determined by the expenditure which it was either obligatory or permissive for the Corporation to incur. Thus no taxes could be raised except such as were needed for the expendi ture for which provision had been made in the budget and the rate of tax was, therefore, determined by the needs of the Corporation. In support of the submission that this was sufficient 545 guidance learned Counsel referred us to the decision of the High Court of Orissa in The Orissa Ceramic Industries Ltd. vs Executive Officer, Jharsuguda Municipality(1) where reference is made to these very provisions as affording sufficient guidance to enable a power to fix the rate being delegated to a municipal authority. We do not consider that sections 115 and 117 afford any guidance for the fixation of a rate. If the amount of money which a municipality needs for discharging its functions, affords any guidance it would appear to follow that the needs of a State for the expendi ture which it has to incur for its manifold activities and again of the Union for the activities which it might undertake ought to afford sufficient guidance to sustain the validity of a skeleton legislation of the type we have indicated earlier. Thus, if learned Counsel is right in his submission as regards sections 115 and 117 read with section 126 as affording sufficient guidance a legislation by a State Legislature or Parliament enacting that the State Government might raise such taxes as it considers necessary and at such rates as it might consider proper for meeting the expenditure of Government could be constitutional and there would be no need for a parliamentary scrutiny and legislation as regards the rates of the several taxes to be levied within the State or the Union, as the case may be. As Mr. Pathak himself realised, this would be plainly unsupportable. If this were so, merely because the area of Government was restricted to a municipality we do not consider how these provisions afford guidance to the subordinate law making authority viz., the Municipal Corporation to fix the rate of the levy. Pausing here, learned Counsel said that even if a maxima were prescribed still it left an amount of discretion to the Municipal Corporation or the Executive, as the case may be, and that even such a "guided" power could be attacked as ultra vires. This, however, do Is not follow. The unconstitutionality arises out of the discretion being %,holly uncanalised and unguided. The argument on the other side is not that no discretion could be left to the legislature to determine within permissible limits the precise rate that would secure the purposes which it seeks to achieve but rather that no guidance is at all afforded and a blank cheque given to the subordinate authority. Where a maxima is fixed and the limit of discretion is thus controlled the legislature has exercised its legislative power on that topic viz., the particular tax. In the other case, where it merely authorises the subordinate law making authority to levy the tax without indicating the essential legislative features of such a tax it is not really legislation on the taxation (1) A.I.R. 1963 Orissa 171. 546 entry but is merely authorising the subordinate legislature to enact a law on that topic. If these provisions, referred to earlier, do not afford any guidance to the Municipal Corporation to fix the rate of the levy it was not suggested that there were any others in the Act which performed that function. Sections 443 and 548(2), it is admitted, do not afford any help for this purpose. It has, therefore, to be held that viewed as a tax, the delegation is unconstitu tional as the essential legislative functions are parted with to the subordinate law making body and the provision is, therefore, unconstitutional. The result is, the appeal fails and is dismissed with costs. ORDER In accordance with the majority judgment, the appeal is allowed with costs throughout. L3Sup/65 2,500 13 12 65 GIPF.

Under a. 413 of the Calcutta Municipal Act, 1951, no person shall without a licence granted by the Corporation of Calcutta, keep open any cinema house for public amusement in Calcutta. Under section 548(2), for every licence under the Act, a fee may be charged at such rate as may from time to time be fixed by the Corporation. In 1948, the appellant (Corporation) fixed fees on the basis of annual valuation of the cinema house. The respondent, who was the owner and licensee of a cinema theatre, had been paying a licence fee of Rs. 400 per year on that basis. In 1958, the appellant, by a Resolution, changed the basis of assessment of the fee. Under the new method the fee was to be assessed at rates prescribed per show according to the sanctioned seating capacity of the cinema house; and the respondent had to pay a fee of Rs. 6,000 per year. The respondent, therefore moved the High Court for the issue of a writ quashing the resolution and the application was allowed. In the appeal to the Supreme Court the appellant contended that (i) the levy was a tax and not a fee in return for services and (ii) section 548(2) does not suffer from the vice of excessive delegation; while the respondent contended that (i) the levy was a fee in return for services to be rendered and not a tax, and as it was not commensurate with the costs incurred by the Corporation in providing the services, the levy was invalid; (ii) if section 548 authorised the levy of a tax, as distinct from a fee in return for service rendered, it was invalid, as it amounted to an illegal delegation of legislative functions to the appellant to fix the amount of a tax without any guidance for the purpose and (iii) the levy was invalid as violating article 19(1) (f) and (g) of the Constitute. HELD (per Sarkar, Raghubar Dayal and Mudholkar JJ) : (i) The was not a fee but a tax. [490 F] The Act does not intend to use the word "fee" as referring only to a levy in return for services, for, the levies authorised by some other sections of the Act are really "taxes", though called "fees". Besides, the words used are "fee for the licence" and these words do not necessarily mean a "fee in return for services" as is apparent from articles 110(2) and 199(2) of the Constitution, where both expressions are used indicating that they are not the same. [483 G H] The word "fee" in section 548 must be read as referring to a tax as any other reading would make the section invalid, and in interpreting a statute, it ought to be made valid if possible. [484 B C] The decisions of this Court establish that in order to make a levy a fee for services rendered, the levy must confer special benefit on the persons on whom it is imposed. The levy under section 548 (2) is not a "fee in return for services" as the Act does not provide for any services of a special kind being rendered, resulting in benefits to the person on 478 whom it is imposed. section 527(43) permits by laws to be framed for regulating the inspection, supervision and control, among others, of cinema houses; but it is not obligatory to make such by laws and therefore, there may be no services to render. Even the by law made provides only for inspection, and the work of inspection done by the appellant was only to see that the terms of the licence were observed by the licensee. It was not a service to him, and so, no question arises of correlating the amount of levy to the costs of any service. The levy therefore is not a fee and must be tax. [485 B C, F; 488 E; 490 E F] The Commissioner, Hindu Religious Endowments, Madras vs Shri Lakshmindra Thirtha Swamiar of Sirur Mutt, [1954] S.C.R. 1005, H. H. Sudhindra Thirtha Swamiar vs Commissioner for Hindu Religious and Charitable Endowments, [1963] Supp. 2 S.C.R. 302 and The Hingir Rampur Coal Co. Ltd. vs The State of Orissa and Ors. ; , referred to. Whether a particular levy is a fee or a tax has to be decided only by reference to the terms of the section. Its position in the Act cannot determine its nature ; an imposition which is by its terms a tax and not a fee, cannot become a fee by reason of its having been placed in a certain part of the Statute. [489 B] It is not right to say that section 443 does not impose any duty on the appellant and that therefore, the licence fee leviable under section 548, should be fixed only with reference to rendering of services. The Corporation has been set up only to perform municipal duties and its powers are for enabling it to perform those duties. But, since there is no provision for service being rendered, the levy cannot be a fee and would indisputably be a tax. [490 B, C, D] (ii) The fixing of the rate of a tax is not of the essence of legislative power and the fixing of rates may be left to a non legislative body. When it is so left to another body the legislature must provide guidance for such fixation. Since there is sufficient guidance in the Act as to how the rate of the levy under section 548 is to be fixed, the section is valid. G H; 497 B] The appellant is an autonomous body. It has to perform various statutory functions. It is given power to decide when and in what manner the functions are to be performed. For all this it needs money and its needs will vary from time to time with the prevailing exigencies. Its power to collect tax is necessarily limited by the expenses required to discharge the functions. it has, therefore, where rates have not been specified in the statute, to fix such rates as may be necessary to meet its needs, and that would be sufficient guidance to make the exercise of its power to fix the rate, valid. [496 D F] Case law reviewed. (iii) The challenge to the levy on the ground that it amounts to expropriation is wholly unfounded. No doubt the increase in the rate of fee was large but considering the available seating capacity of the respondent, it cannot be said to be unreasonably high. [482 E F] The contention of the appellant that even if no guidance for taxation has been prescribed the section would still be valid, because, the Act may be said to have been passed under Entry 5 of List II of the Seventh Schedule to the Constitution and that Entry authorises the passing of a law concerning the powers of a municipal corporation and that such powers must necessarily include the power to levy a tax, was left open. [497 D E, H] 479 per Subba Rao and Ayyangar, JJ (dissenting) (i) If on a proper construction of the Act one reached the conclusion that Part IV of the Act was not exhaustive of the range of levies permitted by the Act, and the fees permitted to be levied by section 548(2) were also taxes, there would be nothing in section 127(3) or (4) to militate against that construction. But, an examination of the provisions of the Act makes three matters abundantly clear; (a) that the Act draws a sharp and clear distinction between taxes properly so called and fees; (b) that the division into Parts and Chapters is logical and clear cut and no matter which properly falls under a subject set out under a Part or Chanter heading, is dealt with in any other; and (c) that taxes, by whatever designation they might be called, are all comprehended and dealt with by Part IV and by Part IV alone, and that what is permitted to be imposed by section 548(2) is only a fee as distinguished from a tax. As admittedly there is no correlation between the fee charged and the service rendered, the impugned levy was not authorised and the High Court was right in granting relief to the respondent. [525 B C; 526 D G] To say that to enable a fee strictly so called to be levied, an immediate advantage measurable in terms of money should be conferred on the payer is to take too narrow a view of the concept of a fee. The word "services" in the context has to be understood in a wide sense, as including supervision and control over the activities for the excess of which the fee is charged. The judgements of this Court in the Shirur Mutt case; , , and the cases following it, do not lay down that where an activity is regulated by licenses, the imposition of charges for the inspection, supervision and control of the activity to ensure compliance with the regulation is not a benefit conferred on the licensee, so as to render the amount charged for such a licence not a fee in the real sense, but a tax, whose constitutional validity could be sustained by reference to the taxation entries in Lists I and II. [508 A; 515 F G; 517 H; 518 A] Case law considered. Also, article 110(2) of the Constitution far from supporting the appellant 's contention, negatives it. If pure taxation measures, employing the machinery of licences and fees, would be money bills, then the fees for licences which are outside the definition, would be those fees which are imposed to meet the cost of regulation and supervision of an activity which is controlled by the requirements of a licence and compliance with its terms. Besides, if the levy of such licence fees on various activities which form the subject of legislative control or regulation under the various non taxation entries in the Lists were treated as tax, Entries 96 and 66 in the respective Lists would have to be read as taxation entries, because, such a levy is permitted only by those entries. This however would be con trary to the entire scheme on which the several entries in the Lists are made, namely, setting out the exclusive general legislative powers the enumeration of taxes which could be imposed and finally the power to, impose fees in respect of any of the matters in the List. [502 C; 519 B C, E, G] (ii) Viewed as a tax the delegation in section 548(2) is unconstitutional, as essential legislative functions are parted with to the municipality, a subordinate law making body, and therefore the provision is unconstitutional. [546 B] Essential legislative functions cannot be delegated but where the law lays down the principles and affords guidance to the subordinate lawmaking authority details may be left for being filled up by the executive or by other authorities vested with quasi legislative power. The power 480 to fix a rate of tax is an essential legislative function and therefore, unless the subordinate law making authority is afforded guidance by the policies being formulated, principles enunciated and standards laid down, the legislation will suffer from the vice of excessive delegation and would be void as arbitrary and unconstitutional. The _Provisions of the Act do not afford any guidance to the Municipal Corporation to fix the rate of levy. No doubt, the municipal government of Calcutta was vested in the Corporation under section 24 of the Act, but the expression "government" does not gather within its fold all powers necessary for administration nor does it create an independent sovereign body entitled to legislate in any manner it likes for the purpose of carrying on civic government. The Corporation is still a subordinate body which is the creation of the legislature and can only function within the framework of the powers conferred upon it by the Act. No assistance is derived in this regard from the powers of supervision which the State Government has over the municipal affairs under a. 42 and 47. If no standards have been laid down by the Act for the Corporation to afford it a guidance for the fixation of a rate, the fact that supervisory power is conferred upon the executive would not obviate that objection, for the Government itself would have no guidance from the legislature as to the policy to be adopted in exercising the supervision. [541 E G; 542 C G; 545 A] It cannot be said that as a result of as. 115, 117 and 126 no taxes could be raised except such as were needed for the expenditure for which provision had been made in the budget and the rate of tax was, therefore, determined by the needs of the Corporation. If the amount of money which a municipality needs for discharging its functions, affords any guidance, then the need of a State or the Union ought to afford sufficient guidance to sustain the validity of any skeleton legislation. [545 A C] The Orissa Ceramic Industries Ltd. vs Executive Officer, Jharsuguda Municipality A.l. R, 1963 Orissa 171 disapproved. The quantum of power which a law could bestow upon an institution or body of its creation is determined, first, by the view of the legislature to what are necessary for achieving the purposes for which the institution or body is created and, secondly, by the overall limitations imposed by the Constitution by the distribution of legislative power. Nothing therefore turns on the use of the word "powers" in Entry 5 of the List 11 which deals with the Constitution and powers of municipal corporations for the purpose of local self government. The State Legislature cannot, therefore, authorise a municipal body which it creates, even though, it be for the purpose of local self Govemment, to exercise a power higher than what it itself possesses. Any legislative practice prevailing before 1st April, 1937 when India was under a unitary form of government or prevailing before the Constitution, does not serve as a guide for interpreting the Legislative entries in the Constitution and any such legislative practise cannot prevail over the limitations imposed by the distribution of Legislative power in respect of post Constitution legislation. [527 F G; F G ; 533 E F; 534 C] The analogy of American decisions also cannot afford any guidance for the application of a different rule as to what constitutes excessive delegation in the case of legislation creating municipal bodies. The rule to limits of delegation by the legislatures constituted in India, by the Consti tution, has been the subject of elaborate consideration by this Court and the decisions have not laid down that a different rule applies when the delegation of legislative power is in favour of a municipal corporation. [535 C D, E] Case law considered.

N: Writ Petition No. 373 of 1970. Under Article 32 of the Constitution of India for enforcement of the Fundamental Rights with Civil Appeals Nos. 2211 and 2212 of 1970 and 85 to 91 of 1971. Appeals from the judgment and decree dated October 26, 1970 of the Madras High Court in Writ Petitions Nos. 64, 117, 118, 119, 120, 121, 185, 186 and 220 of 1970 respectively. M.C. Chagla and K. Jayaram, for the petitioners (in W.P. No. 373 of 1970). M.Natesan, Sardar Bahadur Saharya, K. Jayaram and Yougin dra Khushalani, for the appellant (in C.A. No. 2211 of 1970). 260 M.C. Setalvad and K. Jayaram, for the appellant (in C.A. No. 2212 of 1970). K. Jayaram, for the appellants (in C.As. Nos. 85 to 91 of 1971). section Govind Swaminathan, Advocate General for the State of Tamil Nadu, section Mohan, A. V. Rangam, A. Subhashini and N. section Sivan, for the respondent (in all the matters). The Judgment of the Court was delivered by Khanna, J. The Gudalur Janmam Estates Abolition and Conversion into Ryotwari) Act, 1969 (Act No. 24 of 1969), hereinafter referred to as the Act, received the assent of the President on December 6, 1969, after it had been enacted by the legislature of the State of Tamil Nadu. It was thereafter published in the gazette on December 17, 1969. The Act extends to the Gudalur taluk of the Nilgiris district and applies to all janmam estates. It is to come into force on such date as the State Government may, by notification, appoint. This Court stayed the issue of the notification and, as such, no notification has so far been issued. Nine petitions under article 226 of the Constitution of India were filed in the Madras High Court challenging the vires of the Act on the ground that it was violative of articles 14, 19 and 31 of the Constitution. The case of the petitioners was that their lands in the Gudalur taluk were previously janmam estates but subsequently became ryotwari estates, especially after the resettlement of 1926 and, as such, the provisions of the Act were not applicable to those lands. The Act, it was stated, did not get the protection of article 31A of the Constitution. One of the above petitions was filed by O 'Valley Estate Ltd. This petitioner had taken on lease an estate comprising about 2,000 acres of land in the 19th century from the Nilambur Kovilakam who was the proprietor of that land besides some other land. The Company (O 'Valley Estate Ltd.) has a plantation on the estate and is engaged in cultivation and manufacturing of tea and other plantation products. The Nilambur Kovilakam was the petitioner in another petition. The nine petitions were resisted by the State of Tamil Nadu on the ground that the lands in question were janmam estates and had retained that character till the passing of the Act. The State of Tamil Nadu also invoked the protection of article 31A of the Constitution. The nine petitions were dismissed by the Madras High Court by a common judgment given in the petition filed by O 'Valley Estate Ltd. It was held that the lands were janmam estates and had not lost that character. The Act was held to be 261 (Khanna, J.) protected, by article 3 1 A of the Constitution. Civil appeals Nos. 2211 and 2212 of 1970 and Nos. 85 to 91 of 1971 have been filed against the above judgment of the High Court. Writ petition No. 373 of 1970 has been filed under article 32 of the Constitution. by Balmadies Plantations Ltd. and its share holder Dayanand Bansilal Saxena challenging the vires of the Act or. the ground that it is violative of articles 14, 19 and 31 of the Constitution and is not protected by article 31A. According to the petitioner, the janmam estates which are now intended to be abolished by the Act had been converted into ryotwari estates. The purpose of the Act, it is further stated, is not to bring about agrarian reform. The petitioner company in this case had taken on lease 170.78 hectares from the Nilambur Kovilakam, the appellant in civil appeal No. 2211 of 1970, in the 19th century. Out of the above area, 143.22 hectares is under coffee plantation, while the rest of the land consists of forests and waste land. The writ petition has been resisted by the State of Tamil Nadu and the affidavit of Shri A. section Venkataraman, Additional Secretary has been filed in opposition to the petition. The respondent has controverted the different grounds taken by the petitioner. Gudalur taluk, it may be stated, comprises 12 villages. The said taluk was originally part of Malabar district which now forms part of Kerala State. O 'Valley village was transferred to the Nilgiris in 1873 and the other eleven villages were transferred in 1877. Originally the janmis in Malabar were absolute proprietors of the land and did not pay land revenue. After Malabar was annexed by the British in the beginning of the 19th century, the janmis conceded the liability to pay land revenue. According to the case set up by the petitioner appellants, there was a gradual orision of the rights of janmis in the lands in question and the janmam estates became ryotwari estates after the resettlement of 1926. As such, the Act, it is submitted, does not apply to the lands in dispute. Before dealing with this aspect of the matter, it would be pertinent to refer to the different provisions of the Act. Section 2 of the Act contains the various definitions. Relevant clauses of that section read as under : "section 2. In this Act, unless the context otherwise requires, (1) all expressions defined in the Malabar Tenancy Act shall have the same,respective meanings as in that Act with the modifications, if any, made by this Act; (2)"appointed day" means the date appointed by the Government under subsection (4) of section 1; (4) "forest" includes waste or arable land containing trees, shrubs or reeds. 262 Explanation. A forest shall not cease to be such by reason only of the fact that, in a portion thereof, trees, shrubs or reeds are felled, or lands are cultivated, or rocks, roads, tanks, rivers or the like exist; (6) "jarmiam estate" means any parcel or parcels of land included in the holding of janmi; (7) "janmi" means a person entitled to the absolute proprietorship of land and includes a trustee in respect thereof; (9) "plantation crop" means tea, coffee, rubber, cinchona or cardamom; (11) "tenant" means a verumpattamdar as defined in sub clause (a) of clause (29) of section 3 of the Malabar Tenancy Act;" Section 3 of the Act deals with the vesting of janmam estates in Government, and reads as under : "3. Vesting of janmam estates, etc., in Government. With effect on and from the appointed day and save as otherwise expressly provided in this Act (a) the Malabar Tenancy Act, the, Malabar Land Registration Act, 1895 (Tamil Nadu Act III of 1896), the Gudalur Compensation for Tenants Improvements Act, 1931 (Tamil Nadu Act XIII of 1931) and all other enactments applicable to janmam estates as such, shall be deemed to have been repealed in their application to janmam estates; (b) every janmam estate including all communal lands and porambokes, waste lands, pasture lands, forests, mines and minerals, quarries, rivers and streams, tanks and irrigation works, fisheries, and ferries situated within the boundaries thereof shall stand transferred to the Government and vest in them free of all incumbrances, and the Tamil Nadu Revenue Recovery Act, 1864 (Tamil Nadu Act 11 of 1864), the Tamil Nadu Irrigation Cess Act, 1865 (Tamil Nadu Act VII of 1865), the Tamil Nadu Cultivating Tenants Protection Act, 1955 (Tamil Nadu Act XXV of 1955), the Tamil Nadu Cultivating Tenants (Payment of Fair Rent) Act, 1956 (Tamil Nadu Act XXIV of 1956) and, all other enactments applicable to ryotwari lands shall apply to the janmam estate; 263 (Khanna, J.) (c) all rights and interests created by the janmi in or over his jamnam estate before the appointed day shall as against the Government cease and determine; (d) the Government may, after removing any obstruction that may be offered, forthwith take possession of the janmam estate and all accounts, registers, pattas, muchilikas, maps, plans and other documents relating to the janmam estate which the Government may require for the administration thereof; Provided that the Government shall not dispossess any person of any land in the janmam estate in respect of which they consider that he is prima facie entitled to a ryotwari patta pending the decision of the appropriate authority under this Act as to whether such person is entitled to such patta; (e) the janmi and any other person whose rights stand transferred under clause (b) or cease and determine under clause (c) shall be entitled only to such rights and privileges as are recognised or conferred on him by or under this Act; (f) the relationship of janmi and tenant, shall as between them, be extinguished; and (g) any rights and privileges which may have accrued in the janmam estate to any person before the appointed day against the janmi shall cease and determine and shall not be enforceable against the Government or against the janmi and every such person shall be entitled only to such rights and privileges as are recognised or conferred on him by or under this Act. " According to section 8, the janmi shall with effect on and from the appointed day be entitled to a ryotwari patta in respect of all lands proved to have been cultivated by the janmi himself, or by the members of his tarwad, tavazhi, illom or family or by his own servants or by hired labour with his own or hired stock in the ordinary course of husbandry for a continuous period of three agricultural years immediately before the 1st day of June 1969. Explanation I to that section defines the word "cultivate" to include the planting and rearing of topes, gardens, orchards and plantation crops. According to Explanation 11, where any land is cultivated with plantation crops, any land occupied by any building for the purpose of or ancillary to the cultivation of such crops or the preparation of the same for the market and any waste land lying interspersed among or contiguous to the planted area 264 upto a maximum of twenty five per centum of the planted area shall be constituted to be land cultivated by the janmi. Section 9 deals with lands in ' respect of which a 'tenant is entitled to ryotwari patta. According to the section, every tenant shall, with effect on and from the appointed day, be entitled to a ryotwari patta in respect of the lands in his occupation. The right of the tenant to the ryotwari patta is subject to the conditions regarding cultivation mentioned in the Provisos to that section. Section 10 provides that where no person is entitled to a ryotwari patta in respect of a land in a janmam estate under section 8 or section 9 and the land vests in the Government, a person who had been ' personally cultivating such land for a continuous period of three agricultural years immediately before the 1st day of June 1969, shall be entitled to a ryotwari patta in respect of that land. This right too is subject to conditions mentioned in that section. According to section 11, no ryotwari patta shall be granted with respect. to the following categories situated within the limits of a janmam estate (a) forests; (b) beds and bunds of tanks and of supply, drainage, surplus or irrigation, channels; (c) threshing floor, cattle stands, village sites, carttracks, roads, temple sites and such other lands situated in any janmam estate, as are set apart for the common use of the villagers; (d) rivers, streams and other porambokes. Section 12 empowers the Settlement Officer to inquire into the claims of any person for a ryotwari patta under the Act in respect of any land in a janmam estate and decide in respect of which land the claim should be allowed. A right of appeal against the decision of the Settlement Officer to the 'Tribunal appointed under the Act is given by sub Section (3) of section 12. The Tribunal, according to section 7, shall consist of one Person only who shall be a Judicial Officer not below the rank of Subordinate Judge. Section 13 fastens liability to Pay land revenue to Government on the person Who becomes entitled to a ryotwari patta under the Act. As regards a building, section 14 Provides that with effect on and from the appointed day, the same shall vest in the person who Owned it immediately before that day, subject to the conditions mentioned in that section. Section 15 deals with rights of sons admitted into possession of any land in a janmam estate by any janmi for a non Agricultural purpose while section 16 makes provision for directions to be issued by the Government in respect of a person admitted by a janmi into possession of any land of the 2 65 (Khanna, J.) description specified in section II. Section 17 relates to the rights of lessees of plantations and reads as under : "section 17. Rights of lessees of plantations. (1)(a) Where, at any time before the appointed day the janmi has created by way of lease, rights in any lands for purposes of cultivation of plantation crops, the Govern ment may, if in their opinion, it is in the public interest to do so, by notice given to the person concerned terminate the right with effect from such date as may be specified in the notice, not being earlier than three months from the date thereof. (b) The person whose right has been so terminated shall be entitled to compensation from the Government which shall be determined by the Board of Revenue in such manner as may be prescribed, having regard to the value of the right and the period for which the right was created. (c) Where any such right is not determined under this sub section, the transaction whereby such right was created shall be deemed to, be valid and all rights and obligations arising thereunder, on or after the appointed day, shall be enforceable by or against the Government Provided that the transaction was not void or illegal under any law in force at the time. (2) The Government may, if in their opinion, it is in the public interest to do so, impose reasonable restrictions on the exercise of any right continued, under this section. Explanation. Any rights granted in perpetuity shall cease and determine and be dealt with under section (3) (e) and not under this section. " Section 18 deals with the rights of certain other lessees. Chapter TV of the Act, which contains sections 19 and 20, deals with survey and settlement of janmam estates. Chapter V, which contains sections 21 to 30, makes provision for determination and payment of compensation. As regards the Nilambur Kovilagam, one of the appellants before us, the explanation to section 22 reads as under "Explanation. For the purposes of this section, the janmam estate owned by the Nilambur Kovilagam which is partly divided and partly held in common by the several tavazhis shall be construed as a single janmam estate. " 8 1208SupCI/72 266 Amount of compensation is the subject of section 28, while section 29 relates to the determination of basic annual sum and compensation. The subject deal with by chapter VI, containing sections 31 to 46, is "Deposit and Apportionment of Compensation. Sections 47 to 50 contained in chapter VII make provision for recovery of contribution from pattadars. Chapter VIII contains the miscellaneous provisions. Section 58 makes final the orders passed by the various authorities under the Act, while section 60 confers powers on the Government to, make rules for carrying out the purposes of the Act. The rules are required to be published in the gazette and to be placed on the table, of both Houses of Legislature, so that the Houses may, if they so deem proper, make modification in any such rule. We may at this stage advert to janmam estate. According to Land Tenures in the Madras Presidency by section Sundararaja Iyengar, Second Edition (p. 49), the exclusive right to, and hereditary possession of the soil in Malabar is denoted by the term jenmam which means birthright and the holder thereof is known as jenmi, jenmakaran or mutalalan. Until the conquest of Malabar by the Mahomedan princes of Mysore, the jenmis appear to have held their lands free from any liability to make any payment, either in money or in produce, to government and therefore until that period, such an absolute property was vested in them as was not found in any other part of the Presidency. Sir Charles Turner after noticing the various forms of transactions prevalent in Malabar stated that they pointed to an ownership of the soil as complete as was enjoyed by a freeholder in England. Subba Rao J. (as he then was), speaking for the Court, in the case of Kavalappara Kottarathil Kochuni and Others vs The State of Madras and Others(1) observed : "A janmam right is the freehold interest in a property situated in Kerala. Moor in his "Malabar Law and Custom" describes it as a hereditary proprietorship. A janmam interest may, therefore, be described as "proprietary interest of a landlord in lands", And such a janmam right is described as "estate" in the Constitution. " It was held that the proprietor called janmi could create many subordinate interests or tenures like lease or mortgage in a janmam estate. It is not, however, necessary to dilate upon the matter as janmam estate has been defined in clause (6) of section 2 of the Act to mean any parcel or parcels of land included in the holding of a janmi. Janmi, according to clause (7) of the said section, means a person entitled to the absolute proprietorship of land and includes a trustee in respect thereof. (1) 267 (Khanna, J.) Ryotwari or kulwar system was first introduced into the British possessions by Col. Read in 1792. When the Baramahal and Saleem were ceded to the British by Tippu, Lord Cornwall is specially deputed Col. Read for their settlement. The prevailing system of land revenue settlement at the time was the permanent settlement. Col. Read, however, deemed it prudent to enter into temporary settlements with the actual cultivators and this gave rise to a new system since designated ryotwari or kulwar system. The system introduced by Col. Read embraced the survey of every holding in the district and a field assessment based on the productive powers of the soil. The ryot was not regarded as the proprietor of the soil but only as a cultivating tenant from whom was to be exacted by government all that the he could afford. Certain objectionable features of the ryotwari system were then noticed, and an effort was made to eliminate those objectionable features. The ryotwari system in force at present means the division of all arable land, whether cultivated or waste, into blocks, the assessment of each block at a fixed rate for a term of years and the exaction of revenue from each occupant according to the area of land thus assessed. That area may remain either constant or may be varied from year to year at the occupant 's pleasure by the relinquishment of old blocks or the occupation of new ones. This distinguishing feature of this system is that the state is brought into direct contact with the occupant of land and collects its revenue through its own servants without the intervention of an intermediate agent such as the Zemindar. All the income derived from extended cultivation goes to the state. Ryotwari lands are known as taraf lands in the Tanjore District, and as ayan, sirkar. koru, or government lands in the other parts of the Presidency (see pages 152 and 153 of Land Tenure in the Madras Presidency, Second Edition, by Sundararaja Iyengar). According to Land System of British India by Baden Powell, the holders of ryotwari pattas used to hold lands on lease from Government. The basic idea of ryotwari settlement is that every bit of land is assessed to a certain revenue and assigned a survev number for a period of years, which is usually thirty, and each occupant of such land holds it subject to his paying the land revenue fixed on that land. But it is open to the occupant to relinquish his land or to take new land which has been relinquished by some other occupant or become otherwise available on payment of assessment. The above observations were referred to by this Court in the case of Karimbil Kunhikoman vs State of Kerala(1) and it was said : "The ryot is generally called a tenant of Government but he is not a tenant from year to year and cannot be ,ousted as long as he pays the land revenue assessed. He (1) [1962] 1 Supp. S.C.R. 847. 268 .lm15 has also the right to sell or mortgage or gift the land or lease it and the transferee becomes liable in his place for the revenue. Further, the lessee of a ryotwari pattadar has no rights except those conferred under the lease and is generally a sub tenant at will liable to ejectment at the end of each year. In the Manual of Administration as quoted by Baden Powell, in Vol. III of Land Systems of British India at p. 129, the ryotwari tenure is summarised as that "of a tenant of the State enjoying a tenant right which can be inherited, sold, or burdened for debt in precisely the same manner as a proprietary right subject always to the payment of the revenue due to the State". Though therefore the ryotwari pattadar is virtually like a proprietor and has many of the advantages of such a proprietor, he could still relinquish or abandon his, land in favour of the government. It is because of this position that the ryotwari pattadar was never considered a proprietor of the land under his patta, though he had many of the advantages of a pro prietor." This Court held in the above case that the land held by ryotwari pattadars in the area which came to the State of Kerala by virtue of the States Reorganization Act from the State of Madras were not 'estates ' within the meaning of article 3 1 A (2) of the Constitution. Subsequent to that decision, clause (2) of article 31A was amended by the Constitution (Seventeenth Amendment) Act, 1964. As a result of that amendment, 'estate ' would also include any land held under ryotwari settlement. Let us now go into the question as to whether the janmam rights in the lands in question have been converted into ryotwari estate. We are concerned in the present case with the settlement of 1886 and resettlement of 1926. In connection with the settlement of 1886, G.O. 741 Revenue dated August 27, 1886 was issued and its main purpose was to settle the lands which had been escheated to the Government and to collect revenue for the State An attempt was then made to have direct dealing with the cultivators without notice to the janmi. This act of the State was held to be against law by a Division Bench of the Madras High Court in the case of Secretary of State vs Ashtamurthi(1). In that case the Collector of Malabar let defendant No. 2 into possession of certain waste land in 1869 under a cowle, and in 1872 granted to him a patta for it. The cowledar then brought the land under cultivation but subsequently left it uncultivated and failed to pay the assessed revenue. The land was consequently attached in 1885 for arrears of revenue under the Revenue Recovery Act and sold to defendant No. 3. The plaintiff. who was the janmi of the (1) I.L.R. 13 Madras 89. 269 (Khanna, J.) land, had no notice of the grant of either the cowle or the patta. He asserted his right to janmabhogam in a petition presented to the Collector at the time of the sale, but the sale proceeded without reference to his claim. Suit was thereafter brought by the plaintiff to set aside the sale. It was held that the interest of the janmi did not pass by the sale. Parker, J. in the above context observed : "The evidence shows that the janmis or the proprietors of the soil in Malabar have long been in the habit of leasing out the greater portion of their estates to kanomdars who are thus in the immediate occupancy of the greater part of the soil. This was the state of things at the time of Hyder 's conquest (exhibit XIV), and the British Government is stated to have continued the practice of the Mysore Government in settling the assessment with these kanomdars. At the annexation of Malabar in 1799 the Government disclaimed any desire to act as the proprietor of the soil, and directed that rent should be collected from the immediate cultivators, Trimbak Ranu vs Naina Bhavani(1) and Secretary of State vs Vira Rayan (2) thus limiting its claim to revenue. Further, in their despatch of 17th December 1813 relating to the settlement of Malabar the Directors observed that in Malabar they had no property in the land to confer, with the exception of some forfeited estates. This may be regarded as an absolute disclaimer by the Government of the day of any proprietary right in the janmis ' estate, and is hardly consistent with the right of letting in a tenant which is certainly an exercise of proprietary right. " On account of the above decision, the Madras Government reconsidered the matter and in 1896 the Malabar Land Registration Act (Act 3 of 1896) was enacted. The object of that Act would be clear from its preamble which reads : "WHEREAS Regulation XXVI of 1802 provides that landed property paying revenue to Government shall he registered by the Collector; and whereas such landed property in certain areas in the Nilgiri district has in many cases not been registered in the names of the proprietors thereof; and whereas it is desirable for the security of the public revenue to provide a summary means whereby the Collector may ascertain such proprietors; It is hereby enacted as follows. " According to section 13 of the above Act, every person registered ,is proprietor of an estate shall be deemed to be the landholder in (1) (2) I.L.R. 270 respect of such estate within the meaning and for the purposes of the Madras Revenue Recovery Act II of 1864. The janmam rights in the lands in dispute thus remained intact. The stand taken on behalf of the petitioner appellant, as mentioned earlier, is that the janmam rights in the lands in dispute were converted into ryotwari estate as a result of resettlement of 1926. Government order No. 1902 Revenue dated November 1, 1926 was issued in this connection. Para 3 of that order deals with the janmam estates and reads as under : "3. JANMABHOGAM: Paragraph 11 of the Board 's Proceedings Lands have hitherto been described as (a) Government Janmam, i.e. lands which are held directly from the Government and on which taram assessment and janmabhogam are Paid to the Government and (b) private janmam, i.e. lands which are held directly from the Government and on which taram assessment but not janmabhogam is paid to the Government. These two classes of land will hereafter be referred to as 'New Holdings ' and 'Old Holdings '. The Special Settlement Officer proposed (1) to raise the existing rate of janmabhogam of 8 annas an acre on all so called Government janmam land in estates to Re. 1 an acre for highly developed estate crops; (2) to retain the existing rate on lands cultivated with non estate crops; and (3) to reduce it to 4 annas an acre on undeveloped lands. The Board supported the proposals (1) and (3) but recommended an increase to Re. 1 in the case of proposal (2). The Government have decided to apply the 18 3/4 per cent limit imposed in G.O. No. 924, Revenue, dated 18th June, 1924, to janmabhogam. After careful consideration the Government have decided to accept the Board 's proposal to amalgamate the two items of land revenue, i.e., taram assessment and so called 'Janinabhogam ' which are being collected on all so called Government janmam lands, i.e., on new holdings, and in future to collect assessment on these lands at a 271 (Khanna, J.) consolidated rate based upon the total of the rates at which these two items of the land revenue are now being levied. In all the figures quoted in the Appendix to this order concerning these lands the revised rate given is this consolidated rate. " It would appear from the above that the effect of the resettlement of 1926 was to retain the janmam estates and not to abolish the same or to convert them into ryotwari estates. There was merely a change of nomenclature. Government janmam lands were called the new holdings, while private janmam lands were called the old holdings. In respect of janmabhogam (Janmi 's share) relating to Government janmam lands, the order further directed that the amount to be paid to the Government should include both the taram assessment and janmabhogam. It is difficult, in our opinion, to infer from the above that janmam rights in the lands in question were extinguished and converted into ryotwari estates. The use of the word 'janmabhogam ' on the contrary indicates that the rights of janmis were kept intact. It has been argued on behalf of the petitioner appellants that the grant of a right of relinquishment to janmis had the effect of obliterating the distinction between janmam estate and ryotwari estate. The janmam rights, according to the submission, were thus converted into ryotwari estate. In this connection we find that the Government order No. 1902 dated November 1, 1926 shows that question was raised as to, whether a janmi of private janmam land could claim exemption from assessment by leaving cultivable lands waste. The Board of Revenue recommended that exemption should not be granted unless the janmi pattadar relinquished his whole right, title and interest. The Government, however, considered that having regard to the practice of exempting unoccupied janmam lands from assessment the janmi should not be required to pay assessment on lands the cultivation of which was to cease. In 1896 a system was introduced, according to which a janmi could give notice of relinquishment without giving up his janmam rights over the land and claim remission of assessment on the relinquished land if it was not taken up for cultivation in the following year. '.he Board of Revenue in proceedings dated October 16, 1897 pointed out that this was in effect a reversion to the old system of charging all cultivation with all its attendant evils of corruption, loss of revenue and unnecessary labour in inspection. The matter was thereafter further considered and the Board in its proceedings dated June 13, 1916 expressed the opinion that the existing rule relating to relinquishment of private lands was anomalous and proposed that no relinquishment of such lands should be permitted unless the janmi surrendered also his janmam right and that until he relinquished such right, he should be res ponsible to the Government for the payment of the assessment due 272 on such lands. This proposal was accepted by the Government in 1917 and reiterated in 1919. It would thus appear that the relinquishment permissible in the case of janmi was of a somewhat peculiar nature inasmuch as there could be no relinquishment of janmam lands unless the janmi surrendered also his janam rights. The above right of relinquishment, in our opinion, did not have the effect of converting the janmam rights in the lands in dispute into ryotwari estate. It is not disputed that apart from the lands in question, there are no other janmam estates in the State of Tamil Nadu (Madras). If the janmam estates in question had been converted into ryotwari estates as a result of the resettlement of 1926, there would have arisen no necessity to mention the janmam right in the State of Madras in clause (2) (a) (i) of article 3 1 A of the Constitution. The fact that in addition to the janmam right in the State of Kerala, the janmam right in the State of Madras was also mentioned in clause (2) (a) (i) of article 31 A as a result of amend ment, shows that the janmam rights in the lands in question were assumed by the legislature to be in existence. To hold that the janmam rights in the lands in question ceased to exist after the resettlement of 1926 would have the effect of rendering the, words, wherein there is a reference to janmam right in the State of Madras in clause (2) (a) (i) of article 3 1 A, to be meaningless and without any purpose. Reference has been made, on behalf of the petitioner appellants to the Full Bench case of Sukapuram Sabhayogam vs State of Kerala(1) wherein it was held that a person would cease to be Proprietor of a soil if he gets a right or is under an obligation to relinquish or abandon the land. The, above case related to the plains of Malabar, while we are concerned with the hilly tracts of Gudalur taluk. In the cited case pattas and Adangal registers were Produced in the court and the State accepted the authenticity of those documents. In the cases before us, no patta was produced by the petitioner appellants either in the High Court or in this Court. In view of the above, we are of the opinion that the facts of the Full Bench case are distinguishable. In any case, we are unable to subscribe to the proposition that the right of relinquishment of janmam rights of a janmi would by itself convert janmam rights into ryotwari estate. Argument has also been advanced on behalf of the petitioner appellants that so far as the forest areas in the janmam lands in question are concerned, they do not constitute estate unless they are held or let for purposes of agriculture or for purposes ancillary thereto, as contemplated by clause (2) (a) (iii) of article 31 A of the Constitution. This contention, in our opinion, is devoid of 1963 Kerala 101. (1) A.I.R 1663 Kerala 101 273 (Khanna, J.) force. Sub clause (a) of clause, (2) of article 31A reads as under "(2) In this article, (a) the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its equivalent has in the existing law relating to land tenures in force in that area and shall also include (i) any jagir, inam or muafi or other similar grant and in the States of Madras and Kerala, any janmam right; (ii) any land held under ryotwari settlement; (iii) any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans;" Janmam lands are covered by clause (2) (a) (i) of article 31 A. Forest area, which is part of such janmam land would like the remaining janmam lands, constitute an estate, and it would not be necessary in such a case to show that the forest land is held or let for purposes of agriculture or for purposes ancillary thereto. All lands which are part of a janmam estate of a janmi in the States of Madras and Kerala would constitute estate as mentioned in clause (2) (a) (i) of article 31A of the Constitution. As janmam lands fall under clause (2) (a) (i), it is not essential to show that the requirements of clause (2) (a) (iii) too are satisfied for such lands and it would make no difference whether forests are a part of the janmam lands. The next question which arises for consideration is whether the acquisition of the lands in question is for agrarian reform. It is well established that in order to invoke the protection of article 3 1 A, it has to be shown that the acquisition of the estate was with a view to implement agrarian reform. The said article is confined only to agrarian reform and its provisions would apply only to a law made for the acquisition by the, State of any rights therein or for extinguishment or modification of such rights if such acquisition, extinguishment or modification is connected with agrarian reform [see P. Vajravelu Mudaliar vs Special Deputy Collector,, Madras & Anr.(1)]. (1) ; at p. 622. 274 We have referred in the earlier part of this judgment to the various provisions of the Act, and it is manifest from their perusal that the object and general scheme of the Act is 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 should be held to be a measure of agrarian reform and would consequently be protected by article 31A of the Constitution. The said article provides that notwithstanding anything contained in article 13, no law providing for the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such right 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, article 19 or article 31, provided that where such law is a law made by the Legislature of a State, the provisions of article 31A shall not apply thereto, unless such law, having been reserved for the consideration of the President, has received his assent. The impugned Act, as stated earlier, received the assent of this President on December 6, 1969. As the Act is protected by article 31A of the Constitution, it is immune from attack on the ground of being violative of article 14, article 19 or article 31. This fact would not, however, stand in the way of the court examining the constitutional validity of any particular provision of the Act It has been submitted on behalf of the appellants that whatever might be the position in respect of other janmam lands, so far as forests in janmam estates are concerned, the acquisition of those forests is not in furtherance of the objective of agrarian reform, and as such, is not protected by article 31A. This submission, in our opinion, is well founded. According to section 1 1 of the Act, no ryotwari patta would be issued in respect of forests in janmam estates after those estates stand transferred to the Government. There is nothing in the Act to indicate as to what would be purPose for which the said forests would be used after the transfer of janman land containing forests to the Government. All that section 16 states is that, except where the Government otherwise directs, no person admitted by a janmi into possession of any such forest shall be entitled to any rights in or remain in possession of such land. Sub section (2) of that section specifies the directions which the Government may issue while allowing any person to remain in possession of any such land. In the absence of anything in the Act to show the purpose for which the forests are to be used by the Government, it cannot be said that the acquisition of the forests in janmam land would be for a purpose related to agrarian reform. The mere fact that the ownership of forests would stand transferred to the State would not show that the object of the transfer is to bring about agrarian reform. Augmenting the 275 (Khanna,j.) resources of the State by itself and in the absence of anything more regarding the purpose of utilisation of those resources, cannot be held to be a measure of agrarian reform. There is no material on the record to indicate that the transfer of forests from the janmi to the Government is linked in any way with a scheme of agrarian reform or betterment of village economy. Learned Advocate General has referred to the case of State of Uttar Pradesh vs Raja Anand Brahma Shah(1). In that case all the estates in a Pargana, including the forests, were acquired by the State of Uttar Pradesh under the U.P. Zamindari Abolition and Land Reforms Act. Objection was taken to the acquisition of forests on the ground that it was not for the purpose of agrarian reform. Repelling the objection, this Court observed : "Mr. A. K. Sen further urges that the acquisition of the estate was not for the purposes of agrarian reforms because hundreds of square miles of forest are sought to be acquired. But as we, have held that the area in dispute is a grant in the nature of Jagir or inam, its acquisition like the acquisition of all Jagirs, inams, or similar grants, was a necessary step in the implementation of the agrarian reforms and was clearly contemplated in article 31A." It would appear from the above that the Court in that case was dealing with the acquisition of an estate which was in the nature of a Jagir, inam or similar grant, and it was found that the said acquisition was a necessary 'Step in the implementation of agrarian reform. We are, in the cases before us, not concerned with Jagir, inam or other grant, and so far as the forests in question are concerned, it has already been observed that the acquisition is not in any way related to agrarian reform. As such, the respondent State, in our view, cannot get much assistance from the cited case. We, therefore, hold that the acquisition of the forests on the janmam land is not protected by article 31A. It has not been shown to us that if the protection of article 3 1 A is taken off, the acquisition of forests can otherwise be justified. We, therefore, are of the view that the provisions of section 3 of the Act in so far as they relate to the transfer of forests in the janmam estates in question are violative of the Constitution. As such, we strike down those provisions to that extent. Invalidity of the provisions relating to the transfer of forests would not, however, affect the validity of the other provisions of the Act as the two are distinct and severable. (1) 62. 276 The last submission which has been made on behalf of the petitioner appellants relates to section 17 of the Act regarding the rights of plantation lessees. It is stated that it would be open to the Government under the above provision to terminate by notice the right of the lessees. Such a termination of the lessee rights under the above provision, according to the submission made on ,behalf of the petitioner appellants, would be violative of their rights under articles 14, 19 and 31 of the Constitution. It is, in our opinion not necessary to deal with this aspect of the matter. It is admitted that no notice about the termination of the lessee rights has been issued under section 17 of the Act to any of the petitioner appellants. Indeed, the question of issuing such a notice can only arise after the Act comes into force. Even after the Act comes into force, the Government would have to apply its mind to the question as to whether in its opinion it is in public interest to terminate the rights of the plantation lessees. Till such time as such a notice is given, the matter is purely of an academic nature. In case the Government decides not to terminate the lease of the plantation lessees, any discussion in the matter would be an exercise in futility. If, on the contrary, action is taken by the Government under section 17 in respect of any lease of land for purposes of the cultivation of plantation crop, the aggrieved party can approach the court for appropriate relief. As a result of the above, we uphold the vires of the Act, except in one respect. The provisions of section 3 in so far as they relate to the transfer of forests in janmam estates to the Government are not protected by article 31A and being violative ,of the Constitution are struck down. The appeals and writ petition are disposed of accordingly. The parties, in the circumstances, are left to bear their own costs throughout.

The appellants and the petitioners challenged the vires of the Gudalur Janmam Estates (Abolition and Conversion into Ryotwari) Act, 1969, on the ground that it was violative of articles 14, 19, and 31 of the Constitution. Their case was that their lands in the Gudalur Taluk, in the State of Tamil Nadu, were previously Janmam estates, but, subsequently became ryotwari estates, especially after the Resettlement of 1926,and as such, the provisions of the Act were not applicable to these lands; that so far as the forest areas in the Janmam lands in question were concerned they did not constitute "estate"; and that the acquisition of the lands was not for implementing agrarian reforms and, therefore, did not get the protection of article 31A. HELD : that the provisions of section 3 of the Act in so far as they related to the transfer of forests 'in Janmam estates to the government were not protected by article 31A, and, being violative of the Constitution had to be struck down; and that the vires of the Act in other respects had to be upheld. (i) The effect of the Resettlement of 1926 was to retain the Janmam estates and not to abolish the same or to convert them into ryotwari estates. There was merely a change of nomenclature. Government Janmam lands, were called the new holdings while private Janmam lands were called the old holdings. In respect of Janmabhogam (Janmi 's share) relating to government Janmam lands, the order further directed that the amount to be paid to the government should include both the taram assessment and Janmabhogam. It is difficult to infer from these that Janmam rights in the, lands in question were extinguished and converted into ryotwari estates. The use of the word Janmabhogam, on the contrary, indicates that the rights of Jenmis were kept in tact. [271B] Kottarathil Kochuni and Others vs The State of Madras and Others, , Karimbil Kunhilkoman vs State of Kerala, [1962] 1 Supp. S.C.R. 847 and Secretary of State vs Ashtamurthi, I.L.R. 13 Madras 89, referred to. The grant of a right of relinquishment to a Janmi would not by itself convert janmam rights in the lands into ryotwari estate. [272A B] 259 (Khanna, J.) Further, apart from the lands in question, there are no janmam estates in the State of Tamil Nadu (Madras). To hold that the Janmam rights in the lands ceased to exist after the Resettlement of 1926 would have the effect of rendering the words, in clause (2)(a)(i) of article 31A, wherein there is a reference to Janmam rights in the State of Madras meaningless and without any purpose. [272 D] (ii)As Janmam lands fall under clause (2) (a) (i) of article 31A it is not essential to show that the requirements of clause (2)(a)(iii) too are satisfied for such lands and it would make no difference whether forests are a part of the Janmam lands. All lands which are part of a Janmam estate of a Janmi in the State of Madras and Kerala would constitute "estate" as mentioned in Clause (2) (a) (i) of Article 31A. [273 E] (iii)The object and general scheme of the Act is to abolish intermediaries between the state and the cultivator and to help the actual cultivator by giving him the status of directs relationship between himself and the State. The Act, as such, in its broad outlines,, should be held to be a measure of agrarian reform and would consequently be protected by article 31A of the Constitution. Therefore, it is immune from attack on the ground of being violative of articles 14, 19 or 31. [274 A] Vajrayelu Madaliar vs Special Deputy Collector, Madras & Anr. ; , referred to. (iv)But, the acquisition of forests in Janmam estates is not in furtherance of the objective of agrarian reform, and, as such, is not protected by article 31A. In the absence of anything in the Act to show the purpose for which the forests are to be used by the Government, it cannot be said that the acquisition of the forests in Janmam land would be for a purpose related to agrarian reform. The mere fact that the ownership of forests would stand transferred, to the State would not show that the object of the transfer is to bring about agrarian reform. Augmenting the resources of the State by itself, and in the absence of anything more re garding the purpose or utilisation of those resources cannot be held to be a measure. of agrarian reform. There is no material on the record to indicate that the transfer of forests from the Janmi to the Government is linked in any way with a scheme of agrarian reform or betterment of village ceremony. [274 H] State of Uttar Pradesh vs Raja Anand Brahma, [1967] 1 S.C.R. 362, held inapplicable.

Appeal No. 974 of 1964. Appeal by special leave from the judgment and order dated September 10, 1964, of the High Court in Madhya Pradesh in Misc. Petition No. 113 of 1964. up.165 8 654 M. C. Setalvad, section L. Jain and M. section Gupta, for the appellants. A. V. Viswanatha Sastri, B. R. L. Iyengar, section K. Mehta and K. L. Mehta, for respondent No. 1. The Judgment of the Court was delivered by Mudholkar, J. In this appeal from the judgment of the Madhya Pradesh High Court the question which arises for decision is whether the assessment list of house tax and conservancy tax confirmed by the Municipal Council, Khurai, at a special meeting on February 24, 1964 is effective or is liable to be quashed on the ground that it was not made in accordance with the provisions of the Madhya Pradesh Municipalities Act, 1961 (hereafter referred to as the Act). The material facts are not in dispute. On December 28, 1962 the Municipal Council by a resolution, appointed a Sub Committee consisting of the Vice President and two Members for hearing objections under section 138(2) of the Act against the new assessment which the Chief Municipal Officer would propose to make. On the 30th of that month the Chief Municipal Officer was directed to prepare the assessment lists for all the 11 words into which the municipal area has been divided. Up till then taxes were levied at the rate of Rs. 7 12 0 per cent. on the annual letting value of the house properties and building sites liable to be taxed. On March 3, 1963 the Council considered a proposal for introducing a slab system for assessing these proper ties. Upon that one of the members, Smt. Poonabai suggested a modification of the office proposal and her suggestion was accepted by the majority of the members of the Council. On March 6, 1963 the assessment list prepared by the Chief Municipal Officer in pursuance of the resolution was authenticated by him. It was then duly published that day under section 136 of the Act. Objections were also invited from the assessees. About 2,200 objections were lodged which were considered by the Sub Committee between April 7, 1963 and April 14, 1963. In the meanwhile it would appear that a suit had been instituted by some of the assessees in which the validity of the resolution of March 3, 1963 varying the rate of tax and seeking a permanent injunction against the Committee restraining it from giving effect to the new basis of assessment. The Committee, it would appear, realised that it could not vary the old rates without obtaining the sanction of the State Government and, therefore, in the written statement filed on its behalf, made it clear that an early meeting would be held for deciding whether the resolution of March 3, 1963 should not be given effect to. That 655 meeting was held on April 28, 1963 and there the resolution of March 3, 1963 was revoked and the old rate of assessment was reverted to. Numerous complaints were made by assessees to the effect that the Sub Committee had shown partiality in dealing with objections to assessments and had in fact shown favour to rich persons. The President of the Council enquired into the complaints and was satisfied that there was substance in them. In the meanwhile, however, pursuant to a decision of the Sub Committee dated August 21, 1963 the assessment list as revised by the Sub Committee was authenticated by the Chief Municipal Officer as required by section 140 of the Act and was published on August 30, 1963. It would appear that notices of demand were also issued against the assessees on the basis of the revised list. The President had, in the meantime, intimated to the Collector that the Sub Committee had shown partiality, particularly to rich assessees and in vited him to suspend the revised list in exercise of his supervisory powers. On October 9, 1963 the Collector made the following order "In exercise of the powers delegated to me under section 323 of the M.P. Municipalities Act, 1961 I hereby suspend the execution of the decision of the Sub Committee appointed by the Municipal Council Khurai under section 71(v) of the said Act for assessment of the House Tax and Latrine Tax vide its resolution No. 2 dated 28 12 1962, as the decision taken by the said Committee is not in conformity with the law, is detrimental to the interest of the Council and is causing annoyance to the public. The decision shall remain suspended until the assessment is properly revised afresh. " He forwarded a copy of the order to the Government of Madhya Pradesh and requested that his Order may be confirmed under section 323 (2) of the Act. He made the following endorsement on the copy of the Order forwarded to the President of the Municipal Committee : "Copy forwarded to the President, Municipal Council, Khurai, for information and immediate necessary action in respect of the demand notices issued for recovery of the taxes. Apparently the assessment has not been properly made. No reasons for not accepting the overseer 's valuation have been given and rich persons have been shown favour thereby. The Council 656 has thus defaulted in performing the duty imposed on it under the said Act. The Council is, therefore, called upon to show cause for its ' failure as required under section 327(1) of the said Act and to furnish its explanation within a period of 15 days to my office." After receiving this communication the President caused a proclamation to be made bringing it to the notice of the assessees that the assessment list had been suspended and intimating to them that taxes on the basis of the revised list should not be paid. The Government, acting upon the communication received from the Collector issued notice to the Council on December 2, 1963 under section 323(2) to show cause why the order passed by the Collector should not be confirmed. Eventually the Government confirmed the Collector 's Order. On December 29, 1963 the Council, at a special meeting, resolved that the assessment lists should be revised under section 141 ,of the Act. On January 7, 1964 the Council issued individual notices to 300 persons to show cause why the annual letting value of their properties should not be enhanced. The Council heard the objections between February 16, 1964 and February 20, 1964 and revised the assessments of some or all the persons to whom notices had been issued. On February 24, 1964 the Council, at a special meeting, confirmed the revised assessment as from April 1, 1963. Its resolution was authenticated on March 4, 1964 under section 140(1) by the Chief Municipal Officer and according to the Council the assessment list then became final. It is after this that the writ petition out of which the present appeal arises was presented before the High Court by some of the assessees. It was supported before it on four grounds which have been summarised thus by the High Court in its judgment "(1) The Municipal Council, Khurai, was not competent to appoint a Sub Committee for the purpose of hearing and deciding the objections made against the assessment list. (2) The notice given for lodging objections against the assessment list was not in accordance with the provisions of the Act. (3) The Municipal Council acted illegally and without jurisdiction in adopting a slab system with different and varying rates in disregard of the rate of Rs. 7/13/ 657 per cent at which the house tax had been initially imposed. (4) When the execution of the decision of the SubCommittee dated 21st August, 1963 was suspended (and subsequently revoked), it was not open to the Municipal Council to have recourse to section 141 of the Act for making limited amendments in the assessment list. The Municipal Council had to prepare an assessment list de novo in accordance with the provisions of the Act including those made by sections 137, 138 and 140 of the Act." The High Court thought it unnecessary to consider the first three of these grounds because in its opinion the fourth ground was sufficient for granting relief to the assessees. According to the High Court the assessment list which had been confirmed by the Council on February 24, 1964 and sought to be given effect to was not a valid assessment list because the Municipal Council gave notice only to 300 assessees and heard their objections and not the remaining 1900 assessees. Before us it is contended by Mr. Setalvad on behalf of the Council that an appeal had already been preferred by the respondents against the assessment list and, therefore, they were not entitled to any relief under article 226 of the Constitution. It is true that the High Court would not ordinarily entertain a petition under article 226 of the Constitution where an alternative remedy is open to the aggrieved party. Though that is so the High Court has jurisdiction to grant relief to such a party if it thinks proper to do so in the circumstances of the case. In the present case the High Court has chosen to exercise discretion in favour of the respondents and it would not be right for us to interfere with the exercise of that discretion unless we are satisfied that the action of the High Court was arbitrary or unreasonable. Nothing has been brought to our notice from which it could be inferred that the High Court acted arbitrarily in granting the writ prayed for to the respondents. Coming to the merits, Mr. Setalvad contends that the list having been authenticated by the Chief Municipal Officer under section 140 it became final and, therefore, under section 141 of the Act it was open to the Municipal Council to amend the assessment list. Sub section (1) of that section, without the proviso, is the only part which is relevant for our purpose and it reads thus 658 "The Council may at any time, amend the assessment list by the inclusion, omission or substitution of any matter." Mr. B. R. L. lyengar for the respondents, however, contends that section 141(1) can be availed of only for correcting arithmetical errors or other similar errors and not for revising the taxes. Further, according to him, this provision is available only with respect to the amendment of a current list and that since the assessment list had not become final under section 142 it could not be amended under section 141. Then, according to him, the appropriate provision to which resort could be had was section 146 of the Act. Mr. Iyengar also raised a third argument, which is to the effect that since the assessment list had been suspended by the Collector under his Order made under section 323 of the Act the Council had no power to amend it under section 141. The final argument advanced by him was that the power of hearing objections or of revising the list could not be delegated to the Sub Committee and that, therefore, the revised list was bad in law. It is not disputed before us that the procedure laid down in sections 134, 135 and 136 of the Act for the assessment of buildings and lands to pay the tax was duly followed. It is also not disputed that 2,200 objections were lodged with the, Municipal Council which were investigated and dealt with by the Sub Committee appointed by the Municipal Council. Mr. Setalvad, therefore, contends that having followed this procedure the next step was the authentication of assessment lists by the Chief Municipal Officer as required by section 140(1). This procedure was also followed and, therefore, the assessment list became final and the Municipal Council had the power to amend it under section 141 (1) of the Act. Mr. lyengar, however, contends that the provisional assessment list which was prepared under section 134(1) of the Act and published under section 136 was upon the basis of the new rates of taxes which had been imposed by the Municipal Council on March 3, 1963. According to him, as the Resolution of March 3, 1963 was revoked on April 28, 1963 and the old rate of Rs. 7/13/ per cent. was reverted to it was necessary to publish a fresh assessment list on its basis. His further objection which we have already indicated is that the objections could be dealt with not by the Sub Committee but by the Municipal Council as a whole. In view of these defects the assessment list did not become final by reason of its authentication by the Chief Municipal Officer under section 140. According to Mr. Setalvad these objections were not urged before the High Court. But that is not quite accurate. We 659 have already quoted from the judgment of the High Court the summary of the grounds urged before it and the objections of Mr. lyengar are to be found in the first two grounds. It is true that the High Court did not think it necessary to deal with these grounds upon the view which it took on the fourth ground which was urged before it. But that does not preclude us from considering those grounds. In our opinion, both the grounds are substantial and strike at the very root of the finality of the assessment list which was purported to be authenticated by the Chief Municipal Officer under section 140. The assessment list which has to be published under section 136 of the Act must contain full and accurate particulars specified in section 134(1) of the Act. Amongst those particulars are the following : (1) Valuation of the property based on capital or annual letting value, as the case may be, on which the property is assessed; (2) the rate, of tax applicable; (3) the amount of tax assessed thereon. In view of the fact that the resolution of March 3, 1963 on the basis of which the list was published had been revoked, the particulars mentioned in the second and the third of the above items would necessarily be different from those which would be arrived at after taking into account the resolution of April 28, 1963. Under article 265 of the Constitution no tax shall be levied or collected except by authority of law. This clearly implies that the procedure for imposing the liability to pay a tax has to be strictly complied with. Where it is not so complied with the liability to pay the tax cannot be said to be according to law. The objections which the assessees had filed in pursuance of the notification actually published by the Chief Municipal Officer were based upon the list published under section 136 and not in pursuance of what the liability would be under the Resolution of the Municipal Council, dated April 28, 1963. Therefore, it cannot he said that the opportunity as contemplated by the Act was at all given to the assessees for lodging their objections as required by section 137 of the Act. Moreover, Mr. Setalvad was not able to point out to us any provision of the Act or of the rules, except section 78, whereunder the Council could delegate its function of hearing and deciding objections to a Sub Committee. Section 78 reads thus: "Any powers or duties or executive functions which may be exercised or performed by or on behalf of the 660 Council may, in accordance with the rules made under this Act, be delegated by the Council to the President or Vice President or to the Chairman of the Standing or other Committees, or to one or more stipendiary or honorary officers, but without prejudice to any powers that may have been conferred on the Chief Municipal Officer by or under section 92." Even assuming that under this provision the power of the Council of hearing objections could be delegated, the delegation can presumably be only in favour of the persons mentioned in section 78 quoted above. It cannot be in favour of a Sub Committee or a Committee. It is true that the Convenor of the Sub Committee appointed by the Council was the Vice President but the delegation was not to him alone but to the Sub Committee. The two arc not the same thing because while in one case the right to decide an objection would be solely exercisable by the Vice President in the other it will be exercisable by the Sub Committee as a whole. If there is unanimity amongst the members of the Sub Committee no prejudice may be caused. But if the Vice President is of one opinion and the other two members are of a different opinion the decision of the Sub Committee cannot be said to be that of the Vice President at all. But to the contrary. For these reasons we are of opinion that the assessment list authenticated by the Chief Municipal Officer was not prepared according to law and, therefore, the provisions of section 141 were not available to the Council. Upon the view we take we do not find it necessary to consider whether the reason given by the High Court is right or not. The appeal is, therefore, dismissed with costs. Appeal dismissed.

An assessment list of house and conservancy taxes was prepared on the basis that a slab system of taxation would apply, and was published by the appellant under section 136 of the M.P. Municipalities Act, 1961. The assessees filed objections to it under section 138(2). The appellant later re voked the slab system and reverted to the old rate of assessment. A sub committee appointed by the appellant, considered the objections filed to the list and completed its revision. The final list was published after authentication. when some complaints of partiality in its preparation were made, the list was suspended. The appellant then decided to amend the list under section 141 and, after issuing notices to some assessees and after hearing their objections a new list was authenticated and published. The respondents having preferred an appeal against the new assessment list under the Act, also challenged it in writ petition to the High Court. The High Court allowed the petition. On appeal to the Supreme Court. HELD : The assessment list authenticated by the Chief Municipal Officer was not prepared according to law and therefore, the provisions of s.141 were not available to the appellant. [660 E] (i) Article 265 of the Constitution, implies that the procedure for imposing the liability to pay a tax has to be strictly complied with. Since in the instant case, the objections which the assessees had filed were in respect of the list compiled on the basis that the slab system would apply and not in pursuance of what the liability would be upon the reversion to the old rate of tax, it could not be said that the opportunity as contemplated by the Act was given to the assessees for lodging their objections as required by section 137 of the Act. [659 E G] (ii) Assuming that under section 78, the appellant council could delegate the power to hear objections against a proposed list under section 138(2) to its vice president or certain other officers, this power could not be delegated to a sub committee. [660 B C] (iii) Though an alternate remedy is open to an aggrieved party the High Court has jurisdiction under article 226 to give relief to such a party in appropriate cases. [657 FF]

ition Nos. 3805 and 3850 of 1985 etc. Y.S. Chitale, P.P. Rao, M.K. Ramamurthi, R.K. Garg, F.S. Nariman, K. Parasaran, Attorney General, S.M. Ashri, Petitioner in person, Rakesh K. Khanna, Jaspal Singh, S.K. Verma, Miss Asha Rani Jain, P.H. Parekh, S.K. Verma, C.M. Nayar, K. Swamy, S.S. Khanduja, Yashpal Dhingra, Miss Rani Jethmalani, A.K. Ganguli, M.A. Krishnamoorthy, R.N. Poddar, S.K. Bisaria, Jank Raj Joshi, Kailash Vasdev, Mrs. Vinod Arya, K. Swami, V.K. Maheshwari, U.R. Lalit and Mrs. Indira Sawhney for the appearing parties. The Judgment of the Court was delivered by VENKATARAMIAH, J. In these petitions filed under Article 32 of the Constitution the petitioners have challenged the validity of the proceedings relating to the competitive examination held 371 by the High Court of Delhi for the purpose of recruiting candidates for filling the posts in the Delhi Judicial Service in the year 1984 and of the final list of selected candidates at that examination. The petitioner in Transfer Case No. 61 of 1985, which was also heard along with the above petitions, had filed earlier a writ petition under Article 226 of the Constitution before the High Court of Delhi for the very same relief. That writ petition was withdrawn by an order made under Article 139A of the Constitution for being disposed of along with the writ petitions filed in this court. The petitioners in the above petitions were applicants for the posts of Subordinate Judges in the Delhi Judicial Service. Recruitment to the Delhi Judicial Service is governed by the Delhi Judicial Service Rules, 1970 (hereinafter referred to as 'the Rules ') made by the Lt. Governor of Delhi in exercise of the powers conferred by the proviso to Article 309 of the Constitution read with Article 234 of the Constitution, in consultation with the High Court of Delhi. The initial recruitment to the Delhi Judicial Service was made in accordance with Part III of the Rules. 'Initial recruitment ' means the first recruitment and appointment made to the Delhi Judicial Service after the commencement of the Rules. Any recruitment to the Delhi Judicial Service after the initial recruitment is required to be made in accordance with the rules contained in Part IV of the Rules. We are concerned in these cases mainly with Rules 13 to 18 of the Rules and the Appendix attached thereto. Rule 13 of the Rules provides that recruitment after the initial recruitment, shall be made on the basis of a competitive examination to be held by the High Court at such intervals as the Administrator may in consultation with the High Court determine. The Administrator is not other than the Lt. Governor of Delhi. The dates on which and the place at which the examination is to be held are required to be fixed by the Administrator. Rule 14 prescribes the minimum qualifications for a candidate which he should satisfy in order to be eligible to appear at the competitive examination. A candidate is eligible to appear at the examination if he is (a) a citizen of India; (b) a person practising as an advocate in India or a person qualified to be admitted as an advocate under the ; and (c) not more than 32 years of age on the Ist day of January following the date of commencement of the examination. Rule 15 of the Rules provides that the syllabus for the examination and the fees payable shall be as detailed in the Appendix attached to the Rules. The examination includes the following subjects and each subject carries the number of marks shown against it: 372 (1) Essay and General Knowledge 150 (2) Language 100 (3) Law Paper (I) and Civil Law 200 (4) Law Paper (II) Civil Law 200 (5) Paper(III) Criminal Law 200 (6) Viva Voce 150 The first five papers are called written papers. In clauses (1) to (5) of the Appendix the topics or subjects of each of the above written papers are set out. Clause (6) of the Appendix which deals with Viva Vore reads as under: "(6) Viva Voce: Only such candidates will be called for Viva Voce who have obtained 50% in each written paper and 60 per cent in the aggregate except in the case of candidates belonging to the Scheduled Castes/Tribes, in whose case the qualifying marks will be 40% in each written paper and 50% in the aggregate. " The marks obtained in the Viva Voce have to be added to the marks obtained in the written papers and the candidate 's rank depends on the aggregate of both. Rule 16 of the Rules provides that after the written test, the High Court shall arrange the names of the candidates in order of merit and these names shall be sent to the Selection Committee. The constitution of the Selection Committee is described by rule 5 of the Rules. It provides that for purposes of recruitment to the Delhi Judicial Service there shall be a Selection Committee consisting of the following: "(1) Chief Justice or a Judge of the High Court deputed by him. (2) Two Judges of the High Court nominated by the Chief Justice. (3) Chief Secretary, Delhi Administration, Delhi. (4) A Secretary of the Delhi Administration nominated by the Administrator. " The Registrar of the High Court is the ex officio Secretary to the Committee. The Selection Committee is required to call for Viva Voce test only such candidates who have qualified at the 373 written test as provided in the Appendix. The duties and functions of the Selection Committee are set out in rules 17 and 18 of the Rules. They read: "17. The Selection Committee shall call for viva voce test only such candidates, who have qualified at the written test as provided in the appendix. The Selection Committee shall prepare a list of candidates in order of merit. Such list will be forwarded to the Administrator for filling the vacancies then existing or any vacancy that may occur within a period of one year of the preparation of the list. " The foregoing is in brief the summary of the rules governing the recruitment of persons to the Delhi Judicial Service after the initial recruitment. On July 5, 1984 a notification was published in the local newspapers by the Registrar of Delhi High Court calling for applications from eligible persons for filling the posts in the Delhi Judicial Service. A large number of candidates who were eligible under the Rules applied in response to the said notification. The examination in the written papers, i.e., Essay and General Knowledge, Language, Law Paper (I) and Civil Law, Law Paper (II) Civil Law and Paper (III) Criminal law was held in October, 1984. After the answer books at the written examination were valued, the names of 27 candidates, who were eligible for the viva voce test under the Rules, i.e., the candidates who had obtained not less than 50 per cent marks in each written paper and not less than 60 per cent in the aggregate amongst candidates not belonging to the Scheduled Castes/Tribes and the candidates belonging to Scheduled Castes/Tribes who had obtained not less than 40 per cent marks in each written paper and not less than 50% in the aggregate, were published on the Notice Board of the Delhi High Court in the early part of January, 1985. The names of the said candidates were arranged in accordance with their Roll Numbers and not in the order of merit. The following is the list of 27 candidates: Sl. Roll Name No. No. 1. 20 Sh. Naresh Kumar Kaushik 2. 30 Miss Sangita Dhingra 3. 35 Sh. Pradeep Chaddha 4. 36 Sh. Narender Kumar 374 5. 57 Miss Ravinder Kaur 6. 58 Sh. Kunda Singh Mohi 7. 61 Sh. Padam Kant Saxena 8. 103 Sh. Teeka Ram 9. 112 Miss Anu Prem Shanker Kapoor 10. 170 Sh. Vinod Kumar Maheshwari 11. 180 Sh. Brijesh Sethi 12. 220 Miss Asha Menon 13. 258 Sh. Rakesh Garg 14. 287 Sh. A.K. Chaturvedi 15. 311 Sh. Sukhdev Singh 16. 342 Sh. Sudip Ahluwalia 17. 404 Sh. Pawan Kumar 18. 416 Sh. Dimpy Kumar Malhotra 19. 442 Sh. R. Kiran Nath 20. 526 Sh. Dilbagh Singh Punia 21. 715 Sh. Satish Kumar Minocha 22. 962 Sh. Jaipal Singh Malik 23. 996 Sh. Suraj Bhan 24. 1081 Sh. Narindar Pal Kaushik 25. 1510 Miss Rekha Rani 26. 1566 Sh. Kamlesh Kumar 27. 1883 Sh. Kamlesh Chander Agarwal These candidates were admitted to the Viva Voce test by the Selection Committee. Before the final list of candidates was published by the Selection Committee, as required by rule 18 of the Rules, the petitioners came to know that names of certain candidates who names had not been included in the above list of 27 qualified candidates had been included in the final list by the Selection Committee and that the names of certain candidates who had been interviewed by the Selection Committee had been omitted from the said final list. Immediately thereafter the petitioners filed those petitions questioning the validity of the procedure adopted by the High Court and the Selection Committee in the preparation of the final list of successful candidates. It is not necessary to refer to all the allegations made in the petitions for the purpose of deciding these cases. We propose to deal with only two contentions raised by the petitioners, namely: (1) Whether it was open to the High Court to include in the list prepared under rule 16 of the Rules names of the candidates who had not secured the minimum marks prescribed in the Appendix of the Rules for being eligible to appear at the Viva Voce test; and 375 (2) Whether it was open to the Selection Committee or the High Court to omit the names of certain candidates who had appeared at the Viva Voce examination from the final list. In order to appreciate the above contentions, it is necessary to set out what the Deputy Registrar of the High Court of Delhi has stated in his counter affidavit filed on behalf of the High court in answer to the allegations made by the petitioners. In the counter affidavit dated 12.4.1985 filed in Writ Petition No. 3805 of 1985, the Deputy Registrar has stated as under: II (a) . . . . . . . (b) The petitioner in any event has no right to maintain the present petition. I state that on the basis of the written competitive examination held in October, 1984 for recruitment to the Delhi Judicial Service, the High Court of Delhi had prepared a list of 27 candidates who qualified at the written test. Subsequently, by reason of a Full Court decision of the High Court, the marks obtained by the candidates at the written test were moderated by granting two marks to each of the candidates in each paper for the reasons detailed herein below. On the basis of this moderation and as a result of re valuation of papers of one candidate (details of which are given below) a second list was prepared showing the names of 8 candidates who also qualified for the Viva Voce test. . . . . (c) High Court has treated each candidate equally. I state that as a general practice, after the written examinations are held for recruitment to the Delhi Judicial Service, the results of the same are placed before the Full Court for their Lordships approval. The results of the written examination held in 1984 for recruitment to the Delhi Judicial Service were also placed before the Full Court. The Full Court approved the initial list of 27 candidates who qualified at the said written test. However, the Hon 'ble 376 Judges of the High Court having appreciated that a few candidates who had otherwise scored very high marks would have to be kept out of the zone of consideration for final selection by reason of their having secured one or two marks below the aggregate or the qualifying marks prescribed for the particular paper, decided that "moderation of two marks in each paper to every candidate of the 1984, Delhi Judicial Service be done". Moderation has been done on several occasions in the past also. Accordingly, a second list was also prepared by the High Court and was put on the notice board for information of all the candidates. The said two lists of candidates who qualified at the written test, both before and after the moderation/revaluation, are annexed hereto and marked as 'annexure 'B ' and 'C ', respectively. A list of the candidates who had otherwise scored good marks in individual papers but could not secure 60% in the aggregate is annexed hereto and marked as Annexure 'D '. There was yet another candidate, namely, Shri Raj Kamal Gaur who had scored very good marks in all the law papers viz. in Criminal Law 178 out of 200; in Civil Law (I) 144 out of 200 , in Civil Law (II) 133 out of 200 and in language 50 out of 100 but secured 73 marks out of 150 in the Essay and General Knowledge paper and thus disqualified himself for lack of only 2 marks in the Essay and General Knowledge paper. This case was also taken into consideration by the Full Court for deciding to grant two additional marks to each candidate in each subject. This candidate if had only secured 75% marks out of 150 in Essay and General Knowledge paper would have obtained No.2 position in the merit list even without the addition of two marks in other papers which were subsequently awarded to him as well as to others by reasons of the Full Court decision. Shri Raj Kumar Gaur is an advocate practising at Bhiwani (Haryana) and the other candidates mentioned in annexure 'D ' above are neither related nor in any way connected with the staff of the High Court or the Judges of the High Court. " In the counter affidavit filed in Writ Petition No. 4363 of 1985 in paragraph 7 the Deputy Registrar stated: "In reply to para 7 of the writ petition it is admitted to be correct that it is provided in Rule 18 377 that the Selection Committee shall prepare a list of candidates in order of merit, and that such list may be forwarded to the Administrator for filing the vacancies then existing or any vacancy that may occur within a period of one year of the preparation of the list. It is submitted that if this rule is interpreted to mean that the Selection Committee shall even if it considers in the Viva voce test a candidate to be not suitable for appointment to the Delhi Judicial Service then too it shall recommend his name for appointment to the Service it will render the purpose of viva voce test to be farce and mere empty formality. In the viva voce test the Selection Committee has to judge the suitability of the candidates for appointment to the Service from various aspects. The process of selection of suitable candidates to any responsible post involves by itself a minimum standard to be crossed by candidates and that has to be subjectively determined by the Selection Committee itself. This requirement is all the more important in recruitment to subordinate judiciary. It is submitted that in the present case the Selection Committee has considered only those general candidates, who have secured 600 or more marks in aggregate, and only the first two Scheduled Castes candidates to be suitable for appointment to the Delhi Judicial Service. The Selection Committee in its recommendations dated 1.2.1985 observed that it selects and recommends for appointment only 21 candidates to the service. A copy of the complete list together with a copy of the order passed by Selection Committee in this behalf is enclosed for perusal and marked as Annexure E 1. " The final select list prepared by the Selection Committee is annexed to the counter affidavit filed in Writ Petition 4365 of 1985. It contains the following names which are arranged in the order of merit: Sl. Name No. 1. Miss Sangita Dhingra 2. Dimpy Kumar Malhotra 3. Ms. Anu Prem Shanker 4. R. Kiran Nath 378 5. Ms. Ravinder Kaur 6. Kamlesh Chandra Agarwal 7. Rajan Sharma 8. Satish Km. Manocha 9. Narender Paul Kaushik 10. Raj Kamal Gaur 11. Ms. Asha Menon 12. Pawan Kumar 13. Pradeep Chaddah 14. Narender Kumar 15. Naresh Kumar Kaushik 16. Padam Kant Saxena 17. Brijesh Sethi 18. Miss Rekha Rani 19. Miss Punam Jai 20. A.K. Chaturvedi 21. Sudip Ahluwalia 22. Dilbag Singh 23. Kamlesh Kumar 24. V.K. Maheshwari 25. Rakesh Garg 26. J.S. Malik 27. Raj Kumar Jain 28. Suman Kr. Khanna 29. Rajinder Kumar Grover 30. Vijay Kumar Scheduled Caste Candidates: 1. Sukhdev Singh 2. Teeka Ram 3. Kunda Singh Mohi 4. Gian Chand 5. Suraj Bhan" It is seen from the extract of the counter affidavit filed in Writ Petition No. 3805 of 1985 that the results at the written examination were placed before the Full Court Meeting of the Delhi High Court for its approval on January 25, 1985. The true copy of the minutes of the Full Court Meeting held on January 25, 1985 is produced before us. It reads: "Agenda Minutes To consider the The Full Court considered the ques question whether tion and decided as follows: 379 High Court has (i) Re checking is always possible. the power to re check and revalue (ii) If there is to be revaluation, the answer book of it must be by the same an examinee of the examiner Delhi Judicial (iii) Revaluation may be ordered by service. the Hon 'ble the Chief Justice where he thinks it is a deserving case for sufficient reasons. (iv) Moderation of 2 marks in each paper to every candidate of the 1984 Delhi Judicial Service Examination be done. " It is seen from the above minutes that the subject for consideration at the meeting was whether the "High Court has the power to recheck and revalue the answer book of an examinee of the Delhi Judicial Service. " It may be stated here that one of the candidates had submitted a petition to the High Court requesting it to get some of his answer books revalued before the above Full Court Meeting was held. Resolutions (i) to (iii) passed at the Full Court Meeting relate to the said petition for revaluation. We are not concerned in these cases with the question whether the High Court has the power to get the answer books revalued since the case of the candidate who had prayed for revaluation of his answer books has already been disposed of by a separate order on July 26, 1985 made in Writ Petition No. 3805 of 1985 by which he was permitted to withdraw from the contest. We are concerned, therefore, only with Resolution No. (iv) passed at the Full Court Meeting deciding to add two marks to the marks obtained by a candidate in each paper. On this question the Deputy Registrar has stated in the course of his counter affidavit thus: The Full Court approved the initial list of 27 candidates who qualified at the said written test. However, the Hon 'ble Judges of the High Court having appreciated that a few candidates who had otherwise scored very high marks would have to be kept out of the zone of consideration for final selection by reason of their having secured one or two marks below the aggregate or the qualifying marks prescribed for the particular paper, decided that moderation of two 380 marks in each paper to every candidate of the 1984 Delhi Judicial Service be done. Moderation has been done on several occasions in the past also. " The question for consideration is whether the High Court in the circumstances of this case had the power to add two marks to the marks obtained in each paper by way of moderation. It is no doubt, true that the High Court is entrusted with the duty of conducting the competitive examination under rule 13 of the Rules. It is argued on behalf of the High Court that the power to conduct an examination includes the power to add marks either by way of moderation or by way of grace marks if it feels that it is necessary to do so, and reliance is placed by the High Court on its own past practice, and the practice prevailing in a number of universities in India, where marks are awarded either as moderation marks or as grace marks. It is true that in some educational institutions marks are awarded by way of moderation at an examination if the examining body finds any defect in the examination conducted by it such as inclusion of questions in the question papers which are outside the syllabus, extremely stiff valuation of the answer books by an examiner or any other reason relevant to the question papers or the valuation of the answer books. The reason given by the High Court for adding the moderation marks has nothing to do either with the question papers or with the mode of valuation. The High Court approved the list of 27 candidates who had secured the required qualifying marks which would enable them to appeared at the viva voce test as prescribed in the Appendix. Thereafter the High Court resolved to add two marks to be marks obtained in each paper by way of moderation on the ground that a few candidates who had otherwise secured very high marks may have to be kept out of the zone of consideration for final selection by reason of their having secured one or two marks below the aggregate or the qualifying marks prescribed in the particular paper. The resolution does not show the names of the particular candidates considered at the meeting in whose case such a concession had to be shown. The affidavit filed on behalf of the High Court, of course, refers to certain hard cases which persuaded the High Court to add additional marks by way of moderation. The question for decision is whether such a resolution can be passed by the High Court which is entrusted with the duty of conducting the examination. The High Court had not found any defect in the question papers or any irregularities in the valuation of the answer books. It may be that some candidates had obtained high marks in some papers and by reason of their not obtaining the required marks in the other papers or 60% and above 381 in the aggregate they may not have become qualified for the viva voce test. In our opinion this alone would not be sufficient to add any marks by way of moderation. It is relevant to note the mandatory character of clause (6) in the Appendix to the Rules which says only such candidates will be called for viva voce who have obtained 50% marks in each written paper and 60% in the aggregate except in the case of candidates belonging to the Scheduled Castes/Tribes in whose case the qualifying marks will be 40% in each written paper and 50% in the aggregate. Addition of any marks by way of moderation to the marks obtained in any written paper or to the aggregate of the marks in order to make a candidate eligible to appear in the viva voce test would indirectly amount to an amendment of clause (6) of the Appendix. Such amendment to the Rules can be made under Article 234 only by the Lt. Governor (Administrator) after consulting the High Court in that regard. In the instant case by resolving to add two marks to the marks obtained in each answer book by a candidate has virtually amended the Rules by substituting 48% in the place of 50% which is required to be secured in each written paper and 58% in the place of 60% which is required to be secured in the aggregate in the case of candidates not belonging to Scheduled Caste/Tribes and 38% in the place of 40% in each written paper and 48% in the place of 50% in the aggregate in the case of candidate belonging to Scheduled Castes/Tribes. The adverse effect of the moderation on the candidates who had secured the required qualifying marks at the examination in question is quite obvious, since four candidates whose names were not in the list of 27 candidates published on the first occasion have been included in the first list of candidates chosen for appointment from out of the final list of successful candidates in preference to some of the candidates who had obtained the qualifying marks in the written papers and they would have been appointed as Sub Judges but for the interim order made by this Court. These four candidates were able to get in to the list of persons to be appointed as Sub Judges because of the high marks they were able to secure at the viva voce test for which they were not eligible but for the moderation marks. The area of competition which the 27 candidates who had been declared as candidates eligible to appear at the viva voce examination before such moderation had to face became enlarged as they had to complete also against those who had not been so qualified according to the Rules. The candidates who appear at the examination under the Delhi Judicial Service Rules acquire a right immediately after their names are included in the list prepared under rule 16 of the Rules which limits the scope of competition and that right cannot be defeated by 382 enlarging the said list by inclusion of certain other candidates who were otherwise ineligible, by adding extra marks by way of moderation. In a competitive examination of this nature the aggregate of the marks obtained in the written papers and at the viva voce test should be the basis for selection. On reading rule 16 of the Rules which merely lays down that after the written test the High Court shall arrange the names in order of merit and these names shall be sent to the Selection Committee, we are of the view that the High Court has no power to include the names of candidates who had not initially secured the minimum qualifying marks by resorting to the devise of moderation, particularly when there was no complaint either about the question papers or about the mode of valuation. Exercise of such power of moderation is likely to create a feeling of distrust in the process of selection to public appointments which is intended to be fair and impartial. It may also result in the violation of the principle of equality and may lead to arbitrariness. The cases pointed out by the High Court are no doubt hard cases, but hard cases cannot be allowed to make bad law. In the circumstances, we lean in favour of a strict construction of the Rules and hold that the High Court had no such power under the Rules. We are of the opinion that the list prepared by the High Court after adding the moderation marks is liable to be struck down. The first contention urged on behalf of the petitioner has, therefore, to be upheld. We, however, make it clear that the error committed by the High Court in this case following its past practice is a bona fide one and is not prompted by any sinister consideration. With regard to the second contention, namely, that the High Court had no power to eliminate the names of candidates who had secured less than 600 marks in the aggregate after the viva voce test, reference has to be made to Rules 17 and 18 of the Rules which provide that the Selection Committee shall call for viva voce test only such candidates who are qualified at the written test as provided in the Appendix and that the Selection Committee shall prepare the list of candidates in order of merit after the viva voce test. There is no power reserved under rule 18 of the Rules for the High Court to fix its own minimum marks in order to include candidates in the final list. It is stated in paragraph 7 of the counter affidavit filed in Writ Petition No. 4363 of 1985 that the Selection Committee has inherent power to select candidates who according to it are suitable for appointment by prescribing the minimum marks which a candidate should obtain in the aggregate in order to get into the Delhi Judicial Service. 383 It is not necessary to consider in this case whether any other reason such as character, antecedents, physical fitness which may disqualify a candidate from being appointed to the Delhi Judicial Service may be taken into consideration by the Selection Committee while preparing the final list. But on going through the Rules, we are of the view that no fresh disqualification or bar may be created by the High Court or the Selection Committee merely on the basis of the marks obtained at the examination because clause (6) of the Appendix itself has laid down the minimum marks which a candidate should obtain in the written papers or in the aggregate in order to qualify himself to become a member of the Judicial Service. The prescription of the minimum of 600 marks in the aggregate by the Selection Committee as an additional requirement which the candidate has to satisfy amounts to an amendment of what is prescribed by clause (6) of the Appendix. The question whether a candidate included in the final list prepared and forwarded by the Selection Committee may be appointed or not is a matter to be considered by the appointing authority. In the instant case the decision that a candidate should have secured a minimum of 600 marks in the aggregate in order to be included in the final select list is not even taken by the High Court but by the Selection Committee. Moreover recruitment of persons other than District Judges to the Judicial Service is required to be made under Article 234 of the Constitution in accordance with the Rules made by the Governor as provided therein, in consultation with the High Court. Article 235 which vests in the High Court the control over the District Courts and Courts subordinate thereto, cannot include the power of making rules with regard to recruitment of person other than District Judges to the judicial service as it has been expressly dealt with in Article 234 of the Constitution. We are of the view that the Selection Committee has no power to prescribe the minimum marks which a candidate should obtain in the aggregate different from the minimum already prescribed by the Rules in its Appendix. We are, therefore, of the view that the exclusion of the names of certain candidates, who had not secured 600 marks in the aggregate including marks obtained at the viva voce test from the list prepared under rule 18 of the Rules is not legal. We, therefore, quash the list prepared by the Selection Committee and direct that a fresh list shall be prepared in order of merit on the basis of the aggregate of the marks obtained by the candidates at the written examination and at the viva voce test without taking into consideration the moderation marks added by the High Court and without reference to the decision of the Selection Committee that candidates who had obtained less than 600 marks in 384 the aggregate should not be included in that list. It follows that the said list should contain only the names of the 27 candidates who had secured the minimum marks prescribed by the Appendix to the Rules for appearing at the viva voce test. The appointing authorities directed to treat the final list so prepared as the list forwarded to it under rule 18 of the Rules. On the basis of the said list appointments will now have to be made in accordance with law and relevant Government orders providing for reservation of posts to candidates belonging to Scheduled Castes/ Scheduled Tribes and other backward classes. If in accordance with the interim order made by this Court any candidate has been appointed as a member of the Delhi Judicial Service his continuance in the service or his seniority shall be governed by the list to be prepared in accordance with the directions issued above. These petitions are accordingly allowed. There shall be no order as to costs. N.V.K. Petitions allowed.

Recruitment to the Delhi Judicial Services was governed by the Delhi Judicial Service Rules 1970. Rule 13 thereof provided that after the initial recruitment, recruitments shall be made on the basis of a competitive examination to be held by the High Court. Rule 14 prescribed the minimum qualification for a candidate to be eligible to appear at the competitive examination viz. (a) citizen of India, (b) a person practising as an advocate or qualified to be admitted as an advocate; and (c) not more than 32 years of age. Rule 15 provided that the syllabus for the examination and the fee payable shall be as detailed in the Appendix to the Rules. The examination was to consist of five written papers and a viva voce test. Clause (b) of the Appendix dealt with viva voce, and provided that: "Only such candidates will be called for viva voce who have obtained 50% in each written paper and 60% in the aggregate except in the case of candidates belonging to the Scheduled Castes/Tribes in whose case the qualifying marks will be 40% in each written paper and 50% in the aggregate '. The marks obtained in the viva voce was to be added to the marks obtained in the written papers and the candidates, rank depended on the aggregate of both. Rule 16 provided that after the written test the High Court was to arrange the names of candidates in order of merit and the names to be sent to the Selection Committee. Rules 17 and 18 provided that the Selection Committee shall call for the viva voce test only such 368 candidates who qualified in the written test, and after the viva voce test the Selection Committee was to prepare a list of candidates in order of merit and to forward the same to the Administrator. The Registrar of the Delhi High Court through a notification called for application from eligible persons for filing the posts in the Delhi Judicial Service. A large number of candidates who were eligible applied in response thereto. The examination in the written papers were held and after the answer books were valued, the names of 27 candidates who were eligible for the viva voce test under the Rules were published on the Notice Board. Theses candidates were admitted to the viva voce test by the Selection Committee. Before the final list of the candidates was published by the Selection Committee as required by Rule 18, the petitioners in the Writ Petition came to know that the names of certain candidates whose names had not been included in the above list of 27 qualified candidates were included in the final list by the Selection Committee and that the names of certain candidates who had been interviewed by the Selection Committee had been omitted from the said final list. The petitioners in that writ petition question the validity of the procedure adopted by the High Court and the Selection Committee in the preparation of the final list of successful candidates and contended that it was not open to the High Court to include in the list prepared under Rule 16 names of the candidates who had not secured the minimum marks prescribed for eligibility to appear in the viva voce test and that it was not open to the Selection Committee or the High Court to omit the names of certain candidates who had appeared at the viva voce test from the final list. The writ petitions were contested and opposed by the High Court, by contending that the petitioners had no right to maintain the writ petitions and that the High Court had treated all candidates equally. It was further contended that the results of the written examination were placed before the Full court for approval, and that the Full Court approved the initial list of 27 candidates who qualified at the written test. However, as a few candidates who had secured very high marks were kept out of the zone of consideration for final selection by reason of having secured one or two marks below the aggregate marks prescribed, moderation of two marks in each paper to every candidate was done, and on the basis of this moderation and as a result of 369 revaluation of one answer book of one candidate, a second list was prepared showing the names of 8 candidates who also qualified for the viva voce test. On the question: (1) whether the High Court had the power to add two marks to the marks obtaining in each paper by way of moderation, and (2) whether the High Court had power to eliminate the names of the candidates who have secured less than the 60% marks in the aggregate after the viva voce test. Allowing the writ petitions, ^ HELD: 1.(a) The list prepared by the High Court after adding the moderation marks is liable to be struck down. [382 D] (b) Rule 16 of the Rules merely laid down that after the written examination the High Court shall arrange the names in order of merit of candidates who had obtained the qualifying marks and these names shall be sent to the Selection Committee. The High Court had therefore no power to include the names of candidates who had not initially secured the minimum qualifying marks in the written papers by resorting to the devise of moderation, particularly when there was no complaint either about the question papers or about the mode of valuation. Exercise of such power of moderation is likely to create a feeling of distrust in the process of public appointments which is intended to be fair and impartial. It may also result in the violation of the principle of equality and may lead to arbitrariness. [382 B C] (c) The mandatory character of clause (6) in the Appendix to the Rules provides that only such candidates will be called for viva voce who have obtained 50% marks in the written paper and 60% in the aggregate except in the case of candidates belonging to the Scheduled Castes/Tribes in whose case the qualifying marks will be 40% in each written paper and 50% in the aggregate. Addition of any was by way of moderation to the marks obtained in any written paper or to the aggregate of the marks, in order to make a candidate eligible to appear in the viva voce test would indirectly amount to an amendment of clause (6) of the Appendix. [381 B C] 2.(a) There is no power reserved under Rule 18 of the Rules for the High Court to fix its own minimum marks in order to include candidates in the final list. [382 G] 370 (b) No fresh disqualification or bar may be created by the High Court or the Selection Committee merely on the basis of the marks obtained at the examination, because clause (6) of the Appendix itself has laid down the minimum marks which a candidate should obtain in the written papers or in the aggregate in order to qualify himself to become member of the Judicial Service. The prescription of the minimum of 600 marks in the aggregate by the Selection Committee as an additional requirement which the candidate has to satisfy amounts to an amendment of what is prescribed by clause (6) of the Appendix. [383 B C] In the instant case, the decision that a candidate should have secured minimum of 600 marks in order to be included in the final select list is not even taken by the High Court but by the Selection Committee. [383 D] (c) The exclusion of the names of certain candidates who have not secured 600 marks in the aggregate from the list prepared under Rules 18 of the Rules is not legal. The list is quashed and it is directed that a fresh list shall be prepared in order of merit on the basis of the aggregate of the marks obtained by the candidates at the written examination and at the viva voce test without taking into consideration the moderation marks added by the High Court, and without reference to the decision of the Selection Committee that candidates who had obtained less than 600 marks in the aggregate should not be included in that list. The appointing authority is directed to treat the final list so preared as the list forwarded to it under Rule 18 of the Rules. [382 F 383B]

ivil Appeal No. 735 of 1975. From the Judgment and Order dated 21.6.1974 of the Bombay High Court in Spl. Civil Appln. No. 15 of 1971. U.U. Lalit and A.G. Ratnaparkhi for the Appellants. M.S. Gupta for the Respondent. 68 The Judgment of the Court was delivered by SAWANT, J. These proceedings arise under the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958 (hereinafter referred to as the Act). The appellant Hiraji Tolaji was admittedly a protected lessee or tenant of the agricultural land being Survey No. 30 of Village Madha, Taluqa Chikhali District Buldana. The land measures approxi mately 25 acres and 31 gunthas. The respondent who is men tally disabled became the landlady of the land in question in quite queer circumstances which to say the least are indefensible in law. Her father, one Mr. Brijlal Bansilal owned as many as 568 acres of land of which the suit lands are a part. The lands admittedly are ancestral. He effected first partition of his entire holding of lands on January 31, 1949 between himself on the one hand and his wife and a minor son on the other. On December 16, 1950, he effected a second partition of the very same lands between himself on the one hand and his wife and his son on the other. Again on June 29, 1959 he effected a third partition of the said lands between himself on the one hand and his wife and his two minor daughters including the respondent on the other. There is further no dispute that it is in this third parti tion that the suit lands were given to the share of the respondent and the respondent became the alleged landlady w.e.f. the date of the said partition. It appears that sometime in 1962, the respondent through her guardian, namely her father Brij Lal initiated proceedings against the appellant for recovery of possession of the suit land on the ground of default in payment of rent for three years, namely 1959 60, 1960 61 and 196 1 62. By his decision of April 30, 1963 the Tehsildar dismissed 'the application holding that the respondent was not a landlady since the partitions in question were illegal. The Deputy Collector in appeal confirmed the said decision by his Order dated November 26, 1963. The respondent 's revision before the Maharashtra Revenue Tribunal also failed when the Tribu nal rejected it by its decision of April 29, 1965. In the Writ Petition filed before the High Court under Article 227 of the Constitution against the said decision of the three authorities below, the High Court by its Order dated October 4, 1966 remanded the matter to the Tehsildar for investiga tion into the validity of the partition. Then started the second round of litigation. On remand, the Tehsildar by his decision of March 16, 1968 held that the partition effected on June 29, 1959 (which was the only material partition so far as the respondent was con cerned) was bogus. Hence the notice of demand and therefore the proceedings for recovery of possession pursuant thereto, were bad in law. 69 It appears that thereafter in a different proceeding the Maharashtra Revenue Tribunal on June 25, 1968 had held 'that the said partition was binding. It is after this decision of the Tribunal as stated earlier in an altogether different proceeding, that the matter came up for hearing in appeal filed by the respondent before the Deputy Collector, against the decision of the Tehsildar given on March 2, 1968. The Deputy Collector, therefore, followed the said decision of the Revenue Tribunal, and by his decision of April 16, 1969 held that the partition being valid, the respondent was the landlady of the suit land and, therefore, notice given by her, terminating the tenancy on the ground of default of rent and the proceedings filed for recovery of the suit land, were proper. He also held that the appellant was in arrears of rent for three years as contended by the respond ent and, therefore, allowed the said application for evic tion of the appellant from the suit land. Against the said decision, the appellant preferred a revision before the Revenue Tribunal and the Tribunal by its decision of September 15, 1970 confirmed the findings of the Deputy Collector. Aggrieved by the decision, the appellant preferred a Writ Petition before the High Court under Article 227 of the Constitution, and the High Court by its impugned decision of June 21, 1974 dismissed the petition. Hence this appeal. Before the High Court, two obvious illegalities committed by the lower authorities were highlighted on behalf of the appellant. The first illegality was that the property being admittedly ancestral, Brijlal could not have effected partition of the property between himself on the one hand and his wife and his daughter on the other. In all the three partitions effected on July 31, 1949, December 16, 1950 and June 29, 1959, wife was one of the parties to the partitions. In the third partition made on June 29, 1959 besides his wife, the other parties to the partition were two minor daughters. Secondly, the same property is shown to have been partitioned by Brij Lal on three occasions. Admit tedly, the partition of June 29, 1959 is between Brij Lal on the one hand and his wife and two minor daughters including the respondent on the other. This partition was obviously contrary to the provisions of Hindu Law. Hence the respond ent in any case could not have become a landlady of the suit land because it is in this third partition of June 29, 1959 that the said land is alleged to have gone to the share of the respondent. The High Court dismissed this contention with regard to the patent illegality by giving a spacious reason that the question 70 referred to the Tehsildar in its earlier remand order, namely the validity or otherwise of the partition, was investigated by the three authorities and that they had given a finding upholding the partition. The High Court further held that what was produced before the courts below was a family settlement and since the said family settlement created a right in favour of the respondent she should be held to have become the owner of the suit land. Unfortunate ly, the High Court lost sight of the fact that the family settlement which is accepted by the Courts in lieu of parti tion, is a settlement which gives share to the parties as per their legal entitlement and not a settlement which is made or purported to have been made to circumvent the law. A partition of the property can only be among the parties who have a preexisting right to the property. Under the Hindu Law, a female, major or minor has no share in the ancestral property. A female is given a share either in the self acquired property of the husband or the father, or in the share of the husband or the father in the coparcenary property after the property is partitioned. There cannot, therefore, be a partition and hence a family settlement with regard to the ancestral property so long as it is joint, in favour of either the wife or the daughter. Since this obvi ous illegality was ignored by the High Court, it will have to be held that the High Court 's decision was patently wrong. The respondent, therefore, never became the landlady of the land and it was Brij Lal who continued to be the landlord of the same. Hence the notice given by the respond ent and the proceedings for eviction adopted by her are misconceived. Her application for possession of the land has, therefore, to be dismissed, 5. The second obvious illegality which was brought to the notice of the High Court was that even assuming that the partition deed of June 29, 1959 was a valid document, the same has to be ignored since it could not confer the title of ownership on the respondent transferee in view of the provisions of Section 38(7) of the Act. Under Section 46 of the Act, a protected tenant becomes the owner of the land on and from April 1, 1961. Under section 38(1), however, a landlord is given a right to evict a tenant if he wants the land for bona fide personal cultivation. The right to adopt the proceedings for possession of the land has to be exer cised on or before March 31, 1961. The condition precedent to such application, however, is that the landlord should have given a notice to the tenant, for the purpose, on or before November 15,1961. Under Section 38(2), the time to apply for possession is extended in the case of the landlord who is a minor, widow or a person subject to any physical or mental disability. We are concerned in the present case with a person who is mentally disabled, since the respondent is alleged 71 to be a mentally disabled person. Further the proviso to sub section (2) of Section 38 also makes it clear that where such person is a member of a joint family, the time given to the landlord to terminate the tenancy is not extended if atleast one member of the joint family is outside the cate gories of the disabled persons. Such disabled person, fur ther, has to be the owner of the land on March 31,1961. 6. The sum total of these provisions is that the appel lant in the present case would become the owner of the suit land on and from 1st April, 1961 if the respondent did not intervene as the landlady of the suit land before that date. Admittedly, the respondent is alleged to have become the landlady by virtue of the partition effected on June 29, 1959. Section 38(7) of the Act, however, states as follows: "Nothing in this section shall confer on a tenure holder who has acquired any land by transfer or partition after the 1st day of August 1953 a right to terminate the tenancy of a tenant who is a protected lessee and whose right as such protected lessee had come into existence before such trans fer or partition. " It may be mentioned here that in some copies of the Act published by the Government Press, instead of the 1st day of August 1953, the date printed is 1st day of August 1963. That is admittedly wrong. We perused the Bombay Tenancy and Agricultural Lands (Vidarbha Region) (Amendment) Act 1963. By that Amending Act, all that was done was to add the words "or partition" after the word "transfer" in Section 38(7). No amendment was made of the date the transfer effected after which would not result in conferring title to the land. In fact, the Amending Act also states that the amend ment was effected pursuant to the decision of the Full Bench of the Bombay High Court reported in 1969 Maharashtra Law Journal page 933 where the Court had taken the view that the "transfer" contemplated by the unamended provision of Sec tion 38(7) did not include transfer by partition. It had, therefore, become necessary to include in the "transfer" also transfer by partition and, hence, the Amending Act was enacted only for the purpose of adding the words "or parti tion" after the words "by transfer" and "before such trans fer" in that Section. The position that obtains under Section 38(7) after the Amending Act 1963 is, therefore, that any transfer of land effected after 1st August 1953 whether by way of parti tion or otherwise, has no effect of conferring on the trans feree a right to terminate the tenancy 72 of the tenant who was a protected lessee and whose right as such protected lessee had come into existence before such transfer or partition. This amendment is admittedly retro spective in operation. Even assuming, therefore, that the partition of June 29, 1959 was a valid one, it did not give a right to the respondent to terminate the tenancy of the appellant who was admittedly a protected lessee prior to August 1, 1953 and was on the land as such tenant on April 1, 1961. The result therefore is that firstly, the respondent had not become the landlady of the suit land since the share given to her in the partition was prima facie illegal and contrary to the provisions of law. Secondly, assuming that the partition was valid, the respondent had no right to terminate the tenancy of the appellant on any ground whatso ever. The appellant was a tenant since prior to 1st August 1953 and had also continued to be such tenant till April 1, 1961. Hence he became a statutory owner under Section 46 on and from April 1, 1961. Any proceedings for evicting him on the ground that he was a tenant and, therefore, had fallen in arrears of rent could not have, therefore, been adopted in 1962. It is unfortunate that the High Court lost sight of the ' said patent legal position and brushed aside the con tention in that behalf on the ground that the question involved was a question of law and fact. We are unable to see what questions of fact were necessary to investigate for the disposal ot the said question. It was a pure question of law arising out of the admitted facts on record. Hence we allow the appeal, set aside the decision of the High Court and hold that the appellant had become a statutory owner of the suit land on and from April 1, 1961. He was, therefore, not liable to be evicted at the hands of the respondent and the proceedings adopted by her were illegal and stand dismissed. The respondent will pay the costs throughout. R.S.S. Appeal al lowed.

The appellant was a protected lessee or tenant of the agricultural land in dispute, under the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958. The respond ent became the landlady of the land on June 29, 1959 when her father effected a partition of his ancestral lands between himself, on the one hand, and his wife and his two minor daughters, including the respondent, on the other. This was the third partition effected by the respondent 's father, who had earlier also twice partitioned the same lands. Sometime in 1962, the respondent initiated proceedings against the appellant for recovery of possession of the suit land on the ground of default. The Tehsildar dismissed the application holding that the respondent was not a landlady since the partition in question was illegal. The Deputy Collector in appeal confirmed this decision, and the Maha rashtra Revenue Tribunal rejected the respondent 's revision. In the Writ Petition filed before the High Court under Article 227 of the Constitution against the above decision of the three authorities below, the High Court remanded the matter to the Tehsildar for investigation into the validity of the partition. On remand, the Tehsildar held that the partition effected on June 29, 1959 was bogus. Thereafter, in a different proceeding the Maharashtra Revenue Tribunal had held that the said partition was bind ing. Therefore, in the appeal against the decision of the Tehsildar, the Deputy Collector following the said decision of the Revenue Tribunal, held the partition valid and al lowed the respondent 's application for eviction. The Revenue Tribunal, in revision, confirmed this order of the Deputy Collector. 67 The appellant preferred a writ petition before the High Court. It was, inter alia, contended before the High Court that: (1) the partition was contrary to the provisions of Hindu Law; and (2)even assuming that the partition deed of June 29, 1959 was a valid document, the same had to be ignored since it could not confer the title of ownership on the respondent transferee in view of the provisions of section 38(7) of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958. The High Court however dis missed the petition holding that what was produced before the courts below was a family settlement. Allowing the appeal, this Court, HELD: (1) A partition of the property can only be among the parties who have a pre existing right to the property. Under the Hindu Law, a female, major or minor has no share in the ancestral property. A female is given a share either in the self acquired property of the husband or the father, or in the share of the husband or the father in the coparce nary property after the property is partitioned. There cannot, therefore, be a partition and hence a family settle ment with regard to the ancestral property so long as it is joint, in favour of either the wife or the daughter. [70C D] (2) The position that obtain under section 38(7) after the Amending Act of 1963, is that any transfer of land effected after 1st August 1953 whether by way of partition or otherwise, has no effect of conferring on the transferee a right to terminate the tenancy of the tenant who was a protected lessee and whose right as such protected lessee had come into existence before such transfer or partition. This amendment is admittedly retrospective in operation. [71G H; 72A] (3) The appellant was tenant since prior to 1st August 1953 and had also continued to be such tenant till April 1, 1961. Hence he became a statutory owner under section 46 of the Act on and from April 1, 1961. Any proceedings for evicting him on the ground that he was a tenant and, there fore, had fallen in arrears of rent could not have, there fore, been adopted in 1962. [72C D]

vil Appeal Nos. 54 to 56 of 1975. From the Judgment and Order dated 29.6.1973 of the Kerala High Court in A.S. Nos. 603,604 and 605 of 1969. N. Sudhakaran for the Appellants. K.V. Viswanathan, K.R. Nambiar and T.T. Kunhikannan for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. These appeals by special leave are directed against the judgment and decrees of Kerala High Court in A.S. Nos. 603,604 and 605 of 1969 dated June 29, 1973 confirming the award and decrees of the Civil Court in L.A.O.P. No. 413 etc. of 1964 and 370 and 405 of 1966 dated January 16, 1969. The notification under section 4(1) of the Land Acquisition Act 1894 (for short 'the Act ') was pub lished in the gazette on October 25, 1960 acquiring an ancient Chalai Anicut together with embarkments sluices, culverts etc. by six notifications. This ancient Chalai Anicut originally belonged to Arumughom Pillai. On his demise it devolved on his four sons Venkatachalam Pillai, Vishwanathan Pillai, Pasupathy Pillai and Subhapathy Pillai by intestate succession as coparceners. By partition deed exhibit B 23 dated December 22, 1954, the four brothers parti tioned certain properties but kept in common acquired Chalai Anicut under the management of the eldest brother Venkata chalam Pillai. Pursuant to the notice issued under section 9(3) and 10 of the Act, Venkatacha 468 lam filed his objections making reference therein to the partition deed No. 2437 of 1954 in the Registrar 's office, Palghat and that each of the brothers had 1/4 share in the Anicut and irrigation system. After the award made by the Land Acquisition Officer compensation was made to all the brothers at 1/4th share each. Venkatachalam sought six references under section 18 as he was dissatisfied with the awards made by the Land Acquisition Officer. The Civil Court enhanced in all to a sum of Rs.52,009.40 p. The State filed no appeal against the enhancement of the compensation. The Civil Court granted an award of 1/4 share thereof to Venka tachalam Pillai with solatium at 15 per cent and interest thereon at 4 per cent and did not award the balance amount to the appellants in their respective shares on the ground that they did not jointly ask for reference but only one alone asked for. The two brothers asked for reference for two awards only and the last one did not ask for reference of any award. On appeals, the High Court confirmed the award and decrees of the Civil Court. Thus these three appeals at their behest. Common question of law arises in these appeals and hence they are disposed of by a common judgment. The sole question for decision is whether in a reference Sought for by one of the co owners whether the other co owners who did not expressly seek reference, are entitled to enhanced compensation pro rata as per their shares. It is not in dispute that under the partition deed, the four brothers as coparceners kept in common the acquired property and Venkatachalam was in management thereof and each are entitled to 1/4 share in the ancient Anicut and the irriga tion system. It is also undisputed that total enhanced compensation is Rs.52,009.40 p. Therein all the four broth ers including the appellant are entitled to 1/4 share each. In the reference application made by the Venkatachalam indisputably he mentioned that the acquired property be longed to him and his other brothers and the compensation awarded by the Land Acquisition Officer was inadequate and very low. It was also stated that they Should get an en hanced amount at the figure specified in the reference application. Undoubted he stated therein that he is entitled to 1/4 share. What he stated thereby was that of his enti tlement of 1/4 share of the total enhanced compensation and obviously, after the reference on par with his three broth ers, he is entitled to receive compensation at 1/4 share. The Courts below disallowed the payment to the appellants on the ground that there is no mention in the 469 claim petition of the partition deed; that they are the co owners and that there is no averment that the Venkatachalam was seeking reference under section 18 on his behalf and on behalf of his other three brothers. As regards the first two grounds are concerned they are palpably incorrect. It is seen that an express averment was made in the objections filed pursuant to notice under section 9(3) and 10 and also in his reference application under section 18 of the Act, that there was prior partition and each of the brothers are entitled to 1/4th share and that they are dissatisfied with the award of the Collector. Undoubtedly there is no express averment in the reference application under section 18 that he is seeking a reference on his behalf and on behalf of his three brothers. It is contended by the counsel for the State that the pleadings are to be strictly construed and that as the reference was sought for only by Venkatachalam of all the six awards the other three brothers are not entitled to any share in the enhanced compensation. In support thereof it is also further contended that Viswanathan and Pasupathy had only asked for reference in respect of two awards and Sabhapathy Pillai made no request for reference against any of the six awards made by the Collector. It is true that Viswanathan and Pasupathy made such request in respect of two awards and Sabhapathy did not make any request for reference against any of the awards. But what would be the consequence in law is the question. It is surprising that the State having acquired the property of a citizen would take technical objections regarding the entitlement of the claim. The State certainly is right and entitled to resist claim for enhancement and lead evidence in rebuttal to prove the prevailing price as on the date of notification and ask the court to determine the correct market value of the lands acquired compulsorily under the Act. But as regards the persons entitled to receive compensation are concerned it has no role to play. It is for the claimants inter se to lay the claim for compensation and the court would examine and award the compensation to the rightful person. As seen in the objections pursuant to the notice under section 9(3) and 10, Venkatchalam made necessary averments that himself and his brothers had 1/4 share in the Anicut and irrigation system pursuant to the partition deed referred to therein. In his reference application under section 18 also he 470 reiterated the same and stated that the amount awarded by the Collector was in adequate and that they were dissatis fied with it and that they are entitled to more. It is settled law that one of the co owners can file a suit and recover the property against strangers and the decree would enure to all the co owners. It is equally settled law that no co owner has a definite right, title and interest in any particular item or a portion thereof. On the other hand he has right, title and interest in every part and parcel of the joint property or coparcenery under Hindu Law by all the coparceners. In Kanta Goel vs B.P. Pathak & Ors,. 12, this Court upheld an application by one of the co owners for eviction of a tenant for personal occupation of the co owners as being maintainable The same view was reiterated in Sri Ram Pasricha vs Jagannath & Ors., [1977]1 S.C.R. 395 and Pal Singh vs Sunder Singh (dead) by Lrs. & Ors. , ; A co owner is as much an owner of the entire property as a sole owner of the property. It is not correct to say that a co owner 's property was not its own. He owns several parts of the composite property along with others and it cannot be said that he is only a part owner or a fractional owner in the property. That position will undergo a change only when partition takes place and division was effected by metes and bounds. Therefore, a co owner of the property is an owner of the property acquired but 'entitled to receive compensation pro rata. The State would plead no waiver nor omission by other co owners to seek reference nor disentitle them to an award to the extent of their legal entitlement when in law they are entitled to. Since the acquired property being the ancestral coparcenary and continued to be kept in common among the brothers and the income derived therein was being shared in proportion of their shares by all the brothers it remained as joint property. As co owners everyone is entitled to 1/4 share therein. It was also laid by this Court in a recent judgment in Ram Kumar & Ors. vs Union of India & Ors. , ; that it is the duty of the Collector to send full infor mation of the survey numbers under acquisition to the court and make reference under section 18 and failure thereof is illegal. The same ratio would apply to the facts in this case as well. When one of. the co owner or coparceners made a statement in his reference application that himself and his brothers 471 are dissatisfied with the award made by the Collector and that they are entitled to higher compensation, it would be clear that he was making a request, though not expressly stated so but by necessary implication that he was acting on his behalf and on behalf of his other co owners or coparcen ers and was seeking a reference on behalf of other co owners as well. What was acquired was their totality of right, title and interest in the acquired property and when the reference was made in respect thereof under section 18 they are equally entitled to receive compensation pro rata as per their shares. The courts below committed manifest error in refusing to pass an award and payment thereof to the appel lants merely on the ground that there was no mention in this regard in the reference application or two of them sought reference in respect of two awards and the last one made no attempt in their behalf. The claimants are entitled to payment of the enhanced award by the Civil Court pro rata of their 1/4 share each with 15 per cent solatium and 4 per cent interest as awarded by the Civil Court. The appeals are accordingly allowed with costs of this Court. R.P. Appeals allowed.

The three appellants and their eldest brother, under a family partition, which took place in 1954, kept in common certain ancestral properties under the management of the latter. These properties were acquired in pursuance of a notification dated 15.1.1967 under section 4(1) of the Land Acquisition Act, 1894. The eldest brother filed objections referring to the partition deed of 1954 and stated that each of the four brothers had 1/4 share in the properties in question. Ultimately the compensation was made to all the brothers at 1/4th share each. The eldest brother sought six references under section 18 being dissatisfied with the awards. The Civil Court enhanced the compensation and granted an award of 1/4th share thereof to the eldest brother with solatium and interest, but did not award the balance amount to the appellants in their respective shares on the ground that they did not jointly ask for the reference. Out of the remaining three brothers two asked for reference for two awards only and the last one did not ask for reference of any award. On appeal, the High Court confirmed the award and decrees of the civil court. Aggrieved, the appellants preferred appeals by special leave to this Court. On the question: whether in a reference under section 18 of the Land Acquisition Act sought for by one of the co owners, the other co owners, who did not expressly seek reference are entitled to enhanced compensation pro rata as per their shares? Allowing the appeals, this Court, 466 HELD: 1.1 The Courts below committed a manifest error in refusing to pass an award and payment thereof to the appel lants. The coparceners claimants appellants in the instant case were entitled to payment of the enhanced award by the Civil Court pro rate of their 1/4th share each with 15 per cent solatium and 4 per cent interest as awarded by the Civil Court. [471C D] 1.2 It was not in dispute that under the partition deed, the four brothers as coparceners kept in common the acquired property under the management of the eldest brother. The income derived therein was being shared in proportion to their shares by all the brothers. Therefore, it remained as joint property. As co owners everyone was entitled to 1/4th share therein. [468E; 470F] 1.3 When one of the co owners or coparceners made a statement in the reference application that the acquired property belonged to him and his brothers, that he himself and his brothers were dissatisfied with the award made by the Collector and that they were entitled to higher compen sation, it would be clear that he was making a request, though not expressly stated so but by necessary implication that he was acting on his behalf and on behalf of his other co owners or coparceners and was seeking a reference on their behalf as well. What was acquired was their totality of right, title and interest in the acquired property and when the reference was made in respect thereof under section 18, they were equally entitled to receive compensation pro rata as per their shares. [468F; 471A B] 2.1 One of the co owners can file a suit and recover the property against strangers and the decree would ensure to all the co owners. A co owner is an owner of the property acquired but entitled to receive compensation pro rata. [470A & E] 2.2 A co owner is as much an owner of the entire property as a sole owner. It is not correct to say that a co owner 's property was not his own. He owns several parts of the composite property along with others and it cannot be said that he is only a part owner or a fractional owner in the property. [470C D] 2.3 No co owner has a definite right, title and inter est in any particular item or a portion thereof. On the other hand he has right, title and interest in every part and parcel of the joint property or coparcenary under Hindu Law by all the coparceners. [470A B] Kanta Goel vs B.P. Pathak & Ors., ; ; Sri Ram 467 Pasricha vs Jagannath & Ors., and Pal Singh vs SunderSingh (dead) by Lrs. & Ors., [1989] 1 S.C.R. 67, relied on. It is surprising that the State having acquired the property of a citizen would take technical objections re garding the entitlement of the claim. The State certainly is right and is entitled to resist claim for enhancement and lead evidence in rebuttal to prove the prevailing price as on the date of notification and ask the court to determine the correct market value of the lands acquired compulsorily under the Act. But so far as the persons entitled to receive compensation are concerned, it has no role to play. It is for the claimants inter se to lay the claim for compensation and the Court would examine and award the compensation to the rightful person. [469E F]

Appeal No. 955 of 1965. 470 Appeal by special leave from the judgment and decree dated March 17, 1961 of the Patna High Court in Appeal from Appellate Decree No. 897 of 1956. U.P. Singh, for the appellants. K.K. Sinha for respondent No. 1. The Judgment of the Court was delivered by Hegde, J. In this case a Full Bench of the Patna High Court differing from the view taken in a series. of earlier decisions of that High Court as well as the High Court of Calcutta held that the provisions of Bihar Tenancy Act (to be briefly referred to hereinafter as the Act) do not apply to a lease of a homestead though that homestead was a part of an earlier lease which was admittedly an agricultural lease and to which the provisions of the Act applied. The appellant challenges the correctness of that decision. The relevant facts as. found by the fact finding courts are:One Chakrapani Singh was the lessee of a plot which consisted of agricultural lands as well as a homestead. The homestead was later separately leased to defendants 1 and 2 (appellants). Thereafter the plaintiffs purchased the rights of the main lessee and sued the appellants for possession of the homestead. The appellants resisted the suit mainly on the ground that it had not been brought in accordance with the provisions of the Act and hence not maintainable. The contention of the plaintiffs is that the lease is invalid as it did not conform to the provisions of section 117 of the Transfer of Property Act and therefore they are entitled to evict the appellants. The trial court decreed the plaintiff 's suit but the first Appellate Court reversed the decree of the trial court and dismissed it. It followed the earlier rulings of the Patna High Court to the effect that if the main lease is a lease for agricultural purposes all sub leases of portions of that leasehold should also be considered as agricultural leases despite the fact that a particular sub lease may be that of a homestead only. The plaintiffs took the matter in second appeal to the High Court which was decided by a Full Bench which allowed the appeal as mentioned earlier. Two questions that arise for decision are (1) was the High Court right in holding that the lease in favour of the appellants is governed by section 117 of the Transfer of Property Act and (2) whether in view of the uniform view taken in the earlier decisions during a period of nearly 55 years the High Court was justified in reopening the question. Till the decision under appeal High Courts of Patna and Calcutta proceeded on the basis that if the main lease is governed 471 by the provisions of the Act and consequently taken out of the scope of the Transfer of Property Act then it must be held that all sub leases of portions of the properties included in the main lease are agricultural leases; otherwise the main lease would cease to be a purely agricultural lease as it must be held to relate to both agricultural and non agricultural lands. We agree with the Full Bench that the ratio of these decisions is open to question. If the legal position had not been firmly settled by a long chain of decisions commencing from 1903 onwards, it is likely that we would have concurred with the view taken by the Full Bench. But if we do so we would be unsettling a settled view of the law on the basis of which various rights must have been created, transactions entered into and titles founded. The rule laid down in the earlier decisions was never departed from in the past. The Act was amended a number of times but yet the legislature did not think it necessary to alter or modify the said rule. Different considerations would have arisen if the disputed interpretation related to a penal provision or the same is detrimental to public interest or causes public inconvenience. Law is not always logic. It is a part of life and more so in a democratic set up. In law finality is of utmost importance. Unless so required in public interest, questions. of law firmly settled by a long course of decisions should not ordinarily be disturbed and it is all the more so in the case of an interpretation affecting property fights. In the instant case, there were no compelling reasons for the High Court to depart from the rule laid down earlier. The decision of the High Court, if allowed to stand is bound to disturb numerous transactions. It is solely on that ground we propose to set aside that decision. Now we shall refer to the; decided cases on the point. The earliest decision on the point is Babu Ram Roy vs Mahendra Nath Sarnanta(1). The material facts of that case are similar to the facts of this case. The main lease in that case consisted of an agricultural lands as well as a homestead. The homestead was separately given on sub lease by the main lessee but no registered lease deed was taken. Subsequently the main lessee sued for possession of the homestead. It was contended on his behalf that the lease in favour of the sub lessee being a lease of non agricultural property, the same is invalid as it was not given under a registered lease deed and hence he was entitled to a decree directing the ejectment of the defendants. The High Court rejected the plaintiff 's claim holding that in order to maintain a suit for ejectment a notice ,under section 49 el. 6, Bengal Tenancy Act was necessary and that notice had to be served in accordance with the rules framed under that Act. No notice having been given under that provision, the suit was held to be non (1) VIII, C.W.N. 454. 472 maintainable by Mitra J. His view was affirmed 'by a Division Bench consisting of Maclean C.J. and Pargiter J. The above decision was affirmed by another Division Bench of the Calcutta High Court in Abdul Karim Patwari vs A bdul Rahaman (1). The same view was taken by the said High Court in Krishna Kanta Ghosh vs Jadu Kasya(2) and in Kadrutulla and OrS. vs Upendra Kumar Chowdhury(3). The decision in Arun Kumar Sinha and Ors vs Durga Charan Basu(4) iS Of special importance. That case was decided by a Division Bench consisting of B.K. Mukherjea J. who later became the Judge as well as the Chief Justice of tiffs Court and Roxburgh J. There the learned Judges doubted the correctness of the earlier decisions but yet were of the opinion that public interest required that the interpretation placed on the provision of law by a long series of consistent decisions should not be departed. This what the learned Judges observed in that case. "But the principle was never dissented from, that in a case of this description, the question whether the tenancy is governed by the Bengal Tenancy Act or the Transfer of Property Act, would depend on the nature of the original tenancy, and not on the character of the parcel included in the sub tenancy. The learned advocate who, appears for the appellants has subjected these decisions to a good deal of criticism. Had the matter been yes integral, we might have some hesitation in accepting the view enunciated in them. In the Bengal Tenancy Act, the raiyat is defined to be a person who acquires land primarily for purposes of cultivation; unless the letting was for purposes of agriculture the tenancy would not be governed by the Bengal Tenancy Act even if the superior interest was vested in the holding of the tenure to which the Bengal Tenancy Act was applicable. We do not think also. that any real anomaly would arise if as between a raiyat and his sublessee the rights were governed by the Transfer of Property Act. Mr. Das who appears for the respondents has contended that difficulties would arise in enforcing the provisions of ch. 14 Ben. What he says is that the purchaser of a raiyati holding has the right to annul all sub tenancies which are incumbrances under section 161, Ben. Act; but if the raiyat has created a non agricultural tenancy in respect of a portion of his lands for a fixed period which is. governed by the (1) 15 Cal. Law Journal 672. (2) (3) A.I.R. 1925 Cal. (4) A.I.R. 1941 Cal. 473 Transfer of Property Act, to allow a purchaser to annul such sub tenancies would be to entitle him to go against the provisions of the Transfer of Property Act. We do not think that there is any substance in this contention. It is not necessary that the incumbrances which can be annulled under section 167 Ben. Act must be incumbrances created under that Act. A mortgage is certainly an incumbrance which is created under the Transfer of Property Act but it can never be suggested that because it is governed by the Transfer of Property Act, it cannot be annulled by a purchaser who purchased the holding at a sale in execution of a rent decree under Chap. 14, Ben. The difficulty however is created by the way in which the expression "under Raiyat" has been defined in section 4 Ben. An under raiyat has been defined to be a tenant who holds immediately or mediately under a raiyat. It is not stated here, as in the case of a raiyat, that he must hold also for purposes of cultivation. It may be argued that this must be the implication, for the provisions relating to under raiyats which are contained in Chap. 7 Ben. Act are appropriate only to this character as an agricultural tenant. It cannot be denied however that the wording of section 4, clause (3) Ben. Act is very wide, and ' when the word has been interpreted in one way for a period of nearly 40 years without any dissension whatever, we think that we should not be justified in upsetting the long series of decisions. It is significant to note that considerable changes have been introduced the Bengal Tenancy Act in recent years but the Legislature which must be presumed to be aware of the law as laid down in the abovementioned decisions did not consider it necessary to make any changes in this respect. " It was not denied by the learned counsel ' for the respondents that the principle enunciated in the abovementioned decisions was consistently followed by the Calcutta High Court even up to date. Hence it is not necessary to refer to the other decisions of that court. The Patna High Court consistently followed the decisions of the Calcutta High Court. In Mian Ahir and Ors vs Paramhans Pathak(1) while considering a case similar to the present case, the rule laid down in Babu Ram Roy 's case was followed. also in Shrikishun Lal vs Harihar Sah and another (2). The law (1) A.I.R. 1939 Pat. 409. (2) A.I.R. (36) 1949 Pat. 474 laid down in those decisions was accepted as correct till the decision of the Full Bench in the present case. At page 154 of Craies on Statute Law (6th Edition) it is observed: "In 1958 Lord Evershed M.R. said: "There is wellestablished authority for the view that a decision of long standing, on the basis of which many persons will in the course of time have arranged their affairs, should not lightly be disturbed by a superior court not strictly bound itself by the decision. " Again at page 155, it is observed: 'Earlier in Morgan vs Crawshay, Lord Westbury had thus stated the rule: After explaining that it was unnecessary to examine the interest of a galee in iron ore mines, because supposing it to be regarded as a tenement and not merely as an incorporeal right, I should still arrive at the conclusion that we must bow to the uniform interpretation which has. been put upon the statute of EliZabeth and must not attempt to disturb the exposition it .has. received. If we find a uniform interpretation of a statute upon a question materially affecting property and perpetually recurring and which has been adhered to without interruption it would be impossible for us to introduce the precedent of disregarding that interpretation. Disagreeing with it would thereby shaking rights and ritles which have been rounded through so many years upon the c onviction that interpretation is the legal and proper one and is one which will not be departed from. In that the House of Lords decided that iron mines and all other mines except coal mines were, under the Statute of Elizabeth, exempt from liability to. the poor rate. The statute mentioned coal mines only, and a long course of decision had established that the rule expressi unius est exclusio alterius applied to the enactment." (that decision is reported in In Harding vs Howell(1) Lord Fitzgerald speaking for the Privy Council while dealing with the interpretation of a provision in a statute observed: "Their Lordships do not intend in the least to question the principle which governs the construction and effect of that statute as now long established by decided cases. It has been over and again said that 'so many titles stand on it that it must not be shaken ' and in that their Lordships concur." (1) 14 A.C. 307. 475 In Pugh vs Golden Valley Railway Co.(1). Thesiger L.J. bserved: "And the case is in principle a distinct authority for the proposition that in such circumstances as those which exist in the present case, the diversion of a river is unjustifiable. Viewed simply as the decision of a Court of first instance, the authority of this case, notwithstanding the respect due to the Judges who decided it, is not binding upon us; but, viewed in its character and practical results, it is one of a class of decisions which acquire a weight and effect beyond that which attaches to the relative ' position of the Court from which they proceed. It constitutes an authority which, after it has stood for so long a period unchallenged, should not, in the interests of public convenience, and having regard to the protection of private rights, be overruled by this Court except upon very special considerations. For twelve years and upwards the case has continued unshaken by any judicial decision or criticism as an authoritative exposition of the meanmg of sect. 16 of the Railways Clauses Consolidation Act, 1845, in respect of the matter here in dispute. During such period hundreds. of Special Acts of Parliament have been passed sanctioning the construction of lines of railway and the consequent interference with private fights, and mcorporating for that purposes the provisions of the General Act. Promoters. must have sought their powers, landowners must have regulated their course of action, and parliamentary committees must have given their sanction to the projects submitted to them upon the faith and footing of a limit to the powers sought and conceded being found in the provisions of the general Act 'as interpreted from time to time by judicial decisions. If so., it is to be presumed that the limit put upon the powers of a railway company in regard to the diversion of roads and rivers by the decision of the Court of Kueens ' Bench in Reg. vs Wycombe Railway Company must have exercised a material influence upon the relations of persons owing land proposed to be affected by special railway legislation and the promoters of that legislation. " In Murphy vs Deichler and Ors(2). Lord Loreburn L.C. speaking for the House of Lords observed: "I think this case falls within the rule that it is ' not necessary or advisable to disturb a fixed practice (1) 15 Ch. Division 330. (2) 476 which has been long observed in regard to the disposition of property, even though it may have been disapproved at times by individual judges, where no real point of principle has been violated. " The Full Bench was of the view that the rule laid down in Babu Ram Roy 's case and the decisions following it are clearly wrong. Hence even though that rule held the field for about 55 years, there is no justification for sustaining it. The Full Bench was of the opinion that in all cases where the terms of the statute are clear even a long and uniform course of judicial interpretation of it may be overruled if it is contrary to the meaning of the enactment. 'It accepted that to be the correct position in law and that rule is unqualified. In support thereof they relied on the Full Bench decision of the Allahabad High Court in Lallu Singh vs Gur Narain and Ors.(1) and the decision of the Privy Council in Tricomdas Cooverji Bhoja vs Sri Gopinath Jiu Thakur(2). The Full Bench decision of the Allahabad High Court relied on the Privy Council decision in Tricomdas Cooverji Bhoja 's case and the Privy Council in its turn followed the decision in Arthur John Pate vs W.C. Pate and Ors(3). In the Allahabad case the contention of the defendant was that under Hindu Law as settled by decisions delivery of possession was absolutely necessary for the completion of a gift. Their Lordships held that whatever might have been the strict law prior to the passing of the Transfer of Property Act, it must now be held that gift of immovable property can be validly effected by registered instruments signed either by or on behalf of the donor and attested by at least two witnesses and nothing further is necessary to effectuate the transfer. It is in that context their Lordships observed that Where the terms of the statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is contrary to the clear meaning of the enactment. In fact in that case the learned Judges did not depart from the rule laid down in the earlier cases as regards the scope of section 123 of the Transfer of Property Act. They held that the earlier decisions under the Hindu Law cannot be followed in view of the change in the law effected by section 123 of the Transfer of Property Act. In Tricomdas Cooverjee 's(2) case, the Privy Council did not depart from any well established principle of law. In fact their Lordships in the course of the Judgment referred to certain conflict of decisions on the point under consideration and in that context they happened to make the observations to which we have referred while dealing with the Allahabad decision. As mentioned (1) A.I.R 1922 All. 467. (2) A.I.R. 1916 P.C. 182. (3) [1915]A.C. 1100. 477 earlier the decision of the Privy Council which was followed by the Full Bench of the Allahabad High Court relied on the decision in Pate vs Pate (1). That decision if we may say so with all respect explains the true legal position. In that case while dealing with the various decisions cited before them their Lordships observed: "With aH respect to the learned judges who so read the Ordinance in 1871, their Lordships not only think that their decision was erroneous, but also that even after the interval of forty four years it ought to be overruled. The present is not one of those cases in which inveterate error is left undisturbed because titles and transactions have been founded on it which it would be unjust to disturb." (emphasis supplied). From these observations it is clear that the rule that where the terms of a statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is contrary to the clear meaning of the enactment is inapplicable to decisions on the basis of which titles and transactions must have been founded. For the reasons mentioned hereinbelow this appeal is allowed and the suit dismissed with costs of this Court. G.C. Appeal allowed.

C was the lessee of a plot which consisted of agricultural land as well as a homestead. The homestead was later leased to the appellants. The respondents purchased the rights of C and brought a suit against the appellants for possession of the homestead. The contention of the appellants in defence was that the suit had not been brought according to the provisions of the Bihar Tenancy Act and hence was not maintainable. The contention of the respondents was that the lease of the homestead was not an agricultural lease within the meaning of section 117 of the Transfer of Property Act and was invalid under the provisions of the latter Act. The trial court decreed the suit. The first appellate court however dismissed it. In doing so it relied on earlier rulings of the Patna and Calcutta High Courts which had held the field for over 55 years, to the effect that if the main lease is a lease for agricultural purposes all sub leases of portions of that leasehold should also be considered as agricultural leases despite the fact that a particular lease may he that of a homestead only. The High Court in further appeal departed from the view taken in the earlier cases and decided against the appellants, who came to this Court. The main question for consideration was whether the High Court was justified in departing from the settled view. HELD: The rule laid down in the earlier decisions was never departed from in the past. The Tenancy Act was amended a number of times but yet the legislature did not think it necessary to alter or modify the said rule. In law finality is of the utmost importance. Unless so required in public interest questions of law firmly 'settled by a long course of decisions should not ordinarily be disturbed and it is all the more so in the ease of an interpretation affecting property rights. [471 C E] The rule that where the terms of a statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is ' contrary to the clear meaning of the enactment is inapplicable to decisions on the basis of which titles and transactions must have been rounded [477 D] Case law referred to.

Appeal Nos. 4734 35 of 1992. From the Judgment and Order dated 8.5.1992 of the Madhya Pradesh High Court in Misc. Petition Nos. 48] and 533 of 1992. Shanti Bhushan, N.C. Jain, S.K. Agnihotri and Ashok K. Singh for the Appellant. Kapil Sibal, N.S. Kale, A.P. Dhamija, S.K. Jain, Manmohan, section Atreya, Pradeep Agarwal, Basant Bhai Mehta, Ravindra Srivastava, R.N. Srivastava, B.V. Desai and S.V. Deshpande for the Respondents. The Judgment of the Court was delivered by VERMA, J. The petitioner State of Madhya Pradesh in both these petitions seeks leave to appeal under Article 136 of the Constitution against the common judgment and order dated 8.5.1992 of the High Court of Madhya Pradesh in Miscellaneous Petition Nos. 481 of 1992 and 533 of 1992 under Article 226 of the Constitution. The High Court has allowed both these writ petitions. The material facts are these. In Miscellaneous Petition No. 3909 of 1987 tiled in public interest by Kailash Joshi, then Leader of the Opposition in Madhya Pradesh Vidhan Sabha and now a Cabinet Minister in Madhya Pradesh, relating to the affairs of the Churhat Children 's Welfare Society and the lottery conducted by it, the M.P. High Court by its judgment dated 20.1.1989 issued a direction for setting up an independent high power agency to bold an inquiry into the affairs of the said Society of which respondent 1 Ajay Singh was one of the office bearers. In compliance of that direction, the State Government passed a resolution on 24.2.1989 and also issued notification of the same date having the effect of setting up a Commission of Inquiry consisting of Justice S.T. Ramalingam, a Judge of the Madras High Court to investigate into the affairs of the said Society and the lottery conducted by it. The resolution and notification are as under : "Bhopal, the 24th February, 1989 No. F. 1 3 89 l(i) E.C. Whereas the High Court of Madhya Pradesh in its order dated the 20th January 1989 in M.P. No. 3909/87 Kailash Joshi versus State of Madhya Pradesh and others has directed that an inquiry be made by an independent high power agency into the affairs of the Churhat Children 's Welfare Society and how the share of its profits derived from all or any other draws have been utilized and to take such action as may be required under the law against the said Society and its organizing agent and that the State Government is of the view that the said order of the High Court should be implemented and carried out and whereas the State Government is also satisfied that this is a definite matter of public importance which calls for an inquiry to be made, the State Government hereby appoints an independent high power agency presided over by Shri Justice S.T. Ramalingam, Judge of the Madras High Court. The Headquarters of the Agency shall be at Jabalpur, Madhya Pradesh. The terms of reference for inquiry by the aforesaid Agency shall be as under: (1) How the affairs of the Churhat Children s Welfare Society are conducted and how the share of the profit derived and the money collected through lottery has been utilised ? (2) What is the amount collected draw wise, by the agent and the Society and what is the tax liability as per the Madhya Pradesh lottery (Niyantran Tatha Kar) Adhiniyam, 1973 ? (3) Whether any irregularities, illegalities and offences were committed in organizing the lottery, holding of draws of lottery, distribution of prizes, and in that event, the person responsible for the same; (4) Any other matter incidental or connected with the above subject matter of enquiry. (4) The Agency may complete its enquiry and submit its report to the State Government within a period of six months from the date of issue of this Notification. By order and in the name of the Governor of Madhya Pradesh, R.C. Shrivastava, Secy" "Bhopal, the 24th February, 1989 No. F.1 3 89 I(i) E.C. Whereas by Government of Madhya Pradesh Resolution dated the 24th February 1989 and Notification No. F.1 3 89 I(i) E.C., dated the 24thFebruary 1989 an independent High Power Agency presided over by Shri S.T. Ramalingam, Judge of the Madras High Court has been set up to hold an inquiry into the affairs of the Churhat Children 's Welfare Society; And whereas the State Government having regard to the nature of the inquiry to be made and other circumstances of the case is of the opinion that provisions contained in sub sections (2) to (5) of Section 5 of the , should be made applicable to the aforesaid Agency; Now,therefore, in exercise of the powers conferred by sub section (1) of Section 5 of the , the State Government hereby directs that the provisions of sub sections (2) to (5) of Section 5 of the said Act shall apply to the above described Agency. By order and in the name of the Governor of Madhya Pradesh, R.C. Shrivastava, Secy". According to the terms of the above notification, the inquiry was to be completed within a period of six months from the date of issue of the notification. As the inquiry could not be completed within that period, by a notification dated 1.8.1990 the period for completing the inquiry was extended upto 22.8.1991; then by another notification dated 16.8.1991 the period was extended upto 31.3.1992; and then by another notification dated 27.3.1992 the period for completing the inquiry stands extended upto 31.3.1993. In the meantime, Justice S.T. Ramalingam became due to retire as a Judge of the Madras High Court on 30.6.1991 on attaining the age of superannuation and, therefore, he wrote a letter dated 19.3.1991 to the Chief Secretary of the State drawing attention to this fact and requesting that necessary modalities be worked out well in time for his continuance as Commission of Inquiry in the light of the guidelines issued by the Government of India for the benefits and emoluments payable to a Judge on his retirement in such a situation. Just Ramalingam mentioned in that letter some of the facilities he expected, to which he would not be entitled from the Government of Tamil Nadu on his retirement. The Chief Secretary R.P. Kapoor sent a reply to Justice Ramalingam by DO No. 504/CS/91 dated 9.4.1991 as under: "My dear Hon 'ble Justice Ramalingam, Thank your very much for your letter No. 53 of 19th March, 1991. The issues raised in your letter regarding the tenure of the Commission and the terms and conditions after your superannuation are under active consideration of the Government and I will be in a position to inform your after a final view is taken in this case. In the meanwhile may I request that the proceedings may be continued so that the inquiry can be completed at the earliest possible. With very kind regards, Yours sincerely, Sd/ (R.P. Kapoor)" `This letter of the Chief Secretary apart from promising to give an early reply also requested Justice Ramalingam to continue with the inquiry so that the same could be completed early. While the promised reply from the State Government Justice Ramalingam was awaited, the State Government, without further reference to Justice Ramalingam, issued a notification dated 10.7.1991 as under: "Bhopal, the 10th July, 1991 No. F.1 6 91 I (8 Ka). Whereas, an independent high power agency comprising of a single member namely Justice S.T. Ramalingam, Judge of the Madras High Court was appointed under this Department Notification No. F.1 3 89 I(i) E.C., dated the 24th February 1989; And whereas Justice S.T. Ramalingam has retired as Judge of the Madras High Court, on 30th of June 1991; And whereas for continuing in the said agency after retirement Justice Shri S.T. Ramalingam has placed certain terms and conditions which have not been found possible for the Government to accept. Now, therefore, in exercise of the powers conferred by sub section (3) of Section 3 of the (No. LX of 1952), the State Government hereby appoint Justice Shri G.G. Sohani, retired Chief Justice, High Court of Patna (Bihar) as single member of the said agency in place of Justice Shri S.T. Ramalingam. Accordingly this Department Notification Nos. (I)F.1 3 89 I(i) E.C. dated the 24th February 1989, (2) F.1 3 89 1(i) E.C., dated the 24th February 1989 and (3) F.1 3 89 I(i) E.C. dated the 24th February 1989, shall stand amended to this extent. By order and in the name of the Governor of Madhya Pradesh S.K. Misra, Secy. Accordingly, by this notification, the State Government replaced Justice S.T. Ramalingam with Justice G.G. Sohani, retired Chief Justice of Patna High Court as the sole member of the Commission of Inquiry. The appointment of Justice G.G. Sohani in place of Justice S.T. Ramalingam was challenged in the M.P. High Court by a writ petition M.P. No. 2359 of 1991 by respondent No. 1 Ajay Singh. By an interim order dated 30.7.1991 passed by the High Court, the operation of the above notification dated 10.7.1991 was stayed. During the pendency of that writ petition, Justice G.G. Sohani conveyed to the State Government his disinclination to continue with the assignment and tendered his resignation. Consequently, the High Court dismissed that writ petition as infructuous on 5.9.1991. It was only thereafter that the Chief Secretary of the State Government sent a letter dated 12.9.1991 in continuation of his earlier letter dated 9.4.1991 to Justice Ramalingam which is as under : "This is in continuation to my earlier letter No. 504/CS/91 dated 9th April, 1991 regarding the arrangement for the Commission of Enquiry (Churhat Children Welfare Society and Lottery), consequent to your superannuation as a Judge of the Madras High Court. The State Government have considered your communications about the inconveniences you were facing in coming to Jabalpur for want of Air link between Madras and Jabalpur. The State Government have also considered the terms and conditions mentioned in your letter of 19th March, 1991. On careful consideration of all aspects mentioned in your communications it has not been possible for the State Government to accept the terms and conditions set out in your letter of 19th March for taking up the work of the above mentioned Enquiry Commission after your superannuation. The State Government had accordingly appointed Justice Mr. G.G. Sohani, retired Chief Justice of the Patna High Court to be the single Member of the Commission. I am, however, happy to convey the deep appreciation of the State Government for the services rendered by you in the Commission in spite of all the personal inconvenience it has caused. The Hon 'ble Chief Minister had made a general mention of it in the Vidhan Sabha on the 4th July, 1991. Delay in reply to your letter is regretted. It was caused because of the litigation arising out of the appointment of Justice Sohani which was since been decided. Wishing you and your family a very happy life after your superannuation. Yours sincerely, R.P. Kapoor" The State Government thereafter issued another notification dated 9.1.1992 as under: "Bhopal, the 9th January 1992 No. F.1 6 91 I (8 Ka). Whereas in exercise of the powers conferred by sub section (3) of Section 3 of the Commissions of Enquiry Act, 1952 (No. LX of 1952) Justice Shri G.G. Sohani, retired Chief Justice, High Court of Patna (Bihar) was appointed as single member of an independent high power agency constituted under this department notification No. F.1 3 89 I(i) E.C., dated 24th February 1998 in place of Justice Shri S.T. Ramalingam vide this department Notification No. F.1 6 91 I(8 Ka), dated the 10th July 1991; And whereas Justice Shri G.G. Sohani, retired Chief Justice, High Court of Patna (Bihar) has since withdrawn his consent to work as single member of the said agency; Now, therefore, in exercise of the powers conferred by sub section (3) of Section 3 of the Commissions of Enquiry Act, 1952 (No.LX of 1952), read with Section 21 of the General Clause Act, 1987 (No. 10 of 1897), the State Government hereby appoint Justice Shri Kamlakar Choubey, retired Judge of the Allahabad High Court as a single member of the said agency in place of Shri G.G. Sohani. Accordingly this department Notification Nos. (1) F.1 3 89 l(i) E.C., dated 24th February, 1989, (2) F.1 3 89 I (i) E.C., dated 24th February, 1989, and (3) F.1 3 89 I (i) E.C., dated the 24th February, 1989, shall stand amended to this extent. By order and in the make of the Governor of Madhya Pradesh In this manner, the State Government after replacing Justice S.T. Ramalingam first by Justice G.G. Sohani, thereafter replaced him by Justice Kamlakar Choubey, a retired Judge of the Allahabad High Court, as the sole member of the Commission. It is unnecessary to refer to the terms and conditions of appointment of Justice Kamlakar Choubey which were detailed in the General Administration Department Memo. dated 23.3.1991 and are referred in the High Court judgment, which include the facility of a Camp Office for him at Varanasi and other facilities of vehicle, telephone and staff etc. The appointment of Justice Kamlakar Choubey as the sole member constituting the Commission of Inquiry in this manner resulting in the replacement of Justice S.T. Ramalingam initially appointed for the purpose and to writ petitions M.P. Nos. 481 of 1992 and 533 of 1992 for quashing the notification dated 9.1.1992 appointing Justice Kamlakar Choubey. Challenge to the notification dated 10.7.1991 issued earlier appointing, Justice G.G. Sohani is academic in view of Justice Sohani having resigned as indicated earlier. The remaining significance of the validity of the notification dated 10.7.1991 appointing Justice G.G. Sohani relates only to the State Government 's power to appoint another person in place of Justice S.T. Ramalingam in the above circumstances. The challenge of the writ petitioners before the High Court was that during the continuance as the single member of the Commission of Inquiry of Justice S.T. Ramalingam, there was no power in the State Government to replace him as the member of the Commission and, therefore, the appointment first of Justice G.G. Sohani and on his refusal, of Justice Kamlakar Choubey, being without any authority, was invalid. On this basis, the relief of quashing the notification dated 9.1.1992 appointing Justice Kamlakar Choubey was sought. In substance, the argument was that there being no vacancy in the office, the power under Section 3(3) of the , which is available only to fill any vacancy could not be invoked and there was no other source of power available to the State Government for this purpose. The argument of the learned Advocate General on behalf of the State Government was that a vacancy had arisen in the membership of the Commission on account of Justice Ramalinga 's retirement from Madras High Court on 30.6.91, and there being his implied resignation indicated by his inclination to continue on the terms and conditions suggested by him, which the State (Government did not consider feasible, the power of the State Government under Section 3(3) of the to fill the implied vacancy was available. It was also urged by the learned Advocate General that vacancy in the office of the single member of the Commission was also implied from the fact that the appointment of Justice S.T. Ramalingam as the Commission of Inquiry was also his status as a sitting Judge of the Madras High Court and, therefore, his retirement as a Judge resulted in creation of the vacancy. The learned Advocate General also placed reliance on Section 16 of the , in aid of the State Government 's power under Section 3(3) of the . Another submission of the learned Advocate General was that the State Government was the sole judge in this matter and was, therefore, competent to choose the person for making or continuing the inquiry in view of the power available under Section 3 of the lead with Section 16 of the . The learned counsel appearing on behalf of Kailash Joshi placed reliance on Section 3(2) of the Commission of Inquiry Act read with Section 14 of the to support the State Government 's action appointing Justice Kamlakar Choubey contending that the State Government had power to reconstitute the Commission replacing Justice S.T. Ramalingam by another person. An argument challenging the locus standi of the writ petitioner was also faintly urged by counsel for Kailash Joshi. The High Court allowed the writ petitions and quashed the notification dated 9.1.1992 appointing Justice Kamlakar Choubey. It held that there was no vacancy in the office of the single member of the Commission to empower the State Government to fill the vacancy under Section 3(3) of the . On a construction of the provisions of the and those of the relied on in support of the rival contentions, the High Court came to the conclusion that there was neither any valid reason or ground nor any power available in the State Government to replace Justice S.T. Ramalingam by another person as was purported to be done by First appointing Justice G.G. Sohani and then Justice Kamlakar Choubey, both of whom were also retired Judges. The objection to locus standi for the writ petitioners was also rejected. The relevant part of the directions made by the High Court is as under: 42. As a result of the aforesaid discussion, the petition succeeds and is hereby allowed. The notification dated 10.7.1991 (Annexure H) and the consequent notification based thereon dated 9.1.1992 (Annexure M) are hereby quashed. It is open to the State Government to propose to Hon 'ble Shri Justice S.T. Ramalingam the terms and conditions or his continuance as a member of the Commission equivalent to, loss or more favourable than those offered and fixed for Hon 'ble Shri Justice Kamlakar Choubey. Thereafter depending on his reply the State Government may continue or discontinue his appointment or substitute another member in his place. It is also made clear that it would be open to Justice Ramalingam to accept the terms and conditions offered by the State Government of Madhya Pradesh or to resign from the office, by taking a decision in that behalf early, so that the work of the Commission is not unduly hampered and it is completed well within the extended period i.e. before 31st March, 1993 . . " Hence, these petitions for grant of special leave. Leave granted. Shri Shanti Bhushan, learned senior counsel for the State of Madhya Pradesh, expressly gave up the argument advanced before the High Court of the implied resignation of Justice S.T. Ramalingam giving rise to a vacancy or any implied vacancy on retirement of Justice Ramalingam as a Judge of the Madras High Court to enable exercise of power under Section 3(3) of the for first appointing Justice G.G. Sohani and then Justice Kamlakar Choubey in place of Justice S.T. Ramalingam The case of the State of Madhya Pradesh in this Court was confined by Shri Shanti Bhushan to only one point. The only contention of Shri Shanti Bhushan is that the aid of Section 21 of the is available to the State Government for exercising its powers under the `to add to, amend or vary ' the notification issued initially appointing Justice S.T. Ramalingam as the sole member of the Commission which enables the State Government to reconstitute the Commission by replacing Justice S.T. Ramalingam with any other person in the circumstances of the case. He argued that it is in exercise of this power that the period fixed initially for completion of the inquiry could be amended since, to the extent the provisions in the are silent, recourse can be had to Section 21 of the for making a suitable addition, amendment or variation of the initial notification. According to learned counsel, the power to rescind any notification being provided in Section 7 of the , such a power in Section 21 of the was not available, but not so the power given by Section 21 of the to add to, amend or vary any notification. Shri Shanti Bhushan also referred to Section 8 A of the as an indication to support his submission of the Government 's power to reconstitute the Commission even during the availability of the person so appointed even though, he stated, Section 8 A is not the source of power for reconstitution of the Commission. In reply, Shri Kapil Sibal, learned senior counsel for respondent No.1, submitted that the scheme of the does not permit invoking Section 21 of the except for enlarge ment of the period for completion of the inquiry by amendment of the notification only to that extent since the only situations in which reconstitution of the Commission can be made are provided in the itself and, therefore, the context rules out the applicability of Section 21 of the for any such purpose. Shri Sibal also submitted that the construction suggested by Shri Shanti Bhushan is alien to the scheme of the . Shri Sibal added that Section 8 A of the was enacted for an entirely different purpose, to ensure continuity of the Commission 's work and has nothing to do with its reconstitution. Shri N.S. Kale, learned counsel for Kailash Joshi, while supporting the submission of Shri Shanti Bhushan added that Sections 14 and 16 of the are also available to support the impugned notifications issued by the State Government. In the ultimate analysis, the controversy surviving before us on the rival contentions is considerably narrowed. In substance, the only surviving controversy now is whether in the scheme of the , the power `to add to, amend or vary ' any notification given by Section 21 of the is available to reconstitute a Commission of Inquiry constituted under Section 3 of the by replacing the sole member appointed initially with another person during the availability of the sole member initially appointed. The validity of the aforesaid impugned notifications dated 10.7.1991 appointing Justice G.G. Sohani and dated 9.1.1992 appointing Justice Kamlakar Choubey to replace Justice S.T. Ramalingam depends on the answer to this question which alone now survives for decision. A reference to the object and purpose of an enactment in the nature of the would be worthwhile before proceeding to examine its scheme and the provisions therein. The object of the enactment, to the extent it is relevant, while construing the meaning of its provisions may be of assistance. The Commissions of Inquiry Act, 1955 is similar to and is modelled on the corresponding English statute and provides this historical back ground for the Indian statute. The purpose of such an enactment is aptly summarised in the speech of Lord Salmon on `Tribunals of Inquiry ' as under : "In all countries, certainly in those which enjoy freedom of speech and a free Press, moments occur when allegations and rumours circulate causing a nation wide crisis of confidence in the integrity of public life or about other matters of vital public importance. No doubt this rarely happens, but when it does it is essential that public confidence should be restored, for without it no democracy can long survive. This confidence can be effectively restored only by thoroughly investigating and probing the rumours and allegations so as to search out and establish the truth. The truth may show that the evil exists, thus enabling it to he rooted out, or that there is no foundation is the rumours and allegations by which the public has been disturbed. In either case, confidence is restored. How, in such circumstances, can the truth best be established ?" It is for the purpose of ascertaining the truth in such circumstances that the has been enacted. While construing the provisions of the enactment, it would be useful to bear in mind its object if occasion arises for illumination of any grey areas with reference to the object of the enactment as a permissible aid to construction. The was enacted to provide for the appointment of Commissions of Inquiry and for vesting such Commissions with certain powers. Section 2 of the Act contains definitions. Section 3 provides for appointment of a Commission of Inquiry. Sub section (1) of Section 3 lays down that a Commission of Inquiry for the purpose of making an inquiry into any definite matter of public importance may be appointed by the appropriate Government it is of opinion that it is necessary so to do and shall make such an appointment if a resolution in this behalf is passed by each House of Parliament or, as the case may be, the Legislature of the State, by notification in the Official Gazette. Sub section (2) of Section 3 says that the Commission may consist of one or more members appointed by the appropriate Government, and where the number is more than one, one of them may be appointed as the Chairman. Sub section (3) of Section 3 enables the appropriate Government to fill any vacancy which may arise in the office of a member of the Commission whether consisting of one or more than one member, at any stage of an inquiry. Sub section (4) of Section 3 requires the appropriate Government to cause to be laid before each House of Parliament or, as the case may be, the Legislature of the State, the report, if any, of the Commission of Inquiry together with a memorandum of the action taken thereon, within a period of six months from the submission of the report by the Commission to the appropriate Government. Section 4 prescribes that the Commission shall have the powers or a civil court while trying a suit under the Code of Civil Procedure in respect of the matters mentioned therein. Section 5 deals with the additional powers of the Commission. Section 5 A relates to the power of the Commission for conducting investigation pertaining to inquiry. Section 5 B deals with the power of the Commission to appoint assessors. Section 6 provides for the manner of use of the statements made by persons to the Commission. Section 6 A provides that some persons are not obliged to disclose certain facts. Section 7 deals with the manner in which a Commission of Inquiry appointed Section 3 ceases to exist in case its continuance is unnecessary. It provides for a notification in the Official Gazette by the appropriate Government specifying the date from which the Commission shall cease to exist if it is of the opinion that the continued existence of the Commission is unnecessary. Where a Commission is appointed in pursuance of a resolution passed by the Parliament or as the case may be, the Legislature of the State, then a resolution for the discontinuance of the Commission is also to be passed by it. Section 8 A provides that the inquiry is not to be interrupted by reason of vacancy or change in the constitution of the Commission and it shall not be necessary for the Commission to commence the inquiry afresh and the inquiry may be continued from the stage at which the change took place. Section 8 B prescribes that persons likely to be prejudicially affected by the inquiry must be heard. Section 8 C deals with the right of cross examination and representation by legal practitioner of the appropriate Government, every person referred to in Section 8 B and, with the permission of the Commission, any other person whose evidence is recorded by the Commission. Sections 9, 10 and 10 A relate to ancillary matters while Section 12 contains the rule making power of the appropriate Government. Section 11 provides that the Act is to apply to other inquirying authorities in certain cases and where the Government directs that the said provisions of this Act shall apply to that authority and issues such a notification, that authority shall be deemed to be a Commission appointed under Section 3 for the purposes of this Act. Admittedly, it is by virtue of Section 11 that the Commission of Inquiry appointed in the present case is deemed to be a Commission appointed under Section 3 for the purposes of this Act because the Commission was constituted by a resolution of the Government pursuant to the direction of the M.P. High Court in the writ petition filed in public interest by Kailash Joshi as indicated earlier. For the purposes of this case, the material provisions of the enactment are Sections 3, 7 and 8 A apart from Section 21 of the with reference to which the rival contentions were made. These provisions are as under : The "3. Appointment of Commission. (1) The appropriate Government may, if it is of opinion that it is necessary so to do, and shall, if a resolution in this behalf is passed by each House of Parliament or, as the case may be, the Legislature of the State, by notification in the Official Gazette, appoint a Commission of Inquiry for the purpose of making an inquiry into any definite matter of public importance and performing such functions and within such time as may he specified in the notifications and the commission so appointed shall make the inquiry and perform the functions accordingly: Provided that where any such Commission has been appointed to inquire into any matter (a) by the Central Government, no State Government shall, except with the approval of the Central Government, appoint another Commission to inquire into the same matter for so long as the Commission appointed by the Central Government is functioning; (b) by a State Government, the Central Government shall not appoint another Commission to inquire into the same matter for so long as the Commission appointed by the State Government is functioning, unless the Central Government is of opinion that the scope of the inquiry should be extended to two or more States. (2) The Commission may consist of one or more members appointed by the appropriate Government, and where the Commission consists of more than one member one of them may be appointed as the Chairman thereof. (3) The appropriate Government may, at any stage of an inquiry by the Commission fill any vacancy which may have arisen in the office of a member of the Commission (whether consisting of one or more than one member). (4) The appropriate Government shall cause to be laid before each House of Parliament or, as the case may be, the Legislature of the State, the report, if any, of the Commission on the inquiry made by the Commission under sub section (1) together with a memorandum of the action taken thereon, within a period of six months of the submission of the report by the Commission to the appropriate Government. ' "7. Commission to cease to exist when so notified. (1) The appropriate Government may, by notification in the Official Gazette, declare that (a)a Commission (other than a Commission appointed in pursuance of a resolution passed by each House of Parliament or, as the case may be, the Legislature of the State) shall cease to exist, if it is of opinion that the continued existence of the Commission is unnecesary; (b) a Commission appointed in pursuance of a resolution passed by each House of Parliament or as the case may he, the Legislature of the State, shall cease to exist if a resolution for the discontinuance of the Commission is passed by each House of Parliament or, as the case may be, the Legislature of the State. (2) Every notification issued under sub section (1) shall specify the date from which the Commission shall cease to exist and on the issue of such notification, the Commission shall cease to exist with effect from the date specified therein." "8 A. Inquiry not to be interrupted by reason of vacancy or change in the constitution of the Commission. (1) Where the Commission consists of two or more members, it may act notwithstanding the absence of the Chairman or any other member or any vacancy among its members. (2) Where during the course of an inquiry before a Commission, a change has taken place in the constitution of the Commission by reason of any vacancy having been filed or by any other reason, it shall not be necessary for the Commission to commence the inquiry afresh and the inquiry may be continued from the stage at which the change took place. " The "21. Power to issue, to include power to add to, amend, vary or rescind, notifications, orders, rules or bye laws. Where, by any Central Act or Regulation, a power to issue notifications, orders, rules or bye laws is conferred, then that power includes a power, exercisably in the like manner and subject to the like sanction and conditions (if any) to and to, amend, vary or rescind any notifications, orders, rule or bye laws so issued. " It may be mentioned that sub sections (3) and (4) of Section 3 and Section 8 A were inserted while Section 7 was substituted in the by the Commissions of Inquiry (Amendment) Act, 1971 (No.79 of 1971) as a result of the recommendations of the Law Commission of India made in paras 26 and 34 of its 24th Report. In para 26, the recommendation made was to amend Section 3 of the Act `to provide expressly for the filling up of vacancy or for an increase in the number of members whenever the Government thinks it necessary or expedient to do so '. In para 34 of the Report, the recommendation was to insert a new section 8 A in the light of the proposed amendment in Section 3 to clarify that `it is not necessary for the Commission to recommence its inquiry if a change takes place in the constitution of the Commission during the pendency of an inquiry '. The legislative history of sub section (3) of Section 3 and Section 8 A inserted simultaneously by amendment of the Act shows their interrelation and the object of enacting Section 8 A is to clarity that the inquiry is not required to recommence or be interrupted by reason of the filling of any vacancy or decrease in the number of members of the Commission. Section 8 A along with Sections 8 B and 8 C inserted simultaneously by amendment in the principal Act relate to the procedure of the Commission and were inserted to provide for specific situations while Section 8 contains the general power of the Commission to regulate its own procedure. The real question for decision in the present case is: Whether the appropriate Government after constituting the Commission under Section 3 of the Act is empowered to reconstitute the Commission substituting another person as the sole member in place of the initial appointee? In substance, it is this power that the State Government claims to have exercised in the present case and is attempted to be justified by the argument advanced by Shri Shanti Bhushan to support the appointment first of Justice G.G. Sohani and then of Justice Kamlakar Choubey in place of Justice S.T. Ramalingam. To recapitulate, the argument of Shri Shanti Bhushan is that the power of reconstituting the Commission in this manner is available to the State Government under Section 21 of the which can be invoked in aid of the power of the Government under Section 3 of the . Section 8 A of the is referred to by Shri Shanti Bhushan as an indication of the existence of this power in the State Government even though he does not rely on it as a source of this power. Shri Kapil Sibal, on the other hand, contends that the scheme of the enactment shows that the appropriate Government cannot interfere with the working of the Commission after its constitution except in the manner expressly provided in the Act and Section 7 is a clear indication that interference with the functioning of the Commission is not permissible in any other manner. Shri Sibal contends that Section 21 of the is not available to support the Government 's action in the present case. Shri Shanti Bhushan concedes that there is no express provision in the empowering the Government to replace or substitute the sole member of a Commission with another person during the continuance of the Commission, but he submits that this is implicit in the power to appoint a Commission and designate its personnel under sub sections (1) and (2) of Section 3 of the read with the power to amend or vary any notification available under Section 21 of the . Shri Shanti Bhushan also conceded that the aid of Section 21 of the is available only if the context and the scheme of the so permits. He submitted that the Government 's power to extend the time specified in the initial notification for completing the work of the Commission is not to be found in any express provision in the , but is exercised by amendment of the initial notification only under Section 21 of the . According to Shri Shanti Bhushan, the appointment of a Commission is under sub section (1) and it is under sub section (2) of Section 3 that the person constituting the Commission is appointed even though it may be a simultaneous process. The replacement of the member initially appointed to constitute the Commission, according to learned counsel, is by re exercise of the power under sub section (2) of Section 3. The submission is that the Commission appointed under sub section (1) of Section 3 continues while it may be reconstituted by replacement of the member which is done under sub section (2). In our opinion, the power of the Government to appoint a Commission of Inquiry and name the person or persons constituting it is in sub section (1) of Section 3 and is not an exercise divided between subsections (1) and (2) of Section 3 as suggested by Shri Shanti Bhushan. Sub section (2) merely confers the power in the Government to appoint a Commission consisting of one or more members and provides that if there be more than one member of the Commission, then one of them may be appointed Chairman of the Commission. lt is not as if sub section (1) deals with mere appointment of a Commission of Inquiry without clothing it with its personnel and the power to appoint the member/members thereof is to be found only in sub section (2). That apart, there is nothing in any of these provisions to suggest that the Government has the power to reconstitute the Commission after its appointment by replacing the existing sole member with another person, Sub section (3) deals expressly with the Government 's power to fill any vacancy which may have arisen since the constitution of the Commission. The question of replacement of a member appointed initially is obviously beyond its scope. Sub section (3) inserted by amendment in Section 3 of the is a clear contra indication to the construction suggested by Shri Shanti Bhushan of sub sections (1) and (2) of Section 3 in the scheme of the Act. If the construction suggested by Shri Shanti Bhushan be correct, there was no need to make this amendment and insert sub section (3) which is a clear indication of the limit and extent to which the power of reconstitution of the Commission can be exercised by the Government after the Commission has been constituted. As the Law Commission 's Report itself indicates, this amendment became necessary to provide expressly in the statute for the Government 's power to till any vacancy after the initial constitution Whatever may have been the position prior to insertion of sub section (3) in Section 3, there can be no doubt that after its insertion, the scheme of the enactment excludes the power of reconstitution of the Commission in a manner not expressly provided therein. In view of sub section (3), it is not permissible to construe sub sections (1) and (2) of Section 3 in any other manner. If the scheme of the enactment gave such wide power to reconstitute a Commission after its initial constitution and permitted replacement or substitution of the existing member of a Commission with another person sans sub section (3) of Section 3, the power to fill any vacancy was not required to be provided separately ahat the Commission functions as an independent a gency free from any govern mental control after its constitution. It follows that after appointment the tenure of members of the commission should not be dependent on the will of the Government to secure their independence. A body not so independent is not likely to enjoy the requisite public confidence and may not attract men of quality and self respect. In such a situation the object of the enactment would be frustrated. [302 H. 303 A C] Minerva Mills Ltd. v, There Workers, ; distinguished. The State of Bihar vs D. N. Ganguly.; , , relied on. in Rangachari and Soshit Karamchari respectively reiterated in State of Punjab vs Hira Lal, ; , and Comptroller and Auditor General of India, Gian Prakash vs K.S. Jagannathan & Anr., ; In Rangachari it was held, 'The condition precedent may refer either to numerical inadequacy of representation in the services or even to the qualitative inadequacy of representation '.3 In the context the expression, 'adequately represented imports consideration of size as well as values, numbers as well as the nature of appointments '.4 But, inadequacy of representation is creative of jurisdiction only. It is not measure of backwardness. That is why less rigorous test or lesser marks and competition amongst the class of unequals at the point of entry has been approved both this Court and American courts. But a student admitted to a medical or engineering college is further not granted relaxation in passing the examinations. In fact this has been explained as valid basis in American decisions furnishing justification for racial admissions on lower percentage. Rationale appears to be that every one irrespective of the source of entry being subjected to same test neither efficiency is effected nor the equality is disturbed. After entry in service the class is one that of employees. If the social scar of backwardness is carried even, thereafter the entire object of equalisation stands frustrated. No further classification amongst employees would be justified as is not done amongst students. Constitutional, legal or moral basis for protective discrimination is redressing identifiable backward class for historical injustice. That is they are today, what they would not have been but for the victimisation. Remedytuting the Comm ission. The enactment, therefore, also provides in Section 7 the only situation in which the Government can rescind the notification issued under Section 3 constituting the Commission. To the extent to which express provision is made in the enactment, it is common ground, Section 21 of the cannot be invoked. These aspects have to be borne in mind while considering the tenability of the submission made by Shri Shanti Bhushan with the aid of Section 21 of the . It is common ground before us that Section 21 of the can be invoked only if, and to the extent, if any, the context and the scheme of the so permits. The general power in Section 21 of the is to add to, amend, vary or rescind any notification etc. In the context of reconstitution of the Commission, the power to fill any vacancy in the office of a member of the Commission is expressly provided in sub section (3) of Section 3 of the Commission of Inquiry Act. Similarly, the power to discontinue the existence of the Commission when it becomes unnecessary can be exercised by issue of a notification in accordance with Section 7 of the Act which results in rescinding the notification issued under Section 3 constituting the Commission. Thus, the power to rescind any notification conferred generally in Section 21 of the is clearly inapplicable in the scheme to the which expressly provides for the exercise of this power in relation to a Commission constituted under Section of the Act. The only material remaining general powers in Section 21 of the are the power to `amend ' or `vary ' any notification. The extent to which the constitution of the Commission can be amended or varied by filling any vacancy in the office of a member as provided in the is also obviously excluded from the purview of Section 21 of the which cannot be invoked for this purpose. The surviving question, therefore, is: Whether there is power to reconstitute the Commission by replacement or substitution of the existing member, though not provided in the by invoking the residuary power to amend or vary any notification under Section 21 of the ? In the first place, in a case like the present where the scheme of the does provide for amendment and variation of the notification issued under Section 3 for the purpose of reconstitution of the Commission in the manner indicated, even that power to amend or vary any notification by virtue of Section 21 of the must be taken as excluded by clear implication in the sphere of reconstitution of the Commission. Moreover, the power to amend or vary cannot include the power to replace or substitute the existing composition of the Commission with an entirely new composition. Shri Shanti Bhushan submitted that the time specified in the initial notification for completing the task of the Commission is enlarged by subsequent notification and this is done in exercise of the general power available under the to extend time. This submission does not support the argumentof learned counsel that the general power under Section 21 of the is also available to reconstitute the Commission by replacement or substitution of its sole member. The aid of Section 21 of the general Clauses Act for enlargement of time does not conflict with the context or scheme of the . The context as well as the scheme of the clearly indicate that Section 21 of the cannot be invoked to enlarge the Government 's power to reconstitute the Commission constituted under Section 3 of the Act in a manner other than that expressly provided in the . There being no express power given by the to the appropriate Government to reconstitute the Commission of Inquiry constituted under Section 3 of the Act by replacement or substitution of its sole member and the existence of any such power being negatived by clear implication, no such power can be exercised by the appropriate Government. The scheme of the enactment is that the appropriate Government should have no control over the Commission after its constitution under Section 3 of the Act except for the purpose of filling any vacancy which may have arisen in the office of a member of the Commission apart from winding up the Commission by issuance of a notification under Section 7 of the Act if the continued existence of the Commission is considered unnecessary. The vacancy in the office of a member of the Commission may arise for several reasons, including resignation by the member, when the Government 's power to fill the vacancy under Section 3(3) of the Act can be exercised. Even though a case of implied resignation creating an implied vacancy was set up by the State of Madhya Pradesh before the High Court, that stand was rightly abandoned before us by Shri Shanti Bhushan. We have no doubt that the rule of construction embodied in Section 21 of the cannot apply to the provisions of the relating to reconstitution of a Commission constituted thereunder since the subject matter, context and effect of such provisions are inconsistent with such application. Moreover, the construction made by us best harmonises with the subject of the enactment and the object of the legislation. Restoring public confidence by constituting a Commission of Inquiry to investigate into a 'definite matter of public importance ' is the purpose of such an exercise. It is, therefore, the prime need that the Commission functions as an independent agency free from any governmental control after its constitution. It follows that after appointment, the tenure of members of the commission should not be dependent on the will of the Government, to secure their independence. A body not so independent is not likely to enjoy the requisite public confidence any may not attract men of quality and self respect. In such a situation, the object of the enactment would be frustrated. This aspect suggests that the construction made by us, apart from harmonising the provisions of the statute, also promotes the object of the enactment while the construction suggested by the appellant frustrates both. Shri Shanti Bhushan placed reliance on the decision in Minerva Mills Ltd. vs Their Workers, 1 19541 S.C.R. 465. In that decision, the power of the appropriate Government under Section 7 of the to constitute an industrial tribunal for a fixed period of time and to constitute a new tribunal on the expiry of that period to hear and dispose of references made to the previous tribunal which had not been disposed of by that tribunal was upheld. Shri Shanti Bhushan contended that the observations made in that decision are not confined to the exercise of that power on the expiry of the tenure of the tribunal first constituted. It was clearly indicated in that decision that 'when the life of the first tribunal automatically came to end by efflux of time, no question of vacancy in the office really arose and, therefore, it was not a case falling under sub clause (2) of Section 8 but the situation that arose fell within the ambit of Section 7 '. The observations made in that decision have to be read in the context of the facts of that case. That decision is clearly distinguishable. On the other hand, Shri Kapil Sibal placed reliance on The State of Bihar vs D.N. Ganguly & Others, [1959] S.C.R. 1191. This decision also related to the reference of a dispute under the . It was pointed out that 'it was well settled that the rule of construction embodied in Section 21 of the can apply to the G provisions of a statute only where the subject matter, context, and effect of such provisions are in no way inconsistent with such application . On this basis it was held that it did not apply to Section 10(1) of the . On a construction of Section 10(1 ) of the , it was held that it does not confer on the appropriate Government the power to cancel or supersede a reference made thereunder in respect of an industrial dispute pending adjudication by the tribunal constituted for that purpose. Reliance placed on Section 21 of the on behalf of the Government to invoke such a power by necessary implication was clearly negatived. The decision of this Court in Minerva Mills Ltd. (supra) was distinguished as we have already indicated. In our opinion, the ratio in D.N. Ganguly (supra) supports the view taken by us in the present case that Section 21 of the cannot be invoked to support the impugned action of the State of Madhya Pradesh as contended by Shri Shanti Bhushan. The construction suggested by Sri Shanti Bhushan is inconsistent with the provisions and the scheme of the and must, therefore, be rejected. Admittedly, the power under Section 3(3) of the was not available to the State of Madhya Pradesh in the facts of the present case to appoint any other person replacing Justice S.T. Ramalingam as the sole member of the Commission of Inquiry. The power under sub sections (1) and (2) of Section 3 read with Section 21 of the or even Sections 14 or 16 thereof was also not available for this purpose, for the reasons given earlier. Accordingly, the notification dated 10.7.1991 appointing Justice G.G. Sohani and the notification dated 9.1.1992 appointing Justice Kamlakar Choubey were both invalid. It is not unlikely that Justice G.G. Sohani may have resigned forming the same opinion when his appointment was challenged. However, the State of Madhya Pradesh did not choose to reflect and reconsider the legality of its action in spite of the resignation of Justice G.G. Sohani and it continued to move in the wrong direction by making another invalid appointment of Justice Kamlakar Choubey. Consequently, these appeals are dismissed and the impugned judgment of the High Court quashing the notifications dated 10.7.1991 and 9.1.1992 is sustained for the aforesaid reasons given by us. The State of Madhya Pradesh shall, in view of the retirement of Justice S.T. Ramalingam as a Judge of the Madras High Court in the meanwhile, take necessary action to finalise his terms and conditions in accordance with the guidelines issued by the Government of India in this behalf. Such action be taken promptly to avoid any undue delay in completion of the Commission 's task. No costs. N.P.V. Appeal dismissed.

: Section 21 Power to add to amend or vary or rescind any notification Whether could be invoked to reconstitute the Commission of Inquiry by replacement of substitution of the existing members, though not provided in the scheme of the Act. Pursuant to the direction given by the State High Court, the appellant State by a Notification dated 24.2.1989, constituted a Commission of Inquiry under the (Commission of Inquiry) Act, 1952, to investigate into the affairs of the children 's Welfare Society, of which Respondent No.1 was an office bearer and appointed a sitting Judge of the High Court of another State as the sole member of the Commission. The inquiry was to be completed within a period of six months, but the period was extended from time to time. Meanwhile, the sole member became due to retire as a Judge of the High Court on attaining the age of superannuation and, therefore, he wrote a letter dated 19 3.1991 to the Chief Secretary of the appellant State drawing attention to this fact and requesting that the necessary modalities be worked out well in time for his continuance as Commission of Inquiry, in the light of the guidelines issued by the Government of India for the benefits and emoluments payable to a Judge on his retirement in such a situation. The Judge also mentioned some of the facilities he expected, to which be would not be entitled from the State Government on his retirement. The Chief Secretary sent a reply dated 9.4.1991 to the Judge promising to give an early reply and requesting him to continue with the inquiry so that the same could be completed early. However, without further reference to the Judge, the State Government issued a notification dated 10.7.1991, replacing him by a retired Chief Justice of another High Court. This appointment was challenged before the High Court, which, by an interim order dated 30.7.1991 stayed the operation of the notification. During the pendency of the writ petition, the new member tendered his resignation. Consequently, the High Court dismissed the writ petition as infructuous on 5.9.1991. Thereafter, the Chief Secretary to the Government sent a letter dated 12.9.1991 to the original appointee expressing the State Government 's inability to accept the terms and conditions of the Judge, and informing him of the appointment of retired Chief Justice of another High Court, who had since resigned. Thereafter the State Government issued another notification dated 9.1.1992 appointing a retired Judge of another High Court as a single member of the Commission. This was challenged before the High Court on the ground that during the continuance as the single member of the Commission of Inquiry of the original appointee, there was no power in the State Government to replace him, and there being no vacancy in the office, the power under Section 3(3) of the , which was available only to fill any vacancy, could not be invoked and there was no other source of power available to the State for the purpose and, therefore, the appointment first of the retired Chief Justice and then, on his refusal, of another retired Judge, being without any authority, was invalid. The High Court allowed the writ petitions and quashed the notification dated 9.1.1992. It held that there was no vacancy in the office of the single member of the Commission to empower the State Government to fill the vacancy under Section 3(3) of the . It also held there was neither any valid reason or ground nor any power available in the State Government to replace the original member by another person as was purported to be done by first appointing one member and then another member, both of whom were also retired Judges . In the appeals, by special leave, on behalf of the State Government, it was contended that aid of Section 21 of the was available to the State Government for exercising its powers under the 'to add, to amend or vary ' the notification issued initially appointing the sitting Judge as the sole member of the Commission which enabled the State Government to reconstitute the Commission by replacing that Judge with any other person in the circumstances of the case, though the power to rescind any notification was not available, since this was provided in Section 7 of the . Reference was also made to Section 8 A of the to support the Contention that Government 's power to reconstitute the Commission even during the availability of the person so appointed even though it was submitted that Section 8 A was not the source of power for reconstitution of the Commission. It was also contended that the Government 's power to extend the time specified in the initial notification for Completing the work of the Commission was not to be found in any express provision in the . but was exercised by amendment of the initial notification only under Section 21 of the . and that though there was no express provision in the empowering the Government to replace or substitute the sole member of a Commission with another person during the continuance of the Commission. this was implicit in the power to appoint a Commission and designate its personnel under Sub sections (1) and (2) of Section 3 of the read the power to amend or Vary any notification available under Section 21 of the . It Was submitted on behalf of the petitioner in the Public Interest Petition that Sections 14 and 16 of the were also available to support the notifications under challenge issued by the State Government. On behalf of respondent No.1 it was submitted that the scheme of the did not permit invoking Section 21 of the except for enlargement of the period for completion of the inquiry by amendment of the notification only to that extent since the only situations in which reconstitution of the Commissions could be made were provided in the itself, that Section 8 A of the was enacted for an entirely different purpose namely to ensure continuity of the Commission 's work and had nothing to do with its reconstitutions that the scheme of the enactment showed that the appropriate Government could not interfere provide expressly in the statute for the Government 's power to fill any vacancy after the initial constitution After its insertion the scheme of the enactment excludes the power of reconstitution of the Commission in a manner not expressly provided therein. In view of sub section (3), it is not permissible to construe sub sections (1) and (2) of Section 3 in any other manner. If the scheme of the enactment gave such wide power to reconstitute a Commission after its initial constitution and permitted replacement or substitution of the existing member of a Commission with another person sans sub section (3) of Section 3 the power to fill any vacancy was not required to be provided separately and expressly. It is also significant that in the amendment so made the power is limited only to filling any vacancy without conferring any power to reconstitute the Commission by replacement or substitution of the existing member which indicates that no such power of replacement or substitution of the existing member was contemplated in the scheme of the Act or intended to be conferred on the Government even after the amendment. [298 H: 299 A C; 300 A] 2 7. Section 8 A was simultaneously inserted by amendment to provide that the procedure does not require interruption of the inquiry by reason of change in the constitution of the Commission due to filling any vacancy or decrease in the number of members. The expression 'or by any other reason ' in sub section (2) of Section 8 A cannot be widened to include the reason of reconstitution of the Commission by replacement or substitution of the existing member since that power is not available to the Government in the scheme of the Act and, therefore. this expression in Section 8 A(2) cannot be read as conferring any additional power or giving any such indication. The expression or by any other reason following `vacancy having been filled ' in Section 8 A(2) must therefore. mean any other reason such as decrease in the number of members when the initial number is more than one and the vacancy remains unfilled. It cannot mean substitution of the existing member with another person, since no such power exists. Section 8 A(2) is not the source of an additional power, but merely an indication of the power to reconstitute the Commission. The indication is of the power of reconstitution being available only in the manner indicated. The only situation in which the Government can rescind the notification issued under Section 3 constituting the Commission is laid down in Section 7 the Act, which provides that the Commission would cease to exist when the appropriate Government by notification with the working of the Commission after its constitution except in the manner expressly provided in the Act and Section 7 was a clear indication that interference with the functioning of the Commission was not permissible in any other manner, and, therefore, Section 21 of the was not available to support the Government 's action in the instant case. Dismissing the appeal, this court, HELD: 1. The power under Section 3(3) of the Commissions of the Inquiry Act, 1952, was not available to the State Government in the facts of the instant case to appoint any other person replacing the original member as the sole member of the Commission of Inquiry. The power under sub sections (1) of (2) of Section 3 read with Section 21 of the or even Section 14 or Section 16 thereof was also not available for the purpose. Accordingly, the notifications dated 10.7.1991 and 9.1.1992 issued by the State Government appointing the retired Chief justice and another retired Judge were both invalid. The high Court was, therefore, right in quashing the notifications dated 10.7.1991 and 9.1.1992. The appellant state should, in view of the retirement of the original member as a judge of the High Court in the meanwhile, take necessary action to finalise his terms and conditions in accordance with the guidelines issued by the Government of India in this behalf. Such action should be taken promptly to avoid any undue delay in completion of the commission 's task. [304 C F] 2.1. The power of the Government to appoint a Commission of Inquiry and name the person or persons constituting it is in sub section (1) of Section 3. It is not as if sub section (1) deals with the mere appointment of the Commission of Inquiry without clothing it with its personnel and the power to appoint the member/members thereof is to be found only in sub section (20 That apart, there is nothing in any of these provisions to suggest that the Government has the power to reconstitute the commission after its appointment by replacing the existing sole member with another person. Sub Section (3) of Section 3, inserted by the Amendment Act of 1971, deals expressly with the Government 's power to fill any vacancy which may have arisen since the constitution of the Commission. The question of replacement of a member appointed initially is beyond its scope. The insertion of sub section (3) became necessary to declares that 'the continued existence of ' the Commission is unnecessary '. The scheme of the enactment is that the appropriate Government should have no control over the Commission after its constitution under Section 3 of the Act except for the purpose of filling any vacancy which may have arisen in the office of a member of the Commission apart from winding up the Commission by issuance of a notification under section 7 of the Act if the continued existence of the Commission is considered unnecessary. The vacancy in the office of a member of the Commission may arise for several reasons, including resignation by the member, when the Government power to fill the vacancy under Section 3(3) of the Act can be exercised. [300 A E & G] 2.4. The context as well as the scheme of the clearly indicate that Section 21 of the General clauses Act 1897 cannot be invoked to enlarge the Government 'section power to reconstitute the Commission constituted under Section 3 of the Act in a manner other that that expressly provided in the . There being no express power given by the Commissions of inquiry Act to the appropriate Government to reconstitute the Commission of Inquiry constituted under Section 3 of the Act by replacement or substitution of its sole member and the existence of any such power being negatived by clear implication, no such power can be exercised by the appropriate Government. [302 C F] 2.5. Section 21 of the can be invoked only if, and to the extent. if any the context and the scheme of the so permits. The general power in Section 21 of the is 'to add, to amend vary or rescind any notifications ' etc. In the context of reconstitution of the Commission the power to fill any vacancy in the office of a manner of the Commission is expressly provided in sub section (3) of Section 3 of the Similarly the power to discontinue the existence of the Commission when it becomes unnecessary can be exercised by issue of a notification in accordance with Section 7 of the Act which results in rescinding the notification issued under Section 3 constituting the Commission. Thus the power to rescind any notification conferred generally in Section 21 of the is Clearly inapplicable in the scheme of the Commissions of inquiry Act which expressly provides for the exercise of his power in relation to Commission constituted under Section 3 of the Act. The only other material general powers in Section 21 of the are the power to 'amend ' or vary any notification. The extent to which the constitution of the Commission can be amended or varied by filling any vacancy in the office of a member as provided in the is also obviously excluded from the purview of Section 21 of the which cannot be invoked for this purpose. In a case like the instant one where the scheme of the does provide for amendment and variation of the notification issued under Section 3 for the purpose of reconstitution of the Commission in the manner indicated even that power to amend or vary any notification by virtue of Section 21 of the must be taken as excluded by clear implication in the sphere of reconstitution of the Commission. Moreover, the power to amend or vary cannot include the power to replace or substitute the existing Composition of the Commission with an entirely new composition. The aid of Section 21 of the for enlargement of time does not conflict with the context or scheme of the Commissions of Inquiry Act.[301 A E] 2.6. The rule of Construction embodied in Section 21 of the cannot apply to the provisions of the relating to reconstitution of a Commission constituted there under since the Subject matter. context and effect of such provisions are inconsistent with such application. Moreover. this construction best harmonises with the subject of the enactment and the object of the legislation. Restoring public Confidence by constituting a Commission of Inquiry to investigate into a 'definite matter of public importance ' is the purpose of such an exercise. It is therefore, the prime need that the Commission functions as an independent agency free from any govern mental control after its constitution. It follows that after appointment the tenure of members of the commission should not be dependent on the will of the Government to secure their independence. A body not so independent is not likely to enjoy the requisite public confidence and may not attract men of quality and self respect. In such a situation the object of the enactment would be frustrated. [302 H. 303 A C] Minerva Mills Ltd. v, There Workers, ; distinguished. The State of Bihar vs D. N. Ganguly.; , , relied on.

minal Appeals Nos. 153, 155 and 172 of 1967. 139 Appeals by special leave from the judgment and order dated April 3, 1967 of the Bombay High Court in. Criminal Appeals Nos. 617, 621, 619 and 620 of 1965. A. section R. Chari, N. H. Hingorani and K. Hingorani, for appellant No. 1 (in Cr. A. No. 153 of 1967). N. H. Hingorani and K. Hingorani, for appellant No. 2 (in Cr. A. No. 153 of 1967). A. section R. Chari, and N. N. Keswani, for appellant (in Cr. A. No. 155 of 1967). W. section Barlingay and A. G. Ratnaparkhi, for the appellant (in Cr. A. No. 172 of 1967). M. section K. Sastri and section P. Nayar, for the respondent (in all the appeals). The Judgment of the Court was delivered by Dua, J. The four appellants in these three appeals by special leave were tried in the court of the Special judge for Greater Bombay on a charge of conspiracy punishable under section 120 B, I.P.C. Accused No. 1 (Shiv Kumar Lokumal Bhatia) was a godown clerk; accused No. 2 (Hargun Sunderdas Godeja) was the Senior Godown Keeper and accused No. 3 (Hundraj Harchomal Mangtani) was the Godown Superintendent at the General Motors Godown at T Shed, Sewri, Bombay, belonging to the Food Department of the Government of India. Accused No. 4 (Shankar Maruthi Phadtare) was a driver of Truck No. 2411. The allegation against them was that all these accused during the month of July, 1963 were parties to criminal conspiracy to commit criminal breach of trust in respect of 1060 bags of red wheat which were released from the ship section section Hudson on July 7, 1963 at Bombay for storing them in the G M.2 Godown at Sewri. In pursuance of this conspiracy, it was alleged, they had dishonestly and fraudulently misappropriated or converted to their own use 80 bags of red wheat out of 1060 bags released from the ship. Accused Nos. 1, 2 and 3 were also charged under section 409 read with section 34, I.P.C., section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act. 1947 read with section 34, I.P.C., section 5(2) read with section 5(1) (c) of the Prevention of Corruption Act read with section 34, I.P.C. and section 477 A read with section 34, I.P.C. The learned Special Judge on a consideration of the evidence on the record held that the prosecution has succeeded in proving conspiracy on the part of all the four accused to commit 140 criminal breach of trust in respect of the 80 bags offered wheat Accused Nos. 1, 2 and 3 were also held to have gained pecuniary advantage and further to have altered the records of the T Shed. Holding the offences to be serious in view of the general shortage of foodgrains in the country the court felt that the case called for deterrent sentences. Under section 120 B I.P.C. all the accused were sentenced,, to rigorous imprisonment for four years. Accused Nos. 1, 2 and 3 were in addition held guilty under section 409, I.P.C. read with section 34, I.P.C. and under section 5 (2) read with section 5 (1) (c) of the Prevention of Corruption Act read with section 34, I.P.C., under section 5(2) read with section 5(1)(d) of Prevention of Corruption Act read with section 34, I.P.C. and also under section 477 A read with section 34, I.P.C. and sentenced to rigorous imprisonment for four years on each of these four counts,. the sentences to be concurrent. On appeal the High Court confirmed the order of the trial court as against accused No. 4 and dismissed his appeal. The conviction of accused No. 1 under section 5(2) read with section 5(1) (c) of the Prevention of Corruption Act read with section 34, I.P.C. was set aside. But his conviction and sentence under section 120 B, I.P.C. and under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act read with section 34, I.P.C. as also under section 477 A read with section 34, I.P.C. was confirmed. His conviction under section 409 read with section 34, I.P.C. was altered to one under section 409, I.P.C. but without altering the sentence. The convictions of accused Nos. 2 and 3 under section 409, I.P.C. read with section 34, I.P.C. as also under section 5 (2) read with section 5 (1 ) (c) of the Prevention of Corruption Act read with section 34, I.P.C. were set aside but their conviction and sentence under section 120 B, I.P.C. and under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act read with section 34, I.P.C. was confirmed. In this Court Shri Chari questioned the appellants convic tion on the broad argument, which was indeed the main plank of his challenge against the impugned order, that there was great confusion in the matter of storage of stocks of the foodgrains in the T Shed and there was complete want of regularity and considerable inefficiency in the matter of keeping the records of the arrivals and storage of the stocks with the result that it would be highly unsafe to rely on the evidence relating to the records of the stocks in the T Shed, for holding the appellants guilty of the criminal offences charged. The learned counsel appearing on behalf of the other appellants, while generally adopting Shri Chari 's arguments, supplemented them by reference to the distinguishing features of the case against their indi vidual clients. 141 The counsel in the course of their arguments emphasised that the prosecution, in order to prove the negative, has the difficult task of affirmatively establishing by unimpeachable evidence that 80 bags which were the subject matter of the charge were in fact not received in the T Shed. The prosecution must, said the counsel, bring the charge home to every accused person beyond reasonable doubt. The submission as developed by all the counsel representing the appellants did seem on first impression to be attractive but on a deeper probe we consider it to be unacceptable. It is no doubt true that the onus on the prosecution is of a negative character and also that the failure on the part of the accused to give evidence on the question as to when, where and to whom. the controversial 80 bags were delivered at the point of unloading a fact on which the driver of the truck and those whose duty it was to receive the goods at the T Shed could give the best and the most direct information cannot under our law give rise to any presumption against them. The criminal courts holding trial under the Code of Criminal Procedure have accordingly to bear in mind the provisions of section 342 A of the Code and to take anxious care that in appreciating the evidence on the record and the circumstances of the case, their mind is not influenced by such failure on the part of the accused. But that does not mean that such negative onus is not capable of being discharged by appropriate circumstantial evidence. If the circumstantial evidence which is trustworthy and which with unerring certainty establishes facts and circumstances the combination of which, on reasonable hypothesis, does not admit of any safe inference other than that of the guilt of the accused then there can hardly be any escape for him and the Court can confidently record a verdict of guilty beyond reasonable doubt. The court would, of course, be well advised in case of circumstantial evidence to be watchful and to ensure that conjectures or suspicions do not take the place of legal proof. The chain of evidence to sustain a conviction must be complete and admit of no reason able conclusion consistent with the innocence of the accused. In the present case it is fully proved and is indeed ,not disputed on behalf of the accused that truck No. 2411 with the 80 bags of red wheat did leave the dock and did pass the yellow gate which is the check point where a register is kept by the Regional Director of Food. In this Register entries are made when a truck leaves the yellow gate. The truck in question left the yellow gate at 1 1.20 a.m. on the second trip as deposed by Parmar, (P.W.8). And this is not disputed. According to the accused the 80 bags in question were actually delivered at the appropriate place at the T Shed and the truck chits duly given to the truck driver in token of their receipt and indeed D.W. 1 war, 142 produced by accused No. 4 to prove the actual delivery. The prosecution case, on the other hand, is that those bags were not, delivered at the T Shed but were misappropriated. There is no dispute about the procedure of delivery at the T Shed of the goods brought from the dock. This procedure in regard to the wheat brought on February 7, 1963 may briefly be stated. The foodgrains consisting of 1060 bags of red wheat had arrived by section section Hudson at the Alexandra docks. The trucks were loaded with the wheat bags to be taken to the T Shed, Sewri. Four truck chits were prepared at the docks for each truck out of which two were given to the truck driver concerned. The driver had to give the truck chits at the godown at the time of the delivery of the bags. One such chit would be returned to him after endorsing acknowledgment of the receipt of the bags, the other chit being retained at the godown. The one given to the driver was meant to authorise the receipt of hire charges from the food department. At the godown, according to the general pro cedure, the driver of the trucks had to give the truck chits to one of the godown clerks there. A batch of gangmen under a particular Mukaddam had generally to unload the goods from the truck allotted to him and no Mukaddam with his gangmen could unload the goods from a truck which was not allotted to him for the purpose. The gangmen had, therefore, to unload the goods as instructed by the clerk and the senior godown keeper. After unloading the bags cooly voucher was to be prepared and the daily diary maintained at the godown written: the kutcha chit was prepared by the godown keeper after the unloading and weighment of the goods. Only 10% of the bags were as a matter of practice to be actually weighed. The truck movement chart exhibit 10 shows the order in which the various trucks left the dock for the T Shed on July 7, 1963 as also their contents and the truck chit numbers. Truck No. 2411 with 80 bags of red wheat figures twice in this document but it is not disputed that trip which concerns us is entered at sl. No. 9. Truck chit number of this trip is 69 and the truck left the dock at 11. 15 hours. The truck at serial No. 8 (immediately preceding the trip in question) in this document is No. 2248 with 80 bags and its chit No. is 68. This truck left the dock at 11 a.m. The truck at sl. No. 10 (immediately next after the one in dispute) is 1477 with 65 bags of red wheat whose truck chit No. is 72. This truck left the dock at 11.45 hrs. There were in all 14 trips on July 7, and indeed, this is also established by oral evidence and is not denied on behalf of the accused. We may now turn to the tally sheet for July 7, The first thing to be noticed in this document is that it only shows the arrival of 13 trucks. In other words accord 143 ing to this document there were only 13 trips of the trucks though the Truck Movement Order exhibit 10 clearly shows that there were 14 trips and on behalf of the accused also it was asserted that there were 14 trips. We find in Exhibit 41 that after sl. No. 8 which relates to truck No. 2488 with its chit No. 68 and which arrived at the T Shed at 11.58 a.m there is recorded at serial No. 9 the arrival of truck No. 7866 with chit No. 70 and at sl. No. 10 the arrival of truck No. 1477 with chit No. 72 and at sl. No. 11 the arrival of truck No. 8769 with chit No. 71. These three trucks are shown to have arrived at the unloading point at 1. 15 p.m. It was explained at the bar that from 12 noon to 1 p.m. no work was done, it being lunch interval. It has been so stated by P. section Shinde, Assistant Director, Vigilance Branch, as, P.W. 18. Items at sl. 12 and 13 relate to trucks Nos. 2752 .and 1289 with their respective chit nos. 73 and 74. It is thus clear that chit No. 69 is missing in this sheet. Bapu T. Pingle produced as D.W. 1 claims to have been in truck No. 2411 as a wamer with the driver, accused No. 4, on July 7, 1963. According to him this truck made two trips on that day between the dock and the T Shed and on the second trip the other wamer by name Yashwant had taken the truck chit from the clerk concerned after the same was duly signed. This witness has deposed about the procedure at the godown which is the same as was suggested on behalf of the prosecution. The man at the godown used to direct the drivers to the place of unloading the goods and, to quote his own words, "unless an entry was made in this Book (Tally Book) we were not allowed to go ahead at all. " So, according to his evidence, unless an entry is made in the Tally Book the truck could not proceed to the unloading point to deliver the goods brought from the dock. Exhibits 10 and 41 in our view affirmatively prove that 80 bags of red wheat carried by truck No. 241 1 on July 7, 1963 on the second trip did not reach the T Shed at all. This finds support, even from the testimony of D.W. 1. In view of this documentary evidence with which no fault has been found the evidence regarding irregularities in the record of stock at the T Shed loses all importance. It may be pointed out that July 7, 1963 was a Sunday and as deposed by Parmeshwar D. Menon (P.W. 1) on that day all gates were not opened. But this . is not all. Though in the tally chits time of the arrival of the truck at the unloading point is given in the truck chit in question that time is not shown. According to the evidence of Roque (P.W. 6) on the reverse of all truck chits Exts. 15 to 26 and Exts. li A and 11 B entries are made in the handwriting of accused No. 1. In Exhibits 15 to 26 in addition to the arrival and denarture of the trucks, progressive totals at the back of each of them is also stated, but in exhibit ll B there is no progressive total and in exhibit 11 A there is no signature of accused No. 1 144 though the progressive total is mentioned as 240. Exhibuit 11 B, it may be pointed out, appertains to the trip by truck No. 2411 on July 7, 1963. Shri Shinde, (P.W. 18) who was Assistant Director, Vigilance Branch at the relevant time has deposed that according to the weighment register exhibit 69 only 98 bags of S.S. Hudson were weighed and this was 10% of 980 bags. This document bears the signatures of accused No. 1. Exhibit 41, carbon copy of the Arrival Tally sheet which was sent to the head office for showing if there was any detention of trucks in the godown ' does not, as already noticed contain any entry in respect of the truck in question. The reverse of exhibit 41 is not printed in the printed paper book but we have checked up from the original record that witness Shinde is right. Non inclusion of the entry of the truck in question in exhibit 41, is in our view, very material. In exhibit 53 the daily Arrival Tally book for July 7, 1963 the entry at sl. No. 68 shows departure of the truck in question at 12.15 afternoon whereas in exhibit 41 it is ,shown as at 1. 15 p.m. and in exhibit 11 B at 12.15 afternoon. This, according to P.W. 18, was designed to show that the truck was ,unloaded during the recess period which, according to evidence ,on the record, was not done. The explanation of accused No. 1 is that on July 7, 1963 he was not feeling well though he attended the office. He had to get chits from the warners and count the number of bags in the truck and order the labourers to unload them from the trucks. The suggestion appears to be that due to these multifarious duties and due to his being unwell he had perforce to enter the truck chits in the tally books only when he could get time and meanwhile he had no other alternative but to put the unentered truck chits in his pocket. According to him, it was on July 10, 1963 when he was giving his clothes to the washerman that he discovered, the solitary chit in question left by mistake in his pocket. The explanation is far from satisfactory and we are not impressed by it. It may in this connection be pointed out that July 7, 1963 was a Sunday and the three accused persons were specially called for receiving the grain that had arrived by the two steamers. The amount of work to be done on that day can thus scarcely be ,considered to be excessive. And then the fact that only one solitary truck chit relating to the 80 bags in question should happen to have remained in the pocket of accused No. 1 to be discovered only on July 10, 1963 is also not without some significance. We agree with the High Court in holdings, this explanation to be unconvincing and that the 80 bags in question were in fact not received at the T Shed on July 7, 1963. In 145 our opinion, the material on the record to which our attention has been invited fully supports the conclusions of the High Court. We may appropriately repeat what has often been pointed out by this Court that under article 136 of the Constitution this Court does not normally proceed to review the evidence in criminal cases unless the trial is vitiated by some illegality or material irregularity of procedure or the trial is held in violation of rules of natural justice resulting in unfairness to the accused or the judgment or order under appeal has resulted in grave miscarriage of justice. This Article reserves to this Court a special discretionary power to interfere in suitable cases when for special reasons it considers that interference is called for in the larger interests of justice. As observed by this Court in Chidda Singh vs The State of Madhya Pradesh(1) this Article cannot be so construed as to confer on a party a right of appeal where none exists under the law. We, however, undertook in this case to go through the evidence, to which our attention was invited to see whether or not the conclusions of the High Court are insupportable. We are not persuaded to hold that in this case there is any cogent ground for interference with those conclusions. These appeals according fail and are dismissed. V.P.S. Appeals dismissed. (1) Crl. 125 of 1967 decided on 12th January, 1968.

The appellants were charged with the offences of criminal conspiracy and criminal breach of trust in respect of 80 bags of wheat. They were ,convicted by the High Court for various offences under the Penal Code and the Prevention of Corruption Act. The evidence disclosed that there were some irregularities in the matter of keeping the records relating to storage of stocks at the storage sheds. It was therefore contended in .appeal by special leave, to this Court, that the evidence should be reviewed to see if the prosecution had established by unimpeachable evidence that the 80 bags were in fact not received at the storage shed and, that no presumption should be drawn against the appellants for their failure to give evidence as to where and to whom the bags were delivered. HELD : Non appearance of an accused as a witness in his own defence does not give rise to any presumption against him. [141 C] HELD, also : Negative onus can also be discharged by circumstantial evidence if it is trustworthy and with unerring certainty establishes facts and circumstances, the combined effect of which leads to the only safe inference of guilt. The court has, however, to be watchful to ensure that conjectures or suspicions do not take the place of proof. The chain ,of circumstantial evidence must be complete and admit of no reasonable conclusion consistent with the innocence of the accused. [141 E F] HELD further : under article 136 this Court does not normally proceed to review the evidence in criminal cases unless the trial is vitiated by some illegality or material irregularity of procedure or the trial is held in violation of rules of natural justice resulting in unfairness to the accused or the judgment or order under appeal has resulted in grave miscarriage of justice. This Article reserves to this Court a special discretionary power to interfere in suitable cases when for special reasons it considers that interference is called for in the larger interests of justice. [145 A C] HELD further : This Article cannot be so construed as to confer ,on a party right of appeal where none exists under the law. [145 C] In the present case there were irregularities in the storage records and the evidence was looked into see if the charge as framed was proved. [145 C D] [An examination of the entire evidence, oral and documentary, however, showed, that there was enough evidence to support the conviction and that the irregularities were unimportant.] [145 A] Chidda Singh vs State of Madhya Pradesh, Cr. A. No. 125 of 1967 dt. 12 1 1968, referred to.

Appeal No. 226 of 1960. Appeal from the judgment and decree dated February 2, 1956, of the Allahabad High Court in Special Appeal No. 158 of 1954. M.C. Setalvad, Attorney General for India, Veda Vyasa, R. K. Garg, section C. Agarwal, Shiv Sastri and K. K. Jain, for the appellant. S.T. Desai, K. section Hajela and C. P. Lal, for respondent No. 1. C.K. Daphtary, Solicitor General for India, Radhy Lal Agarwal and P. C. Agarwal, for respondent No. 2. 764 1962. December 6. The Judgment of Das, Kapur, Sarkar and Hidayatullah, was a delivered by Hidayatullah, J., Dayal, J., delivered a separate judgment. HIDAYATULLAH.J., This is an appeal on a certificate granted by the High Court of Allahabad under Article 133 (1) (c) of the Constitution against its judgment and order dated February 2, 1956. By the judgment, under appeal, which was passed in a Letters Patent Appeal, the Divisional Bench confirmed the order of a learned single judge dismissing the petition of the appellant under article 226 of the Constitution. Seth Banarsi Das, the appellant before us, was the petitioner in the High Court and the two respondents before us, namely, the Cane Commissioner, U. P., Lucknow, and the Cane Marketing Society Ltd., Bijnor, were the opposite parties. The petition asked for a number of writs in the alternative, but its purport was to seek to prohibit the two respondents from continuing certain proceedings pending before the Cane Commissioner under rule 23 of the United Provinces Sugar Factories Control Rules, 1938. That rule provides for arbitration in disputes touching agreements entered into by sugar cane factories and cane growers for supply of sugar cane as laid down by the United Provinces Sugar Factories Control Act, 1938. The facts of the case are as follows: The appellant was at the material time the lessee and "Occupier" of Shiva Prasad Banarsi Das Sugar Mills, Bijnor, for five years from the crushing season 1946 47 to 1950 51. The second respondent is the Cane Marketing Society Ltd., Bijnor, which is a society registered under the Uttar Pradesh Co operative Societies Act, and one of its objects is to supply sugar cane grown by its members to the sugar mills. Before the control of 765 sugar cane, cane growers, whether they belonged to a co operative society or not, sold sugar cane directly to the factories and made Supplies from any area as it suited them. The United Provinces Sugar Factories Control Act was passed for the purpose of licensing of sugar factories and for regulating the supply of sugar cane intended for use in such factories and the price at which it may be purchased and for such other matters as may be incidental thereto. The broad outline of the Act and the rules framed thereunder may be given here. Under the Act the control of sugar cane grown in the State was vested in an officer known as the cane Commissioner and Advisory Committees and Sugar Control Board were to be appointed to advise upon and effectuate control of sugar and sugar cane. There was a scheme for licensing of factories with which we are not concerned in this case. Chapter IV of the Act made provision for regulating the purchase of sugar cane. Under section 14, the State Government could require the "Occupier ' of any factory to submit to 'the Cane Commissioner an estimate in the prescribed form and manner of the quantity of sugar cane which would be required in his factory during a crushing season. This estimate was examined by the Cane Commissioner who, after consulting the Advisory Committee in that area, published it with such modifications, if any, as he. thought fit to make. Under section 15 the Cane Commissioner, in consultation with the Advisory Committee (if any) and the ,Occupier ' of the factory, could issue an order declaring an area to be 'a reserved area ' for the purpose of supply of sugar 'cane to a particular factory. Section 18 then provided as follows "18.Purchase of cane in reserved area. (1) A cane grower or a Cane growers ' Co operative Society in a reserved area may offer, in the form and by the date prescribed, to supply to 766 the occupier of the factory for which the area is reserved cane grown by the cane grower or by the members of such Cane growers ' Co operative Society as the case may be, not exceeding the quantity, if any, prescribed for such grower or Cane growers ' Co operative Society. (2)The Occupier or manager of a factory for which an area is reserved shall enter into an agreement, in such form, by such date and on such terms and conditions as may by prescribed, to purchase the cane offered in accordance with sub section (1) : Provided that, he shall not enter into an agreement to purchase cane from a person who is a member of a Cane growers ' co operative Society. (3)Except with the permission of the Provincial Government, cane grown in a reserved area shall not be purchased in such area by a purchasing agent, or by any person other than occupier of the factory for which such area has been reserved. (4)Cane grown in a reserved area shall not be sold by any person other than a cane grower or a Cane growers ' Co operative Society: Provided that a cane grower or a Cane growers ' Co operative Society may deliver cane intended for use in a factory through another cane grower or through a carrier. (5)During the crushing season the Provincial Government may, if it is satisfied that there is likely to be in the area reserved for a factory any quantity of cane available for sale to the occupier of the factory in excess of the quantity 767 for which he is required to enter into agree ments, direct that cane shall not be purchased outside the reserved areas until the occupier of the factory enters into agreements to purchase all the cane offered to him in the reserved area : Provided that such prohibition shall not apply in respect of cane for the supply of which agreements in writing have been entered into before such direction was issued." In addition to the reserved area, section 19 provided for declaration of assigned area and purchase of sugar cane therein. The factory was authorised to take its supplies also from the assigned area. The important difference between the two areas was that the factory was bound to enter into agreements with cane growers or cane growers ' co operative societies in an area reserved for the factory for the prescribed quantity of sugar cane but in an assigned area, the Factory could enter into an agreement for a specified quantity of sugar cane as the factory desired. In other words, in a reserved area if sugar cane of the prescribed quality was offered by the cane grower or cane growers ' society, the factory was bound to purchase that cane up to the prescribed quantity but in an assigned area the factory was at liberty to purchase cane, as it needed, subject to its entering into an agreement for the purpose. In addition to the reserved and assigned areas there was a third category, namely, areas which were neither reserved nor assigned. We are not concerned with such areas or the provisions dealing with the purchase of sugar cane from such areas. Section 27 provided for certain penalties. Sub section 3 (b) provided as follows: "(3) If the occupier or manager of a factory x x x x 768 (b) intentionally fails to enter into agree ments as required by section (2) of section 18. he shall be punishable with fine which may extend to two thousand rupees" Section 30 gave power to the Government to make rules. The material portions of section 30 for our purpose are as follows: "30 Power to make rules (1) The Provincial Government may make rules to carry out the provisions of this Act. (2)In particular and without prejudice to the generality of the foregoing power, such rules may provide for; x x x x (u)the reference to the Cane Commissioner of disputes relating to the supply of cane for decision or if he so directs to arbitration, the mode of appointing an arbitrator or arbitrators, the procedure to be followed in proceedings before the Cane Commissioner or such arbitrator or arbitrators, and the enforcement of the decisions of the Cane Commissioner or the awards of arbitrators;" In exercise of the powers conferred by the last quoted section, the following, rules (among others) were framed "15. Purchase of cane growing in a reserved area. (1) The occupier or manager of a factory shall estimate or cause to be estimated by 30th September, the quantity of sugarcane with each grower enrolled in the Growers ' Register and shall submit the estimates to the Collector. The Collector may, after such enquiries as he considers necessary, modify the estimates and 769 cause them to be published in such manner as he may direct, In framing these estimates, sugarcane grown in more than one third of the area of land suitable for sugarcane cultivation in the holding of each grower may be excluded. (2)A cane grower or a cane grower 's co operative society in a reserved area may offer in form 10, Appendix III, by the 15th October each year to supply during the crushing season to the occupier or manager of the factory for which the area has been reserved, cane not exceeding, in the case of a cane grower, the quantity estimated in accordance with subrule (1). (3)The occupier or manager of the factory for which the area is reserved shall enter into an agreement with the cane grower or the cane growers ' co operative society as the case may be, in forms 15 and 18 respectively or in any other form approved by the Cane Commissioner within a month of the offer mentioned in sub. rule (2). (4)The occupier or manager of a factory shall spread the purchase made in the reserved area in an equitable manner and shall in the case of cane grower of the reserved area make purchase of cane only after issuing requisition slips. In order to comply with this rule the occupier or manager shall 'cause identification cards to be distributed to all cane growers of the reserved area to whom requisition slips have been issued and shall maintain a record of the same. He will also keep a record of the requisition slips issued and distributed to the growers and returned by them. 770 (5)Cane grown in a reserved area shall not except with the permission of the Cane Commissioner be purchased by any person with out the previous issue at convenient centres in the reserved area of requisition slips and identification cards to the growers, by the occupier or manager of the factory for which the area is reserved. (6)Requisition slips and identification cards to members of a "can growers ' co operative society shall not be issued except by such society. (7)In case of a dispute whether a particular system adopted for the purchase of cane grown in the reserved area is equitable or not, the dispute may be 'referred to the Cane Commissioner whose decision shall be final "23. Arbitration (1) Any dispute touching an agreement referred to in section 18 (2) or section 19 (2) of the Act shall be referred to the Cane Commissioner for decision, or if he so directs to arbitration. No suit shall lie in a civil or revenue court in respect of any such dispute. (2)If the Cane Commissioner directs the reference of a suit to arbitration, it shall be referred to a sole arbitrator acceptable to the parties concerned. In case no sole arbitrator is acceptable to both parties, the dispute in question shall be referred to a Board of Arbitration, consisting of one representative of each party and an umpire acceptable to both representatives. If the representatives or the parties are unable to elect such an umpire within a fortnight, the Cane Commissioner shall either himself act as umpire or nominate one. The umpire shall be the President of the Board of 771 Arbitration and shall have a vote in case of disagreement between the representatives. (3)The sole arbitrator or the President of the Board, of Arbitration shall have the full power of a court in respect of summoning the parties, witnessess and records. (4) The decision of the sole arbitrator or Board of Arbitration shall be final and binding on both parties and shall not be called in question in any civil or revenue court. (5) The sole arbitrator or the Board of Arbitration shall give an award within the time fixed by the Cane, Commissioner, failing which the Cane Commissioner may decide the dispute himself or appoint another arbitrator or arbitrators for the purpose. (6)Any party considering himself aggrieved by an award may appeal to the Commissioner of the Division in which the factory is situated within one month of the date of the communication of the award and the Commi ssioner shall pass such order as he deems fit. (7)The Commissioner 's order in appeal shall be final. (8)On application to the Civil Court having jurisdiction over the subject matter of the decision or award, the decision of the Cane Commissioner, or the award of the arbitrator or arbitrators, or the Commissioner 's order in a peal against an award, shall be enforced by the Court as if such decision, award, or order in appeal were a decree of that Court. " " 25.Penalties (1) Any person contravening any of the provisions of these rules for which no 772 penalty has been provided in the Act or not obeying a lawful order or direction conveyed to him in writing which the Cane Commissioner or a Collector or an Inspector is authorised to pass or issue shall be punishable with fine which may extend to Rs. 750: (Proviso omitted) We are concerned with the crushing seasons of 1949 50 and 1950 51. In these two years, the Cane Marketing Society offered sugar cane by Form 10. According to the appellant, the Society should have offered 85% of its net estimated crop but it made an offer in both the years which was less than 85% and actually supplied a quantity which was still less. The relevant figures or the two years, according to the appellant, were as follows: 1949 50 1950 51 (In Lacs of Maunds) Net estimated Crop 45.82 55.20 Less 15% 6.82 8.28 85% which should have been offered 39.00 46.92 Opposite party No 2 offered to sell finally 32.00 32.00 Shortage in offer 7.00 14.92 Actually supplied 23.1113129 7954 Actual shortage 15.8886917.1246 The appellant therefore preferred a claim to the Cane Commissioner for compensation for the short supply calculated at one anna per maund of sugar cane, by an application dated October 31, 1950. This was preceded by a long correspondence 773 which began in June 1950. Of this correspondence a few of the letters have been printed in the record of the case. The first letter is by the appellant to the Cane Marketing Society Ltd., Bijnor, in which a claim for Rs. 1,02,116 13 0, as compensation on account of short supplies in the season 1949 50 was made. The next letter in August, 1950, showed that the Society was claiming a sum of Rs. 1,64,094 4 6 as commission for the years 1948 49 and 1949 50 and that the appellant was setting up a counterclaim for Rs. 1,04,890 2 9 as compensation for short supply. On November 4,1950, the appellant wrote a final letter giving the accounts and sending a cheque for Rs. 22628 13 0 in full satisfaction of the claim. This cheque was accepted by the Society but under protest. The real dispute was about the compensation for short supplies which the Society did not admit. According to the Society they had a claim for Rs. 2,63,624 2 6 and they also moved the Cane Commissioner under Rule 23 (1) of the U. P. Sugar Control Act and Rules, 1938, for arbitration. The Cane Commissioner, who had not acted on the letter of the appellant, then passed an order on July 26, 1951, calling upon the parties to be present before him on August 18, 1951, for the decision of the dispute. On September 3, 1951, the appellant filed a petition under article 226 of the Constitution for a Writ of Certiorari to quash the proceedings pending before the Cane Commissioner, for a Writ of Prohibition for restraining the Cane Commissioner from continuing the proceedings and for a writ of quo warranto for a declaration that the Cane Commissioner had no right to assume the office of arbitrator in the dispute. In support of the petition the appellant contended that there could be no arbitration in this dispute because the agreement was not a proper agreement as the Society had omitted to complete the prescribed form XII by leaving the Schedule, the area of cultivation and the estimated yield, blank and as the agreements were not signed 774 by the Mills who did not accept them in their incomplete state. In the alternative, it was contended that Rule 23 offended against article 14 of the Constitution because it provided two different methods of decision of the disputes one by the Cane Commissioner and the other by arbitration leaving it to the arbitrary will of the Cane Commissioner to choose which it should be in a particular case, and by providing an appeal in one case, and not in the other. It was further contended that the provision in sub Rule (6) of Rule 23, which provided for an appeal went beyond the rule making power of the Provincial Government as no such power was conferred on it by section 30 of the Act and sub Rule (6) being unseverable, the whole of Rule 23 must fail and that, there could be no action by the Cane Commissioner. The petition was heard by Chaturvedi, J., and was dismissed. A special appeal under the Letters Patent was heard by Mootham, C. J., and C. B. Agarwala, J. Both of them concurred in dismissing the appeal but there was a difference as to sub Rule (6) between the learned judges. According to the learned Chief justice, in making sub Rule (6) of Rule 23 the Provincial Government had exceeded its power and the Rule was invalid but the sub Rule was severable and the rest of the Rule was validly framed. According to Agarwala, J,, the sub Rule was properly framed and there was a right of appeal both against the order of the Cane Commissioner as well as the award of the arbitra tors to the Commissioner of the Division. Both the learned judge held that the provisions of Rule 23 were not discriminatory and thus not void under article 14. In this appeal the same points, which were urged before the High Court, have been urged before us. The scheme of the Act and the Rules analysed above shows that the purchase of suger cane was 775 regulated. There were reserved areas, assigned areas and other areas. Supplies from a reserved area were meant for a factory for which the area was reserved and forms were prescribed for offer, agreements etc.so that the scheme might not be defeated by parties contracting out of the scheme. We are not concerned with the merits of the rival contentions about short supply or unpaid commission. Those are matters for adjudication elsewhere. We are only con cerned with the. legality of the proceedings before the Cane Commissioner. This dispute has been referred to him under Rule 23 not only by the Society but earlier also by the appellant. The appellant now says that he had made a mistake arid seeks to avoid a decision by the Cane Commissioner or by arbitrator and has set up two contentions. The first is that by reason of three defects in the agreement of 1949 50 season and two in the agreement of 1950 51 season there is no binding contract as is contemplated by section 18(2) and the agreement not having come into force the Commissioner has no power to act under Rule 23. The defects are : (a) Absence of signature for the mills in both agreements, (b) Schedule left blank in both agreements, (c) Two blanks left in the agreement for 1949 50 season where an area and a quantity had to be mentioned. The second contention is that Rule 23 enjoining arbitration is void under articles 13 and 14 of 'the Constitution as, on its face it allows discrimination and sub Rule (6) of Rule 23 making provision for an appeal is beyond the rule making power conferred by section 30 of the Act and that sub Rule being unseverable Rule 23 as a whole fails. We shall deal with the first contention separately and the other two points in the second contention together. 776 The first question thus to consider is whether there is a binding contract between the parties or not. Clause No. 10 of the agreement which is in the prescribed form, says that "all disputes touching the agreement shall be decided by arbitration as provided for in the rules and no suit shall lie in a civil or revenue court in respect of any such dispute". The exclusion of the jurisdiction of 'courts is also provided in Rule 23(1). If the agreement were binding the matter would have to be referred to arbitration as laid down in Rule 23. The agreement was challenged in the petition under Article 226 on four grounds. Three of them deal with the facts in dispute with which we are not concerned. The last was that "no agreement was entered into at all between the parties as contemplated under section 18(2) of the U.P. Sugar Factories Control Act and in the form No. 12 as prescribed under the Rules made thereunder." The defects that are pointed out now, it is said, make out that there was no agreement at all. To begin with the agreement was accepted on both sides and was acted upon. The appellant himself moved the Cane Commissioner for the enforcement of the agreement on October 31, 1950. He now says that this was under the erroneous belief that even without a written agreement Rule 23 app lied. Even in the proceedings before the Cane Commissioner the appellant caused an appearance to be made and asked for time. No objection that there was no valid agreement, was taken. In his letters to the Society the appellant relied upon the agreements and calculated his compensation and the commission of the Society on its basis. The appellant sent requisitions for supplies for sugar cane in accordance with Rule 15(5) and (6) and the agreement. He accepted bills and paid for them. The appellant had the signed form 10 and also form 12 with him. He could have got the blanks filled in and also signed the agreement but evaded doing this. By his conduct 777 the appellant appears prima facie to have accepted the agreement though now he is relying on his own default and petty omissions in the form. Now it must be remembered that this form was prescribed so that the scheme of the Act and Rules should work smoothly, and the purchase and sale of sugar cane should follow a particular pattern. The failure to enter into an agreement in the prescribed form was made an offence to compel the factories to keep to the scheme. Here the form in fact has been used. All the terms are included and none has been altered or new terms added. The agreement has also been acted upon. The question is whether the want of signature of the complaining party and the existence of the blanks render the contract void and non existing. There is no doubt that in the agreement for the season 1949 50 the area of the crop in one place and the approximate yield from that area in another have not been filled in the blank space provided for that purpose. The form in 1950 51 has no such blanks. The agreement was preceded by from No. 10 which showed these particulars. That form was with the appellant and it supplied these two details, namely, the area under cultivation and the estimated yield. 'Indeed, the two forms between them contained all the particulars which are required to be entered in the body of the agreement. As regards the schedule to the agreement the headings read as follows: Village Area under sugar Approximate Remarks cane Deal: Ra yield in Mds.toon: Plant If the appellant required this information it could have been furnished. The Schedule merely gives details village by village of the area under cultivation mentioned in form No. 10 and the body of the agreement and also shows the quality grown 778 in each village. This is obviously to facilitate re quisitions being sent and the appellant if he has any complaint on this score can raise it in the proceedings. The banks in the body of the agreement for 1949 50 thus are insignificant. Those details were already mentioned in form 10. They do not bear upon the terms which are quite unaffected by the omissions. The form for 1949 50 season was therefore not invalid because of the omissions in the body of the agreement. The schedule was intended to record the details of the crop grown but those details were not an integral part of the agreement or its terms. The agreements for 1949 50 and 1950 51 season were therefore not invalid for this reason also. This leaves over the absence of the signature of the party who had the custody of the document and who is now complaining of its absence. It is somewhat odd that he should complain of the lack of his own signature because it is tantamount to his making a virtue of his own lapse. The argument is therefore attempted to be put on a legal foundation and it is that section 18 (2) used mandatory language and attached penal consequences and the slightest deviation in a material respect and particularly the lack of signature of one of the contracting parties renders the agreement null and void. What the law requires is that the cane growers and the factories should, in view of the scheme, conform to certain terms and conditions which have been predetermined so that the scheme of rationalisation does not fail. For this purpose a form is prescribed and the form shows the place where the parties have to sign in token of their acceptance. Of course, the terms could be accepted orally but the section requires that the contract should be in a particular form and hence in writing. As to signatures it was held by Duke L. J. as he then was in Ruf (T. A.) & Co. vs Pauwels (1) as follows (1) , 670.779 "As to the suggestion which was made that the words 'contract in writing ' imports a contract made by means of a writing or writings signed by both parties, I do not think the words necessarily have that meaning. A document purporting to be an agreement may be an agreement in writing sufficient to satisfy the requirements of an Act of Parliament though it is only verified by the signature of one of the parties. Re Jones The learned Attorney General, however, contends that the prescriptions of section 18(2) being manda tory they had to be followed to the letter. He urges that in as much as the Act and the rules prescribe a penalty for breach the section cannot but be regarded as mandatory in all its parts. He assumes that the appellant may be guilty and punished but, says he, the mandatory provision not having been followed according to the letter there can be no resulting valid contract. A large number of rulings on how to distinguish between mandatory and directory provisions of law were cited before us, in support of the contention. More cases were cited ' to show that where a form is prescribed, the form and must be used otherwise there is no contract. We shall only briefly refer to them. The general rule as to which provision of law, can be regarded as mandatory and which directory is stated in Maxwell on the Interpretation of Statutes at page 364 "It has been said that no rule can be laid) down for determining whether the command (of the statute) is to be considered as a mere direction or instruction involving no invalidating consequence in its disregard, or as imperative, with an implied nullification for dig ) obedience, beyond the fundamental one that 780 it depends on the scope and object of the enactment. It may, perhaps, be found generally correct to say that nullification is the natural and usual consequence of disobedience, but the question is in the main governed by considerations of convenience and justice (R. vs Ingall (2) , per Lush, J.), and, when that result would involve general inconvenience or injustice to innocent persons, or advantage of those guilty of the neglect, without promoting the real aim and object of the enactment, such an intention is not to be attributed to the legislature. The whole scope and purpose of the statute under consideration must be regarded. The general rule is, that an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially. " This rule has been applied in many cases both in India and in England. In State of U. P. vs Manbodhan Lal Srivastava (1) this Court observed that no general rule can be laid down but the object of the statute must be looked at and even if the provision be worded in a mandatory form, if its neglect 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 is to be treated only as directory and the neglect of it though punishable would not affect the validity of the acts done; These observations have been followed in other cases and recently in Bhikraj vs Union of India (2) it was observed that where a statute requires that a thing shall be done in a particular manner or form but does not itself set out the consequences of non compliance the question whether the prescription of law shall be treated as mandatory or directory could only be solved by regarding the object, purpose and scope of that law. If the statute (1) ; (2) A.I.R. (1962) 113,119.781 is found to be directory a penalty may be incurred for noncompliance but the act or thing done is regarded as good. It is unnecessary to multiply these cases which are based upon the statement in Maxwell which is quoted over and over again. Now the prescription of the law in the present case was that the cane growers and the factory must enter into an agreement in a prescribed form. That form has in fact been used, only there are certain blanks and the appellant has not signed where he was expected to do so. Reliance is placed by the appellant upon a decision of the House of Lords reported in Thomas vs Kelly (1) particularly the observations of Lord Macnaghten where a distinction was made between the words "in accordance with the form" and "in the form". It is argued that the Act and the rules in the present case require the agreement to be in the form prescribed and not in accordance with the form. It is submitted that a substantial compliance may be permissible when the words of the statute are " 'in accordance with the form" but that strict compliance is necessary when the words are "in the form": The form in Thomas vs Kelly (1) was in a different category from their form which we have. Under the statute, which prescribed the form (a bill of sale), it was provided that a bill of sale given by way of security was void unless made in accordance with the form. , The form used there being not in accordance with the form prescribed was held to be void though there are observations to show that if this consequence had not been attached a departure from the statutory form in any thing which was not a characteristic of that form would not have been fatal. In the body of the bill of sale executed in that case there was no description of the things intended to be assigned and this portion was regarded as characteristic of the form prescribed. There are some cases of this Court in which the prescribed forms have been considered, In two (1) 782 cases under the Representation of the People Act,1950, the form for making a security deposit which was prescribed, was not strictly followed but it was held that it was merely a matter of form and as there was substantial compliance the penal consequences did not ensue. See Jagan Nath vs Jaswant Singh (1) and Kamaraja Nadar vs Kunju Thevar (2), In Hari Vishnu Kama the vs Syed Ahmed Ishaque (3) votes not given in the form prescribed were held to be invalid because the form prescribed was considered to be essential and an intention of the voter expressed otherwise than in the form prescribed was considered to be an intention not expressed at all. In Radhakisson Gopikisson vs Balmukund Ramchandra (4) a by law provided that contract between agents and their constituents shall be in the form prescribed. It was held by the Privy Council that a literal compliance with the forms was not essential if the contract contained all the terms and conditions set out in the form but it was otherwise if it did not. In the present case the form prescribed set out a number of conditions and these have all been incorporated in the agreement which has been executed by the society. In other words the form has been used. There is no deviation from the prescribed form except in respect of the three defects which we have mentioned earlier. We have pointed out that the failure to execute the agreement in the form is made an offence but no other consequence is indicated if the form is not followed. The utmost that can be said is that if the form which was used included conditions which were at variance with the conditions in the prescribed form a contract might not have resulted. But we need not express any opinion on this, because in this case the terms as stated in the prescribed form are the terms in the form used. We have pointed out that no consequence attaches to the failure to observe the form except punishment by fine and section 18 (2) is capable (1) ; (2) (3) ; (4) [1932] L.R. 60 1.A. 63.783 of being read as directory. Even if it be read as mandatory we have shown already that the failure of the appellant to sign the form is not a matter of which he can take advantage regard being had to his own conduct. The blanks also do not matter in view of the existence of form No. 10 which suppli ed the information accidentally omitted from the agreement. The form is also sufficiently identified by the signature on behalf of the Society and it has been acted upon not only by the Society but also by the appellant who is complaining of the want of signature. In our opinion, the agreement was binding. It may be pointed out that the arbitration clause in the agreement was enforceable, if agreed to, even without the signature of the appellant as it is settled law that to constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties and it is sufficient if the terms are reduced to writing and the agreement of the parties thereto is established. See Jugal Kishore Rameshwardas vs Mrs. Goolbai Hormusji (1). In our opinion even if the section be held to be mandatory to the extent that the terms as prescribed should appear in writing, that is complied with in this case. There was thug a binding contract between the parties and the dispute was to be ,resolved as required by Rule 23. The appellant has an alternative argument by which he challenges the validity of Rule 23 itself. He says that Rule 23 permits the Cane Commissioner to follow two different methods for the adjudication of the disputes. One method is that the Cane Commissioner can himself hear and decide the dispute and the other is that he can direct the parties to have their dispute decided by arbitration. It is said that Rule 23 thus confers on the Cane Commissioner an arbitrary power to proceed with some cases in one way and in some cases in another because there is no (1) ; 784 guiding principle. It is also contended that one of the procedures, (namely the decision by the arbitrators) gives a right of appeal from the award to the Commissioner of the Division while there is no right of appeal in the other (namely, decision by the Cane Commissioner) and there is thus discrimination between those persons whose case is decided by the Cane Commissioner and those whose case is decided by arbitration. It is contended that the Commissioner is given an arbitrary power to discriminate between one case and another in as much as he can decide one case himself and refer another to arbitration and the rule thus offends against the equal protection clause contained in article 14 of the Constitution. Reference is made to those cases in which this Court has ruled that in such circumstances the law is void. It is also contended that Rule 23 contains a provision for appeal but sub r.(6) providing for an appeal goes beyond the power conferred by section 30 which confers the rule making power on the Provincial Government. It is also said that sub r.(6) is not severable from the rest of the Rule because the Provincial Government would not have made a rule for arbitration in that form if it was not able to enact a rule giving a right of appeal to an aggrieved party when there was arbitration. It is thus contended that sub r.(6) allowing the right of appeal should be struck down as ultra vires the Provincial Government and the whole rule because sub r.(6) is not severable from the rest of the rule. The arguments are somewhat conflicting. If sub r.(6) was ultra vires the Provincial Government and must be struck down then one of the reasons on which the complaint of discrimination is based must disappear provided the sub r.is severable, because the decision in either case then would be final. It is only if it is unseverable that other considerations would arise. It is therefore necessary to see if section 30 of the Act confers power to provide for appeal from 785 the award of the arbitrators. An appeal is no doubt a creature of statute and does not lie in the nature of things. Under the general law relating to arbitration there is no appeal against an award. The power to provide for an appeal by a rule must, therefore, flow from section 30 of the Act. Section 30 first confers a general power to make rules and then enumerates, as illustrative of the general power, certain topics on which rules in particular may be made ' The general power is conferred by the first sub section which reads: "The Provincial Government may make rules to carry out the provisions of this Act. " It is argued by the appellant that this sub section does not use the common formula "carry out the purposes of this Act" and the Provincial Government could only provide for an appeal if a provision enabling it to ' do so existed in the Act, and no such provision regarding appeals is to be found. The other side relies upon sub section(2) which says that rules may provide for : "(u) the reference to the Cane Commissioner of disputes relating to the supply of Cane for decision or if he so directs to arbitration, the mode of appointing an arbitrator or arbitrators, the procedure to be followed in proceedings before the Cane Commissioner or such arbitrator or arbitrators, and the enforcement of the decisions of the Cane Commissioner or the awards of arbitrators. " It is contended that this clause confers on the rule making authority the power to make rules regarding disputes relating to the supply of cane for decision by arbitration and being itself a provision of the Act '. rules can be made to carry out this provision. The appellant however contends that 186 clause (u) mentions only four matters and the provision of an appeal is not one of them. In our opinion, clause (u) conferred a general power to make rules for the resolving of disputes either by the Cane Commissioner or if he so directs by arbitration and to give effect to the latter part of this provision arbitration with an appeal from the arbitrator 's decision would be giving effect to the provisions as a whole. In this sense sub r.(6) providing for an appeal against the decision of the arbitrators must be considered as a rule giving effect to the provision of section 30 (2) (u) providing for the resolving of disputes by arbitration. Sub Rule (6) was thus within the rule making power of the Provincial Government and it is unnecessary to discuss whether it is severable or not from the rest of the rule. We shall now pass on to the main contention in this case, that Rule 23 provides for two different types of procedures to be followed at the option of the Cane Commissioner. If it could be said that the rule, as framed, allows the Cane Commissioner to discriminate between one party and another, then the rule must offend Article 14. We shall, therefore, see whether there is any room for discrimination at the hands of the Cane Commissioner. It is necessary in this connection to see first whether the Cane Commissioner can compel a party to go to arbitration against his will. The rule says that any dispute touching an agreement shall be referred to the Cane Commissioner for decision or if he so directs to arbitration. It also provides that no suit shall lie in a civil or revenue court in respect of any such dis pute. At first sight, it does look as if the Cane Commissioner can pick and choose between two disputes of like nature., keeping one two himself ' and sending another for decision by a sale arbitrator or Board of arbitrators. But the purport of the first sub Rule is that an arbitration can be with the permission of the Cane Commissioner 787 and parties cannot go to arbitration without the permission of the Cane Commissioner. The rest of the rule shows that there can be no arbitration without the consent of the parties. If the reference to arbitration is purely on a voluntary basis then there can be no complaint that two different procedures are provided for the solution of the same kind of disputes. If parties cannot be compelled to go to arbitration and refuse to go to arbitration then the Cane Commissioner must decide the dispute himself. If this view was correct then there is but one mode of deciding disputes, namely, by the Cane Commissioner and an alternative mode, no doubt, under the direction of the Cane Commissioner but only if the parties agree, by arbitration. Therefore the provisions regarding arbitration cannot be compared with the procedure before the Cane Commissioner, and the provision for an appeal in the former but prima facie not in the latter loses all significance. The procedure of arbitration with the appeal included really applies only if both sides accept that procedure willingly. To determine whether the procedure involving arbitration is voluntary or not we shall have to examine Rule 23 in some detail but before we do so we shall advert to section 46 and three other sections of he Arbitration Act. That section provides : "The provisions of this Act, except sub section (1) of section 6 and sections 7, 12, 36 and 37, shall apply to every arbitration under any other enactment for the time being in force, as if the arbitrations were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as this Act is inconsistent with that other enactment or with any rules made thereunder. " It was admitted before us by the learned counsel for the appellant that section 46 in its first part does not apply but it was argued that section 8, 9 and 10 of the 788 arbitration Act must be considered in deciding whether the arbitration is purely on a voluntary basis or not. We have thus to compare the provisions of Rule 23 with those of these sections to find out if the rule prevails over the sections. Rule 23(2) provides that when the Cane Commissioner directs the reference of the dispute to arbitration "it shall be referred to a sole arbitrator acceptable to the parties concerned". It is thus clear that arbitration by a sole arbitrator can only be by consent of parties. New if the matter were governed by section 8 of the Arbitration Act it would be open to any party to serve the other party with a written notice to concur in the appointment and after a lapse of a fortnight the Court could be moved to make the appointment. This provision is clearly inconsistent with what happens in the same circumstances under the Rule. The Rule provides : in case no sole arbitrator is acceptable to both parties the dispute in question shall be referred to a Board of Arbitration., consisting of one representative of each party and an umpire acceptable to both representatives. The Board is a three member board and this eliminates from consideration section 8. It also excludes section 9, of the Arbitration Act which deals with situations in which the reference is to two arbitrators and if one party fails to appoint his arbitrator the other party after appointing his own arbitrator can give a notice and the appointed arbitrator becomes the sole arbitrator. Under Rule 23 this cannot happen. Section 9 is thus inconsistent with a three member board which is the sine qua non of the Rule. The Rule provides that each party must appoint his, own arbitrator and then the umpire is to be chosen by the two representatives. Tile Cane Commissioner comes into the picture again when the representatives are unable to agree regarding the umpire. But there is an initial stage at which any of the parties can frustrate the arbitration by declining in limine to 789 select his own arbitrator. The arbitration must therefore be by agreement or it cannot take place at all. It remains to mention section 10. That section has no relation to the appointment of arbitrators to begin with. It deals with the position of the third arbitrator chosen by two arbitrators appointed by the parties. That stage does not reach at all if one of the parties does not appoint his arbitrator. It is thus quite clear that sections 8, 9 and 10 of the Arbitration Act do not apply being inconsistent with Rule 23. It is also quite clear that the decision by the Commissioner is the normal mode of disposing of disputes regarding the supply of sugar cane. The Cane Commissioner has the power to direct that the dispute be referred to arbitration but the rules show that there can be no arbitration unless the parties themselves agree. If it is to a sole arbitrator then the sole arbitrator must be acceptable to the parties concerned. If parties do not agree about the sole arbitrator the arbitration is by a Board of arbitrators consisting of one representative of each party and an umpire acceptable to both representatives. The Rule stops short of providing what is to happen if a party does not appoint his representative and the Arbitration Act furnishes no answer because it is inconsistent with the Rule. It is, therefore, obvious that the arbitration must be with the consent of parties and they must express this consent either by selecting an agreed sole arbitrator or by appointing their representative on the Board. This choice is entirely theirs, If the parties do not agree thus far there can be no arbitration at all and the case must be disposed of by the Cane Commissioner himself. Where there are two procedures one for every one and the other if the disputants voluntarily agree to follow it, there can be no discrimination because discrimination can only be 790 found to exist if the election is with someone alse who can exercise his will arbitrarily. It remains to consider an argument which was raised by Mr. Veda Vyasa at the end of the hearing but which was not urged by the learned Attorney General and it is that there may be discrimination in as much as the Cane Commissioner may refer some, disputes to arbitration and keep some to himself even though in all of them parties wish for arbitration. In other words, the discrimination is said to exist the other way round that is to say not because there are two modes from which one may be selected arbitrarily but because parties in some cases may be deprived of their election to proceed by arbitration. As we have said the normal mode is decision by the Cane Commissioner with a possibility of arbitration by the agreement of parties. It is most unlikely that the Cane Commissioner would decline to refer a dispute to arbitration where the parties agree that it should be so referred. Where the Cane Commissioner declines to make a reference the question may arise whether he could not be compelled to do so and also whether his decision given against the wishes of the parties would be binding on the parties. But we cannot say that the rule offends Article 14 because the Cane Commissioner may himself decide a dispute which the parties wish to go to arbitration. In our opinion the agreement was a binding agreement and Rule 23(6) of the U.P. Sugar Factories Control Rules 1938 was not ultra vires the Provincial Government and the Rule as a whole does not offend Article 14 of the Constitution. This appeal must therefore fail. It is dismissed with costs. RAGHUBAR DAYAL, J. I have had the advantage of perusing the judgment of my learned brother Hidayatullah,J., and I agree that there was a binding contract between the parties and in the view of 791 cl.10, the dispute was capable of being referred to arbitration. 1, however, do not agree that r. 23 of the U. P. Sugar Factories Control Rules, 1938 is not discriminatory. Sub r.(1) of r. 23 provides that the dispute be referred to the Cane Commissioner for decision or,.if he so directs, for arbitration, and thus gives discretion to the Cane Commissioner to direct that the dispute touching the agreement be referred to arbitration. There is nothing to guide his discretion. The procedure contemplated seems to be that when a party approaches the Cane Commissioner for the settlement of the dispute, the Cane Commissioner may either proceed to decide the dispute himself or may direct the party to go to arbitration. There is nothing in this sub rule to suggest that the Cane Commissioner can refer the dispute to arbitration by arbitrators only when the parties agree to have the dispute so settled. In the absence of such a provision, the discretionary power of the Cane Commissioner cannot be restricted. There seems to be no justification for taking the clause 'if he so directs ' to be if he so directs on the parties agreeing to have the dispute settled by arbitrators '. Clause 10 of the agreement in Form 12, together with the direction of the Cane Commissioner, amounts to the arbitration agreement. Once the Cane Commissioner has given the necessary direction the dispute is to go to the sole arbitrator acceptable to the parties concerned. This is what sub r.(2) provides. In case no sole arbitrator is acceptable to both the parties, the dispute is to be referred to a Board of Arbitration. The parties can thus avoid arbitration by the sole arbitrator by their not agree ing to any particular person to act as sole arbitrator. If the parties do not accept any sole arbitrator each of the parties has to appoint one representative 792 to the Board of Arbitration and the representatives so appointed, then appoint an umpire acceptable to them. It is suggested for the respondent that in case a party does not wish the matter to be referred to the Board of Arbitration, it can easily avoid it by not appointing a representative and that in that contingency, the Cane Commissioner will have to decide the dispute himself. If the parties agree to appoint a representative, the reference of the dispute to the Board of Arbitration would be a reference with the consent of the parties and therefore no question of discrimination can arise, even if the incidents of the dispute decided by the Cane Commissioner himself and by the Board of Arbitration be different. Sub r.(2) or any other sub rule of r.23, does not provide what is to happen when any of the parties does not appoint a representative. It does not necessarily follow from the absence of such a provision that the dispute goes back to the Cane Commissioner for decision or that the Cane Commissioner is empowered to withdraw his direction of referring the dispute to arbitration. Rule 23 has no such express provision in this regard, though sub r.(5) expressly, provides for the Cane Commissioner to take charge of ' the dispute afresh in another contingency. Once the Cane Commissioner has directed reference of the dispute to arbitration, he, in the absence of any provision in the rules empowering him to do so, is not to withdraw that direction and take over the decision of the dispute himself. The omission to provide for such a contingency can only mean that the rule does not contemplate a party not nominating his representative. This appears to be more reasonable to suppose than to hold that the reference of the dispute reverts to the Cane Commissioner who had already decided not to decide the dispute himself. Further, the party 's nominating a representative would not make the reference to arbitration a 793 voluntary act. The parties have no choice. They had to enter into an agreement in Form 12. Their agreeing to cl. 10 of the agreement is not voluntary but is due to statutory requirement. So is their agreement to nominate representative to the Board of Arbitration as they cannot go to a Civil Court for the decision of the dispute in view of sub r. There is nothing in r. 23 to indicate that the decision of the dispute by the Cane Commissioner is the normal procedure contemplated by the rule. Of course, the Cane Commissioner can act as an umpire if he so desires in case the two representatives appointed by the parties to the Board of Arbitration are unable to elect an umpire within a fortnight of the reference to them. In case the Board of arbitration does not give the award within a time fixed by the Cane Commissioner, the dispute is to be deemed to have been freshly referred to the Cane Commissioner, as sub r.(5) in these circumstances, empowers the Cane Commissioner to decide the dispute himself or to appoint another arbitrator or arbitrators for the purpose. It is clear from the various provisions of r. 23 that there is a difference in the procedure for the dispute being decided by the Cane Commissioner and the dispute being decided by the arbitrator or Board of Arbitration. In the former case, the decision of the Cane Commissioner is final and enforcible by the Civil Court referred to in sub r. In the latter case, the award of the sole arbitrator or the Board of Arbitration is appealable to the Commissioner of the Division in which the factory is situated and the Commissioner 's order is final and enforcible by the Civil Court. It follows that the procedure provided by r. 23 for decision of the dispute touching the agreement is such that parties similarly situated may have the dispute decided by different person an by different procedures according to the, 794 inclination of the Cane Commissioner whose discretion in this matter is uncontrolled by any guiding principles. The rule therefore offends against article 14 of the Constitution and is void. It is also contended that sub r.(6) providing an appeal to the Commissioner, against the order of the arbitrator or Board of Arbitration is void as the ,State Government had no power to make a provision about appeal. Sub section(1) of section 30 of the U. P. Sugar Factories (Control) Act empowers the State Government to make rules to carry out the provisions of that Act, There is nothing in the Act to the effect that provision be made for an appeal against the award of the arbitrator or arbitrators. A rule providing for appeal against the order of the arbitrator or arbitrators is therefore not a rule to carry out any provision of the Act. Clause (u) of sub section (2) of section 30 states that the State Government may make rules to provide for the reference to the Cane Commissioner of disputes relating to the supply of cane for decision or, if he so directs, to arbitration, the mode of appointing arbitrator or arbitrators, the procedure to be followed in proceedings before the Cane Commissioner and such arbitrator or arbitrators and the enforcement of the decisions of the Cane Commissioner or of the award of the arbitrators. It is true that these provisions relate to the settlement of disputes between the parties, but that by itself does not mean that the State Government can provide for appeals against the orders of the arbitrator or arbitrators. These provisions of cl.(u) do not expressly state that the rule can provide for an appeal against the award of the arbitrator. Provisions of cl.(u) make no reference either for the provision of an appeal or for the procedure to be followed by the appellate Tribunal, or for the enforcement of the order of the appellate Tribunal. The absence of such reference establishes that cl.(u) did neither contemplate nor empower the State 795 Government to make rules providing an appeal against the award of arbitrator or arbitrators. Further, the order of the Commissioner is not an award and this is recognised by the language of sub r. (8) of r. 23 which refers to the decision of the Cane Commissioner to the award of the arbitrator or arbitrators and to the Commissioner 's order in appeal. The provision for an appeal in sub r.(6) therefore is not to be treated as something ancillary to the provision for settling disputes between the parties by the Cane Commissioner for which object cl.(u) empowered the State Government to make rules with respect to certain matters. The right to appeal is a substantive right and is to be conferred on a party by or under the Act. The Act must either provide for the appeal or enact that the rules framed thereunder may provide for appeals against certain orders of decisions. ' In the absence of such a provision in the Act, the rules cannot provide for appeals. I am therefore of opinion that sub r.(6) is void. It is true that if sub r.(6) is struck down as void, there would not be any substantial difference between the procedure to be followed by the Cane Commissioner or the Arbitrator or Board of Arbitrators in deciding the dispute, but it does, not necessarily follow from this that r. 23 minus sub rule (6) and other incidental deleted provisions, is valid. It is difficult to say that sub r.(6) is severable. The existence of sub r.(6) and other consequential provisions makes it clear that the State Government which made r. 23 provided for the decision of the dispute by the arbitrator or arbitrators subject to an appeal against the award. It will be sheer speculation to say that the State Government would have made provision for the dispute to be settled by arbitrators if it had known that it could not make any provision for an appeal against that order. I am therefore of opinion that the entire r. 23 is to be struck down both because in its present for it is 796 discriminatory and because sub r.(6) is void inasmuch as the State Government had no power to enact it and it is not servable from the rest of the rule. I would therefore allow the appeal with costs and order the issue of a writ quashing the proceedings pending before the Cane Commissioner and prohibiting him to continue those proceedings. By COURT : In accordance with the opinion of the majority, this Appeal is dismissed with costs.

Certain disputes arose between the appellant and the Cane Marketing Society Ltd., Bijnor. The appellant preferred a claim to the Cane Commissioner for compensation for short supply of Sugar cane. The Society also moved the Cane Commissioner for arbitration. The Commissioner passed an order calling upon the parties to be present before him for a decision of the dispute. It was then that the appellant filed a petition under article 226 of the Constitution of India for a writ of certiorari to quash the proceeding pending before the Cane Commissioner, for a write of prohibitation for restraining the Cane Commissioner from continuing quo warranto for a declaration that the Cane the proceedings and a writ of Commissioner had, no right to assume the office of arbitrator in the dispute. The appellant contended that there could be no arbitration because the claim was not a proper claim as the Society had omitted to complete the prescribed form XII by leaving the schedule, the area of cultivation and the estimated yield blank and as the agreements were not signed by the Mills who did not accept them in their incomplete state. In the alternative, it was contended that Rule 2 3 offended against article 14 of the Constitution. It was also contended that r. 23(6) providing for an appeal went beyond the rule making power of the Provincial Government under section 30 of the Act. The writ petition was dismissed by the High Court. The Letters Patent appeal was also dismissed. The appellant came to this Court by a certificate. Held, that the agreement was a binding agreement. The form prescribed set out a number of conditions and all of them have been incorporated in the agreement executed by the Society. There has been no deviation from the prescribed form except some minor omission. The failure to execute the 761 agreement in the form is made an offence but no other cons equence is indicated if the form is not followed. The utmost that can be said is that if the form that was used included conditions which were at variance with the conditions in the prescribed form, a contract might not have resulted, but in the present case the terms as stated in the prescribed form are the terms in the form used. No consequence attaches to the failure to observe the form except punishment by fine and section 18(2) is capable of being read as directory. Even if it be read as mandatory, the failure of the appellant to sign the form is not a matter of which he can take advantage, regard being bad to his own conduct. The blanks also do not matter in view of the existence of form 10, which supplied the information accidently omitted from the agreement. The arbitration clause in the form was enforceable, if agreed to, even without the signature of the appellant as it is settled law that to constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties and it is sufficient if the terms are reduced to writing an the agreement of the parties thereto is established. Even if section 18(2) be held to be mandatory to the extent that the terms as prescribed should appear in writing, that is complied with in this case, Held (Raghubar Dayal, J., dissenting), that section 30(2 of the Act conferred a general power to make rules for the resol ving of disputes either by the Cane Commissioner or if he so directs, by arbitration and to give effect to the latter part of this provision arbitration with an appeal from the arbitrator 's decision would be giving effect to the provisions as a whole. Rule 23(6) providing for an appeal against the decision of arbitrators must be considered as a rule giving effect to the provisions of section 30(2)(u) providing for the resolving of disputes by arbitration. Sub rule (6) was thus within the rule making power of the Provincial Government. Sections 8, 9 and 10 of the Arbitration Act do not apply being inconsistent with r. 23. The decision by the Commis sioner is the normal mode, of disposing of disputes regarding the supply of sugar cane. The Cane Commissioner has the power to direct that the dispute be referred to arbitration, but the rules show that there can be no arbitration unless the parties themselves agree. If it is to a sole arbitrator, then the sole arbitrator must be acceptable to the parties concerned. If the parties do not agree to the appointment of a sole arbitrator, the arbitration is by a Board of Arbitrators consisting of one representative of each party and an Umpire acceptable to both the representatives. The Rule stops short of providing what is to happen if a party does not appoint his 762 representative and the Arbitration Act furnishes no answer because it is inconsistent with the Rule. It is, therefore, obvious that the arbitration must be with the consent of the parties and they must express their consent either by selecting an agreed sole arbitrator or by appointing their representative on the Board. This choice is entirely theirs. If the parties do not agree, there can be no arbitration at all and the case must be disposed of by the Cane Commissioner himself. Where there are two procedures, one for everyone and the other if the disputants voluntarily agree to follow it, there can be no discrimination because discrimination can only be found to exist if the election is with some one else who can exercise his will arbitrarily. Rule 23 as a whole does not offend Art.14 of the Constitution. Per Raghubar Dayal, J. It is true that the provisions of section 30(2)(u) relate to the settlement of disputes between the parties but that by itself does not mean that the State Government can provide for appeals against the orders of the arbitrator or arbitrators. These provisions do not expressly state that the rule can provide for an appeal against the award of the arbitrator. They make no reference either for the provision of an appeal or for the procedure to be followed by the Appellate Tribunal or for the enforcement of the order of the Appellate Tribunal. The absence of such a reference establishes that cl. (u) did neither contemplate nor empowered the State Government to make rules providing an appeal against the award of arbitrator or arbitrators. Further, the order of the Commissioner is not an award and this is recognised by the language of r. 23(8) which refers to the decision of the Cane Commissioner to the award of the arbitrator or arbitrators and to the Commissioner 's order in appeal. The provision for an appeal in r. 23(6), therefore, is not to be treated as something ancillary to the provision for settling disputes between the parties by the Cane Commissioner for which object cl. (u) empowered the State Government to make rules with respect to certain matters. The right to appeal is a substantive right and is to be conferred on a party by or under the Act. The Act must either provide for the appeal or enact that the rules framed thereunder may provide for appeals against certain orders or decisions. In the absence of such a provision in the Act, the rules cannot provide for appeals. The result is that r. 23(6) is void. It is clear from the various provisions of r. 23 that there is a difference in the procedure for the dispute being decided by the Cane Commissioner and the dispute being decided by the arbitrator or a Board of Arbitration. In the former case, 763 the decision of the Cane Commissioner is final and enforceable by the Civil Court referred to in r. 23(8). In the latter case, the award of the sole arbitrator or the Board of Arbitration is appealable to the Commissioner of the Division in which the factory is situated and the order of the Commissioner is final and enforceable by the Civil Court. It follows that the procedure provided by r. 23 for decision of the dispute touching the agreement is such that parties similarly situated may have the dispute decided by different persons and by different procedures according to the inclination of the Cane Commissioner whose discretion in this matter is uncontrolled by any guiding principles. The rule, therefore, offends against article 14 of the Constitution and is void. The entire r. 23 is struck down both because in its present form it is discriminatory and because sub r. (6) is void inasmuch as the State Government had no power to enact it and it is not severable from the rest of the rule. Ruf (T. A.) & Co. vs Pauwels, ; State of U. P. vs Manbodhan Lal Srivastava, ; , Bhikraj vs Union of India, A. I. R. , Thomas vs Kelly, 888) 13 App. 506, Jagan Nath vs Jaswant Singh, ; , Kamaraja Nadar vs Kunju Thevar, , Hari Vishnu Kamath vs Syed Ahmed Ishaque, ; , Radhakinsson Gopikis8on vs Balmukund Ramchandra (1932) L. R. 60 I. A. 63 and Jugal Kishore Rameshwardas vs Mrs. Goolbai Hormusji, [1955] 2 section C. R. 857, referred to.

iminal Appeal No. 7 of 1953. Appeal by Special Leave from the Judgment and Order of the High Court of Judicature at Nagpur dated the 15th. September, 1952, in Criminal Case No. 45 of 1951 from the Order of the Court of the Magistrate 1st Class, Hoshangabad, in Criminal Case No. 75 of 1949. H.J. Umrigar, Rameshwarnath and Rajinder Narain for the appellants. T. L. Shevde, Advocate General of Madhya Pradesh (T. P. Naik and I. N. Shroff, with him) for the respondent. May 14. The Judgment of the Court was delivered by MEHAR CHAND MAHAJAN C.J. The facts giving rise to this appeal are these: The appellant, Harishankar Bagla, and his wife, Smt. Gomti Bagla, were arrested at Itarsi, by the Railway Police on the 29th November, 1948, for contravention of section 7 of the Essential Supplies (Temporary Powers) Act, 1946, read with clause (3) of the Cotton Textiles (Control of Movement) 383 Order. , 1948, having been found in possession of new cotton cloth " weighing over six maunds which cloth, it was alleged,was being taken by them from Bombay to Kanpur without any permit. After various vicissitudes through which the chalan passed the case was eventually withdrawn by the High Court to itself on the 3rd of September, '1951, as it involved a decision of constitutional issues. By its order dated the 15th September, 1952, the High Court upheld the provisions of sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, as constitutional. It also upheld the constitutionality of the impugned Order. Section 6 of the Act was held to be inconsistent with the provisions of the Railway Act but it was held that its unconstitutionality did not affect the prosecution in this case. The High Court directed that the prosecution should proceed and the records sent back to the trial Court for being dealt with in accordance with law. Leave to appeal was given both to the appellants and the respondent and requisite certificates under articles 132 and 134 of the Constitution were granted. This appeal along with the connected appeal No. 6 of 1953 is before us on the basis of the said certificates. Mr. Umrigar, who appeared in this and the connected appeal, urged the following points for our consideration and decision: (1) That sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, and the provisions of the Cotton Cloth Control Order contravened the fundamental right of the appellants guaranteed by article 19(1)(f) and (g) of the Constitution; (2) That section 3 of the Essential Supplies (Temporary Powers) Act, 1946, and in particular section 4 were ultra vires, the Legislature on the ground of excessive delegation of legislative power; (3) That section 6 having been found ultra vires, section 3 was inextricably connected with it and that both the sections should have been declared ultra vires on that ground; and (4) That the impugned Control Order contravened existing laws, viz., the provisions of section 27,28 and 384 41 of the Indian Railways Act, and was thus void in its entirety. The respondent challenged the judgment of the High Court that section 6 of the Act was unconstitutional. In our judgment, none of the points raised by Mr. Umrigar have any validity. On the other hand, we are of the opinion that the High Court was in error in declaring section 6 of the Act unconstitutional. Sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, provide as follows: "3. (1) The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity, or for socuring their equitable distribution and availability at fair prices, may by order provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein (2) Without prejudice to the generality of the powers conferred by sub section (1), an order made thereunder may provide (a) for regulating by licences, permits or otherwise the production or manufacture of any essential com modity;. . (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity; 4. The Central Government may by notified order direct that the power to make orders under section 3 shall,in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by (a) such officer or authority subordinate to the Central Government, or (b) such State Government or such officer or authority subordinate to a State Government as may be specified in the direction. " Section 6 runs thus: "6. Any order made under section 3 shall have effect notwithstanding anything inconsistent therewith 385 contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act." Under powers conferred by section 3 the Central Government promulgated on 10th September, 1948, Cotton Textiles (Control of Movement) Order, 1948. Section '2 of this order defines the expressions "apparel," " carrier," " hosiery," " cloth " and " textile commissioner. " Section 3 of the order runs as follows: "3. No person. shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth, yarn or apparel except under and in accordance with (i) a general permit notified in the Gazette of India by the Textile Commissioner, or (ii) a special transport permit issued by the Textile Commissioner. " Section 8 provides that the Textile Commissioner may, by notification in the Gazette of India, prescribe the manner in which any application for a special transport permit under this Order shall be made. The Central Government has prescribed forms for application for obtaining permits and the conditions under which permits can be obtained. The first question canvassed by Mr. Umrigar was that the provisions of section 3 of the Control Order infringed the rights of a citizen guaranteed in subclauses (f) and (g) of article 19(1) of the Constitution. These sub clauses recognise the right of a citizen to dispose of property and to carry on trade or business. The requirement of a permit to transport by rail cotton textiles to a certain extent operates as a restriction on the rights of a person who is engaged in the business of purchase and sale of cotton textiles. Clause (5) of article 19 however permits such restrictions to be placed provided they are in the public interest. During the period of emergency it was necessary to impose control on the production, supply and distribution of commodities essential to the life of the community. It was for this reason that the Legislature passed the Essential Supplies (Temporary Powers) Act 50 386 authorising the Central Government to make orders from time to time controlling the production, supply and distribution of essential commodities. Clause 3 of the Control Order does not deprive a citizen of the right to dispose of or transport cotton textiles purchased by him. It requires him to take a permit from the Textile Commissioner to enable him to transport them. The requirement of a permit in this regard cannot be regarded as an unreasonable restriction on the citizen 's right under sub clauses (f) and (g) of article 19(1). If transport of essential commodities by rail or other means of conveyance was left uncontrolled it might well have seriously hampered the supply of these commodities to the public. Act XXIV of 1946 was an emergency measure and as stated in its preamble, was intended to provide for the continuance during a limited period of powers to control the production, supply and distribution of, and trade and commerce in, certain commodities. The number of commodities held essential are mentioned in section 2 of the Act, and the requirement of a permit to transport such commodities by road or rail or other means of transport cannot, in any sense of the term, be said, in a temporary Act, to be unreasonable restriction on the citizen 's rights mentioned in clauses (f) and (g) of article 19(1). The High Court was therefore right in negativing the contention raised regarding the invalidity of the Control Order as abridging the rights of the citizen under article 19(1) of the Constitution. Mr. Umrigar further argued that the Textile Commissioner had been given unregulated and arbitrary discretion to refuse or to grant a permit, and that on grounds similar to those on which in Dwarka Prasad vs The State of Uttar Pradesh (1), this Court declared void section 4(3) of the Uttar Pradesh Coal Control Order, section 3 of the Control Order in question should also be declared void. This argument again is not tenable. In the first place, the appellants never applied for a permit and made no efforts to obtain one. If the permit had been applied for and refused arbitrarily they might then have had a right to attack the law on (1) A.T.R. ; 387 the ground that it vested arbitrary and unregulated power in the textile commissioner. The appellants were not hurt in any way by any act of the textile commissioner as they never applied for a permit. They were transporting essential goods by rail without a permit and the only way they can get any relief is by attacking the section which obliges them to take a permit before they can transport by rail essential commodities. It may also be pointed out that reference to the decision of this Court in Dwarka Prasad 's case(1) is not very opposite and has no bearing on the present case. Section 4(3) of the Uttar Pradesh Coal Control Order was declared void on the ground that it committed to the unrestrained will of a single individual to grant, withhold or cancel licences in any way he chose and there was nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Section 4(3) of the Uttar Pradesh Coal Control Order was in these terms: " The Licensing Authority may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence or any terms thereof granted by him under the Order for reasons to be recorded. Provided that every power which is under this Order exercisable by the Licensing Authority shall also be exercisable by the State Coal Controller, or any person authorized by him in this behalf In the present Control Order there is no such provision as existed in the Uttar Pradesh Coal Control Order. Provisions of that Control Order bear no analogy to the provisions of the present Control Order. The policy underlying the Order is to regulate the transport of cotton textile in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile Commis sioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion (i) ; A.I.R. 1954 S.C. 225; 388 cannot be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief Presumably, as appears from the different forms published in the Manual, there are directions and rules laid down by the Central Government for the grant or refusal of permits. The next contention of Mr. Umrigar that section 3 of the Essential Supplies (Temporary Powers) Act, 1946, amounts to delegation of Legislative power outside the permissible limits is again without any merit. It was settled by the majority judgment in the Delhi Laws Act case (1) that essential powers of legislation cannot be delegated. In other words, the legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. In the present case the legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to the Central Government in exercising its powers under section 3. Delegation of the kind mentioned in section 3 was upheld before the Constitution in a number of decisions of their Lordships of the Privy Council, vide Russell vs The Queen (2), Hodge vs The Queen (3), and Shannon vs Lower Mainland Dairy Products Board (4)and since the coming into force of the Constitution delegation of this character has been upheld in a number of decisions of this Court on principles enunciated by the majority in the Delhi Laws Act case (1). As already. pointed out, the preamble and the body of the sections sufficiently formulate the legislative policy and the ambit and character of I I) ; (2) 7 A.C. 829. (3) 9 A.C. II7. (4) [I938] A.C. 708. 389 the Act is such that the details of that policy can only be worked out by delegating them to a subordinate authority within the framework of that policy. Mr. Umrigar could not very seriously press the question of ' the invalidity of section 3 of the Act and it is unnecessary therefore to consider this question in greater detail. Section 4 of the Act was attacked on the ground that it empowers the Central Government to delegate its own power to make orders under section 3 to any officer or authority subordinate to it or the Provincial Government or to any officer or authority subordinate to the Provincial Government as specified in the direction given by the Central Government. In other words, the delegate has been authorized to further delegate its powers in respect of the exercise of the powers of section 3. Mr. Umrigar contended that it was for the Legislature itself to specify the particular authorities or officers who could exercise power under section 3 and it was not open to the Legislature to empower the Central Government to say what officer or authority could exercise the power. Reference in this connection was made to two decisions of the Supreme Court of the United States of America Panama Refining Co. vs Ryan (1) and Schechter vs United States (2). In both these cases it was held that so long as the policy is laid down and a standard established by a statute, no unconstitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the Legislature is to apply. These decisions in our judgment do not help the contention of Mr. Umrigar as we think that section 4 enumerates the classes of persons to whom the power could be delegated or sub delegated by the Central Government and it is not correct to say that the instrumentalities have not been selected by the Legislature itself. The decision of their Lordships of the Privy Council in Shannon 's case (3), completely negatives the contention raised regarding the invalidity of section 4. (1) ; (3) (2) ; 390 In that case the Lt.Governor in Council was given power to vest in a marketing board the powers conferred by section 4A(d) of the Natural Products Marketing (British Columbia) Act, 1936. The attack on the Act was that without constitutional authority it delegated legislative power to the Lt.Governor in Council. This contention was answered by their Lordships in these terms: " The third objection is that it is not within the powers of 'the Provincial Legislature to delegate so called legislative powers to the Lt. Governor in Council, or to give him powers of further delegation This objection appears to their Lordships subversive of the rights which the Provincial Legislature enjoys while dealing with matters falling within the classes of subjects in relation to which the Constitution has granted legislative powers. Within its appointed sphere the Provincial Legislature is as supreme as any other Parliament; and it is unnecessary to try to enumerate the innumerable occasions on which Legislatures, Provincial, Dominion and Imperial, have entrusted various persons and bodies with similar powers to those contained in this Act. " The next contention that the provisions of the Textile Control Order operate as an implied repeal of sections 27, 28 and 41 of the Indian Railways Act and are therefore invalid is also not well founded. The requirement of a permit by clause (3) and provisions of clause (4) of the Order which empower the Textile Commissioner to direct a carrier to close the booking or transport of cloth, apparel, etc., are not in direct conflict with sections 27, 28 and 41 of the Railways Act. The Railways Act does not exclude the placing of a disability on a railway administration by the Government or any other authority. This clause merely supplements the relevant provisions of the Railways Act and does not supersede them. Similar observations apply to clause (5) which enables the Textile Commissioner to place an embargo on the transport of certain textiles from one area to another. There is nothing in the provisions of the order which in any way overrides or supersedes the provisions of the different sections of the Railways Act referred to above. 391 The last contention of Mr. Umrigar that section 6 having been declared invalid, section 3 is inextricably mixed with it and should also have been declared invalid is also not valid, because apart from the grounds given by the High Court for holding that the two sections were not so interconnected that the invalidity of one would make the other invalid, the High Court was in error in holding that section 6 was unconstitutional. Section 6 of the Act cited above declare, that an order made under section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. In other words it declares that if there is any repugnancy in an order made under section 3 with the provisions of any other enactment, then notwithstanding that inconsistency the provisions of the Order will prevail in preference to the provisions of other laws which are thus inconsistent with the provisions of the Order. In the view of the High Court the power to do something which may have the effect of repealing, by implication, an existing law could not be delegated in view of the majority decision of this Court in In Re: Delhi Laws Act (1), where it was held that to repeal or abrogate an existing law is the exercise of an essential legislative power. The learned Judges of the High Court thought that the conferment of power of the widest amplitude to make an order inconsistent with the pre existing laws is nothing short of a power to repeal. In our opinion the construction placed on section 6 by the High Court is not right. Section 6 does not either expressly or by implication repeal any of the provisions of pre existing laws; neither does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means as if the repealed statute was never on the statute book. It is wiped out from the statute book. The effect of section 6 certainly is not to repeal any one of those laws or abrogate then;. Its object is simply to by pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) (I) [1951) S.C.R, 747. , or the orders made thereunder. In other words, the orders made under section 3 would be operative in regard to the, essential commodity covered by the Textile Control Order wherever there is repugnancy in this Order with the existing laws and to that extent the existing laws with regard to those commodities will not operate. By passing a certain law does not necessarily amount to repeal or abrogation of that law. That law remains unrepealed but during the continuance of the order made under section 3 it does not operate in that field for the time being. The ambit of its operation is thus limited without there being any repeal of any one of its provisions. Conceding, how ever, for the sake of argument that to the extent of a repugnancy between an order made under section 3 and the provisions of an existing law, to the extent of the repugnancy, the existing law stands repealed by implication, it seems to us that the repeal is not by any Act of the delegate, but the repeal is by the legislative Act of the Parliament itself. By enacting section 6 Parliament itself has declared that an order made under section 3 shall; have effect notwithstanding any inconsistency in this order with any enactment other than this Act. This is not a declaration made by the delegate but the Legislature itself has declared its will that way in section 6. The abrogation or the implied repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under section 3. The power of the delegate is only to make an order under section 3. Once the delegate has made that order its power is exhausted. Section 6 then steps in wherein the Parliament has declared that as soon as such an order comes into being that will have effect notwithstanding any inconsistency therewith contained in any enactment other than this Act. Parliament being supreme, it certainly could make a law abrogating or repealing by implication provisions of any pre existing law and no exception could be taken on the ground of excessive delegation to the Act of the Parliament itself. There is no delegation involved in the provisions of section 6 at all and that section could not be held to be unconstitutional on that ground, 393 The result therefore is that in our opinion the provisions of sections 3, 4 and 6 of the Essential Supplies (Temporary Powers) Act, 1946, are constitutional and. the impugned order is also constitutional. Accordingly ' this appeal is dismissed, and the trial Court is directed to proceed expeditiously with the case in accordance with law. Appeal dismissed.

Clause 3 of the Cotton Textile (Control of Movement) Order, 1948, promulgated by the Central Government under section 3 of the Essential Supplies (Temporary Powers) Act, 1946, does not deprive a citizen of the right to dispose of or transport cotton tex B tiles purchased by him. It requires him to take a. permit from the Textile Commissioner to enable him to transport them. The requirement of a permit in this respect cannot be regarded as an A unreasonable restriction on the citizen 's right under sub clauses (f) and (g) of article 19(1) of the Constitution. The policy underlying the Control Order is to regulate the transport of cotton textiles in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or a refusal of a permit is to be governed by the policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion cannot be called invalid and if there is an abuse of power there is ample power in Courts to undo the mischief. Messrs. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh (([1954] S.C.R. 803) distinguished. It was settled by the majority judgment in the Delhi Laws Act case ([1951] 'S.C.R. 747) that the essential powers of legislation cannot be delegated. The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The Legislature has laid down such a principle in the Act and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at given prices. The preamble and the body of the sections in the Essential Supplies (Temporary Powers) Act, 1946, sufficiently formulate the legislative policy and the ambit and the character of the Act is such that the details of that policy can only be worked out by delegating that power to a subordinate authority within the framework of that policy. Therefore section 3 of the Act is not ultra vires the Legislature on the ground of delegation of legislative power. Section 4 of the Act enumerates the classes of persons to whom the power could be delegated or sub delegated by the Central Government and it is not correct to say that the instrumentalities have not been selected by the Legislature itself. Accordingly section 4 of the Act is not ultra vires on the ground of excessive delegation of legislative powers. Shannon vs Lower Maintand Dairy Products Board ([1938] A.C. 708) applied. 382 The requirements of a permit by clause 3 and the provisions of clause 4 of the Central Order which empower the Textile Commissioner to direct a carrier to close booking or transport of cloth apparel, etc., are not in conflict with sections 27, 28 and 41 of the Railways Act. These clauses merely supplement the relevant provisions of the Railways Act and do not supersede them. ' Section 6 of the Act does not either expressly or by implication repeal any of the provisions of the preexisting laws ; nor does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means that the repealed statute must be regarded as if it had never been on the statute book. The effect of section 6 is not to repeal those laws or abrogate them but simply to by pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) Act, 1946 or the orders made thereunder. Even assuming that the existing law stands repealed by implication, such abrogation or repeal is by force of the legislative declaration contained in section 6 and is not by force of the order made by the delegate under section 3. Accordingly there is no delegation involved in the provision of section 6 and it cannot be held uncon stitutional on that ground.

Criminal Appeal No. 640 of 1988. From the Judgment and Order dated 27.4.1987 of the Delhi High Court in Crl. Rev. No. 221 of 1986. B. Datta, Additional Solicitor General, Kitty Kumar Mangalam and Miss A. Subhashini for the Appellant. Hardev Singh and R.K. Agnihotri for the Respondent. The Judgment of the Court was delivered by RAY, J. Special leave granted. Heard learned counsel for the parties. The prosecution case, in short, is that to create fear and terror to commit murder and to aggravate tense situation some persons hatched a conspiracy to massacre the general public by placing transistor bombs at public places and also by placing them in public transports as trains, buses etc. Many explosions took place in May 1985 in Delhi and parts of Uttar Pradesh in consequence whereof many persons were killed in Delhi and some places in Uttar Pradesh. Several cases were registered in different police stations of Aligarh, Ghaziabad, Meerut and Khekra etc. In Delhi F.I.R. No. 238 of 1985 was registered i.e. State vs Kartar Singh Narang etc. wherein all the accused persons named therein were arrested except one Gurdeep Singh Sehgal who was declared as a proclaimed offender. The accused Jagjit Singh and Gurvinder Singh turned approvers and they were granted pardon under Section 308 of the Code of Criminal Procedure, 1973. They were examined as P.W. 1 and P.W. 2 in the committal case proceeding in the court of Chief Metropolitan Magistrate on December 24, 1985. Both these approvers resiled from their statements in the court of the Committing Magistrate. The accused persons were committed to the Court of Sessions to stand their trial for offences under Sections 121, 121A, 153, 153A, 302 and 307 I.P.C. and sections 3, 5 and 6 of Explosives Substances Act. PG NO. 1096 On February 27, 1986, Surjit Kaur, another accused in the Transistor Bomb Case, against whom cases were pending in the Meerut, Ghaziabad and Aligarh Districts of U.P., moved an application under Section 406 of the Code of Criminal Procedure before this Court for transfer of criminal case pending in the court of Meerut to a court in Delhi. This Court after hearing Counsel for the State of Uttar Pradesh has directed that criminal cases referred to at Serial Nos. 1, 2, 3 and 5 in paragraph 2 of the transfer petition stand transferred to the Court of the Chief Metropolitan Magistrate, Delhi and shall be tried along with the case instituted in the Court of the Chief Metropolitan Magistrate, Delhi arising out of F.I.R. No. 238 of 1985 of Police Station, Patel Nagar, New Delhi. When the matter was taken up in the Court of Sessions, the respondent, Jagjit Singh, the approver moved an application that he cannot be examined as a witness as he had not accepted the pardon and did not support the prosecution version and he was forced to make a wrong statement by the police before the Metropolitan Magistrate. The application was rejected by the Trial Judge after hearing the arguments of the parties on March 1, 1986. Against this order, a Criminal Revision Petition No. 92 of 1986 was filed by the respondent, Jagjit Singh in the High Court at Delhi. This application was heard by Jagdish Chandra, J who dismissed the petition on August 12, 1986 holding that the mandate of the law requiring that the approver shall be examined both before the Committing Magistrate as well as during trial as a witness, is binding not only on the trial court and the prosecution but also on the approver as well. Thereafter, one of the accused person who was a proclaimed offender was arrested and a supplementary challan was filed in the Court of Metropolitan Magistrate, Delhi. The respondent, Jagjit Singh was sought to be examined as an approver by the prosecution, in the said supplementary committal proceeding in F.I.R. No. 238 of 1985. The respondent objected to his being summoned as an approver on the ground inter alia that he cannot be examined as a witness in a case though he is figuring as an accused person in other five cases on the same facts and circumstances which are being jointly tried. The Chief Metropolitan Magistrate, Delhi dismissed the application by his order dated October 6, 1986. Against this order the respondent Jagjit Singh filed Criminal Revision Petition No. 221 of 1986. M.K. Chawla, J after hearing the parties allowed the Revision Petition and directed the State not to examine the respondent approver as an approver in case F.I.R. No. 238 of 1985. PG NO. 1097 Aggrieved by this order this appeal by special leave has been filed by State. It has been urged that the statement recorded under Section 164 of the Code of Criminal Procedure was not made by the respondent, Jagjit Singh voluntarily but it was obtained under coercion by the police. It has also been contended that he resiled from his statements in the court of the Committing Magistrate and he has not accepted the pardon granted to him by the Magistrate. He should be arrayed as an accused in the case F.I.R. No. 238/85 and should be tried as an accused along with other accused in the said case. This contention is not tenable in as much as the pardon granted to the respondent, Jagjit Singh was accepted by him and other approver, Gurvinder Singh who were examined as P.W. 1 and P.W. 2 in the court of the Committing Magistrate. These approvers, of course, resiled from their statement in the court of the Committing Magistrate. It has therefore, been submitted that the prosecution cannot examine him as a witness in the said case as he has cast away the pardon granted to him. This submission, in our considered opinion, is not tenable in as much as sub section (4) of Section 306 of Code of Criminal Procedure clearly enjoins that a person accepting a tender of pardon has to be examined as a witness in the court of the Magistrate taking cognizance of the offence and in the subsequent trial, if any. It is therefore, a mandate of the provisions of the said Act to the prosecution to examine the approver to whom pardon has been granted as a witness both in the Committing Court as well as in the trial court It does not matter whether the approver has resiled from his statement and has not made a full and true disclosure of whole of the circumstances within his knowledge relating to the offence so long as the Public Prosecutor does not certify that in his opinion the approver has either wilfully concealed anything essential or has given false evidence contrary to the condition on which the tender of pardon was made. It has been next contended that the grant of pardon is in the nature of a contract between the State granting the pardon on the one hand and the person accepting the pardon on the other hand. As the State has the power to revoke the pardon at any time the approver has also got the reciprocal right to cast away the pardon granted to him. This submission is also not tenable. The power to grant pardon carries with it the right to impose a condition limiting the operation of such a pardon. Hence a pardoning power can attach any condition, precedent or subsequent so long as it is not illegal, immoral or impossible of performance. Section 306 clearly enjoins that the approver who was PG NO 1098 granted pardon had to comply with the condition of making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence and to every other concerned whether as principal or abettor, in the commission thereof. It is because of this mandate, the State can not withdraw the pardon from the approver nor the approver can cast away the pardon granted to him till he is examined as a witness by the prosecution both in the Committing Court as well as in the trial court. The approver may have resiled from the statement made before the Magistrate in the Committing Court and may not have complied with the condition on which pardon was granted to him, still the prosecution has to examine him as a witness in the trial court. It is only when the Public Prosecutor certifies that the approver has not complied with the conditions on which the tender was made by wilfully concealing anything essential or by giving false evidence, he may be tried under section 308 of the Code of Criminal Procedure not only for the offence in respect of which pardon was granted but also in respect of other offences. In these circumstances, the question of casting away the pardon granted to an approver and his claim not to be examined by the prosecution as a witness before the trial court is without any substance. It has been submitted in this connection by citing a decision In re Arusami Goundan, AIR 1959 (Madras) 274 that the accomplice who has been tendered a pardon if at any stage either wilfully conceals material particulars or gives false evidence and thereby fails to comply with the conditions on which pardon was tendered to him and thereby incurs its forfeiture he should not be compelled by the prosecution to be examined as a witness before the trial court. It has been observed even in the said case that the provisions of Section 337(2) of the old Code of Criminal Procedure, 1898 (5 of 1898) provide that the approver who has been tendered pardon must be examined both in the Committing Court and the Court of Sessions it has been held that: "The obligation to make a full and true disclosure would arise whenever the approver is lawfully called upon to give evidence touching the matter; it may be in the Committing court, or, it may be in he Sessions Court. But, the obligation to make a full and true disclosure rests on the approver at every stage at which he can be lawfully required to give evidence. If at any stage he either wilfully conceals material particulars or gives false evidence he would failed to comply with the conditions on which the pardon was tendered to him and thereby incurred its forfeiture. Neither as a matter of reason or logic, nor as a matter PG NO 1099 of statutory interpretation can it be said that section 339(1) is dependent on or connected with section 337(2) in the sense that the approver must be examined both in the Committing Court and the Sessions Court before it can be held that he has forfeited his pardon. It is sufficient if he fails to conform to the conditions on which the pardon has been granted to him at either stage." This decision has been considered in Emperor vs Shandino Dhaniparto, AIR 1940 (Sind) 114 wherein it has been held that: "When an accused after accepting pardon denies all knowledge of facts before the Committing Magistrate and the case is committed to Sessions Court the pardon cannot be forfeited before the accused is examined in the Sessions Court. Once a pardon is tendered and accepted, section 337(2) renders it obligatory for the prosecution to examine the approver both in the Committing Magistrate s Court and in the Sessions Court should the case be committed. Failure of the prosecution to examine the approver in the Sessions Court vitiates the trial. " The provisions of Sections 337 and 339 of the old Code of Criminal Procedure are almost in identical terms with the provisions of Sections 306 and 308 of the Code of Criminal Procedure, 1973. This submission on a plain reading of these sections, cannot be sustained. It has been urged with great vehemence that the appellant, Jagjit Singh was granted pardon with regard to case F.I.R. No. 238 of 1985 whereas his name appears as an accused in the other four cases which have been directed to be tried along with above case wherein the facts are almost similar. The appellant approver in such circumstances should not be examined by the prosecution as a witness in as much as his evidence may be used in the other criminal cases wherein he figures as an accused. This is against the protection given by Article 2(3) of the Constitution of India. It has, therefore, been submitted that the order dated April 27, 1987 passed in Revision Petition No. 221 of 1986 directing the State not to examine the approver as a witness should not be set aside. This contention is also not tenable in as much as once an accused is granted pardon under section 306 of the Code of Criminal Procedure, he ceases to be an accused and becomes a witness for the prosecution. The only condition imposed by the provisions of the Act is that the approver must make a full and true disclosure of the whole of the circumstances within his PG NO 1100 knowledge relating to the offence and to every other concerned, whether as principal or abettor, in the commission thereof. So long as the Prosecution does not certify that he has failed to do so he continues to be a witness and the prosecution is under obligation to examine him as a witness both in the Committing Court as well as in the trial court. This has been made very clear by this Court in the case of A.J. Peiris vs State of Madras, AIR 1954(SC) 616 wherein it has been observed that: ". .We think that the moment the pardon was tendered to the accused he must be presumed to have been discharged whereupon he ceased to be an accused and became a witness. " We have already held hereinbefore that sub section 4 of Section 306 casts an obligation on the prosecution to examine the approver both in the Committing Court as well as in the trial court. So the appellant who has been granted pardon in case F.I.R. No. 238/85 has to be examined by the prosecution in the trial court no matter that he has resiled from his earlier statement and tried to conceal what was within his knowledge with regard to the offence in question. It will be pertinent to mention here Section 132 of the which lays down that: "A witness shall not be excused from answering any question as to any matter relevant to the matter in issue in any suit or in any civil or criminal proceedings, upon the ground that the answer to such question will criminate, or may tend directly or indirectly to criminate, such witness, or that it will expose, or tend directly or indirectly to expose, such witness to a penalty or forfeiture of any kind. Proviso Provided that no such answer, which a witness shall be compelled to give, shall subject him to any arrest or prosecution, or be against him in any criminal proceeding, except a prosecution for giving false evidence by such answer. Therefore, a witness is legally bound to answer any question which is relevant to the matter in issue even if the answer to such question is likely to criminate him directly or indirectly. Proviso to Section 132 expressly provides that such answer which a witness is compelled to give shall not subject him to any arrest or prosecution PG NO 1101 nor the same can be proved against him in any criminal proceeding except a prosecution for giving false evidence by such answer. The provisions of proviso to Section 132 of the clearly protect a witness from being prosecuted on the basis of the answers given by him in a criminal proceeding which tend to criminate him directly or indirectly. In view of this provision, the apprehension of the respondent that his evidence as approver will be used against him in the other four criminal cases where he figures as an accused is without any basis. On the other hand, he is absolutely protected from criminal prosecution on the basis of the evidence to be given by him when examined by the prosecution as an approver in the said case. This submission of the respondent is, therefore, not tenable. It is pertinent to refer in this connection the decision of this Court in Laxmipat Choraria and Ors. vs State of Maharashtra. wherein it has been observed by Hidayatullah, J as he then was that: ". . Under section 132 a witness shall not be excused from answering any question as to any matter relevant to the matter in issue in any criminal proceeding (among others) upon the ground that the answer to such question will incriminate or may tend directly or indirectly to expose him to a penalty or forfeiture of any kind. The safeguard to this compulsion is that no such answer which the witness is compelled to give exposes him to any arrest or prosecution or can ii be prove i against him in any criminal proceeding except a prosecution for giving false evidence by such answer. " So Section 132 of the Evidence Act sufficiently protects him since his testimony does not go against him. For the reasons aforesaid, the appeal is allowed. The judgment and order dated April 27, 1987 passed in Revision Petition No. 221 of 1986 is hereby set aside. R.S.S. Appeal allowed.

Many explosions took place in May 1985 in Delhi and Uttar Pradesh killing many persons. Consequently, a number of cases were registered. In Delhi, FIR No. 238 of 1985 was registered wherein the respondent and another accused turned approvers and were granted pardon under section 306 of the Code of Criminal Procedure, 1973. Both these approvers however resiled from their statements in the Court of the Committing Magistrate. Four Criminal cases pending in Meerut were later transferred by the Supreme Court to the Court of the Chief Metropolitan Magistrate, Delhi, to be tried along with the case arising out of FIR No. 238 of 1985. In the supplementary committal proceedings in case FIR No. 238 of 1985, the respondent objected to his being summoned as an approver on the ground inter alia that he could not be examined as a witness in the case because he was figuring as an accused person in the other four cases on the same facts and circumstances, which were being jointly tried. The Chief Metropolitan Magistrate dismissed the application. The High Court allowed the respondent 's revision petition and directed the State not to examine the respondent as an approver in case F.I.R. No. 238 of 1985. In the appeal before this Court, it was inter alia contended that the prosecution could not examine the respondent as a witness because he had cast away the pardon granted to him. Allowing the appeal, HELD: 1. The pardon granted to the respondent was accepted by him and he was examined as a prosecution witness in the Court of the Committing Magistrate, though he resiled from his statement there. [1097C] PG NO 1093 PG NO. 1094 2. It is a mandate of the provisions of the Criminal Procedure Code to the prosecution to examine the approver to whom pardon had been granted as a witness both in the Committing Court as well as in the trial court. [1097E] 3. Section 306 clearly enjoins that the approver who was granted pardon had to comply with the condition of making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offencc and to every other concerned whether as principal or abettor, in the commission thereof. It is because of this mandate that the State cannot withdraw the pardon from the approver nor the approver can cast away the pardon granted to him, till he is examined as a witness by the prosecution both in the Committing Court as well as in the trial court. [1097H; 1098A B] 4. The respondent who has been granted pardon in case F.I.R. No. 238 of 1985 has to be examined by the prosecution in the trial court no matter that he has resiled from his earlier statement and tried to conceal what was within his knowledge with regard to the offence in question. [1100D] In re: Arusami Goundan, AIR 1959 Mad. 274 and Emperor vs Shandino Bhaniperto, AIR 1940 (Sind) 114 referred to. Once an accused is granted pardon under section 306, he ceases to be an accused and becomes a witness for the prosecution. So long as the prosecution does not certify that he has failed to make a full and true disclosure of the whole of the circumstance within his knowledge relating to the offence, he continues to be a witness and the prosecution is under obligation to examine him as a witness both in the Committing Court as well as in the trial court. [1099H; 1100A B] A.J. Peiris vs State of Madras, AIR 1954 (SC) 616 referred to. A witness is legally bound to answer any question which is relevant to the matter in issue even if the answer to such question is likely to incriminate him directly or indirectly. [1100G] 7. The proviso to section 132 of the Indian Evidence Act clearly protects a witness from being prosecuted on the basis of the answers given by him in a criminal proceeding which tend to incriminate him directly or indirectly. [1101A] PG NO. 1095 8. The apprehension of the respondent that his evidence as approver will be used against him in the other four criminal cases where he figures as an accused was without any basis. On the other hand, he was absolutely protected from criminal prosecution on the basis of the evidence to be given by him when examined by the prosecution as an approver. [1101B C]

Civil Appeal No. 10234 of 1983. From the Judgment and Order dated 3.1.19/9 of the Alla habad High Court in Civil Revision No. 3714 of 1978. K.B. Rohtagi for the Appellant. R.K. Garg and D.K. Garg for the Respondent. The Judgment of the Court was delivered by AHMADI, J. The short question which arises for our consideration in this appeal by special leave is whether a tenant of a premises constructed in 1967 is entitled to the protection of Section 39 of the U.P. Urban Buildings (Regu lation of Letting, Rent and Eviction) Act, 1972 (Act No. 13 of 1972 as amended by Act No. 17 of 1985), hereinafter called 'the Act ', in an eviction suit instituted before the commencement of the Act. The Act came into force w.e.f. 15th July, 1972 by virtue of the notification issued by the State Government in exercise of power conferred by Sub Section 4 of Section 1 of the Act, vide Notification No. 3409/XXIX 59 72 dated 27th June, 1972 published in the U.P. Government Gazette, Extra, dated 1st July, 1972. The Act was enacted for inter alia regulation of letting and eviction of tenants from certain classes of buildings situate in urban areas specified in Sub Section (3) of Section 1. Section 2 indicates the buildings to which the Act shall not apply. We are concerned with Sub Section (2) of Section 2, the rele vant part whereof reads as under: "Except as provided in sub section (5) of section 12, sub section (1 A) of Section 21, sub section (2) of Section 24, Sections 24 A, 24 B, 24 C or sub section (3) of section 29, nothing in this Act shall apply to building during a period of ten years from the date on which its construction is completed". Since it is not disputed before us that the construction of the suit property was completed in 1967, we need not set out the provisos and the explanations to the sub section. Section 3 defines the various expressions used in the Act. Under 189 clause (a) 'tenant ', in relation to a building means a person by whom its rent is payable and 'building ' according to clause (i) means a residential or non residential roofed structure including any land, garages and out houses appur tenant thereto. Any person to whom rent is or if the build ing were let, would be, payable, including his agent or attorney or such person, is a 'landlord ' within the meaning of clause (j) of that section. It would thus seem that but for the exemption granted by Section 2(2), the provisions of the Act would have applied to the letting of the suit prem ises. The scheme of Section 2 is that buildings referred to in clauses (a) to (f) are exempt from the operation of the Act for all times (subject of course to legislative changes) whereas the exemption granted by Section 2(2) is for a period of ten years from the date of completion of construc tion. Chapter III regulates to letting. Section 11 provides that no person shall let any building except in pursuance of an allotment order issued by the District Magistrate under Section 16. Chapter IV regulates eviction. Section 20 inter alia prohibits the institution of a suit for eviction of a tenant from any building except on the grounds catalogued in clauses (a) to (g) of sub section (2) thereof. Section 21 provides for the eviction of a tenant if the building is bonafide required by the landlord for his own use or the use of any of his family member. The scheme of Chapters III & IV clearly shows that both the letting of and eviction from the buildings to which the Act applies are regulated by the provisions of the Act. Section 39 of the Act with which we are mainly concerned finds its place in Chapter VII entitled Miscellaneous and Transitional Provisions. That section reads as under: "Pending suits for eviction relating to building brought under regulation for the first time In any suit for evic tion of a tenant from any building to which the old Act did not apply, pending on the date of commencement of this Act, where the tenant within one month from such date of com mencement or from the date of his knowledge of the pendency of the suit, whichever be later, deposits in the court before which the suit is pending, the entire amount of rent and damages for use and occupation (such damages for use and occupation being calculated at the same rate as rent) to gether with interest thereon at the rate of nine per cent per annum and the landlord 's full cost of the suit, no decree for eviction shall be passed except on any of the 190 grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, and parties shall be entitled to make necessary amendment in their pleadings and to adduce additional evidence where necessary. " This Section carried an explanation which came to be omitted by Section 8(iv) (and be deemed always to have been omitted) of the Civil Laws Amendment Act, 1972. Section 40 lays down that where an appeal or revision arising out of a suit for eviction of a tenant from any building to which the old Act did not apply is pending on the date of commencement of this Act, it shall be disposed of in accordance with the provi sions of Section 39, which shall mutatis mutandis apply. The plain reading of Section 39 makes it clear that the said section obliges the court to refuse to pass a decree for eviction, except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20, if the following four require ments are satisfied: (i) the building is one to which the old Act (the U.P. (Temporary) Control of Rent and Eviction Act, 1947 U.P. Act No. III of 1947) did not apply; (ii) the eviction suit must be pending on the date of commencement of the Act i.e., 15th July, 1972: (iii) the tenant deposits in court the entire amount of rent/damages for the use and occupation of the building together with interest at 9% per annum and the landlord 's full cost of the suit; and (iv) such deposit is made within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the eviction suit, whichever is later. The benefit of Section 39 is extended mutatis mutandis to an appeal or revision arising out of an eviction suit to which the old Act did not apply provided the said appeal or revi sion was pending on the date of commencement of the Act. On a plain reading of Section 39 it becomes clear that in a suit for eviction to which the said provision applies, the Court trying the suit is 191 precluded from passing a decree for eviction if the tenant deposits in court the entire amount of rent and damages together with interest at 9% per annum and the landlord 's full cost of the suit within the time allowed but this embargo does not apply if eviction is sought on the ground or grounds mentioned in the proviso to Sub section (1) or in clauses (b) to (g) of Sub section (2) of Section 20. The ground mentioned in the proviso to sub section (1) of Sec tion 20 is determination of tenancy by efflux of time where the duration of tenancy is fixed under a compromise or adjustment arrived at with reference to a suit, appeal, revision or execution proceeding which is recorded in Court or is otherwise reduced to writing and signed by the tenant. Sub section (2) of Section 20 enumerates the grounds in clauses (a) to (g) on which an eviction suit can be rounded against a tenant. Clause (a) permits the institution of a suit for eviction if the tenant is in arrears of rent for not less than four months and has failed to pay the same within one month from the date of service of a notice of demand upon him. The grounds in clauses (b) to (g) are other than arrears of rent. From the fact that a suit rounded on anyone or more of the grounds set out in the proviso to sub section (1) and clauses (b) to (g) of sub section (2) of Section 20 is exempt from the operation of Section 39, it would seem that the legislature desired to grant protection from eviction where the same is sought on the sole ground of arrears of rent. That is why in the exemption clause con tained in Section 39, clause (a) to sub section (2) of Section 20 which permits eviction on the ground of arrears of rent is deliberately and intentionally excluded and an embargo is created against the passing of an eviction decree if the tenant deposits in court within the time allowed the entire arrears of rent together with interest and costs. If the suit is on anyone or more of the exempted grounds, the landlord is permitted to proceed with the same, if necessary by effecting an amendment in the pleading and by adducing additional evidence. Such a suit may be continued and if the ground or grounds pleaded is/are proved, the court is enti tled to grant eviction. It, therefore, seems clear to us that the legislature intended to protect eviction of a tenant on the ground of arrears of rent if the tenant com plied with the conditions of Section 39. In the present proceedings it is not disputed that the construction of the demised premises was completed in 1967 and the letting had taken place in the same year. It is also not disputed that immediately on the completion of ten years the tenant deposited on 2nd September, 1977 an amount of Rs.4,005 being the arrears of rent inclusive of interest and cost. It is not disputed that this payment was made within one month after the expiry of the period of ten years stipu lated in 192 Section 2(2) of the Act to take advantage of Section 39 of the Act. The eviction suit was admittedly filed on 27th May, 1972 i.e. before the commencement of the Act i.e. 15th July, 1972. There is also no dispute that the provisions of the old Act did not apply to the suit. On these undisputed facts the trial court gave the benefit of Section 39 and refused to order ejectment of the tenant. The landlord filed a revision application which was rejected by the Second Addi tional District Judge, Bulandshahr, on 15th July, 1978. The High Court rejected the landlord 's further revision applica tion on the ground that the question was concluded by the decision in R.D. Ram Nath & Co. & Anr. vs Girdhari Lal & Anr. , It is against the said decision that the present appeal is preferred. The question then is wheth er or not the provision of Section 39 of the Act is attract ed in the backdrop of the above facts. We may now consider the case law on the point to which our attention was called. In Ram Swaroop Rai vs Lilavathi, ; 3 SCC 452, this Court while con struing section 2(2) of the Act observed that the burden is on the landlord to show that his case falls within the exemption engrafted in the said sub Section. In the present case, since the facts are not in dispute the question of onus recedes in the background. In Om Prakash Gupta etc. vs Dig Vijen: drapal Gupta etc. ; , , a three Judge Bench had to consider the effect of section 2(2) read with section 39 of the Act. In that case, an eviction suit was filed against the appellant tenant on the ground that the provisions of the Act did not apply to the demised shop and the tenant was therefore liable to be evicted. The Trial Court decreed the suit on the finding that the construction of the suit shop was completed in 1967 and since 10 years had not elapsed from the date of completion of the construc tion the provisions of the Act had no application. The tenant carried the matter in revision but the judgment and decree of the Trial Court was substantially maintained. The tenant thereupon moved the High Court under section 115, C.P.C. The learned Single Judge who heard the revision remitted the matter to the Trial Court for recording a finding as to on what date the construction of the building could be said to have been completed within the meaning of section 2(2) read with Explanation I(a) thereto. The Trial Court returned a finding to the effect that the construction of the disputed shop must be taken to have been completed on the date of the first assessment, i.e. 1st April, 1968, within the meaning of the said provision. The tenant chal lenged the finding on the ground that the date of occupation should have been taken to be the date of completion of the construction and not the date of the first assessment. The Division 193 Bench to which the case was referred concluded that the construction of the shop must be deemed to have been com pleted on 1st April, 1968 i.e. at the date of the first assessment and not at the date of actual occupation and hence the provisions of the Act had no application to the building till the date of the decision of the revision application on 23rd March, 1978 as the period of 10 years expired later on 31st March, 1978. This Court upheld the finding that the date of construction must be taken, as the date of first assessment i.e. 1st April, 1968 and not the date of actual occupation. To overcome this difficulty it was contended on behalf of the tenant that on a correct reading of section 2(2) the exemption engrafted therein would not embrace buildings constructed prior to the en forcement of the Act. This Court construing the language of section 2(2) of the Act held that the sub section nowhere provided that the building should have been constructed after the commencement of the Act; to so interpret it would tantamount to adding words in it which was not permissible. This Court, therefore, negatived the contention that the exemption under the sub section did not embrace buildings constructed before the Act came into force. As pointed out earlier the revision application was decided on 23rd March, 1978 whereas the period of 10 years from the date of comple tion of the construction i.e. 1st April, 1968 was to end on 31st March, 1978 i.e. a week later. Section 39 of the Act, therefore, clearly did not apply in the facts of that case. Secondly, it was found that the suit was instituted on 23rd March, 1974 long after the commencement of the Act and was therefore not pending on 15th July, 1972 to attract the application of Section 39 of the Act. For these reasons, this Court came to the conclusion that the appellant Om Prakash was not entitled to tile protection of section 39 of tile Act. Two features which distinguish this case from the case on hand are: (i) that the revision application was disposed of by the High Court before the expiry of the moratorium period of 10 years granted by section 2(2) of the Act; and (ii) the suit having been filed long after the commencement of the Act on 15th July, 1972 could not be said to be pending at the date of the commencement of the Act to enable the tenant to seek redress under section 39 of the Act. In Vineet Kumar vs Mangal Sain Wadhera, ; , an , eviction suit was filed on the ground of arrears of rent and damages for use and occupation of the demised premises pendente lite. The tenant was inducted in the building stated to have been constructed in 1971 on 7th February, 1972, on a monthly rent of Rs.250. The building in suit was assessed to house and water tax on 1st October, 197 1. The tenant defaulted in the payment of rent 'despite service of notice dated 24th 194 March, 1977. Admittedly, the suit was filed after the com mencement of the Act. The point for consideration was wheth er the building which was not 10 years ' old on the date of the suit and was therefore exempted from the operation of the Act, would be governed by it on the expiry of the period of 10 years pendente lite. Dealing with this contention this Court observed in paragraph 13 of the judgment as under: "The moment a building becomes ten years old to be reckoned from the date of completion, the new Rent Act would become applicable. " The decision in Om Prakash Gupta 's case (supra) was rightly distinguished on the ground that it was not neces sary in that case to deal with the question whether the tenant would be entitled to the benefit of Section 39 as the building had not become ten years old when the revision was disposed of by the High Court on 23rd March, 1978. Dealing next with the contention that the Court had to decide the case on the basis of the cause of action that had accrued before the institution of the suit and not on a new cause of action, this Court, relying on the observations to the effect that subsequent developments can be looked into made in paragraph 14 of the decision in Pasupuleti Venkates warlu vs Motor and General Traders; , , ob served as under: "Normally amendment is not allowed if it changes the cause of action. But it is well recognised that where the amend ment does not constitute an addition of a new cause of action, or raise a new case, but amounts to no more than adding to the facts already on the record, the amendment would be allowed even after the statutory period of limita tion. The question in the present case is whether by seeking the benefit of Section 39 of the new Act there is a change in the cause of action." After referring to the case of A.K. Gupta & Sons vs Damodar Valley Corporation, ; , this Court further observed: "The appellant in the present case only seeks the protection of the new Rent Act which became applicable to the premises in question during the pendency of the litigation. We see no reason why the benefit of the new Rent Act be 195 not given to the appellant. Section 20 of the new Rent Act 'provides a bar to a suit for eviction of a tenant except on the specified grounds as provided in the section. Subsection (4) of Section 20 stipulates that in any suit for eviction on the grounds mentioned in clauses (a) to sub section (2), viz. the arrears of rent, if at the first hearing of the suit the tenant in default pays all arrears of rent to the landlord or deposits in court the entire amount of rent and damages for use and occupation of the building due from him, such damages for use and occupation being calculated at the same rate as rent together with interest thereon at the rate of nine per cent per annum and the landlord 's cost of the suit in respect thereof after deducting therefrom any amount already deposited by the tenant under sub section (1) of Section 30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground. Sections 39 and 40 of the new Rent Act also indicate that the benefit of the new Act will be given to the tenant if the conditions contemplated in those sections are satisfied. Section 39 also indicates that the parties are entitled to make neces sary amendment in their pleadings and to adduce additional evidence where necessary. " On this line of reason this Court set aside the judgment and decree of the High Court insofar as it related to evic tion. We find, with respect, that Their Lordships committed an error in overlooking the text of Section 39 of the Act. That section in terms says that the suit must be pending at the commencement of the Act to seek the benefit of that provi sion. Admittedly, the suit in question was filed after the commencement of the Act and hence the tenant was not enti tled to the benefit of Section 39 of the Act. But that apart, in a subsequent decision of this Court in Nand Ki shore Marwah vs Samundri Devi, ; , this Court dissented from the view in Vineet Kumar 's case on the ground that the attention of the Court was not drawn to Om Prakash Gupta 's case (supra) which specifically considered the provisions of the Act and in particular the language of Section 39 of the Act to point out that in order to attract that provision it must be shown that the suit was pending at the commencement of the Act i.e. on 15th July, 1975. Refer ring to Section 20 of the Act, which bars institution of a suit for eviction of a tenant except on grounds specified in clauses (a) to (g) this Court observed as under: 196 "This clearly indicates that the restriction put under Section 20 is to the institution of the suit itself and therefore it is clear that if the provisions of this Act applied then no suit for eviction can be instituted except on the ground 'specified in the sub sections of this sec tion. Keeping in view the language of this section if we examine the provisions contained in sub section (2) of Section (2) it will be clear that for a newly constructed building the provisions of this Act will not apply for 10 years and therefore so far as the restriction under Section 20 is concerned they will not apply and therefore it is clear that within 10 years as provided for in sub section (2) of Section 2 restriction on the institution of suit as provided for in Section 20 subsection (1) quoted above will not be applicable and it is thus clear that during the pendency of the litigation even if 10 years expired the restriction will not be attracted as the suit has been instituted within 10 years and therefore restriction as provided for in Section 20 cannot be attracted. " It may with respect, be pointed out that the comment that the Court 's attention was drawn to Om Prakash Gupta 's case is not correct as this case is specifically mentioned in paragraph 14 of the judgment in that case. Lastly, in Atma Ram Mittal vs Ishwar Singh Punia, ; , the appellant landlord had filed an eviction suit in respect of a shop which had been rented to the respondent in 1978. The suit was filed on the ground that the tenant was in arrears of rent from ist December, 1981 to 31st May, 1982 and the tenancy had been duly terminated by a notice. The suit was filed under sub section (3) of Section 1 of the Haryana Urban (Control of Rent and Eviction) Act, 1973. That sub section provided that "nothing in the Act shall apply to any building the construction of which is completed on or after the commencement of this Act for a period of ten years from the date of its completion". Section 13(1) enumerated the usual grounds on which possession of a building or land could be obtained from a tenant. In November 1984, the tenant applied for dismissal of the suit on the ground that the moratorium period of 10 years expired in June/984 since admittedly the demised shop was constructed sometime in June 1974. Quoting the following passage from Ram Swaroop Rai 's, case (supra): 197 "The legislature found that rent control law had a chilling effect on new building construction, and so, to encourage more building operations, amended the statute to release, from the shackles of legislative restriction, 'new construc tions ' for a period of ten years. So much so, a landlord who had let out his new building could recover possession with out impediment if he instituted such proceeding within ten years of completion. " this Court held as under: "It is well settled that no man should suffer because of the fault of the court or delay in the procedure. Broom has stated the maxim "actus curiae neminem gravabit" an act of court shall prejudice no man. Therefore, having regard to the time normally consumed for adjudication, the ten years ' exemption or holiday from the application of the Rent Act would become illusory, if the suit has to be filed within that time and be disposed of finally. It is common knowledge that unless a suit is instituted soon after the date of letting it would never be disposed of within ten years and even then within that time it may not be disposed of. That will make the ten years holiday from the Rent Act illusory and provide no incentive to the landlords to build new houses to solve problem of shortages of houses. The purpose of legislation would thus be defeated. Purposive interpreta tion in a social amelioration legislation is an imperative irrespective of anything else. " Proceeding further, this Court said: "We are clearly of the opinion that having regard to the language we must find the reason and the spirit of the law. If the immunity from the operation of the Rent Act is made and depended upon the ultimate disposal of the case within the period of exemption of ten years which is in reality an impossibility, then there would be empty reasons. In our opinion, bearing in mind the well settled principles that the rights of the parties crystallise to the date of the institution of the suit as enunciated by this Court in Om Prakash Gupta vs Digviiendrapal Gupta, the meaningful con struc 198 tion must be that the exemption would apply for a period of ten years and will continue to be available until suit is disposed of or adjudicated. Such suit or proceeding must be instituted within the stipulated period of ten years. Once rights crystallise the adjudication must be in accordance with law. " In order to appreciate the controversy in the correct perspective it would not be out of place to notice the legislative changes. During the second world war certain orders were issued under the Defence of India Rules, 1939, relating to the control and letting of accommodations to cope with the paucity of accommodation. This was followed by an ordinance promulgated in 1946 which was repealed by the U.P. (Temporary) Control of Rent and Eviction Act, 1947 described as the Old Act by Section 3(h) of the Act. The measure which was intended to be of a temporary character only continued till the passing of the Act in 1972. When the old Act replaced the 1946 ordinance, the expectation was that the acute shortage of accommodation was only a tempo rary feature and would disappear with the passage of time. The hope was belied and the stringent restrictions placed on the landlord 's rights in the matter of fixation and recovery of rent and eviction from the rented premises had to be continued indefinitely. These restrictions discouraged building activity which added to the already serious housing problem. There was an urgent need to provide incentives and thereby encourage new constructions. With that in view Section 2(2) provided that nothing in the Act shall apply to a building during a period of ten years from the date on which its construction is completed. In other words the legislature has relieved the owner of a new building from the restrictive provisions relating to rent, etc., contained in Sections 4 to 9 of the Act. So also such owners are granted a holiday or recess of ten years from the restric tive provisions regulating letting (Chapter III) and Evic tion (Chapter IV) contained in the Act. This freedom from the operation of the Act for ten years is given for the obvious purpose of encouraging building activity to ease the problem of scarcity of accommodation. The provisions of the Act in this behalf must, therefore, be understood in this background. Section 2(2) in terms says that the provisions of the Act will not apply to new constructions for a period of ten years from the date of completion of the construction. Read positively it means that the Act will apply to such build ings on the expiry of the recess period. But how are suits already filed during the recess period to be dealt with? Does 199 the Act offer any clue in this behalf? In this connection the only provisions which come to mind are sections 39 and 40 of the Act. Section 39 deals with suits pending on the date of commencement of the Act. Section 40 extends protec tion to an appeal or revision pending on the date of com mencement of the Act provided it has arisen out of an evic tion suit filed against a tenant to which the old Act did not apply. Such an appeal or revision has to be disposed of in the same manner as the suit is required to be dealt with under Section 39 of the Act. In order to secure the benefit of Section 39 or 40 it must be shown that the suit, appeal or revision was pending on the date of commencement of the Act. Secondly, if the suit is rounded on the allegation of nonpayment of rent, the tenant must, within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the suit, deposit in court the entire amount of rent and damages for use and occupation of the building with interest as prescribed and landlord 's entire cost of the suit, to take the benefit of the said provision. If both these conditions are satisfied, the law, Section 39. mandates that no decree for eviction shall be passed except on any of the grounds specified in the proviso to sub section (1) or clauses (b) to (g) of sub section (2) of Section 20 of the Act. Similarly Section 40 lays down that if an appeal or revision (arising out of a suit for eviction of a tenant from any building to which the old Act does not apply) is pending on the date of commencement of the Act, the benefit of Section 39 will be available to the tenant. What these two provisions emphasise is that in order to avail of the benefit engrafted therein, the proceedings i.e., the suit, appeal or revision application must be pending at the date of commencement of. the Act, i.e., 15th July, 1972, and the tenant must have deposited the arrears of rent and damages together with interest and full cost of the landlord in the court within one month from the date of such commencement. Once the four conditions of Section 39 set out in the earlier part of this judgment are satisfied, the court is debarred from passing a decree in ejectment except on any of the grounds mentioned in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act. Therefore, even in a suit, appeal or revision application pending at the date of commencement of the Act, a decree for eviction can be passed if the case is brought within the exemption clause of Section 39 not withstanding the fact that the tenant has deposited the full amount of arrears of rent and damages together with interest and cost as required by that section. It, therefore, seems clear to us on the plain language of Section 39 of the Act that the legislature desired to grant protection from evic tion where the same was sought on the sole ground of arrears of rent. In cases falling within the exemption clauses of that section, the legislature has 200 itself permitted the landlord to proceed with the suit and claim eviction on any of the grounds enumerated in the proviso to sub section (1) or in clauses (b) to (g) of sub section (2) of Section 20 of the Act, if necessary by making the required amendment in the pleadings and by adducing additional evidence where necessary. It therefore seems to us that the legislature desired to limit the scope of the application of Sections 39 and 40 to suits, appeals and revisions pending on the date of com mencement of the Act, i.e. 15th July 1972, relating to buildings to which the old Act did not apply and to which the new Act was to apply forthwith and not at a later date. This is clear from the fact that the section contemplates deposit of arrears of rent and damages together with inter est and cost within one month from "such date of commence ment" meaning the date of commencement of the Act. To put it differently the section expects the tenant to make the deposit within one month from 15th July, 1972. This may not be possible unless the Act is to apply to the building forthwith. Of course the benefit of an extended date is given to those cases where the knowledge about the pendency of the proceedings is gained after 15th July, 1972. For example where a suit is actually filed before the commence ment of the Act but the summons of the suit is served in October 1972, the tenant would be entitled to make the deposit within one month from the service of the summons to avail of the benefit of this provision. So also it can apply to cases where the tenant had died before the Act came into force or before the expiry of one month from the date of commencement of the Act and the landlord took time to bring the legal representative on record; in which case the legal representative would be entitled to seek the benefit from the date of knowledge. Of course this benefit would not be available where the tenant dies after the expiry of the period within which the right is to be exercised. The same would be the case in the case of an appeal or revision application. It seems to us that the legislature intended to give the benefit of Sections 39 and 40 to suits, appeals or revisions which were pending on 15th July, 1972 and in which the deposit came to be made within one month from that date. The expression such preceding the word 'commencement ' is clearly suggestive of the fact that it has reference to the date of commencement of the Act and the payment must be made within one month from such commencement. Unless we give such a restricted meaning to the section we would not be able to advance the legislative intent to relieve the landlords of new buildings from the rigours of the Act. This interpreta tion is also in tune with the ratio in Ram Swaroop Rai 's case (supra). 201 was argued that the words 'commencement of this Act ' should be construed to mean the date on which the moratorium period expired and the Act became applicable to the demised buildings. Such a view would require this Court to give different meanings to the same expression appearing at two places in the same section. The words 'on the date of com mencement of this Act ' in relation to the pendency of the suit would mean 15th July, 1972 as held in Om Prakash Gupta (supra) but the words 'from such date of commencement ' appearing immediately thereafter in relation to the deposit to be made would have to be construed as the date of actual application of the act at a date subsequent to 15th July, 1972. Ordinarily the rule of construction is that the same expression where it appears more than once in the same statute, more so in the same provision, must receive the same meaning unless the context suggests otherwise Besides, such an interpretation would render the use of prefix 'such ' before the word 'commencement ' redundant. Thirdly such an interpretation would run counter to the view taken by this Court in Atma Ram Mittal 's case (supra) wherein it was head that no man can be made to suffer because of the court 's fault or court 's delay in the disposal of the suit. To put it differently if the suit could be disposed of within the period of ten years, the tenant would not be entitled to the protection of Section 39 but if the suit is prolonged beyond ten years the tenant would be entitled to such protection. Such an interpretation would encourage the tenant to pro tract the litigation and if he succeeds in delaying the disposal of the suit till the expiry of ten years he would secure the benefit of Section 39, otherwise not. We are, therefore, of the opinion that it is not possible to uphold the argument. In the above view of the matter we are of the opinion that the courts below committed an error in giving the benefit of Section 39 of the Act to the tenant since admit tedly the tenant could not and had not made the deposit within one month from the date of commencement of the Act on 15th July, 1972 but had made the deposit within a month after the moratorium period expired in 1977. As stated above the legislature intended to limit the application of Sec tions 39 and 40 of the Act to cases where the Act became applicable immediately and the deposit could be made within one month from its applicability and not to cases where the moratorium period was to expire long thereafter. For the reasons stated above we think the courts below were wrong in the view they took. We, therefore, set aside the judgment and decree of the courts below by allowing this appeal. Having regard 202 to the fact that the respondent will have to look for alter native accommodation we give him a year 's time to vacate on condition that he pays all the arrears of rent and damages, if due, within one month and files an undertaking in the usual form within even time. In the circumstances of the case we think the parties may be left to bear their own costs. R.S.S. appeal allowed.

On the completion of construction of the demised prem ises in 1967, the appellant landlord had let it out to the respondent tenant in the same year. Later, on 27th May, 1972 the landlord filed the eviction suit against the tenant. On 15th July, 1972 the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act. 1972 came into force. The tenant deposited in the Court on 2nd September, 1977 an amount of Rs.4005 being the arrears of rent inclusive of interest and cost. This payment was made within one month after the expiry of the period of ten years stipulated in section 2(2) of the Act to take advantage of section 39 of the Act. Section 2(2) inter alia provided that nothing in the Act shall apply to a building for a period of ten years from the date on which its construction was completed, while section 39 dealt with pending suits for eviction relating to building brought under the regulation for the first time. The Trial Court gave the benefit of section 39 and refused to order ejectment of the tenant. The landlord 's revision application was rejected by the Additional District Judge, and his further revision was dismissed by the High Court. Allowing the appeal, this Court. , HELD: (1) In order to secure the benefit of Section 39 or 40 it must be shown that the suit, appeal or revision was pending on the date of commencement of the Act. Secondly, if the suit is rounded on the allegation of non payment of rent, the tenant must, within one month from the date of commencement of the Act or from the date of knowledge of the pendency of the suit, deposit in court the entire amount of rent and damages for use and occupation of the building with interest as prescribed and landlord 's entire cost of the suit, to take the benefit of 187 the said provision. If both these conditions are satisfied, the law, section 39, mandates that no decree for eviction shall be passed except on any of the grounds specified in the proviso to sub section (1) or clauses (b) to (g) of sub section (2) of section 20 of the Act. Similarly, section 40 lays down that if an appeal or revision (arising out of a suit for eviction of a tenant from any building to which the old Act does not apply) is pending on the date of commence ment of the Act, the benefit of section 39 will be available to the tenant. [199B E] The legislature intended to give the benefit of sec tions 39 and 40 to suit, appeals or revisions which were pending on 15th July, 1972 and in which the deposit came to be made within one month from that date. The expression 'such ' preceding the word 'commencement ' is clearly sugges tive of the fact that it has reference to the date of com mencement of the Act and the payment must be made within one month from such commencement. unless such a restricted meaning to the section is given, it would not be able to advance the legislative intent to relieve the landlords of new buildings from the rigours of the Act. [200F H] (3) The Legislature desired to limit the scope of the application of sections 39 and 40 to suits, appeals and revisions pending on the date of commencement of the Act, i.e., 15th July, 1972, relating to buildings to which the old Act did not apply and to which the new Act was to apply forthwith and not at a later date. This is clear from the fact that the section contemplates deposit of arrears to rent and damages together with interest and cost within one month from 'such date of commencement ' meaning the date of commencement of the Act. [200B C] R.D. Ram Nath & Co. & Anr. vs Girdhari Lal & Anr., ; Ram Swaroop Rai vs Lilavathi, ; 3 SCC 452; Om Prakash Gupta etc. vs Dig Vijen drapal Gupta etc. ; , ; Vineet Kumar vs Mangal Sain Wadhera, ; ; Pasupuleti Venkateswarlu vs Motor and General Traders, ; A.K. Gupta & Sons vs Damodar Valley Corporation, [1966] I SCR 796; Nand Kishore Marwah vs Samundri Devi, ; and Atma Ram Mittal vs Ishwar Singh Punia, ; , referred to. (4) The Courts below committed an error in giving the benefit of section 39 of the Act to the tenant since admit tedly the tenant could not and had not made the deposit within one month from the date of commencement of the Act on 15th July, 1972 but had made the deposit 188 SUPREME COURT REPORTS [1990] 1 S.C.R. within a month after the moratorium period expired in 1977. [201F]

Appeal No. 255 of 1961. Appeal from the judgment and order dated March 21, 1960, of the Mysore High Court in Writ Petition No. 147 of 1958. B. J. Kolah, J. B. DadachanJi, O. C. Mathur and Ravinder Narain, for the appellants. 779 C. K. Daphtary, Solicitor General of India, B. R. L. Iyengar and P. D. Menon, for respondents. August. KAPUR, J This is an appeal against the judgment and order of the High Court of Mysore in Writ Petition No. 147 of 1958 dismissing the appellant 's petition under articles 226 and 227 of the Constitution for quashing the order of assessment for the period of assessment 1955 56 i.e, from April 1, 1955, to March 31, 1956. In this appeal because of the Validating Act (VII of 1956) the appellants did not challenge their liability for the period April 1, 1955, to September 6, 1955. The facts necessary for the decision of this appeal are these : Appellant No. 1 The Cement Marketing Co. Ltd are the Sales Managers of the second appellant The Associated Cement Co. Ltd. appointed under an agreement dated April 21, 1954. The High Court has described the first appellant to be the Distributors of the second apppellant. The second appellant is a manufacturer of cement and at the material time it had over a dozen factories in different parts of India, none of which was in the State of Mysore. The head office of first appellant is at Bombay and it had then a branch office at Bangalore in the State of Mysore. The first appellant was registered as a dealer under the Mysore Sales Tax Act 1948, hereinafter called the "Mysore Act". At all material times cement was and still is a controlled article. Whether the sale was to a Government Department i.e. to the Director General of Supplies & Disposal, Government of India, New Delhi, or to a person authorised by the said Officer or to the ' public it was effected on authorisations given to the buyers by appropriate Government authorities and 780 produced by them in the office of the first appellant. Both in regard to purchases by the public and the Government the Modus operandi was more or less identical. It was this Every one wishing to buy cement had to get an authorisation in a standard form which authorised the first appellant to sell cement in quantities mentioned, therein and the cement had to be supplied from the factory therein mentioned. That document was in the following form which actually ralates to a sale to a Government contractor. "Government of India Ministrary of Commerce & Industry. Office of the Regional Honorary Cement Adviser 4/12 Race Course Road, Coimbatore. Central Quota. Dated 8 10 1955. Authorisation No. RA/CT/28/CMI/1 7 2 CQ. (CENTELEC) Period IV/55 The Cement Marketing, Name of Suppliers Co. of India P. Box No.613, Sugar Company Bulding Bangalore 2. You are authorised to sell cement in quantity mentioned below under this authorisation. The sale will be a direct deal between yourself and 781 the purchaser. The Government undertakes no responsibility of any nature whatsoever: Name and Name of the Quan Name of Rly. Re address of the person factory or cement is to in whose companybe booked. favour required to authorisation supply is issued. cement. 1 2 3 4 5 M/s. G. section Mudhukkarai300 Bangalore Duggal & Co Shababadtons Ltd Engineers & Contractors, Jalhalli P.O. Bangalore. No. J/1 17/115 date 29 9 55 from the above indentors For manufacture of the tiles for the Bharat Electronics Ltd. Supply recommended by the Commander Works Engineers(B.E.I.P.), Jalahalli. Full details of the purpose for which and the place at which cement will actually be consumed; Priority, Defence work. C.C. Ramanath, Reg, Hon. Cement Advisor (Coimbatore) Copy to 1. The indentor. The Dy. Development Officer, Govt. of India, Ministry of Commerce & Industry, Development Wing,(Chemicals 1, Mineral Industries) Shahjehan Road, Now Delhi. The Controller of Civil Supplies in My sore Bangalore for information". 782 This authorisation was subject to the following conditions: It was to be utilised within 15 days; the cement released could be used only for the purpose for which it was given; the authorisation was not transferable; the issuing authority could, if necessary, revoke the authorisation at any time and even the orders booked under the authorisation could be cancelled. The purchaser or the indentor had then to place an order with the first appellant as Sales Managers of the second appellant stating the requirement, where the goods were to be sent and how they were to be sent. The seller entered into a contract with the first appellant. This contract is in a standard form and gives conditions of sale. Thereupon the first appellant instructed its Bombay office to despatch the cement in accordance with the instructions of the buyer and the authorisation. In this letter they had to mention the number of the authorisation and the person who had issued it and also to whom the goods were to be sent and how and certain other details which are not necessary for the purposes of this appeal were also to be given. Each instruction indicates that it was issued for and on behalf of appellant No. 2 by appellant No. 1 as its Sales Managers. A copy of the letter of instruction was sent to the factory from where the goods were to be despatched and the particulars of the authorisation had to be mentioned therein. Thereafter the first appellant sent an advice to 783 the purchaser enclosing therewith the Railway Receipt for the goods and this advice also mentioned the goods were being sent. Both the contract of sale and the advice above mentioned stated that the goods were being despatched at the buyer 's risk from the time the delivery was made by the factory to the carriers and the railway receipt was obtained for the goods. In the present case all the goods were sent, as indeed they had to be sent, against the authorisations from the various factories belonging to the second appellant which at the relevant time were all situate outside the State of Mysore and were received in the State of Mysore by the various purchasers. The position of the first appellant is as was accepted by the Sales tax Officer in his order dated March 31, 1958, that of Sales Managers of the second appellant but in regard to the nature of the transactions the Sales tax Officer found: " Though the property in the goods pass to the dealers and consumers outside the State immediately the goods are handed over to the carriers outside the state and railway receipt is taken out since the goods have actually been delivered In Mysore State as a direct result of such sale for purposes of consumption in the State, sale is deemed to have taken place in Mysore State". and again he said: "Thus the sales of cement manufactured by A.C.C. Factories situated outside Mysore .State effected by the dealers M/s. Cement Marketing Company of India Ltd. Bangalore, to dealers and customers in Mysore State amounts to intrastate sales and therefore liable to Mysore Sales Tax Act 48". 784 In its judgment the High Court took into consideration the fact that the first appellant had a branch office at Bangalore within the State of Mysore and that the public placed their orders with the first appellant for supplies of cement against permits granted to them; that the first appellant, who after accepting the offer for the supplies of cement, collected the price from the intending purchasers and then directed one of the factories of the second appellant to supply cement to the purchasers and actual delivery to the purchaser was within the State) of Mysore and therefore the contention that cement was loaded outside the State of Mysore and despatched to the purchaser did not not convert sales into inter State sales but were intra state sales. It appears that the true nature of the transaction was not correctly considered by the High Court, The modus operandi above mentioned shows that before an intending purchaser could obtain cement he had to get what is called an authorisation from a Government authority which nominated the factory from which the intending purchaser had to get his supplies of cement. That authorisation with an order had to be given to the first appellant; and after a contract in the standard form was entered into the first appellant sent the order to the factory named in the authorisation and that factory then supplied the requisite goods to the purchaser. The factory from where the cement was to be supplied was not in the hands or at the option of the first appellant, but was entirely a matter for the Government authority to decide, so that the cement which was supplied from a particular factory was supplied not at the choice of the first appellant but pursuant to the authorisation. It was contended that the sales which took place in the present case in which the movement of 785 goods was from one State to another as a result of a covenant or incident of the contract of sale fell within article 286(2) of the Constitution and therefore the imposition 'of Sales tax on such sales was unconstitutional. The Article applicable at the relevant time i.e., before its amendment was as follows: 286 (1) "No law of a State shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place. (a) outside the State; or (b) in the course of the import of the goods into or export of the goods out of, the territory of India. Explanation . . . . . (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State or commerce: Provided. . . . . . " The Article had since been repealed and another substituted in its place by the Constitution (Sixth Amendment) Act but the sales in question were prior to the amendment. In the present case the contract itself involved the movement of goods from the factory to the purchaser i. e. across the broder from one State to another because the factories were outside the State of Mysore and therefore transactions were 786 clearly transactions of sale of goods in the course of inter State trade or commerce. Taking the nature of the transaction and preliminaries which are necessary for the sale or purchase of cement it cannot be said that the sale itself did not occasion the movement of goods from one State to another. The essential features of the contracts proved in the present case are analogous to those in M/s. Mohan Lai Hargovind vs The State of Madhya Pradesh.(1) In that case the assessees were a firm carrying on business of making and selling birds in Madhya Pradesh. In the course of their business they imported finished tobacco from dealers in Bombay State, rolled it into biris and exported the biris to various other States. Both the exporters of tobacco from Bombay State who supplied the assessees and the assessees were registered dealers under the C. P. & Berar Sales Tax Act., 1947. It was held that the asessees imported the finished tobacco into Madhya Pradesh from persons who were carrying on in the State of Bombay business of processing tobacco and selling the goods and there was, as a result of these transactions movement of goods from the State of Bombay to the State of Madhya Pradesh and therefore the transactions involved movement of goods across the State border and they were not liable to be taxed by virtue of article 286 (2) of the Constitution. In The State of Pravancore Cochin & Others vs The Bombay Co Ltd. (1) which was a case under article 286 (1) (b) i. e. sale and purchase in the course of export trade, Patanjali Sastri, C. J., observed: "A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the (1) (2) (1952) section C. R. III2. 787 country by land or sea. Such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export from parts of a single transactions. At p. 1120 the learned Chief Justice again observed: "We accordingly hold that whatever else may or may not fall within article 286 (1) sales and purchases which themselves occasion the export or the import of the goods, as the case may be, out of or into the territory of India come within the exemption and that is enough to dispose of these appeals". Thus a sale to fall within article 286 (1) (b) has to be a sale which occasions the export. Again in the, State of Travancore Cochin & Other8 vs Shammugha Vilas Cashew Nut Factory & Other8 (1) the words "in the course of" were interpreted to mean a sale taking place not only during the activities directed to the end of exportation of the goods out of the contury but also as a part of or connected with such activities. At p. 63 the learned Chief Justice explained the words "integrated activities" as follows: "The phrase "integrated activities" was used in the previous decision to denote that "such a sale" (i. e. a sale which occasions the export) "cannot be dissociated from the export without which it cannot be affectuated, and the sale and the resultant export form parts of a single transaction '. It is in that sense that the two activities the sale and the export were said to be integrated". In Endu puri Narasiham & Son vs The State of Orissa, it was held in the case of sales covered (1) ; (2) ; 788 by article 286 (1) (b) that only Bale or purchase 'of goods which occasions the export or import of the goods out of or into the territory of India were exempt from the imposition of tax on the sale or purchase of goods and in regard to prohibition against imposition of tax on inter State sales the test, it was said, was that in order that a sale or purchase might be inter State it is essential that there must be transport of goods from one State to another under the contract of sale or purchase. The following observatins from the Bengal Immunity Co. Ltd. vs The State of Bihar (1) were quoted with approval in support of the position: "A sale could be said to be in the course of inter State trade only if two conditions concur: (1) A sale of goods, and (2) a transport of those goods from one State to another under the contract of sale. Unless both these conditions are satisfied, there can be no sale in the course of inter State trade". Thus the tests which have been laid down to bring a sale within inter State sales are that the transaction must involve movement of goods across the border (Mohanlal Hargovind 's case (2) ); transactions are inter State in which as a direct result of such sales the goods are actually delivered for consumption in another State; M/s Ram Narain It Ssns V. Assistant Commissioner of Sales tax (3) a contract of sale must involve transport of goods from one State to another under the contract of sale; Bengal Immunity Co ' case (1). in the case of sales in the course of export or import the test laid down was a series of integrated activitiesm commencing from an agreement of sale and ending with the delivery of goods to a common (1) , 784 5 (2) (1965) 2 S.G R. 509. (3) ; , 504. 789 carrier for export by land or by sea ; The Bombay Co. Ltd, case (1). "In the course of" was explained to mean a sale taking place not only during the activities directed to the end of the exportation of the goods out of the country but also as part of or connected with such activities and "integrated activities" was explained in similar langauage. This Court again accepted these tests in Endupuri Narasim ham 's case (2). In a. 3 of the (Act 74 of 1956), the legislature has accepted the principal governing inter State sales as laid down in mohan Hargovind 's case (3). The principles for determining when a sale or purchase of goods takes place in the course of inter state sale or commerce outside the state are : "S.3 A sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or pur chase (a) occasions the movement of goods from one State to another ; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another". In Tata Iron & Steel Co. Ltd, Bombay vs S.R. Sarkar & Another (4) Shah, J., in explaining what sales are covered by el. (a) of s.3 above said : "Cl. (a) of a. 3 covers sales, other than those included in Cl. (b), in which the movement of goods from one state to another is the result of a convenant or incident of the contract of sale. and property in the goods passes in either State . " As stated above under the contracts of sale in the present case there was transport of goods from (1) (3) (1955) 2 S.G.R. 509. (2) ; (4) ; ,391, 790 outside the State of Mysore into the State of Mysore and the transactions themselves involved movement of goods across the border. Thus if the goods moved under the contract of sale, it cannot be said that they were intrastate sales. It was not the volition of the first appellant to supply to the purchaser the goods from any of the factories of the second appellant. The factories were nominated by the Government by authorisations which formed the basis of the contract between the buyer and the seller. Applying these tests to the facts of the present case we are of the opinion that the sales were in the nature of inter State sales and were exempt from Sales tax. In these circumstances the contracts of sale in the present case have been erroneously considered to be intrastate sales. The decision in Rohtas Industrieg Ltd. vs The State of Bihar (1) to which reference was made by the respondent does not apply to the facts of the present case because the agreement between the first appellant and the second appellant is different from that which existed between Rohtas Industries Ltd. and the Cement Marketing Co of India in the case above cited. (in an examination of the agreement between those two companies this court held that the rotation. ship which existed between the two was of seller and buyer and not of principal agent. In the present case the agreement is quite different. In the first clause of the agreement between the two appellants and the Patimia Cement Co. dated April 21, 1954, the first appellant was appointed the sole and exclusive Sales Manager of the second appellant and as such the first appellant was entitled to enter into contracts of sale, receive payment of the same and do all seta and things necessary for the effective management in connection with the contracts of sale entered into on behalf of the principals. The sale price and the terms and conditions of sale were to be (1) (1961) 12 S.T.C. 615. 791 determined by the principals. The Sales Manager was to keep its administrative and technical staff at such places in India as was determined by the principals. All the establishment charges and other expenses of the Sales Managers were for and on behalf of the principals and were to be defrayed by the principals in proportion to their annual sales. At the end of every mouth the Sales Managers were to submit to the principals accounts showing sales con tracts by it on behalf of each one of the principals. At the end of each financial year ending July 31 the Sales Managers had to make a. proper account of all their operations during the year and after submitting them for confirmation to the principals had to pay the price of annual sales realizations to each of the principals to whom they happened to relate. Clause to provided that subject to instructions of the principals the Sales Managers were to make all necessary arrangements to secure speedy and economicial transport of cement. These terms are quite different from those in the case of Rohtas Industries Ltd. and therefore that decision has no application to the facts of the present case. In the result, the imposition of the Sales tax on the appellant for the year of assessment except for the period April 1, 1955, to September 6, 1955, was illegal and was not leviable for that period. The appeal is therefore allowed to that extent and the petition of the appellants succeeds but it will not effect the tax paid for the period abovementioned. In view of the partial success of appellants they will be entitled to half costs of the appeal. Appeal allowed in part. (1) (1961) 12 S.T.C. 615.

The second appellant was a manufacturer of cement and at the material time it had over a dozen factories in different parts of India none of which was in the State of Mysore. The first appellant was its sales manager and had its head office in Bombay with a branch office at Bangalore in the State of Mysore ' Cement was a controlled article and every one wishing to buy cement. had to get an authorisation from the appropriate Government authorities in a standard form which authorised the first appellant to sell cement in quantities mentioned therein and the cement had to be supplied from the factory therein mentioned. The purchaser had to place an order with the first appellant. stating the requirement, where the goods were to be sent and how they were to be sent. In the present case, all the goods were sent against the authorisations from the various factories belonging to the second appellant which were all outside the State of Mysore and were received in the State of Mysore by the various 778 purchasers. The Sales Tax Officer by his order dated March 31, 1958, took the view that though the property in the goods passed to the dealers and consumers outside the State, of Mysore, since the goods had actually been delivered in the State of Mysore as a direct result of such sales for purposes of consumption in the State, the sales must be deemed to have taken place in that State and, therefore, the sales effected by the first appellant as the sales manager of the second appellant, to customers in Mysore State amounted to intrastate sales and liable to tax under provisions of the Mysore Sales Tax Act, 1948. The High Court held that as the actual delivery to the purchasers was within the State of Mysore, the cement loaded outside the State and despatched to the purchaser did not convert the sales into inter State sales but were intrastate Wes. Held, that the sales which took place in the present case in which the movement of goods was from one State to another as a result of a convenant or incident of the contract of sale, were in the course of inter State trade or commerce and fell within Art ' 286(2) of the Constitution of India, Consequently, the imposition of sales tax on such sales was unconstitutional. M/S. Mohan Lai Hargobind vs The State of Madhya Pradesh, ; , followed. Endapuri Narasimhan & son vs The State of Orissa; , , Bengal Immunity Co. Ltd. vs The State of Bihar, M/s. Ram Narain & Sons vs Assistant Commissioner of Sales Tax, ; and Tata Iron and Steel Co. Ltd. Bombay vs section R Sarkar, [1961] 1 S.C.R. 379, relied on. Rohtas Industries Ltd. vs The State of Bihar, [1961] 12 S.T.C. 615, distinguished.

Appeal No. 176 of 1956 and Petition No. 165 of 1955. Appeal by special leave from the judgment and order dated March 15/23,1955 of the Orissa High Court, in Civil Reference No, 4 of 1954, 169 N. C. Chatterji, D. N. Mukherjee and R. Patinaik, for the appellant. Porus A. Mehta and R. H. Dhebar, for respondent No. 1. 1956. November 29. The Judgment of the Court was delivered by S.K. DAS J. The appellant is Shri Lalit Mohan Das, a pleader of about 25 years ' standing. who ordinarily practiced in the Courts at Anandapur in the district of Mayur bhanj in Orissa. The Munsif of Anandapur, one Shri L. B. N. section Deo ' drew up a proceeding under sections 13 and 14 of the , against the pleader for grossly improper conduct in the discharge of his professional duty and submitted a report to the High Court through the District Judge of Mayurbhanj on December 12, 1953. The District Judge forwarded the report, accompanied by his opinion, to the High Court of Orissa on March 9, 1954. The recommendation of the Munsif was that the pleader should be suspended from practice for one year. The reference was heard by the High Court of Orissa ' and by its order dated March 15, 1955, the High Court came to the conclusion that the pleader was guilty of grave professional misconduct and suspended him from practice for a period of five years with. effect from March 15,1955, Shri Lalit Mohan Das then obtained special leave from this Court to appeal against the judgment and order of the Orissa High Court dated March 15 /23, 1955. He also filed a petition under article 32 of the Constitution. Learned counsel for the petitioner has not pressed the petition under article 32 and nothing more need be said about it. We proceed now to deal with the appeal which has been brought to this Court on special leave. The charges against the appellant were the following On July 15, 1953, the appellant was appearing on behalf of the defendant in Suit No. 81 of 1952 pending before the Munsif of Anandapur. On that date, there were two other suits pending before the same Munsif. There were petitions for time in all the three suits. 22 170 The Munsif wanted to take up the oldest suit for hearing, and the oldest suit being Suit No. 54 of 1952, it was taken up first and five witnesses for the plaintiff were examined. Suit No. 81 of 1952 was postponed to August 18, 1953. The appellant, who appeared for the defendant in that suit, was informed of the postponement. When so informed, the appellant made a remark in open Court and within the hearing of the Munsif to this effect: " If the Peshkar is gained over, he can do everything." He then left the Court. The Munsif was surprised at the remark made and asked the appellant to explain his conduct, by means of a letter sent the same day. As the appellant sent no reply, the Munsif wrote again to the appellant on July 18, 1953. To this letter the appellant sent the following reply: "Dear Sir, I am painfully constrained to receive memo after memo for some imaginary act of mine not in any way connected with my affairs for which if any explanation is at all warranted officiallv. For your second memo I felt it desirable as a gentleman to reply. Further I may request you to be more polite while addressing letters to lawyers. Yours faithfully, Sd. L. M. Das. Pleader. " It is obvious that the letter of the appellant was couched in very improper terms and considerably strained the relation between the Munsif and the appellant. The appellant, it may be stated here, was at that time the President of the Anandapur Sub Divisional Bar Association which consisted of about 14 legal practitioners. On July 21, 1953, Shri B. Raghava Rao, who was the predecessor in office of Shri Deo, came to Anandapur. He was the guest of Shri A. V. Ranga Rao, the Sub Divisional Officer. One Shri N. C. Mohanty, a pleader of. Anandapur and who was related to the appellant, came to invite the two Munsifs to a luncheon on the occasion of a housewarming ceremony. On hearing about the trouble between Shri Deo 171 and the appellant, Shri B. Raghava Rao interceded and it appears that the appellant was persuaded to come to the house of the Sub Divisional officer and to ,say that he was sorry for what had happened in court on July 15, 1953, and that he did not happean to insult Shri Deo; Shri Deo, it appears, accepted the apology and for the time being. the trouble between the two was smoothed over. A second incident, however, took place on September 25, 1953. The appellant was appearing for a defendant in another suit before the Munsif It was Suit No. 101 of 1952. This suit was fixed for hearing on September 21, 1953. As that date was a holiday, the suit was taken up 'on September 22, 1953. Another suit, Suit No. 86 of 1952, was also fixed for hearing on that date but Shri N. C. Mohanty, pleader for the defendants in that suit, took time on the ground of the illness of one of the defendants, which ground was supported by a medical certificate. In Suit No. 101 of 1952 also, the defendants applied for time. on the ground of illness of their witnesses; but there being no medical certificate in support of the allegation of illness and no witnesses having been summoned in that suit, the learned Munsif refused to grant time, and one Shri P. N. Patnaik who also represented the defendants agreed to go on with the suit. The suit was then heard for two days, i. e., on September 22 and 23, 1953, and at the request of the defendants ' lawyers the hearing of arguments was postponed to September 25, 1953. On that date the appellant came to Court accompanied by his junior Shri P. N. Patnaik, for the purpose of arguing the case on behalf of the defendants. At the very outset of his arguments the appellant made the follwing remarks:The Court is unfair to me, while the Court was fair to Mr. Misra (meaning Shri Bhagabat Prasad Misra who was appearing for the plaintiffs in that suit). The Court is accommodating and granting adjournments to Mr. Misra while it was not accommodating me.". The Munsif took objection to these remarks but nothing untoward happened. The appellant concluded his arguments. 172 A third incident brought matters to a climax, and this incident took place on September 29, 1953. The appellant was appearing for the defendants in Suit No. 6 of 1951. In that suit a preliminary point of jurisdiction and sufficiency of court fees was raised and Shri B. Raghava Rao, the predecessor in office of Shri Deo, had dealt with the point and decided it against the appellant 's client. A Civil Revision taken to the High Court was also rejected. 'The appellant, however, again pressed the same preliminary point and on September. 29, 1953, Shri Deo passed an order dismissing the preliminary objection. When this order was shown to the appellant, he stood up and shouted at the top of his voice I 'I on behalf of the Bar Association, Anandapur, challenge the order of the Court,. The Court has no principle as it is passing one kind of order in one suit and another kind of order in another suit. " The Munsif, it appears, was disgusted at the conduct of the appellant and he stood up and, left the Court room, directing the bench clerk to send a telegram to the District Judge. , A telegram was accordingly sent to the District Judge asking him to come to Anandapur. The District Judge asked for a detailed report which was sent on October 1, 1953. On October 5, 1953, the Munsif drew up a proceeding against the appellant on a charge under section 13 of the referring therein to the three incidents mentioned above. The appellant was asked to show cause by October 26, 1953. On November 3, 1953, the appellant denied the allegations made and took up the attitude that the Munsif was not competent to hold the enquiry on the ground that the Munsif was in the position of a complainant. The appellant gave a different version of what happened on the three dates in question. With regard to the incident of July 15, 1953, the appellant 's plea was that some other client had come to him. in connection with a criminal case pending in another Court and to that client the appellant had said that an enquiry should be made from the Peshkar as to the date fixed. With regard to the incident, on September 25, 1953, the plea of the appellant was^ total denial, and with regard to the last incident, the appellant said 173 that the Munsif behaved rudely and wanted to ' assault the appellant, for which the appellant appears, to have filed a petition to the Governor of Orissa on September 30, 1953, for according sanction for the prosecution of the Munsif. It may be stated here that on October 8, 1953, a resolution was passed, numbered Resolution 6, which purported to be a resolution on behalf of the Bar Association, Anandapur. The resolution was in these termis: "Resolved that on September 29, 1953, the Court 's (Munsif) action on the. dais in rising from the chair, thumping on the table, shouting at the top of his voice, and using the words 'shut up ' against one honourable member (President) of this Bar Association is quite unprecedented. , undesirable and affecting the prestige of the Bar and may cause apprehension in the mind of the litigant public to get fair justice. " It may be stated that some other members of the Bar dissociated themselves from the a id resolution at a later date. The proceeding against the appellant under the stated, as we have said earlier, on October 5, 1953, and the appellant filed his written statement on November 3, 1953. On November 5, 1953, the Munsif sent the record to the District Judge in connection with the plea of the appellant that the enquiry should be made by some other judicial officer. The District Judge, however, took the view that under the provisions of sections 13 and 14 of the the enquiry should be made by the Munsif himself and the records were accordingly sent back to the Munsif. Thereafter, the appellant non co operated and did not appear at the enquiry though more than one communication was sent to ham The enquiry was concluded on December 11, 1953, and the Munsif submitted his report. the High Court through the District Judge on December 12, 1953. On December 22, 1953, the appellant filed an application to the Additional District Judge for time to move the High Court to get an order to have the matter heard by some other judicial officer. One month 's time was 174 accordingly granted and the Additional District Judge, for some reason which is not very apparent, sent the record back to the learned Munsif In the meantime, the Additional District Judge, it appears, made an effort to settle the trouble. On December 23, 1953, he met the members of the Bar Association and the Munsif at the inspection bungalow at Anandapur on his way to Mayurbhanj. At a meeting held there, a copy of a draft resolution to be passed by the members of the Bar Association, Anandapur, was made over. This draft resolution was in these terms: "This Association re rets very much that an incident relating to the bench clerk of the Civil Court. should have led to the subsequent unhappy differences between the Bench and the members of the Bar. As in the interest of the litigant public it is felt not desirable to allow these strained feelings to continue further, this Association unanimously resolves to withdraw Resolution No. 6 dated October 8, 1953, passed against the Court and communicate copies of the same to the addressees previously communicated. It is further resolved to request the Court to see to the desirability of withdrawing the proceedings that had been started against the various members of the Bar and their registered clerks on their expressing regret to the Court individually in connection with those proceedings. It is further resolved that the members of the Bar involved in the proceedings be requested to take immediate steps in this direction. The Association hopes that the bench clerk who has to some extent been the cause for this friction between the Bench and the Bar would be replaced by a person from a different place at an earlier date. " On January 8, 1954, the appellant appeared in the Court of the Munsif and filed a written apology and expressed his regret. His signature wag taken on the order sheet and the order of that date reads: "Sri L. M. Das, pleader, appears and expresses his regret. So the proceeding No. 2 of 1952 is dropped. Intimate Additional District Judge. " No resolution, however, was passed in the terms 175 suggested by the Additional District Judge. On January 19, 1954, two resolution,% were passed in the following terms: "No. 1. In view of the fact that past misunderstandings between the Munsif and members of the Bar caused by an incident relating to the bench clerk of the Civil Court, have been removed by amicable settlement of differences existing between both parties, it is unanimously resolved that resolution No. 6 dated October 8, 1953, stands withdrawn. No. 2. It is further resolved that the copies of the above resolution be sent to the addressees previously communicated of resolution No. 6 of October 8, 1953. " The learned Munsif, it appears, wanted to see the minute book of the Bar Association, presumably to find out in what terms the proposed resolution was passed. There was again trouble between the Munsif and the appellant over the production. of the minute book. Ultimately, the minute book was produced, and on February 2,1954, the Munsif expressed the view that the resolution passed did not fully carry out the terms of settlement suggested by the Additional District Judge. Accordingly, the proceeding was re opened and the record was re submitted to the District fudge. The District Judge thereupon sent the report of the Munsif to the High Court accompanied by his opinion. The High Court dealt with the report with the result which we have already indicated. The main contention of Mr. N. C. Chatterji, who has appeared on behalf of the appellant is this. He has submitted that there was no valid reason for reviving the proceeding against the appellant, after the proceeding had been dropped on January 8, 1954, on the submission of an apology and expression of regret by his client; because, in substance and effect, the terms of the settlement suggested by the Additional District Judge had been complied with. According to Mr. Chatterji an expression of regret having been made earlier than the passing of the resolutions on January 19, 1954, by the Anandapur Bar Association and the bench clerk having already been transferred from 176 Anandapur, the resolutions could not be in the same terms as were suggested by the Additional District Judge; but the two resolutions passed on January 19, 1954 coupled with the expression of individual regret made on January 8, 1954, complied in substance with the essential terms of the draft resolution which the Additional District Judge had made over on December 23, 1953. Mr. Chatterji has contended that this view of the matter has not been properly considered by the High Court. He has submitted that in view of the order passed by the learned Munsif himself on January 8, 1954, the proceeding against the appellant should be treated as having been dropped and concluded on that date. Mr. Chatterji has also drawn our attention to ground No. VI in the petition for special leave dated May 9, 1955, in which the appellant said that he was " willing and prepared to submit before this Court expressions of unreserved regret and apology for his error of judament and indiscretion, if any, in the discharge of his professional duties. " We cannot accept the contention of Mr. Chatterji that the order passed by the learned Munsif on January 8, 1954, had the effect of terminating and bringing to an end the proceeding against the appellant. The learned Judges of the High Court rightly pointed out that the report of the Munsif dated December 12, 1953, was a report which was submitted to the High Court. Under the provisions of section 14 of the , such a report had to be forwarded to the High Court by the District Judge accompanied by his opinion. It was not open to. the Additional District Judge to send back the record to the Munsif The efforts of the Additional District Judge were, indeed, well intentioned; but at that stage, after the Munsif had made his report to the High Court, the High Court alone Was competent to pass final orders in the matter. Apart, however, from that difficulty, we are not satisfied that the terms of settlement suggested by the Additional District Judge were fully complied with in this case. It is true, that the appellant did express his 177 regret and to that extent the settlement suggested by the Additional District Judge was carried out. It is also true that by the resolutions passed on January 19, 1954, the earlier resolution of October 8, 1953, was cancelled, but one essential and important part of the terms of settlement suggested by the Additional District Judge was that the Association should express regret at what had happened. Resolution No. I dated January 19, 1954, was so worded as to give the impression that the misunderstanding between the Munsif and the appellant was all due to the bench clerk and that misunderstanding having been removed Resolution No. 6 dated October,$, 1953, should be withdrawn. There is nothing in the resolution to show that the appellant was in any way at fault, a fault which he had expiated I by an expression of regret. It may be pointed out that the earlier ,resolution, Resolution No. 6 dated October 8, 1953, had been communicated to a large number of persons and authorities and the later resolution dated January 19, 1,954, passed in the diluted form in which it was passed, could hardly undo the damage which had been made by the earlier resolution. On merits we agree with the High Court that the appellant was undoubtedly guilty of grave professional, misconduct. A member of the Bar undoubtedly owes a duty, to his client and must place before the Court all that can fairly and reasonably be submitted on behalf of his client. He may even submit that a particular order is not correct land may ask for a review of that order. At the same time, a member of the 'Bar is an officer of the Court and owes a duty to the Court in which he is appearing. He must phold the dignity and decorum of the Court and must not do any thing to. bring the Court itself into disrepute. The appellant before us grossly ' overstepped the limits of proprieety when he made imputation$; of partiality and unfairiness against the Munsif in open Court. In suggesting that the Munsif followed no principle in his orders the appellant was adding insult to injury, because the 'Munsif had merely up held an order of his predecessor on the preliminary point of jurisdiction and Court fees, 23 178 which order had been upheld by the High Court in s revision. Scandalising the Court in such manner is really polluting the very fount of justice; such conduct as the appellant indulged in was not a matter between an individual member of the Bar and a member of the judicial service; it brought into disrepute the whole administration of justice. From that point of view, the conduct of the appellant was highly reprehensible. The appellant gave no evidence in support of his version of the incidents, though he had an opportunity of doingso, if he so desired. The only point left for consideration, is the question of punishment. On a matter of this nature, this Court would be reluctant to interfere with the order of the High Court as respects the disciplinary action to be taken against a member of the Bar who has been guilty of professional misconduct. There are, however, two mitigating circumstances. One is that the learned Munsif himself recommended suspension of practice for one year only. The appellant was suspended from practice with affect, from March 15,1955. The order of suspension has now lasted for a little more than a year and eight months. The second mitigating circumstance is that the appellant did file la written apology and expressed regret to the learned Munsif onJanuary 8, 1954. It is unfortunate that the appellantdid not take up a more contrite attitude in the High Court. In this Court, the appellant tried to make out that the proceeding against him should not have been revived; he however showed his willingness to offer an apology and ex pression of regret Having regard to all the circumstances, we think that the punishment imposed errs on the side of excess. We would accordingly reduece the period of susppusion to, two years only. In the result, the petition, under article 32 is dismissed and the appeal is,also dismissed subject to the reduction of the period of suspension as indicated above. In the circumstances of this case, there will be, no 'order for costs.

The appellant pleader who already had strained relation with the Munsif made certain objectionable remarks in open Court, suggesting partiality and unfairness on the part of the Munsif. The Munsif drew up a proceeding under sections 13, 14 Of the , against the pleader and submitted a report to the High Court through the District judge. An application to the Additional District judge was filed by the pleader, for time to move the High Court to get an order to have the matter heard by some judicial Officer other than the 168 Munsif who had made the report. One month 's time was accordingly granted, and for some reason which is not very apparent, the Additional District judge sent the record back to the Munsif. The Additional District judge made an effort to settle the trouble. It was arranged that the pleader should apologise and a resolution should be passed by the members of the local Bar Association. Accordingly, the pleader appeared in the Court of the Munsif and filed a written apology and expressed his regret, and the Munsif dropped the proceeding. It was later found that the resolution was not passed in the terms suggested by the Additional District judge, and the terms of settlement suggested by the latter were not fully carried out. Accordingly, the proceeding was re opened and the report was re submitted to the District judge who with his opinion forwarded the same to the High Court. The High Court suspended the pleader for 5 years. It was contended on behalf of the appellant that there was no valid reason for reviving the proceeding, after it had once been dropped on the submission of an apology and expression of regret. Held, that the report under section 14 of the is a report which is submitted to the High Court. When a report is made to the High Court by any Civil judge subordinate to the District judge, the report shall be made through the District judge and the report must be accompanied by the opinion of such judge. Once the report has been made, it is not open to the District judge to send back the record to the Subordinate Civil judge, and no order passed by the Subordinate Civil judge can have the effect of terminating or bringing to an end the proceeding. The High Court alone is competent to pass final orders on the report. A member of the Bar is an officer of the Court, and though he owes a duty to his client and must place before the Court all that can fairly and reasonably be submitted on behalf of his client, he also owes a duty to the Court and must uphold the dignity and decorum of the Court in which he is appearing. Making amputations of partiality and unfairness against the subordinate Civil judge in open Court is scandalizing the Court in such a way as to pollute the very fount of justice ; such conduct is not a matter between an individual member of the Bar and a member of the judicial Service. With regard to disciplinary action against a member of the Bar, the Supreme Court would be reluctant to interfere with the order of the High Court unless there are clear mitigating circumstances.

Civil Appeal Nos. 2084 2085/74. Appeals by Special Leave from the Judgment and Order dated 10/11/10/1974 of the Bombay High Court in First Appeal No. 160 and 173 of 1966. U. R. Lalit, V. N. Ganpule and Mrs. V. D. Khanna for the appellant. B. D. Bal, P. H. Parekh and M. Mudgal for the Respondent. The Judgment of the Court was delivered by DESAI, J. These two appeals by special leave arise from a suit filed by the respondents plaintiffs for recovering possession of land bearing Survey Nos. 487/1 to 487/6 situated at Shirwal Peta Khandala from the appellant defendant. During the pendency of this suit a portion of the land in dispute was acquired under the Land Acquisition Act and as both the plaintiffs and the defendant laid a claim to compensation, a reference was made under section 30 of the Land Acquisition Act for determining the eligibility for the amount of compensation. The trial Court decreed the plaintiffs ' suit and First Appeal No. 160 of 1966 was preferred by the defendant to the High Court of 958 Bombay. Following the decision of the trial Court, the reference under section 30 of the Land Acquisition Act was answered in favour of the plaintiffs respondents and the defendant preferred First Appeal No. 173 of 1966 to the High Court. Both the appeals were heard together and by its judgment dated 10/11 October, 1974 a Division Bench of the High Court dismissed both the appeals with costs. Thereupon the appellant preferred the present two appeals. As both the appeals arise from a common judgment, they were heard together and are being disposed of by this common judgment. Facts necessary for appreciating the point of law canvassed in these appeals lie within a narrow compass. One Dattatraya Govind Kulkarni, husband of plaintiff No. 1 and father of plaintiffs 2 to 6 had borrowed a Tagai loan of Rs. 12,000/ by making an application Exhibit 129 accompanied by prescribed form, Ext. 128 on 7th February, 1949. The loan was borrowed for constructing wells in Survey Nos. 167 and 170 and he offered as security the lands bearing Survey Nos. 165, 166, 167, 170 and 172. In the application Ext. 129 that accompanied the prescribed form it was stated that wells have to be sunk to bring barren land under cultivation. In other words, the loan was for improvement of the land. The loan was advanced and the borrower failed to repay the loan as per the stipulations. A revenue recovery proceeding was commenced and as by the sale of the land offered as security the Government could not reimburse itself the total amount outstanding, a proclamation of sale was issued and ultimately the suit land was auctioned and it was purchased by the defendant and the sale in his favour was confirmed and he was put in possession on 20th May, 1960. The plaintiff stated that prior to the date of auction there was a partition between the father and his sons on 6th July, 1956 evidenced by Ext. 53 and at this partition the suit land with its sub divisions came to the share of the plaintiffs and therefore, the father had no saleable interest in the suit land and it could not have been sold at a revenue auction for recovering the personal debt of the father. So contending, the plaintiffs brought an action for a declaration that the sale is not binding upon them and possession may be restored to them. The trial Court held that the suit land was joint family property consisting of Dattatraya and his sons but as there was an effective partition prior to the revenue sale and the partition being a genuine one, the subsequent sale is not binding upon the plaintiffs to whose share the suit land was allotted at the partition and, therefore, the sale was void and the plaintiffs are entitled to be put back in possession. 959 The High Court in appeal by the present appellant examined the question of the validity of the revenue sale in the context of the provisions of the ( 'Loans Act, for short) and held that the auction sale of the lands at the relevant time standing in the names of the plaintiffs, the land being not one in respect of which the Tagai loan was advanced, or which was offered as security for that loan, would not be binding upon the plaintiffs as the plaintiffs were not borrowers within the meaning of section 7(1) of the Loans Act and the plaintiffs ' suit on this ground was rightly decreed. The submission on behalf of the defendant that Tagai loan was a debt and that it was incumbent on the sons of Dattatraya under the doctrine of pious obligation of the sons of a Hindu father to pay their father 's debts which were not tainted with immorality or illegality, was not accepted and the High Court held that this doctrine of pious obligation cannot be extended to the debts contracted under the Loans Act as the Act applies to all citizens of India irrespective of their religion. With these findings the appeals were dismissed. Mr. U. R. Lalit, learned counsel for the appellant urged that Tagai loan was borrowed by Dattatraya, the father for improvement of lands bearing Survey Nos. 167 and 170 which were joint family property and the debt represented by Tagai loan would be joint family debt incurred by the manager for the benefit of the joint family or for the benefit of the estate of the joint family and, therefore, the joint family property, irrespective of the fact whether it was offered as security for the loan or whether it benefited by the loan, would be liable for the repayment of the loan notwithstanding the fact that a partition has taken place before the suit land, which again is a joint family property, was brought to revenue auction. It was also urged that the partition is not genuine and that it is a sham and bogus one and in fact there was no partition in the eye of law. It was further urged that the pious obligations of the sons of a Hindu father to pay the debt incurred by the father not tainted with illegality or immorality to the extent of the joint family property in their hands would certainly apply to loan borrowed under the Loans Act and the expression "borrower" under the Loans Act can as well include a joint Hindu family and thereby making the entire joint family property liable for repayment of the loan. Mr. Bal, learned counsel for the plaintiffs respondents contended that Tagai loan was not a joint family debt nor in borrowing the loan the father was acting as Karta but was acting in his personal capacity, nor the loan was for the benefit of the joint family estate. It was said that the Loans Act being a complete Code in itself and only 960 recognised borrower in his individual capacity, one cannot import the concept of Karta of a joint family borrowing under the Loans Act in his representative capacity so as to make the joint family property liable for such loans. The principal contention which goes to the root of the matter is whether the Tagai loan borrowed by Dattatraya, the father, was borrowed in his personal capacity for his personal use or as Karta of the joint family for the benefit of the joint family or joint family estate. If the loan was borrowed by Dattatraya, the father, as Karta of the joint Hindu family for the benefit of the family, certainly it would be a joint family debt and all the joint family property would be liable for this debt. Even if there is a subsequent partition before the debt is repaid, the creditor can proceed against the joint family property in the hands of any of the coparceners because the joint family property is liable for the joint family debts. The Karta or the Manager of a joint Hindu family has implied authority to borrow money for family purposes and such debts are binding on other coparceners and the liability of the coparceners in such a case does not cease by subsequent partition (See Para 240, Mulla 's Hindu Law, 14th Edn., p. 298). Where father is the Karta of a joint Hindu family and the debts are contracted by the father in his capacity as manager and head of the family for family purposes, the sons as members of the joint family are bound to pay the debts to the extent of their interest in the coparcenary property. Further, where the sons are joint with their father and the debts have been contracted by the father for his own personal benefit, the sons are liable to pay the debts provided they were not incurred for illegal or immoral purposes. This liability arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara Law to discharge the father 's debts, where the debts are not tainted with immorality. This liability of the sons to pay the father 's debts exists whether the father be alive or dead, (para 290, Mulla 's Hindu Law, 14th Edn., p. 354). A further requirement is that for an effective partition of a Mitakshara joint Hindu family a provision for the joint family debts should be made. In order to determine what property is available for partition, provision must first be made for joint family debts which are payable out of the joint family property, personal debts of the father not tainted with immorality, maintenance of dependent female members and of disqualified heirs, and for the marriage expenses of unmarried daughter. This must be so because partition is of joint family property and if joint family debts are repaid before the partition only the residue would be available for partition. Therefore, if partition is effected before paying 961 the debts, provision to pay the debts should be made so as to determine the residue available for partition. Having cleared the ground in law, let us look at facts which have been found by the Courts on appreciation of evidence and which unless found to be utterly unconscionable this Court would not interfere with. The trial Court found that the suit property was joint family property and the High Court has not departed therefrom. In fact, in an earlier suit filed by these very plaintiffs being Special Suit No. 14 of 1958 it has been in terms stated that the lands described in para 1 of the plaint Ext. 37 which include the suit land, were originally owned by joint family of plaintiffs and Dattatraya. Therefore, on plaintiffs ' own admission the suit land was joint family property of plaintiffs and Dattatraya. The next important question is whether the Tagai loan was the personal debt of Dattatraya or was debt incurred by him as Karta of the joint family for the benefit of the joint family. We would only look at uncontroverted salient features of the evidence. Prescribed form of application, Ext. 128 with application Ext. 129 would show that the loan was borrowed for constructing wells for improvement in the potentiality of the lands bearing Survey Nos. 167 and 170. It was submitted that these lands, for the improvement of which the loan was borrowed, were not joint family property. There again, a reference may be made to the admission of the plaintiffs in plaint Ext. 37 which also includes lands bearing Survey Nos. 167 and 170 being described by the plaintiffs themselves as joint family property. The High Court held that Dattatraya borrowed the loan for improvement of the land. Therefore, Dattatraya, the father, borrowed loan in his capacity as the father for improvement of joint family lands and for this purpose offered as security three other pieces of land which were joint family property. In the face of this unimpeachable evidence the statement in Ext. 128, the application for loan, that Dattatraya was the full owner of the lands therein mentioned would not convey the idea that it was his separate property. It is not necessary that Karta acting in his capacity as Karta to describe himself as Karta to affirm his representative capacity. Whether he has acted in his personal capacity or representative capacity can be gathered from all the surrounding circumstances and in this case they are eloquent, in that he mortgaged or gave as collateral security joint family property, to wit land, and it extends to whole of the interest of the family and is not confined to Karta 's share, and therefore, he must be deemed to have acted in the transaction on behalf of the family (see Mulla 's Hindu Law, 14th Edn., page 313, article 251). It was, however, stated that agriculture 962 was not the avocation of the joint family and, therefore, the father as the Karta did not have the implied authority to borrow loan so to be binding on the joint family property. One has merely to look at the content of the application for loan, Ext. 129 made by Dattatraya to the Mamlatdar, Taluka Vichitragad, for advancing loan to him, to dispel the contention. The application recites that applicant Dattatraya, the father had undertaken extensive work to bring barren land under cultivation to raise sufficient crops as well as to improve the quality of Land and for improving the quality of agriculture he had undertaken, loans should be advanced to him. Mr. Bal, however, pointed out that Dattatraya was carrying on some business which would be evident from Ext. 23, a copy of execution application No. 87/60 filed by Bhor State Bank Ltd., against one Pandurang Krishnaji Kamble and Dattatraya Govind Kulkarni in which the occupation of Dattatraya is shown as business; and Ext. 22 being a copy of Execution Application No. 92/57 in which his occupation is shown as general agent, and Ext. 120 a copy of the decree in Special Civil Suit No. 2/49 wherein the occupation of Dattatraya is shown as business and which further shows that Dattatraya had running account with one Raghunath Shridhar Phadke in which Dattatraya had withdrawn Rs. 56,800/ and had credited Rs. 41,000/ and after adding interest leaving a debit balance of Rs. 19,238 14 00. It was urged that if all these aspects are taken into consideration, it would appear that agriculture was not the occupation of the joint family. Now, as against this, one may also refer to Ext. 24 a copy of the BADR Execution Application No. 294/56 for executing an Award made under the Bombay Agricultural Debtors ' Relief Act against Dattatraya which would show that Dattatraya was an agriculturist by occupation and his debts were adjusted by the Courts set up under the Bombay Agriculture Debtors ' Relief Act and this could have only been done if his principal occupation was agriculture. Therefore, mere description of Dattatraya 's avocation in Exts. 22, 23 and 120 is hardly determinative of the occupation of Dattatraya or his family. It may be that over and above agriculture Dattatraya may have been carrying on some side business but if his application Ext. 129 shows that he had on his own showing 160 bighas of land most of which are admittedly shown to be joint family property, it cannot be denied that agriculture was one of the occupations of Dattatraya and he was carrying on that avocation as Karta of the joint family consisting of himself and his minor sons. Now, if agriculture was one of the occupations of the joint family and if loan was borrowed for the purpose of improving the joint family lands, the loan would ipso facto be for legal necessity and it would be joint family debt for which all the joint family property would be liable. 963 If thus the loan for the recovery of which the suit property was brought to auction was joint family debt and if the suit property was joint family property, certainly it would be liable to be sold for recovery of joint family debt. The question, however, is: does the subsequent partition make any difference in respect of the liability of the joint family property for the joint family debts ? That would necessitate examination of the circumstances in which the partition was brought about though we are not inclined to examine the question whether the partition was a sham or bogus transaction or was a motivated one with a view to defeating the creditors of the joint family. The partition is evidenced by a registered deed, Ext. 79 dated 6th July 1956. Partition is between father and his minor sons. There is no dispute that on that date the debt of Tagai loan was outstanding as well as there were certain other debts. In the partition deed Ext. 79 there is no express or implied provision for the repayment of joint family debts or even outstanding debts of Dattatraya, the father. There was some suggestion that the property which was allotted to Dattatraya was sufficient for discharging the debts outstanding on the date of partition. That at least is not borne out by the partition deed nor has Dattatraya gone into the witness box to say that such was the position. Therefore, taking into consideration the recitals in the partition deed as well as the relevant evidence on record the position is clear that no provision was made at the time of partition for the joint family debts or alternatively outstanding debts incurred by the father. It is not for a moment suggested that on this account the partition is bogus and sham, an argument which was put forward before the High Court and negatived. The substance of the matter is that if at a partition amongst the members of the joint family no provision is made for joint family debts, then despite the partition and allotment of shares to different coparceners the joint family property in their hands which they acquired by partition would still be liable for the joint family debts. The Judicial Committee in Sat Narain vs Das(1), pointed out that when the family estate is divided, it is necessary to take account of both the assets and the debts for which the undivided estate is liable. After affirming this ratio, this Court in Pannalal & Anr. vs Mst Naraini & Ors.(2) observed as under: ". the right thing to do was to make provision for discharge of such liability when there was partition of the 964 joint estate. If there is no such provision, "the debts are to be paid severally by all the sons according to their shares of inheritance", as enjoined by Vishnu (Vishnu, Chap. 6, verse 36). In our opinion, this is the proper view to take regarding the liability of the sons under Hindu law for the pre partition debts of the father. The sons are liable to pay these debts even after partition unless there was an arrangement for payment of these debts at the time when the partition took place. This is substantially the view taken by the Allahabad High Court in the Full Bench case referred to above and it seems to us to be perfectly in accord with the principles of equity and justice". If thus the partition makes no provision for repayment of just debts payable out of the joint family property, the joint family property in the hands of coparceners acquired on partition as well as the pious obligation of the sons to pay the debts of the father will still remain. This position of law was reaffirmed in Vriddhachalam Pillai vs Shaldean Syriam Bank Ltd. & Anr.(1). The only effect of partition is that after the disruption of joint family status by partition the father has no right to deal with the property by sale or mortgage even to discharge an antecedent debt nor is the son under a legal obligation to discharge the post partition debts of the father. Assuming we are not right in holding that the debt, was for the benefit of the estate of the joint family and, therefore, a joint family debt, and assuming that Mr. Bal is right in contending that it was the personal debt of the father, yet the doctrine of pious obligation of the son to pay the father 's debt would still permit the creditor to bring the whole joint family property to auction for recovery of such debts. Where the sons are joint with their father and debts have been contracted by the father for his personal benefit, the sons are liable to pay the debts provided they were not incurred for an illegal or immoral purpose. This liability to pay the debt has been described as pious obligation of the son to pay the father 's debt not tainted with illegality or immorality. It was once believed that the liability of the son to pay the debts contracted by the father, though for his own benefit, arises from an obligation of religion and piety which is placed upon the sons under the Mitakshara law to discharge the father 's debts, where the debts are not tainted with immorality, yet in course of time this liability has passed into the realm of law. 965 In Anthonyswamy vs M. R. Chinnaswamy Koundan (dead) by l.r.s. & Ors.(1), following the decision in Muttayan vs Zamindar of Sivagiri(2), this Court held that this obligation of the son to pay the father 's debt not tained with illegality or immorality was not religious but a legal obligation and the rule would operate not only after the father 's death but even in the father 's life time and the pertinent observation is as under: "It is evident therefore that the doctrine of pious obligation is not merely a religious doctrine but has passed into the realm of law. The doctrine is a necessary and logical corollary to the doctrine of the right of the son by birth to a share of the ancestral property and both these conceptions are correlated. The liability imposed on the son to pay the debt of his father is not a gratuitous obligation thrust on him by Hindu law but is a salutary counter balance to the principle that the son from the moment of his birth acquires along with his father an interest in joint family property". It is not the case of the plaintiffs that the debt contracted by the father for which the property was sold was tainted with illegality or immorality or that it was ayyravaharik in the sense opposed to good morals. Therefore, even assuming that there was a partition, the debt being antecedent debt for which no provision was made in the partition and the debt having not been shown to be tainted with illegality or immorality, the sons were liable to pay this debt to the extent the joint family property came in their hands. Viewed from either angle, the property sold was liable for the discharge of the debt of Dattatraya, the father, and even if it came in the hands of the sons on partition, the debt admittedly being a pre partition debt not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons. Mr. Bal, however, raised an interesting contention that if the joint family property which came in the hands of the sons on partition was to be sold for recovery of the debt of the father after partition a suit would have to be filed by the creditor and if the property in the hands of the son was to be made liable for discharge of the debt, the sons ought to be joined as parties to the suit because only in such an event the sons could set up the defence of the debt being tainted 966 with illegality or immorality. Where a revenue sale takes place, it was said, the sons would have no opportunity to contest the character of the debt, and, therefore, any sale in such circumstances, of the property that has fallen to the shares of the sons at a partition, subsequent to the partition would be void as against the sons. In support of the submission reliance was placed on an observation in Pannallal 's case (supra) that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allotted to the sons and that a separate and independent suit must be filed against the sons before their shares can be reached. After observing that a son is liable even after partition for the pre partition debts of his father which are not immoral or illegal, this Court proceeded to examine the question as to how this liability is to be enforced by the creditor, either during the life time of the father or after his death. After taking note of a large number of decisions in which it was held that a decree against the father alone obtained after partition in respect of such debt cannot be executed against the property that is allocated to the sons on partition and a separate and independent suit must be instituted against the sons before their shares can be reached, it was held that the principle underlying these decisions is sound. This Court approved the decision in Jagnarayan vs Somaji (1). It may be noted that decree for the pre partition debt was made after partition when in the suit father after partition could not represent the sons. This very question again came up before this Court in section M. Jakati & Anr. vs section M. Borkar & Ors.(2) In that case the Deputy Registrar of Co operative Societies had made an order against Mr. Jakati for realisation of the amount and an item of property belonging to the joint family of Jakati was attached by the Collector and duly brought to sale under section 155 of the Bombay Land Revenue Code. The sale was held on 2nd February, 1943 and confirmed on 23rd June, 1943. In the meantime. On January 15, 1943, one of the sons of Jakati instituted a suit for partition and separate possession of his share in the joint family property and contended inter alia that the sale in favour of the first respondent was not binding on the joint family. If the order of the Deputy Registrar was to be treated as a decree, the sale under section 155 of the Bombay Land Revenue Act being execution of that decree, was after the institution of the suit for partition and therefore it was contended that a partition after the decree but before the auction sale limited the efficacy of the sale to the share of the father even though the sale was of a whole estate including the interest of the sons, because after the partition the 967 father no longer possessed the power to sell the shares of sons to discharge his debts. Negativing this contention it was held as under: "But this contention ignores the doctrine of pious obligation of the sons. The right of the pre partition creditor to seize the property of the erstwhile joint family in execution of his decree is not dependant upon the father 's power to alienate the share of his sons but on the principle of pious obligation on the part of the sons to discharge the debt of the father. The pious obligation continues to exist even though the power of the father to alienate may come to an end as a result of partition. The consequence is that as between the sons ' right to take a vested interest jointly with their father in their ancestral estate and the remedy of the father 's creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting up their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable for the debts of the father. Therefore where the joint ancestral property including the share of the sons has passed out of the family in execution of the decree on the father 's debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons ' attack, because even after the partition their share remains liable". The High Court while examining the ratio in Jakati 's (supra) case observed that even though Ganpatrao Vishwanathappa Barjibhe vs Bhimrao Sahibrao Patil(1), was referred to therein it was not specifically overruled and, therefore, the trial Court was right in relying upon it and incidentally itself relied on it. In that case it was held that in order to make the share of sons liable after partition they should be brought on record. This Court referring to Ganpatrao (1) observed that the decision should be confined to the facts of that case and further observed as under : "Therefore where after attachment and a proper notice of sale the whole estate including the sons ' share, which was attached, is sold and the purchaser buys it intending it to be the whole coparcenary estate, the presence of the sons eo nomine is not necessary because they still have the right 968 to challenge the sale on showing the immoral or illegal purpose of the debt. In our opinion where the pious obligation exists and partition takes place after the decree and pending execution proceedings as in the present case, the sale of the whole estate in execution of the decree cannot be challenged except on proof by the sons of the immoral or illegal purpose of the debt and partition cannot relieve the sons of their pious obligation or their shares of their liability to be sold or be a means of reducing the efficacy of the attachment or impair the rights of the creditor. " The binding ratio would be one laid down in Jakati 's (supra) case and it cannot be ignored by merely observing that a different approach in Ganpatrao (supra) case holds the field for the High Court as it was not overruled in Jakati 's case. It is thus crystal clear that the pious obligation of the sons continues to be effective even after partition and if the creditor in execution of a decree obtained prior to partition seizes the property in execution without making sons parties to the suit and the property is sold at an auction and the purchaser is put in possession and the property thus passes out of the family in execution of the decree on the father 's debt, the remedy of the sons would be to challenge the character of the debt in an appropriate proceeding brought by them. The sale cannot be voided on the only ground that the sale of the property took place after partition and the property sold was one which was allotted to the sons on partition once the property is liable to be sold for recovery of debt of the father incurred prior to partition and which is not tainted with illegality or immorality. Partition in such a situation merely provides a different mode of enjoyment of property without affecting its liability for discharge of pre partition debts. In the present case the sons have filed the suit and in this suit issue No. 6 framed by the learned trial judge was whether the Tagai loan of Rs. 12,000/ was incurred by Dattatraya as manager of the family, for legal necessity and the family has benefited by it, and this issue was answered in the affirmative, meaning the debt is not shown to be tainted with illegality or immorality. No submission was made to us by Mr. Bal on behalf of the respondents that the debt was tainted with illegality or immorality. In such a situation unless in this suit the sons challenged the character of the debt and established to the satisfaction of the Court that the debt was tainted with illegality or immorality, they cannot obtain any relief against the purchaser who purchased the property at an auction held by the Civil Court or by the revenue authorities for recovering the debt of the father which the sons 969 were under a pious obligation to pay. Therefore, even if the plaintiffs were not parties to the proceedings held by revenue authorities for sale of the land involved in this dispute, once the sale took place and it was confirmed and purchaser was put in possession, the sons can successfully challenge the sale by establishing the character of the debt thereby showing that they were not bound to pay it and, therefore, their share in the property cannot be sold to discharge the debt. They cannot succeed merely by showing, as is sought to be done in this case, that as the sale took place subsequent to partition and as they were not parties to the proceedings the sale is not binding on them. This clearly merges by reading Pannalal and Jakati cases (supra) together. The loan sought to be recovered was a Tagai loan advanced under the Loans Act. The amount can be recovered as arrears of land revenue. Chapter XI of the Bombay Land Revenue Code provides procedure for realisation of land revenue, recovery to be made as if they are arrears of land revenue and other revenue demands. Section 150 provides that an arrear of land revenue may be recovered inter alia by sale of the defaulter 's immovable property under section 155. Section 155 provides that the Collector may cause the right, title or interest of the defaulter in any immovable property other than the land on which the arrear is due to be sold. The sale is subject to sanction and confirmation. The first contention is that the Collector is authorised to cause the right, title or interest of the defaulter in any immovable property which is sought to be sold in a revenue auction and in this case as the sale was after the partition the defaulter Dattatraya had no interest in the property brought to auction and, therefore, no title passed to the auction purchaser. This submission overlooks again the pious duty of the sons to pay the father 's debt as also the right of the creditor to recover debts from the joint family property in the hands of the coparceners. In Jakati 's case (supra) this was the exact contention and after comparing the parallel provision in the Code of Civil Procedure, viz., "the right, title or interest of the judgment debtor", this Court held that it is a question of fact in each case as to what was sold in execution of the decree. This Court affirmed the ratio in Rai Babu Mahabir Prasad vs Rai Markunda Nath Sahai(1), that it is a question of fact in each case as to what was sold, viz., whether the right, title or interest of the debtor or defaulter was sold or the whole of the property was put up for sale and was sold and purchased. It 970 was concluded that where the right, title and interest of the judgment debtor are set up for sale as to what passed to the auction purchaser is a question of fact in each case dependent upon what was the estate put up for sale, what the Court intended to sell and what the purchaser intended to buy and did buy and what he paid for. There is not the slightest doubt that the whole of the property was sold in the instant case and that was intended to be sold and the purchaser purchased the whole of the property and the certificate was issued in respect of sale of the property and, therefore, it is futile to say that only the right, title and interest of Dattatraya was sold and that as he had no interest in the property sold on the date of auction sale, nothing passed to the purchaser. Assuming, for a moment that if the sale takes place after the partition, to such a proceeding the sons should be a party before the liability arising out of the doctrine of pious obligation to pay the father 's debt is enforced against the joint family property in the hands of the sons, evidence reveals that the sons were fully aware of the intended sale and not only they knew of the intended sale but possession was taken from them by the purchaser after notice to them. Proceedings for the recovery of the amount of Tagai loan of Rs. 12,000/ were commenced much prior to 25th April, 1955 because the first proclamation of sale in respect of four pieces of land was issued on 25th April, 1955. 79 would show that no bid was received whereupon the Kamgar Patil offered a nominal bid of Re. 1/ for four pieces of land. It may here be mentioned that this sale was challenged by none other than Dattatraya and it was quashed and he had taken back the land included in the proclamation Ext. Thus the recovery of the loan started prior to partition which took place on 6th July, 1956. Where a loan is taken under the Loans Act and it is being recovered as arrears of land revenue, the order of the revenue authority to recover the amount would tantamount to a decree and when a proclamation of sale is issued it amounts to execution of the decree, to borrow the phraseology of the Code of Civil Procedure. It is thus clear that execution started prior to the partition. Undoubtedly the proclamation for sale of suit land was issued on 22nd January, 1957 as per Ext. 80 and that was subsequent to the partition but when different properties are brought to auction by different sale proclamations it is nonetheless an execution proceeding. The sale proclamation was issued under the provisions of the land revenue code. Amongst others the proclamation of sale is to be fixed on the property which is to be auctioned. After the sale was confirmed, the purchaser was required to be put in possession. The plaintiff claimed to be in possession and yet the revenue officer on 20th May, 1960 as per Ext. 82 handed over possession of 971 the land involved in the dispute to the purchaser. It would be advantageous to point out here that the plaintiffs served notice dated 2nd February, 1957 which would mean that the notice was served prior to the date of the auction. The plaintiffs therein referred to the proclamation of sale for the land involved in dispute and they also referred to the proclamation of sale for the land involved in dispute and they also referred to the attachment of the land. They also referred to the date of intended auction sale and they called upon the Collector not to proceed with the sale. The plaintiffs thereafter filed their first suit being Special Suit No. 14/58, certified copy of the plaint of which is Ext. 37, which would show that it was filed on 6th April, 1957. In this plaint they sought a declaration that the sale held on 26th May, 1955 and 6th April, 1957 be declared illegal. It was alleged in the plaint that Dattatraya was a drunkard and was in bad company and had borrowed the Tagai loan for his own vices and in collaboration with the concerned officers of the revenue department and the loan could never be said to be a Tagai loan. Amongst others, the State of Bombay was impleaded as party defendant. Subsequently this suit was withdrawn and the present suit was filed deleting State of Bombay as party. From this narration of facts it clearly emerges that the plaintiffs had the knowledge of the proclamation of sale and yet no attempt was made by them either to appear before the Collector who had issued the proclamation or as was now sought to be urged, offered to repay the loan. If after this specific knowledge that proceeding for recovery of Tagai loan had commenced and during its pendency the partition was brought about and yet on the subsequent sale the revenue authority sold the whole of the property and the purchaser intended to buy the whole of the property, the only way the sons can challenge this sale is by establishing the character of the debt as being tainted with illegality or immorality and the purchaser would be entitled to defend his purchase and possession on all the contentions which would negative the plaintiffs ' case including the one about the pious obligation of the sons to pay the father 's debt. Therefore, there is no force in the contention that as the plaintiffs were not parties to the recovery proceedings the sale is not binding on them. That brings us to the last contention which has found favour with the High Court. The contention is that a loan borrowed under the provisions of the Loans Act could always be in the individual and personal capacity of the borrower and the Loans Act being applicable to all the communities in this country, it does not admit of a person borrowing loan in his representative capacity as Karta of the joint family and, thereby making joint family property liable for the discharge 972 of the debt. Section 5 prescribes the mode of dealing with the applications for loans and section 6 provides for the period for repayment of loans. Then comes section 7 which is material. It provides for the mode of recovery of the loans borrowed under the Act. Section 7 reads as under: "7. (1) Subject to such rules as may be made under section 10, all loans granted under this Act, all interest (if any) chargeable thereon, and costs (if any) incurred in making the same, shall, when they become due, be recoverable by the Collector in all or any of the following modes, namely: (a) from the borrower as if they were arrears of land revenue due by him; (b) from his surety (if any) as if they were arrears of land revenue due by him; (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realisation of land revenue by the sale of immovable property other than the land on which that revenue is due: Provided that no proceeding in respect of any land under clause (c) shall affect any interest in that land which existed before the date of the order granting the loan, other than the interest of the borrower, and of mortgages of, or persons having charges on, that interest, and where the loan is granted under section 4 with the consent of another person, the interest of that person, and of mortgagees of, or persons having charges on, that interest. (2) When any sum due on account of any such loan, interest or costs is paid to the Collector by a surety or an owner of property comprised in any collateral security, or is recovered under sub section (1) by the Collector from a surety or out of any such property, the Collector shall, on the application of the surety or the owner of that property (as the case may be), recover that sum on his behalf from the borrower, or out of the land for the benefit of which the loan has been granted, in manner provided by sub section (1). (3) It shall be in the discretion of a Collector acting under this section to determine the order in which he will resort to the various modes of recovery permitted by it. " 973 The loan can be recovered from the borrower as if it were an arrear of land revenue due by him or from his surety by the same procedure or out of the land for the benefit of which the loan has been granted by following the same procedure or out of the property comprising as collateral security, if any, according to the procedure for realisation of land revenue by sale of immovable property or by the sale of immovable property other than the land on which the land revenue is due. Now the word 'borrower ' is not defined. Could it be said that a borrower for the purpose of section 7 can be an individual and no other person ? The High Court observed that the Act is applicable to all communities in India and not merely to Hindus and there are many communities which do not have the system of joint family and if the legislature intended to include in the word 'borrower ' manager of a family, it should have said so in express terms. There is nothing in the language of section 7 which would show that the borrower must always and of necessity be an individual. Even if the Act applies to other communities which do not have the system of joint family, that by itself would not exclude the manager of a joint Hindu family from becoming a borrower under section 7. If the construction as suggested by the High Court is accepted it would put joint Hindu family at a disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer, nor could he take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family. We see no justification for restricting the word 'borrower ' to be an individual alone. In fact the Act itself contemplates joint borrowers. Section 9 provides for joint and several liability of joint borrowers. A Karta of a joint Hindu family therefore can be a borrower in his representative capacity. If the Karta of a joint Hindu family is considered eligible for becoming a borrower would it run counter to the position of other communities in which there is no concept of a joint family and joint family properties ? In the absence of any such concept a borrower other than a Hindu can offer all the property at his disposal even if he has not sons, as security for the loan to be borrowed because in other communities governed by their personal laws the son does not acquire interest in the ancestral properties in the hand of the father from the time of his birth. But in Hindu law there are two seemingly contrary but really complimentary principles, one the principle of independent coparcenary rights in the sons which is an incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their father 's debts not tainted with immorality or illegality, 974 which lays open the whole estate to be seized for the payment of such debts (see Jakati 's case) (Supra). Now, if the sons of a Hindu father take interest in the ancestral property in the hands of the father by the incident of birth, they also incur the corresponding obligation of discharging the debts incurred by the father either for his own benefit or for the benefit of the joint family from the property in which the sons take interest by birth. Such a concept being absent in communities not governed by Hindu law in this behalf, the father would be free to encumber the property and the sons in such communities would neither get interest by birth nor the liability to pay the father 's debt and would not be able to challenge the sale or property for discharge of the debt incurred by the father. Therefore, the expression 'borrower ' in section 7 need not be given a restricted meaning merely because the Act applies to all communities. Hence a father who is the Karta of the joint family consisting of himself and his sons can become a borrower in his capacity as Karta and if the loan is for legal necessity or for the benefit of the joint family estate he would render the joint family property liable for such debt and if it is for his personal benefit the joint family property even in the hands of the sons would be liable if the debt is not tainted with illegality or immorality. The High Court said that such liability which arises from the obligation of religion and piety cannot be extended to the loans borrowed under the Loans Act because there is no such obligation in other communities to which the Act applies. In reaching this conclusion the High Court overlooked the principle that this doctrine of pious obligation is not merely a religious duty but has passed into the realm of law (see Anthonyswamy), (supra). On the facts of that case this principle was applied to parties belonging to Tamil Vannian Christians. Viewed from this angle, the High Court was in error in holding that Dharmashastras of Hindus never contemplated improvement loans being given by the Governments of the day which were usually monarchies and, therefore, a debt of the kind which is contemplated under the Loans Act could never have been under the contemplation of the writers like Brihaspati and Narada in whose texts the pious liability is imposed on the sons and others. It is not possible to subscribe to this view for the reasons hereinbefore mentioned. The decisions in Sankaran Nambudripad vs Ramaswami Ayyar,(1) and Chinnasami Mudaliar vs Tirumalai Pillai,(2) do not touch the question herein raised and are of no assistance in the matter. It, therefore, clearly transpires that Dattatraya had borrowed a loan from the Government under the Loans Act for the benefit of 975 joint family property. It was being recovered as arrears of land revenue. The property which is the subject matter of dispute in this proceeding was joint family property. It was sold at a revenue auction and the whole of the property was sold and the whole of it was purchased by the purchaser. The debt of Tagai loan for which the property was sold is not shown to be tainted with illegality or immorality or avyavaharik. Therefore, the suit property was liable to be sold at court auction for two reasons, one that the debt was joint family debt for the benefit of the joint family estate and, therefore, all segments of the joint family property were liable for the discharge of the debt, and secondly, under the doctrine of pious obligation of the sons to pay the father 's debt. In the present proceedings no attempt was made to establish that the debt was tainted with illegality or immorality. Therefore, the sale is valid and the purchaser acquired a full and complete title to the property. The sale is not void. Part of the property is acquired and the compensation is taken by the plaintiffs subject to the orders of the Court. Accordingly, both these appeals are allowed and the plaintiffs ' suit is dismissed but in the facts and circumstances of this case, with no order as to costs throughout. N.V.K. Appeals allowed.

The respondents ' father took a Tagai loan from the Government for the purpose of digging wells in his land by offering his land as security for the loan. When he failed to repay the loan, the suit land was auctioned under the revenue recovery proceeding and it was purchased by the appellants. In a suit for recovery of possession, the respondents alleged that their father had no saleable interest in the land because, prior to the date of auction. in the partition between themselves and their father, the suit land came to their share and therefore the land which belonged to them could not have been sold in an auction for recovering a personal debt of their father. The trial court declared the sale as void. The High Court affirmed the trial Court 's order. In appeal to this Court the respondents contended that the debt was not a joint family debt; neither was the father acting as Karta of the joint family nor was the loan for the benefit of the joint family and therefore the joint family property could not be made liable for such loan. Allowing the appeals the Court, ^ HELD: 1 (a) The suit land was joint family property of the respondents and their father. [961C] (b) If the loan, for the recovery of which the suit property was brought to auction, was joint family debt and if the suit property was joint family property it would be liable to be sold for recovery of joint family debt. [963A] (c) Whether the Karta acted in his personal capacity or representative capacity has to be gathered from all the surrounding circumstances. The father borrowed the loan in his capacity as Karta of the joint family for improvement of the joint family lands and for this purpose he offered as security the land which was joint family property. It is not necessary that the Karta acting in his capacity as Karta should describe himself as Karta to affirm his representative capacity. Therefore he must be deemed to have acted in the transaction on behalf of the family. [961G H] 956 (d) Agriculture was one of the occupations which the father was carrying on as Karta of the joint family. If agriculture was one of the occupations of the joint family and if the loan was borrowed for the purpose of improving the joint family lands, the loan would ipso facto be for legal necessity and it would be joint family debt. [962H] (e) Where the sons are joint with their father and debts have been contracted by the father for his personal benefit the sons are liable to pay the debts provided they were not incurred for illegal or immoral purpose. This liability to pay the debt had been described as pious obligation of the son to pay the father 's debt if it is not tainted with illegality or immorality. [960F] Muttayan vs Jamindar of Sivagiri, [1883] 9 I.A. 128 Anthonyswmy vs M. R. Chinnaswamy Koundan (dead) by L. Rs. Ors. ; ; referred to. (f) If at a partition amongst the members of the joint family no provision was made for joint family debts, then despite the partition and allotment of shares to different coparceners, the joint family property acquired by partition would still be liable for the joint family debts. [964D] Sat Narain vs Das, [1936] 63 I.A. 384; Pannalal & Anr. vs Mst. Naraini & Ors. ; at 558; Vriddhachalam Pillai vs Shaldean Syrian Bank Ltd. & Anr. ; ; referred to (g) In the instant case the property sold was liable for the discharge of the father 's debt. The debt being a pre partition debt which was not shown to be tainted with illegality or immorality, could be recovered from the joint family property in the hands of the sons. [965F] (h) The pious obligation of the sons continues to be effective even after partition. If the creditor, in execution of a decree, obtained prior to partition, seizes the property in execution without making the sons parties to the suit and the property was sold at an auction and the purchaser was put in possession, the remedy of the sons would be to challenge the character of the debt in an appropriate proceeding. The sale cannot be voided on the only ground that it took place after partition and the property sold was one which was allotted to the sons on partition. Partition in such a situation merely provides a different mode of enjoyment of property without affecting the joint family 's liability for discharge of pre partition debts. [968D F] section M. Jakati & Sons & Anr. vs section M. Barkar & Ors., referred to. (i) In the instant case the debt was not shown to be tainted with illegality or immorality. Therefore, even if the respondents were not parties to the proceeding held by the Revenue Authorities, once the sale was confirmed and the purchaser was put in possession, the sons can challenge the sale only by establishing the character of the debt. [968G, 969A] (2) The loan sought to be recovered being Tagai loan advanced under the Loans Act, it can be recovered as arrears of land revenue. The Bombay land Revenue Code, provides procedure for realisation of land revenue, recovery of which could be made as if it was arrears of land revenue and other revenue demands. [969C] 957 (3) When a loan was taken under the Loans Act and was being recovered as arrears of land revenue, the order of the Revenue Authority would tantamount to a decree and when a proclamation of sale was issued it amounted to execution of the decree. [970F] 4 (a) The High Court was wrong in holding that since the Act was applicable to all communities in India and not merely to the Hindus, if it legislature intended to include manager of a family in the word 'borrower ', it should have said so in express terms. There is nothing in the language of section 7 of the Loans Act to show that the borrower must always and of necessity be an individual. If the construction suggested by the High Court is accepted it would put the joint Hindu family at disadvantage in borrowing loans under the Loans Act because the Karta of a joint Hindu family, if he has no separate property of his own, and if he cannot borrow the loan in his representative capacity, has no security to offer. Nor would he be able to take advantage of the beneficial provision of the Act for improving the land belonging to the joint Hindu family. [973C E] (b) Moreover there is no justification for restricting the word 'borrower ' to be an individual alone. The Act itself contemplates joint borrowers. A Karta of a joint Hindu family can be a borrower in his representative capacity. [973F] Sankaran Nambudripad vs Ramaswami Ayyar, Madras 691; Chinnaswami Mudaliar vs Trimalai Pillai, Madras 572, inapplicable.

Appeal No. 205 of 1953. Appeal from the Judgment and Order dated the 24th February, 1953, of the High Court of Judicature at Calcutta in Appeal from Original Order No. 19 of 1952, arising out of the Order dated the 23rd day of August, 1951, of the High Court of Calcutta in its Ordinary Original Civil Jurisdiction Matter No. 157 of 1951. K. P. Khaitan, (section N. Mukherjea and Rajinder Narain, with him) for the appellant. M. C. Setalvad, Attorney General for India, (A. N. Sen, V. section Sawhney and section P. Varma, with him) for the respondents. November 1. The Judgment of the Court was delivered by MUKHERJEA J. This appeal is directed against a judgment of an appellate bench of the Calcutta High Court, dated the 24th February, 1953, reversing, on appeal, the judgment and order of a single Judge sitting on the Original Side of that Court, passed on an application under section 34 of the . The material facts are not in controversy and may be shortly stated as follows: On the 7th of July, 1950, the respondent, Moran and Company Limited, passed two Bought Notes to the appellant company, couched in identical terms, under which the appellant purchased 12,00,000 yards of hessian cloth, 6,00,000 yards under each contract, on certain terms and conditions stated therein. The delivery was to be made every month from January, 1951, at the rate of 1,00,000 yards per month under 864 each of these notes and payments were to be made in cash 'on delivery, each delivery being treated as a separate and distinct contract. The Bought Notes commenced thus: Dear Sirs, We have this day Bought by your order and on your account from our Principals. " The particulars of the goods, the price, the time of delivery and other terms of the contract are then set out and amongst the terms is an arbitration clause worded as follows: " All matters, questions, disputes, differences and/ or claims arising out of and/or concerning and/or in connection with and/or in consequence of or relating to this contract, whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and, whether or not this contract has been terminated or purported to be terminated or completed, shall be referred to the arbitration of the Bengal Chamber of Commerce under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted. " The notes were signed by the respondent, Moran and Company, describing themselves as brokers. It is admitted that the goods covered by the Bought Notes were delivered to the appellant in all the months from January to June, 1951, with the exception of the goods due to be delivered for the month of March, 1951. The appellant required from the respondent delivery of goods in respect of the month of March but the latter informed the appellant, by a letter dated the 27th March, 1951, that its principals disowned a liability in this respect as there was default on the part of the appellant in not giving shipping instructions for the said goods within the time mentioned in the contracts. The appellant denied any default on its part and did not also accept the position that the respondent had any principal, and on the 27th of April, 1951, it sent its bills to the respondent claiming Rs. 1,13,042 3 0 as damages for non delivery of the 865 goods. As the respondent did not comply with this demand, the appellant contemplated referring the matter in dispute to the arbitration of the Bengal Chamber of Commerce as provided in the contracts and while it was preparing to take steps in that direction, the respondent, on the 11th of June, 1951, filed a suit against the appellant in the Original Side of the Calcutta High Court (being Suit No. 2516 of 1951,) and it is in respect of this suit that the application under section 34 of the has been made. It was alleged in the plaint that the plaintiff acted merely as broker and in that capacity brought about the two contracts of sale and purchase evidenced by the two Bought Notes mentioned above, that the real seller was a firm known as Gowarchand Danchand, and that the plaintiff not being a party to the contract could not incur any liability under its terms. There were prayers in the plaint for a declaration that the plaint. off was not a party to the said contracts and, that it had no liability under the same. There was a further prayer for an injunction restraining the respondent from, claiming any damages in respect of the said contracts The writ of summons was served on the appellant on the 23rd of June, 1951. On the 19th July, 1951, it filed an application under section 34 of the praying that the proceedings in the suit may be stayed in order that the matter in dispute between the parties may be dealt with under the arbitration clause contained in the contracts. The application was heard by Das Gupta J. who allowed the prayer of the applicant and stayed further proceedings in the suit. In the opinion of the learned Judge the dispute in this case was not whether there was any contract entered into by and between the appellant and the respondent: but whether the respondent, who admittedly passed the two Bought Notes to the appellant, could be made liable under the contract by reason of the fact that it described itself as broker. The answer to this question depended according to the learned Judge upon the interpretation of the contract itself and the dispute arising as. it did out of or concerning or relating to the 866 contracts would come within the purview of the arbitration clause. Against this judgment the respondent took an appeal to the Appellate Division of the High Court and the appeal was heard by a bench consisting of Chakravartti C.J. and Sarkar J. By two separate judgments which concurred in the result, the Chief Justice and the other learned Judge allowed the appeal and vacated the order for stay. It is against this judgment that the appellant has come to this Court on the strength of a certificate under article 133(1)(a) of the Constitution. The short point for our consideration is, whether on the facts of this case, the appellant is entitled to an order under section 34 of the , staying the proceedings of the suit commenced by the respondent. Section 34 of the is in these terms: " Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings. " Thus in order that a stay may be granted under this section, it is necessary that the following conditions should be fulfilled: (1)The proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement; (2)the legal proceeding which is sought to be. stayed must be in respect of a matter agreed to be referred 867 (3)the applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance. It is also necessary that he should satisfy the Court not only that he is but also was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration; and (4)the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement. The third condition can be taken to have been fulfilled on the facts of the present case, and the fourth is one which is exclusively for the determination of the Court. The controversy between the parties centres round the other two conditions, namely, conditions (1) and (2) ; and unless the applicant for stay succeeds in establishing that the respondent is a party to an arbitration agreement and that the subject matter of dispute in the suit is a matter coming within the scope of such agreement, it cannot possibly ask the Court to order a stay of the proceedings, under section 34 of the . The learned Judges of the appellate bench of the High Court have taken the view that the only matter in dispute between the parties to the suit is whether the plaintiff was a party to the contract. It was definitely alleged by the plaintiff that the contract was not between it and the appellant but was one between the appellant and a third party and since the arbitration agreement is contained in the contract, it is an agreement between those parties only, which could not bind or affect the plaintiff in any way. The dispute, it is said, which is the subject matter of the suit does not arise under the contract and does not relate to it; it is outside the contract altogether and does not come within the scope of the arbitration agreement. The decision in the appeal therefore rests entirely on the finding of the learned Judges that the matter in dispute between the parties to the suit does not come within the ambit of the arbitration clause. In view of this decision the learned Judges did not consider it necessary to go into the first point as to whether in fact 868 there was a binding arbitration agreement between the parties to the suit. The learned Chief Justice no doubt did in a manner consider that point also, but he refrained from pronouncing any decision upon it, being of opinion that a decision on this question which was the only issue in the suit itself might prejudice the parties and create a bar of res judicata against one or the other. We think that on the facts of this case it was necessary for the learned Judges of the appellate bench to decide the question as to whether or not the plaintiff in the suit which the applicant wants to stay was a party to the arbitration agreement. This would have a material bearing on the decision of the other question upon which the learned Judges rested their judgments. The first and essential pre requisite to making an order of stay under section 34 of the is that there is a binding arbitration agreement between the parties to the suit which is sought to be stayed. The question whether the dispute in the suit falls within the arbitration clause really pre supposes that there is such agreement and involves consideration of two matters, viz., (1) what is the dispute in the suit and (2) what disputes the arbitration clause covers?(1). The contention raised by the plaintiff in the present suit is, that the contract was really between the appellant and another party and not between it and the appellant and consequently it was not bound by the contract and could not be made liable for any damages in terms thereof. In substance therefore the controversy between the parties in the suit is whether the plaintiff did incur any liability in terms of the contracts evidenced by the two Bought Notes to which it was a signatory no matter in whatever capacity. The question whether the plaintiff was a party to the agreement at all is undoubtedly one which cannot go before the arbitrators and with that question they cannot possibly deal. But as Lord Porter pointed out in Heyman vs Darwins (2), "this does not mean that in every instance (1) Vide per Viscount Simon in Heyman vs Darwins, at 360. (2) , 393. 869 in which it is claimed that the arbitrator has no juris diction the Court will refuse to stay an action. If this were the case such a claim would always defeat an agreement to submit disputes to arbitration, at any rate until the question of jurisdiction had been decided. The Court to which an application for stay is made is put in possession of the facts and arguments and must in such a case make up its mind whether the arbitrator has jurisdiction or not as best it can on the evidence before it. Indeed, the application for stay gives an opportunity for putting these and other considerations before the court that it may determine whether the action shall be stayed or not. " Section 34 of the as is well known is a virtual reproduction of section 4 of the English of 1889. The observations quoted above were approved of by Mr. Justice section R. Das in the case of Khusiram V. Hanutmal (1) and it was held by the learned Judge that where on an application made under section 34 of the for stay of a suit, an issue is raised as to the formation, existence or validity of the con. tract containing the arbitration clause, the Court is not bound to refuse a stay but may in its discretion, on the application for stay, decide the issue as to the existence or validity of the arbitration agreement even though it may involve incidentally a decision as to the validity or existence of the parent contract. We are in entire agreement with the view enunciated above. As we have said already, it is incumbent upon the Court when invited to stay a suit under section 34 of the to decide first of all whether there is a binding agreement for arbitration between the parties to the suit. So far as the present case is concerned if it is held that the arbitration agreement and the contract containing it were between the parties to the suit, the dispute in the present suit would be one relating to the rights and liabilities of the parties on the basis of the contract itself and would come within the purview of the arbitration clause worded as it is in the widest of terms, in accordance with the principle enunciated by this Court in A. M. Nair and (1) at 518. 870 Company vs Gordhandass (1). If on the other hand it is held that the plaintiff was not a party to the agreement, the application for stay must necessarily be dismissed. The appellate Judges of the High Court in our opinion held rightly that the decision in A. M. Mair and Company vs Gordhandass (1) was not in any sense conclusive in the present case on the question of the dispute in the suit being included in the arbitration agreement. The report shows that the dispute in that case was whether the appellants had made the contract in their own right as principals or on behalf of the Bengal Jute Mill Company as agents of the latter. The decision of this question was held to turn upon a true construction of the contract and consequently it was a dispute under or arising out of or concerning the contract. The judgment proceeds on the footing that there was in fact a contract between the parties and the only dispute was in which character they were parties to it, the respondents contending that the appellants were not bound as principals while the latter said that they were. Mr. Justice Fazl Ali in delivering the judgment pointed out that the error into which the learned Judges of the appellate bench of the High Court appeared to have fallen was their regarding the dispute raised by the respondent in respect of the position of the appellants under the contract as having the same consequence as a dispute as to the contract never having been entered into. In this case it is certainly not admitted that the respondent was a party to the contract. In fact that is the subject matter of controversy in the suit itself. But, as has been said already, the question having been raised , in this application, under section 34 of the , the Court has undoubted jurisdiction to decide it for the purpose of finding as to whether or not there is a binding arbitration agreement between the, parties to the suit. It has been said by Chakravartti C.J. and in our opinion rightly, that if the person whose concern with the agreement is in question is a signatory to,the contract and formally a (1) ; 871 contracting party, that will be sufficient to enable the Court to hold for purposes of section 34 that he is a party to the agreement. It was the contention of the respondent in the Court below that this test was not fulfilled in the present case. The point has been canvassed before us also by Mr. Sen and it has been argued on the authority of several decided cases that in cases of this description the Bought Note is a mere intimation to the buyer, that the orders of the latter have been carried out and purchases have been made from other persons and not from them. The writer does not thereby become a party to the contract of purchase and sale even as an agent. He remains a mere broker or intermediary and the provision of section 230(2) of the Contract Act 'Cannot be invoked against him. Mr. Khaitan on the other hand argues that the English law being quite different from the Indian law regarding the liability of an agent contracting on behalf of an undisclosed principal, the English authorities are no guide to a solution of the problem. It is said that the case of Patiram Banerjee vs Kanknarrah Co., Ltd.(1), upon which the respondent relies, was wrongly decided being based upon English authorities which have no application to India. The respondent here, it is pointed out, signed an elaborate document setting out in full every particular of the contract entered into and it is impossible to say that he was not an agent executing a contract on behalf of another whose identity he did not disclose but was a mere intermediary conveying an information to the buyer. In our opinion, the point is not free from doubt and requires careful consideration and as it was not decided by the learned Judges of the High Court and we have not the advantage of having their views upon it, the proper course for us to follow would be to send the case back for a hearing of and decision on this point. We, therefore, allow the appeal and set aside the judgments of both the Courts below. The matter will go back to the appellate bench of the Calcutta High Court which will decide as an issue in the proceeding under section 34 of the the question whether the respondent was or was not a party (1) Cal. I050. 872 to the arbitration agreement. If the Court is of opinion that the respondent was in fact a party, the suit shall be stayed and the appellant would be allowed to, proceed by way of arbitration in accordance with the arbitration clause. If on the other hand the finding is adverse to the appellant, the application will be dismissed. The appellant will have its costs of this appeal. Further costs between the parties will abide the result. Appeal allowed.

Held, that in order that a stay may be granted under section 34 of the Indian , it is necessary that the following conditions should be fulfilled: (1) The proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement; (2) the legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred ; (3) the applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance. It is also necessary that he should satisfy the court not only that he is, but also was at the commencement of the proceedings, ready and willing to do everything necessary for the proper conduct of the arbitration ; and (4) the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement. The first and essential pre requisite to making an order of stay under a. 34 of the is that there is a binding arbitration agreement between the parties to the suit which is sought to be stayed. The question whether the dispute in the suit falls within the arbitration clause really pre supposes that there is such agreement and involves consideration of two matters, viz., (1) what is the dispute in the suit and (2) what disputes the arbitration clause covers. It is incumbent upon the Court, when invited to stay a suit under section 34 of the Indian , to decide first of all whether there is a binding agreement for arbitration between the parties. If, in the present case, it is held that the arbitration agreement and the contract containing it were between the parties to the suit, the dispute in the present suit would be one relating to the rights and liabilities of the parties on the basis of the contract itself and would come within the purview of the arbitration clause 863 worded as it is in the widest of terms. If, on the other hand, it is held that the plaintiff was not a party to the agreement, the application for stay must necessarily be dismissed. Case sent back for the decision of the question whether the respondent was or was not a party to the arbitration agreement. Heyman vs Darwins ([1942] A.C. 356), Khusiram vs Hanutmal ((1948) , A. M. Mair and Companay vs Gordhandas ([1960] S.C.R. 792) and Patiram Y. Kankarah Company ((1915) I.L.R. referred to.

Appeal No. 546 of 1962. Appeal by special leave from the judgment and decree dated December 17, 1958 of the Allahabad High Court in Misc. Case No. 152 of 1952. C. B. Agarwala and C. P. Lal, for the appellant. section K. Kapur, section K. Mehta and K. L. Mehta, for the respondent. March 20, 1964. Under the U.P. Sales Tax Act (15 of 1948) which came into force on April 1, 1948, sales tax became payable on sales of diverse commodi ties including cotton yarn at a uniform rate of three pies in a rupee. By Act 25 of 1948, section 3 A was incorporated in Act 15 of 1948 conferring upon the Provincial Government power to declare by notification that the proceeds of sale of any goods or class of goods shall not be included in the turnover of any dealer except at such single point in the series of sales by successive dealers as the State Government may specify. By section 7 as amended by Act 25 of 1948, a dealer had the option to submit his return on the basis of the turnover of the sales in the previous year or on the basis of turnover of the sales in the current year. The respondent company opted to be assessed on the basis of the turnover of the previous year ending March 31, 1948. In exercise of the power under section 3 A of the Act the Government of U.P. issued a notification declaring that with effect from June 9, 1948, the proceeds of goods entered in column 2 of the schedule to the said notification (which included cotton yarn) shall not be included in the turnover of any dealer except at the point in the series of sales by successive 385 dealers, and that with effect from June 9, 1949, the rate of tax in respect of the turnover of the aforesaid goods shall be as set out in the schedule. As a result of the notification the sale of cotton yarn became taxable at a single point i.e. at a point of sale by the importer if the goods were imported from outside Uttar Pradesh and at a point of sale by the manufacturer, if manufactured in Uttar Pradesh, and the rate of tax in respect of cotton yarn was fixed, since the date of notification, at six pies per rupee. The Sales tax Officer, Hathras in assessing the respondent company to sales tax for the assessment year 1948 49 held that because of the notification issued by the Government, the rate of three pies per rupee in respect of sales of cotton yarn was to apply in the year of assessment for the first 69 days and for the remaining part of the year the rate of six pies per rupee was to apply, and on that account notwithstanding that the assessee had opted under section 7 to be assessed on the basis of the turnover of the previous year, the rate of three pies was applicable to the assessable turnover for the first 69 days and for the rest of the year the rate applicable was six pies per rupee. This order was modified in appeal by the Judge (Appeals) Sales Tax, Meerut, who directed assessment of tax on the turnover at a uniform rate of three pies per rupee. But the order of the ap pellate court was reversed by the Judge (Revisions) Sales Tax, U.P. who restored the order of the Sales tax Officer. The Judge (Revisions) Sales Tax at the instance of the respondent company then referred to the High Court of Judicature at Allahabad the following question: "Whether the assessees who had elected the previous year are liable to pay tax in the assessment year 1948 49 according to the rates prevailing during the year", and the High Court following its judgment in Modi Food Products Ltd. vs Commissioner of Sales Tax, U.P.(1) answered the question as follows: "all sales of the assessee during the previous year which corresponded with the calendar year 1947 have to be taxed at the flat rate of 3 pies per rupee when making the assessment for the assessment year 1948 49". With special leave, the Commissioner of Sales Tax, U.P. has appealed to this Court against the order of the High Court. It may be observed that the judgment of the Allahabad High Court in Modi Food Products Ltd. 's case(1) was confirmed by this Court: Commissioner of Sales Tax, U.P. vs The (1) A.I.R. 1956 All. 35. L P(D)ISCI 13 386 Modi Sugar Mills Ltd.(1) But the Legislature of the State of Uttar Pradesh has, since that judgment was pronounced, en acted validating legislation by Act III of 1963 which has provided by section 7 of the Amending Act that: "After section 30 of the Principal Act, the following, shall be added and be deemed to have been added with effect from the first day of April, 1948, as new section 31 : '31 (1) Where any dealer has, in accordance with the provisions of section 7, as it stood prior to its amendment by section 7 of U.P. Act XIX of 1956, opted to be assessed to tax on the basis of his turnover of the previous year, he shall be assessed to tax at such rates as are prevalent during the year for which the assessment is being made, and if the rates of tax on any goods or class of goods arc altered during such assessment year, the dealer, in respect of the turnover of such goods, shall be liable to pay tax at the altered rates, as if the altered rates were in force during the previous year also proportionately for the same number of days as, they are in force during the assessment year. (2) Notwithstanding any judgment, decree or order of any court, all assessments or orders made, actions. or proceedings taken, directions issued, jurisdictions exercised or tax levied or collected by any officer or authority purporting to act under the provisions of sub section (1) of section 7, as it stood prior to its amendment by section 7 of U.P. Act XIX of 1956, shall be deemed to be good and valid in law as if such assessments, orders, actions, proceedings, directions, jurisdictions and tax have been duly made, taken, issued, exercised, levied or collected, as the case may be, under or in accordance with the said provisions of this Act as amend ed by the Uttar Pradesh Bikri Kar (Sanshodhan) Adhiniyam, 1962 and as if the amendment so made had been in force on all material dates. Explanation For the purpose of this section the expression "previous year" shall have the meaning assigned to it in sub clause (ii) of clause (j) of section 2 of this Act, as it stood prior to its amendment by section 2 of the U.P. Act XIX of 1956. ' " Section 31 makes sales tax exigible from an assessee who has, opted to pay tax on the turnover of the previous year, as if the altered rates were in force during the previous year. The turnover of the previous year must therefore be broken up, the new rate of tax being applicable proportionately for the (1) ; 387 same number of days in the previous year as were in force in the assessment year. The amendment is retroactive, and applies to assessments pending or closed, as if the validating Act had been in force at the material date. This Court had in the Modi Sugar Mills Ltd. 's case(1) held that where the assessee had elected to submit his return on the turnover of the previous year under section 7 of Act 15 of 1948 as amended by Act 25 of 1948 he was liable to be assessed to sales tax at the rate in force on the first day of the year of assessment, because the liability arises on that date, and any subsequent enhancement of the rate by virtue of a notification under section 3 A does not alter that liability. The view expressed by the Court has been modified by express legislation operative retrospectively. The liability to tax of the turnover of the previous year which is regarded as the fictional turnover of the year of assessment has to be determined on the basis that the rates applicable in the year of assessment were fictionally projected on the taxable turnover. Mr. Kapur appearing on behalf of the respondent company submitted that in answering the question referred by the Judge (Revisions) this Court was bound to give its opinion in the light of the law applicable to the transaction as it prevailed at the date on which the reference was made and not of any subsequent amendment of the Act. Counsel submits that as the High Court exercises an advisory jurisdiction, so does this Court in appeal against the order of the High Court, and its advice can only be tendered on the question referred and in the light of the law as was applicable at the date when the reference was made. Counsel says that if the law as amended is to be taken into consideration, in substance this Court would be answering a question other than the one which was referred by the Judge (Revisions) Sales Tax. In our view there is no substance in this contention. The question referred to the High Court posed a problem as to the liability of the respondent company to be assessed for the assessment year 1948 49. Two rival views were propounded before the Judge (Revisions) Sales Tax. One was that the rates applicable to the fictional turnover for the year of assessment were those prevalent in the year 1948 49 and for the purpose of assessment they had to be applied to the turnover in the same proportion in which they would have applied if the option had not been exercised. That was the contention of the Sales Tax X X Department. The contention of the assessee was that having opted for the turnover of the previous year, the rates applicable to the turnover would be crystalised on the first day of the year of assessment and any modification since the commencement of the year in the rates would be inapplicable. This Court in the Modi Sugar (1) ; 388 Mills Ltd. 's case(1) accepted the contention raised by the assessee. But for the amendment, the question which was posed by the Judge (Revisions) Sales Tax would have to be answered as it was answered by the High Court. The Legislature has,. however, amended the Act and has declared that notwithstanding the option exercised by the assessee the tax would have to be computed in the light of the rates prevailing in. 1948 49 as. if they were projected upon the turnover of the previous year. The Legislature has expressly stated that this rule will prevail as if it was in force during the assessment year and all assessments will be made in the light of this amended rule. In answering the question which was submitted by the Judge (Revisions) Sales Tax, therefore, the law enacted by the Legislature is the law found incorporated in section 31 by Amending Act III of 1963. This Court in giving its opinion on the question in the light of the amending Act is seeking to apply a legislative provision which was, by express enactment, in force at the time when the liability arose, for section 31 enacted by Act III of 1963 is to be deemed to have been in operation at all material times in supersession of the previous rule declared by this Court. This Court is, therefore, not seeking to apply any law to the question posed before the High Court which was not in force. on the date of the transaction which is the subject matter of the reference. The following observation made by Jagannadhadas J., in Messrs Chatturam Horilram Ltd. vs Commissioner of Incometax, Bihar and Orissa(2) on which reliance was placed by counsel for the respondent company: "The High Court 's jurisdiction was only to answer the particular question that was referred to it by the Income tax Appellate Tribunal and it is extremely doubtful whether they could have taken notice of a subsequent legislation and answered a different question. ", does not suggest a different rule. In Messrs Chatturam Horilram Ltd. 's case ( 2 ) a previous assessment to income tax of the assessee fell through because the Indian Finance Act of 1939 was not in force in Chota Nagpur area where the assessee was carrying on business during the relevant assessment year. Thereafter Bihar Regulation IV of 1942 was promulgated by the Governor of Bihar with the assent of the Governor General and thereby the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively as from March 30, 1939. On February 8, 1944, the Income tax Officer issued a fresh notice under section 34 of the Indian Income tax Act, 1922, which resulted in the assessment of the appellant to income tax, and the question which fell to be determined was whether the (1) ; (2 ) ; 389 notice was properly issued under section 34 of the Act. It was argued that when the High Court answered the earlier reference which negatived the claim of the Revenue to assess the assessee, Bihar Regulation IV of 1942 had in fact been enacted, and if the High Court had applied that Regulation the result would have been different, and in meeting that argument the Court observed that it was doubtful if the High Court had jurisdiction to take into consideration the subsequent legislation for answering a question other than the one which was actually raised. The doubt expressed was therefore in respect of the power of the Court to decide a question other than the question which was actually referred and not in respect of the power and indeed the duty of the High Court to apply to the question referred the law enacted with retroactive operation. In support of his contention Mr. Kapur relied upon the observation of Desai, C.J., in M/s Rampur Distillery Chemical Works Ltd. vs The Commissioner of Income tax, U.P.(1) to the following effect: "The argument was that though the High Court has to answer the question referred to it with reference to the law in force in 1957 (when the Tribunal disposed of the appeal), what that law was has to be discovered today with reference to the law existing today. What was the law in 1957 on the basis of which the Tribunal disposed of the appeal has certainly to be decided by this court today but what has to be decided is the law existing in 1957 and not deemed to exist in 1957 by virtue of an amendment in the law made in 1962. " But in that case, in the view of the High Court the amendment made by the amending statute of 1962 which came into force after the reference was made by the Income tax Tribunal had no retrospective operation, and the question referred by the Tribunal had to be answered by the High Court in the light of the relevant law applicable at the date of the transaction. The observation relied upon has to be read in the context of the finding of the High Court as to the character of the amending legislation. The observation therefore does not assist the contention that even in cases where the relevant statute has been amended with retroactive operation, so as to apply to the transaction which forms the subject matter of the reference, and the High Court or this Court is bound in recording its opinion on the question referred to ignore the amended law. If what counsel contends is true. the answer given by the High Court or by this Court would have no value whatever in cases where by retroactive amendment of the law, the old law has (1) I.T. Reference No. 362 of 1958 decided on Jan. 17, 1964. 390 been superseded and is substituted by a new statutory provision. Undoubtedly the Tribunal called upon to decide a taxing dispute must apply the relevant law applicable to a particular transaction to which the problem relates, and that law normally is the law applicable as on the date on which the transaction in dispute has taken place. If the law which the Tribunal seeks to apply to the dispute is amended, so as to make the law applicable to the transaction in dispute, it would be bound to decide the question in the light of the law so amended. Similarly when the question has been referred to the High Court and in the meanwhile the law has been amended with retroactive operation, it would be the duty of the High Court to apply the law so amended if it applies. By taking notice of the law which has been substituted for the original provision, the High Court is giving effect to legislative intent and does no more than what must be deemed to be necessarily implicit in the question referred by the Tribunal, provided the question is couched in terms of sufficient amplitude to cover an enquiry into the question in the light of the amended law, and the enquiry does not necessitate investigation of fresh facts. If the question is not so couched as to invite the High Court to decide the question in the light of the law as amended or if it necessitates investigation of facts which have not been investigated, the High Court may refuse to answer the question. Application of the relevant law to a problem raised by the reference before the High Court is not normally excluded merely because at the date when the Tribunal decided the question the relevant law was not or could not be brought to its notice. There is nothing so peculiar in the nature of a reference under the Indian Income tax Act or the Sales Tax Acts that in deciding it the High Court is restricted to the application of the law which has been superseded by legislation since the date when the reference was made by the Tax Tribunal and is obliged to refuse to apply the law which by legislative direction has to be applied to a particular transaction which is the subject matter of the reference. On the view taken by us this appeal must be allowed and the question raised by the Judge (Revisions) Sales Tax must be answered in the affirmative. Having regard to the circum stances of the case, the parties will bear their own costs both in this Court and the High Court. Appeal allowed.

The respondent is a manufacturer of cotton yarn and is registered as a dealer under the U.P. Sales Tax Act, 1948. This act came into force on April 1, 1948. Under this Act, sales tax was payable on sales of cotton yarn at a uniform rate of 3 pies in a rupee. Under section 3(A) of the Act the Government of U.P. issued a notification declaring that with effect from June 9, 1948, the Sales Tax would be charged at the rate of six pies per rupee in respect of sales of the cotton yam. In the present case, the assessee had opted under section 7 of the Act to be assessed on the turnover of previous year. The Sales Tax Officer held on the basis of the notification dated June 9, 1948, that the rate of three pies per rupee in respect of sales of cotton yarn was to apply in the year of assessment for the first 69 days and for the remaining part of the year the rate of six pies per rupee was to apply. The decision of the Sales Tax Officer was affirmed by the Judge (Revisions) Sales Tax. The Judge referred the case to the High Court. On reference the High Court held on the basis of its judgment in Modi Food Products Ltd. that the rate of three pies per rupee would apply for the assessment of 1948 49 because the assessee had opted under section 7 to be assessed on the basis of the turnover of the previous year. In the meantime the legislature of Uttar Pradesh by Act III of 1963 enacted section 31 which makes Sales tax exigible from an assessee who has opted to pay tax on the turnover of the previous year, as if the altered rates were in force during the previous year. The amendment is given retroactive operation and applies to assessments pending or closed. The question for consideration before this Court was whether this Amending Act would apply to the present assessment. Held:(i) The law found incorporated in section 31 by Amending Act III of 1963 would apply to the present case. This Court in giving its opinion on the question in the light of the amending Act is seeking to apply a legislative provision which was, by express enactment, in force at the time when the liability arose, for section 31 enacted by Act III of 1963 is to be deemed to have been in operation at all material times in supersession of the previous law declared by this Court in Modi Sugar Mills Ltd. 's case. This Court is, therefore, not seeking to apply any law to the question posed before the High Court which was not in force on the date of the transaction which is the subject matter of the reference Modi Food Products Ltd. vs Commissioner of Sales tax, U.P. A.I.R. 1956 All. 35 and Commissioner of Sales tax, U.P. vs Modi Sugar Mills Ltd.; , explained. 384 (ii)When the question has been referred to the High Court and in the meantime the law has been amended with retroactive operation, it would be the duty of the High Court to apply the law so amended as if it applies. By taking notice of the law which has been substituted for the original provision, the High Court is giving effect to the legislative intent and does no more than what must be deemed to be necessarily implicit in the question referred by the Tribunal, provided the question is couched in terms of sufficient amplitude to cover an enquiry into the question in the light of the amended law, and the enquiry does not necessitate investigation of fresh facts. M/s. Chatturam Horilram Ltd. vs Commissioner of Incometax, Bihar and Orissa, ; and M/s. Rampur Distillery Chemical Works Ltd. vs Commissioner of Income tax, U.P., I.T. Reference No. 362/58 dt. 17 1 64, distinguished.

Appeal No. 2515 of 1973, (From the judgment and Decree dated the 11th/12th July, 1972 of the Gujarat High Court in L.P. A. No. 40 of 1969.) section T, Desai and H.S. Parihar for the appellant. M.C. Bhandare, P. H. Parekh and Manju Jetley for respondent No. 1. 536 The Judgment of the Court was delivered by BEG, J. This appeal, after certification by the Gujarat High Court of fitness of the case for it, I rises in the following circumstances: Uttamram Mayaram Thakar, a flourishing lawyer, made a will, on 10 6 1945 and died childless on 20 8 1946. His widow, Bai Ruxmani, obtained, under the will, inter alia, certain shares the right and title to which are disputed before us. On 6 3 1948, Bai Ruxmani executed a registered gift deed purporting to donate the disputed shares in various limited companies, of which details were given in the gift deed, to her brother, Vasudev Ranichandra Shelat, the appellant before us (hereinafter referred to as "Shelat"). On 18 4 1948, Bai Ruxmani also expired. But, before she died, she had signed several blank transfer forms,apparently intended to be filled in by donee so as to enable him. to obtain the transfer of the donated shares in the registers of the various companies and share certificates in his own name. She had put her signatures in the correct places showing that she meant sign as the transferor of the shares. The shares could not, however, be transferred in the registers of the various companies, in accordance with the relevant provisions of Company law, before the lady 's death. Therefore, the respondent before us, Pranlal Jayanand Thakar, a nephew of the late Uttamram Mayaram Thakar, disputed the claim of the appellant Vasudev Ramchandra Shelat to these shares in an administration suit which came up before a learned Judge of the Gujarat High Court in second appeal together with other matters. The learned Single Judge held that Shelat was entitled to the shares covered by the registered gift deed to which the blank transfer forms could be related but not to others said to have been orally gifted with which we are not concerned here. The learned Judge having granted leave to file a Letter 's Patent Appeal, a Division Bench of the Gujarat High Court, which considered the rival claims, reversed the decision of the learned Single Judge even with regard to the shares covered by the registered gift deed on the ground that the gift was incomplete for failure to comply with the formalities prescribed by the Companies ' Act for "transfer" of shares. It held that there was no equity in favour of Shelat so that he may claim a right to complete what was left incomplete by the donor in her lifetime even though there could be no doubt that Bai Ruxmani had intended to donate the shares to Shelat. We think Mr. S.T. Desai, learned Counsel for the appellant Shelat, rightly pointed out that every material finding on questions of fact, given in favour of the appellant, was upheld by the Division Bench. After indicating the terms of the gift deed, the Division Bench held: "Thus, it is undoubtedly true that the deed of gift discloses a clear and unequivocal intention on the part of Bai Ruxmani that Vasudev should become the owner of these shares and he should for all future time enjoy the fruits thereof. it is a well settled position in law that unless the gift it completed as required by law, mere intention to make a gift cannot pass any title to the donee and does not make the 537 donee the owner of the property gifted by the donor. The registered gift deed itself cannot create any transfer and so it was not competent to the donor to divest the title in her merely by the execution of the gift deed. She was required to execute the regular transfer deeds or instruments of transfer in favour of Vasudev Shelat and hand them over to the donee, Vasudev Shelat, together with the share certificates. " It went on to say: "The circumstances as they clearly emerge and the facts as found by the Courts below, go to show that the deed of gift was executed on March 6, 1948, and, at the same time, the re levant share certificates were handed over by the donor to the donee; and, sometime between March 6, 1948, when the gift deed was executed, and April 18, 1948, when Bai Ruxmani died blank transfer forms signed by Bai Ruxmani were handed over by Bai Ruxmani to vasudev Shelat, the donee. " The appellant 's submissions, on facts found, may be summarised as follows: (1) As between the donor and the donee the transfer was complete with the registration of the gift deed; and, as there was a registered document, even delivery of share certificates to the donee was not necessary in view of Section 122 . (2) Assuming, without conceding that the donor had to do something more than to execute a registered document, this too was done when the shares certificates and the signed "blank transfer" forms were handed over to the donee by the donor. It did not matter if the name of the donee and other particulars are wanting in these blank forms. All necessary particulars of shares involved were expressly mentioned in the gift deed which specifies and identifies each individual share meant to be donated. The gift deed and the signed blank forms had to be read together. The donor had done all that reasonably lay with in her power to complete the donation. (3)The conduct of the donor, in handing over the share certificates to the donee and the blank transfer forms, read in the context of the expressly laid down intentions of the donor in the gift deed, raised the presumption of an implied authority to fill in the details and to submit to the companies concerned the forms given by the donor to Shelat before her death. (4) There was no evidence whatsoever in the case to repel the irresistible inference of an implied authority given to the donee to fill in and submit the transfer forms so as to obtain the necessary entries in the registers of the various companies concerned. (5) The Division Bench had, after giving all the necessary findings of fact in favour of the appellant, misdirected itself by resorting to the doctrine that there is no equity to complete an incomplete transaction, as there is when a bonafide purchaser for value comes before the Court. 538 There was no question of any equity involved here. The simple question was one of fact. Did the inference of an implied authority of the donee to fill in the forms and take other steps necessary to get his name entered in the registers of shareholders arise or not? Instead of considering and deciding whether such an inference arose, the Division Bench had failed to decide the real issue on the erroneous view that equity debars it from inferring an implied authority because the donee, unlike a bona fide purchaser for value, had paid nothing for the rights he could get from the donor. All that could be urged on behalf of the respondent may be summed up as follows : (1) The facts found make out, at best, an intention of Bai Ruxmani to donate but not the completion of a donation required by law for divesting the donor of interest in the property under consideration which consisted of shares. (2) Although shares are goods, as defined by the Sale of Goods Act, yet, they are 'goods ' of a special kind. Their transfer is not completed merely by the execution of a registered document or by delivery but the correct mode of transfer is determined by the character of these "goods" Sec. 123 of the lays down only a general mode of transfer by gift for goods in 'general but not for the transfer by gift of shares which are a special type of 'goods ' capable of transfer only in accordance with a special mode prescribed by the Companies Act of 1913, which was applicable at the relevant time. In other words, an adoption of the prescribed form of transfer is of the essence of a transfer for all purposes and not merely as between the shareholder and the company concerned. (3) Sections 122 & 123 of the had to be read harmoniously with Sections 28 and 34 of the Companies Act, 1913. (4) Since material portions of the transfer form given in regulation 19 of Table A of the first Schedule of the Companies Act of 1913 were never filled in, the doctrine of "substantial compliance" with the required form could not come to the aid of the appellant. (5) The gift deed itself does not empower the donee to take any of those steps which remained to be taken to complete the 'transfer ', so that the doctrine of implied authority would be excluded by the ex. press terms of the gift deed which not only do not confer any such authority Upon the donee but indicated that the donor was to take the necessary steps herself. (6) Inasmuch as acceptance of the gift "during the life time of the donor" is a condition precedent to the validity of the gift as a transaction, and the appellant Shelat did not apply for the transfer of shares, so as to indicate his acceptance of the gift before the dono died, the purported donation was frustrated by reason of Sec. 122 of of the . 539 (7) Even if we were to assume that the facts proved disclosed that the appellant donee was armed with an implied authority to obtain a transfer, yet that authority not having been acted upon during the life time of the donor, lapsed with the donor 's death. The result was that the donation, even if intended, was imperfect or infructuous in the eye of law and could not be perfected or completed. Equity does not aid a merely purported donee who has given no consideration to obtain any right. In other words, equitable considerations would not be irrelevant in deciding the question before us. (8)Even apart from equity, under the law of agency, found in sec. 201 of our Contract Act, the Principal 's death terminates the agency, so that the doctrine of implied authority does not help the appellant. (9) Section 202 of the Contract Act could not apply to a case where the subject matter of the alleged agency is the taking of steps to complete a transfer and not the rights which could only accrue after the necessary steps are taken. Hence, the appellant donee could not be said to have an interest in the "subject matter of the agency" which is distinct from rights which could have arisen if the object of the agency had been fulfilled. (10) Section 202 of the Contract Act could apply to a case where an agent has an actual or existing interest in the subject matter of the agency. Even if the subject matter of the agency could be said to be "Property", consisting of shares, there could be no question of applying Section 202 of the Contract Act before an " 'merest" in the shares arose. Such "interest" could only arise after a completed transfer. (11) Section 202 of the Contract Act contemplated cases of termination of agency in ways other than death. It meant that, so long as a Principal is alive, he could not terminate an agency so as to injure the interests of the agent in "the subject matter of the agency". But, in the case of the death of the Principal, the relationship terminated ipso facto or automatically by death. (12) A resort to the very concept of agency in this case presupposes that some interest of the Principal or the donor in the property said to be donated continued, or, in other words, the assumption behind it was that the donation of shares was not complete in the eye of law. Its completion was not possible after the death of the donor. We think that questions to be really decided in the case before us have tended to become needlessly clouded by references to statutory provisions and to doctrines or concepts which really operate in separate and distinct fields of their own. It is true that the relevant provisions of the and the Companies Act must be interpreted harmoniously. But, this certainly does not mean that a provision of one Act could be nullified by any provisions of the other Act. It means that the provisions of the two Acts should be read consistently with each other so far as it is reasonably possible I to do SO. 540 We think that this end can be best achieved here by examining the objects and the subject matter, of each enactment and by viewing each relevant provision as a limb of an integrated whole meant to serve the underlying purposes. In this way, their separable spheres of operation will be clarified so as to avoid possibilities of conflict between them or any unnecessary overflow of what really appertains to one field into another. No doubt the is not exhaustive. It does not deal with every kind of transfer of property which the law permits. Nor does it prescribe the mode for every legally recognised transfer. Nevertheless, it is an enactment meant for defining certain basic types of transfer and it lays down the requirements both of substance and of form for their legal recognition and effectiveness. Section 5 of this Act gives a wide connotation to "transfer of pro perty". All that it requires is that the transferor must be living at the time of the transfer recognised by the Act. Section 6 of the Act lays down that "property of any kind may be transferred" subject to certain exceptions. Shares in a company are certainly a form of property. Section 28 of the Companies Act, 1913, says that they "shall be movable property, transferable in the manner provided by the articles of the company". Both sides accept as correct the view of the Division Bench of the High Court that the shares are "goods" within the meaning of the Sale of Goods Act. The point which, however, deserves to be noted here is that wide definition of "property" in Section 6 of the Transfer. of Property Act includes not merely shares as transferable, movable property, but would cover, as a separable form of property, a right to obtain shares which may be antecedent to the accrual of rights of a shareholder upon the grant of a share certificate in accordance with the articles of association of company. In M.P. Barucha & Anr. vs V. Sarabhai & Co. '& Ors.(1) which was a case of handing over share certificates together with blank signed transfer forms, the Privy Council said (at p. 97 98): "But" further, there seems to their Lordships a good deal of confusion arising from the prominence given to the fact that the full property, in shares in a company is only in the registered holder. That is quite true. It is ture that what Barucha had was not the perfect right of property, which he would have had if he had been the registered holder of the shares which he was selling. The company is entitled to deal with the shareholder who Is on the register, and only a person who is on the register is in the full sense of the the word owner of the share. But the title to get on the register consists in the possession of a certificate, together with a transfer signed by the registered holder. This is what Barucha had. He had the certificates and blank transfers, signed by the registered holders. It would be an upset of all Stock Exchange transactions if it were suggested that a broker who sold shares by general description (1) 53 Indian Appeals P. 92 @ P. 97 98. 541 did not implement his bargain by supplying the buyer with certificates and blank transfers, signed by the registered holders of the shares described. Barucha sold what he had got. He could sell no more. He sold what in England would have been chooses in action, and he delivered chooses in action. But in India, by the terms of the Indian Contract Act, these chooses in action are goods. By the definition of goods as every kind of movable property it is clear that not only registered shares, but also this class of chooses in action, are goods. Hence, equitable considerations not applicable to goods do not apply to shares in India. " Thus, we find that, in Barucha 's case (supra), a distinction was made between "the title to get on the register" and "the full property in the shares in a Company., ' The first was held to have been acquired by mere delivery, with the required intention, of the share certificate and a blank form signed by the transferor. The second is only obtained when the transferee, in exercise of his right to become a shareholder, gets his name on the register in place of the transferor. This antecedent right in the person to whom the share certificate is given with a signed blank transfer form under a transaction meant to confer right or title upon him to become a shareholder, is enforceable so long as no obstacle to it is shown to exist in any of the articles of association of a company or a person with a superior right or title, legal or equitable does not appear to be there. We think that Section 6 of the Justifies such a splitting up of rights constituting " property" in shares just as it is well recognised that rights of ownership of a property may be split up into a right to the "corpus" and another to the "usufruct" of the property and then separately dealt with. 122 of the defines a ",gift". its substantial requirements are : (1) the donor must transfer "property", which is the subject matter of the gift, voluntarily and without consideration; (2) and, the donee must accept it during the life time of the donor or while the donor 's competence to give exists. Section 123 of the prescribes the mode of transfer by gift. It lays down that "the transfer may be effected either by registered instrument signed by the donor and attested by at least two witnesses or by delivery". No special mode of delivery is specified. On the other hand, it is indicated that the delivery "may be made in such a way as the goods sold are delivered". In the case before us, the registered document was signed by the donor as "the giver" as well as by the donee as "the acceptor" of the gift, and it is attested by six witnesses. In it, the donor specified and gave particulars of the shares meant to be gifted and undertook to get the name of the donee put on to the registers of the companies concerned. The donor even said that she was, thenceforth, a trustee for the benefit of the donee with regard to the income she may get due to the fact that her name was still entered in the registers of the companies concerned as a shareholder. The donor delivered the registered gift deed together with the share certificates to the donee. We 542 think that, on these facts, the donation of the right to get share certificates made out in the name of the donee became irrevocable by registration as well as by delivery. The donation of such a right, as a form of property, was shown to be complete so that nothing was left to be done so far as the vesting of such a right in the donee is concerned. The actual transfers in the registers of the companies concerned were to constitute mere enforcements of this right. They were necessary to enable the donee to exercise the rights of the shareholder. The mere fact that such transfers had to be recorded in accordance with the company law did not detract from the completeness of what was donated. We think the learned Counsel for the appellant rightly contended that, even in the absence of registration of the gift deed, the delivery of the documents mentioned above to the donee with the clear intention to donate, would be enough to confer upon the donee a complete and irrevocable right, of the kind indicated above, in what is movable property. He relied upon : Kalyanasundaram Pillai vs Keruppa Mooppanar & Ors.(1); Venkatsubba Shrinivas Hegde vs Subba Rama Hegde;(2) Firm Sawan Mat Gopi Chand vs Shiv Charan Das(3). The requirements of form or mode of transfer are really intended to ensure that the substantial requirements of the transfer have been satisfied. They subserve an object. In the case before us, the requirements of both Section 122 and Section 123 of the were completely met so as to vest the right in the donee to obtain the share certificates in accordance with the provisions of the Company law. We think that such a right is in itself "property" and separable from the technical legal ownership of the shares. The subsequent or "full rights of ownership" of shares would follow as a matter of course by compliance with the provisions of Company law. In other words, a transfer of " 'property" rights in shares, recognised by the , may be antecedent to the actual vesting of all or the full rights of ownership of shares and exercise of the rights of shareholders in accordance with the provisions of the Company law. The Companies Act of 1913 was meant "to consolidate and amend the law relating to trading companies and other associations". It is concerned with the acts and proceedings relating to the formation, running, and extinction of companies, with rights, duties, and liabilities of those who are either members or officers of such companies, and of those who deal with companies in other capacities. Its subject matter is not transfer of property in general. It deals with transfers of shares only because they give certain rights to the legally recognised shareholders and imposes some obligations upon them with regard to the companies in which they hold shares. A share certificate not merely entitles the shareholder whose name is found on it to interest on the share held but also to participate in certain proceedings relating to the company (1) 54 I. A. 89. (2) ILR (3) AIR 1924 Lab. 543 concerned. It is for this purpose that Section 34 of the Companies Act, 1913 enables the making of "an application for the registration of the transfer of shares in a Co. . either by the transferor or the transferee". A share certificate is a prima facie evidence, under Sec. 29 of the Act, of the title to a share. 'Sec. 34 of the Act does not really prescribe the mode of transfer but lays down the provisions for "registration" of a transfer. In other words, it presupposes that a transfer has already taken place. The manner of transfer of shares, for the purposes of Company law, has to be provided, as indicated by Sec. 28, by the articles of the Company, and, in the absence of such specific provisions on the subject, regulations contained in Table 'A ' of the 1st Schedule of the Companies Act apply. Table 'A ' of the 1st Schedule to the Companies Act of 1913 gives regulation 19 as follows "19. Shares in the company shall be transferred in the following form, or in any usual or common form which the directors shall approve : 1, A. B. of in consideration of the sum of rupees paid to me by C. D. of (hereinafter called "the said transferee"), do hereby transfer to the said transferee the share (or shares) numbered in the undertaking called the Company, Limited, to hold unto the said transferee, his executors, administrators and assigns, subject to the several conditions on which I held the same at the time of the execution thereof, and I (the said transferee) do hereby agree to take the said share (or shares) subject to the conditions aforesaid. As witness our hands the day of Witness to the signatures of, etc. " Apparently, the form given here is only for sales. In the case of a gift the more general provisions of regulation 18 would apply. This regulation says : "The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof. " We find from the gift deed that both the donor and the. donee have signed the document, under two headings respectively : "giver of the gift" and "acceptor of the gift". Hence, we think that the broadly indicated requirements of regulation 18 were also complied with by the contents 'of the gift deed. It is immaterial that the gift deed deals with a number of items so long as the requirements of regulation 18 are fulfilled. After all, the observance of a form, whether found in the or in the Companies Act, is meant to serve the need of the substance of the transaction which were undoub tedly shown to have been completely fulfilled here. There is nothing in regulation 18 or anywhere else in our Company law to indicate that, 544 without strict compliance with some rigidly prescribed form the transaction must fail to achieve its purpose. The subservience of substance of a transaction to some rigidly prescribed form required to be meticulously observed savors of archaic and outmoded jurisprudence. Buckley on the Companies Acts (XIII Edn. p. 813) was cited before us for the proposition that "non registration of a transfer of shares made by a donor does not render the gift imperfect". Considerable argument was advanced by both sides on the correct interpretation of the leading English case mentioned there : Re Nose, Midland Bank Executor & Trustee Co. Ltd. vs Rose,(1) where Jenkins J., after an exhaustive discussion of the English case law on the subject, held that when a testator had done everything that lay in his power to divest himself of his Fights in preference shares "completion of the legal title by registration could only be the act of a third party which did not affect the efficacy of the gift of shares inter vivos". The Court of Appeal upheld this decision in : In Be Rose V. Inland Revenue Commissioners.(2) It held that "the deceased was in the position of. a trustee of the legal title in the shares for the transferees", pending the entry of the names of the donees in a company 's register and the issue of share certificates to them. In the case before us, we find that Bai Ruxmani had actually stated in the gift deed that her position, vis a vis the donee, who had accepted the gift, was that of a trustee for the benefits received by her from the gifted shares until the completion of the legal formalities so that appropriate entries are made in ' the registers of companies concerned and fresh share certificates are issued to the donee. We, therefore, think that this case helps the appellant. In M/s. Howrali Trading Co. Ltd. vs The Commissioner of Income tax, Calcutta(3), considering a case of blank transfers, Hidayatullah J., speaking for this Court, said (at p. 453) : "In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferee, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable. of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of a blank transfer ', and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee. These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of (1) (2) [1932] (1) Ch. D. 499. (3) [1959] Supp. (2) SCR 448 @ 453. 545 members can be made against the company, if the transferor retains the money in his own hands and fails to pay to it to him. " This case also makes a distinction between an antecedent right and title of the transferee under a blank transfer and the fully blossomed rights and title of such a transferee after the due registration of a transfer. Another case cited before us was : R. Subba Naidu vs Commis sioner of Gift Tax, Madras,(1) where a distinction was made between a transfer of the antecedent right to the shares which operated with full force between a donor and the donee, "notwithstanding that, vis a vis the company, the donor continued to be holder of the shares in the absence of transfer of shares". In other words, the fields of operation of the provisions of Sections 122 and 123 of the and the provisions of the Companies Act 1913 were different. Each had different objects and legal consequences. The Companies Act did not prevent the completion of a gift of the right to obtain the shares which could, in common parlance or loosely speaking, be spoken of as a gift of shares themselves even before the gift is acted upon so that the donee obtains share certificates in his own name. The could not enable the donee to exercise the rights of a shareholder, vis a vis the company, until a transfer of shares is made in accordance with the Company law. other cases cited on behalf of the appellant, which we will only mention without discussion, were 1. Colonial Bank vs Hepworth(2); 2. In Re. Tahiti Cotton Company ex parte Sargent(3); 3. In Re. Letheby & Christopher, Limited(4); 4. In the matter of Bengal Silk Mills Co. Ltd.(5); 5. The Bank of Hindustan Ltd. & Ors. vs Kowtha Suryanara yana Rao & Ors.(6); 6. Arjun Prasad &.Ors. vs Central Bank of India Ltd. (7); 7. Benode Kishore Goswani vs Ausutosh Mukhopadhya & Anr.(8). Learned Counsel for the respondent cited the following passage from the Palmer 's Company Law (21st edition 1968, p. 334). A transfer is incomplete until registered. Pending registration, the transferee has only an equitable right to the shares transferred to him. He does not become the legal owner until his name is entered on the, register in respect of these shares." (1) [1969] (Vol. (2) (3) [1873] (17) Equity Cases 273@ 279. (4) , (5) AYR @ 464. (6) RR @ 1072. (7) AIR 1956 Pat. (8) 546 This statement of the law in England is correct. The transferee, under a gift of shares, cannot function as a shareholder recognised by company law until his name is formally brought upon the register of a company and he obtains a share certificate as already indicated above. indeed, there may be restrictions on transfers of shares either by gift or by sale in the articles of association. Thus" we find in Palmer 's Company Law (at p. 336) : "There is nothing to limit the restrictions which a company 's articles may place on the right of transfer. The articles may give the directiors power to refuse to register a transfer in any specified cases, for instance, where calls are in arrear, or where the company has a lien on the shares and some such provisions are usually inserted. Thus article 24 provides that the directors may decline to register any transfer of a share (not being a fully paid share) to a person of whom they do not approve, and may also decline to register any transfer of shares on which the company has a lien. But the articles in many cases go far beyond this. They may prohibit, for example, the transfer of a share to any person who is not a member of a specified class, or provide, as they often do in private com panies, that before transferring to an outsider the intending transferor must first offer the shares to the other members, and give them a right of pre emption. Such provisions, though permanent, do not contravene the rule against perpetuities. " In the type of cases contemplated above, where there are special restrictions on the transfer of shares imposed by the articles of association, the difficulty or defect is inherent in the character of such shares. In such cases, the donee or purchaser cannot get more than what the transferor possesses. Therefore, in such cases, it is possible to hold that even the right and title to obtain shares, which we have viewed as separable from the legal right and title to function as a shareholder, is incomplete because of a defect in the nature of shares held due to some special restrictions on their transferability under the articles of association of the company concerned. But, such is not shown to be the case at all with any of the shares which formed the subject matter of the gift in favour of Shelat. Hence, in our opinion, cases which deal with inchoate rights to shares do not assist the respondent because at least a gift of the right to obtain the transfer of shares in the books of the companies concerned was shown to be complete on the terms of the gift deed of Bai Ruxmani coupled with the handing over of the share certificates and the subsequent signing of the blank transfer forms. It was not a ease of a bare expression of an intention to donate. The donor had done everything which she could reasonably be expected to do to divest herself of her rights in the shares donated. Ireland vs Hart '(1) relied upon by the respondent, was a case in which a prior equitable title of a wife, for whom the husband was a (1) [1902] (1) C.D. p. 522 @ 529. 547 trustee, took precedence over the claim of a subsequent mortgagee. This case was cited in Palmer 's Company Law as an instance of how delay in registration may endanger the claims of a transferee when some already existing prior equity comes to light In upholding the wife 's claim of a prior equitable right the Court said (at p. 529) : "It is established by Societe Generale de Paris vs Walker (11 App. Case 20), Roots vs Williamson ; and Moore vs North Western Bank [1891(2) Ch. 599] that, where the articles are in the form in which they are in the present case, a legal title is not acquired as against an equitable owner before registration, or at all events until the date when the person seeking to register has a present absolute and unconditional right to have the transfer registered. I am not called upon to define the meaning of a present absolute and unconditional right, but, as it appears to me, I am not sure that anything short of registration would do except under very special circumstances. At all events, I am of opinion that in this case, prior to the date of the injunction, the defendant Hart had not a 'present absolute and unconditional right ' to the registration of the transfer of these shares, and that the prior equitable right of the plaintiff, Mrs. Ireland, must prevail." Thus, what was disputed there was the right to obtain registration of a transfer of shares. The husband 's power to mortgage was itself circumscribed by his position as a trustee. It was also pointed out in Palmer 's Company Law (at p. 334) "It has never been clearly decided in what circumstances the `present, absolute, unconditional right to have the transfer registered ' to which Lord Selborne refers arises. It is thought that in many instances the test is that indicated by Jenkins J. in Re. Rose. 'I was referred on that to the well known case of Milroy vs Lord and also the recent case of Re. Fry, Chase National Executors & Trustees Corpn. vs Fry. Those cases, as I understand them, turn on the fact that the deceased donor had not done all in his power, according to the nature of the property given, to vest the legal interest in the property in the donee. In such circumstances it is of course, well settled that there is no equity to complete the imperfect gift. If any act remained to be done by the donor to complete the gift at the date of the donor 's death the court will not compel his personal representatives to do that act and the gift remains incomplete and fails. In Milroy V. Lord the imperfection was due to the fact that the wrong form of transfer was used for the purpose of transferring certain bank shares, The document was not the appropriate document to pass any interest in the property at all. In Re Fry the flaw in the transaction, Which was a transfer or transfers of shares in a certain company, 548 was failure to obtain the consent of the Treasury which in the circumstances surrounding the transfers in question was necessary under the Defence (Finance Regulations) Act 1939, and, as appears from the head note, what was held was that the donor 's executors ought not to execute confir matory transfers. In this case, as I understand it, the testator had done everything in his power to divest himself of the shares in question to Mr. Hook. He had executed a transfer. It is not suggested that the transfer was not in accordance with the company regulations. He had handed that transfer together with the certificates to Mr. Hook. There was nothing else the testator could do. Therefore it seems to me that the present case is not in pari materia with the two cases to which I have been referred. The real position, in my judgment, is that the question here is one of construction of the will. The testator says "if such preference shares have not been transferred to him previously to my death. " The position was that, so far as the testator was concerned, they had been so transferred. " Respondent 's learned Counsel also relied on Re Fry, Chase National Executors & Trustees Corpn. Ltd. vs Fry & Ors.(1) which has been referred to by Jenkins J. in the passage quoted above. In that case, apart from other distinguishing features, the flaw in the purported transfer was that it contravened the Defence (Finance Regulation) Act, 1939, which prohibited an acquisition of interest in the shares without a licence from the Treasury. Hence, the purported transfer was really illegal. No such illegality is shown to exist in the case before us. Respondent 's learned Counsel cited Amarendra Krishna Dutt vs Monimunjary Debi, (2) where, after a husband had executed a document in favour of his wife, the parties had done nothing to get the transfer registered for nearly 2 years during which the dividend was received sometimes by the wife and sometimes retained by the husband with the permission or implied consent of the wife. The Court held that the purported gift being an intended "transfer" only could not operate as a "declaration of trust". Another ground for the decision was that "the disposition of the shares failed as being imperfect voluntary gift". Here, the Calcutta High Court purported to follow Milroy vs Lord, (3) and, Richards vs Delbridge(4). No such facts are present in the case before us. Moreover, we seriously doubt the correctness of this decision of the Calcutta High Court. It seems to conflict with the law declared in the cases cited by the appellant which we approve. Another case relied upon by the respondent was: The Bank of Hindustan Ltd. V. Kowtha Suryanarayana Rao & Ors. (supra), where the Court refused,. to direct rectification of a register of member s (1) (2) ILR (3) ; (4) 1874 LR. 18 Eq. 549 because the articles of association vested an absolute discretion in the company to recognise or refuse to recognise a transfer. The Company 's consent to a transfer had been refused because the company did not accept the correctness of the form of transfer deeds. In other words, this was a case in which the provisions of articles of association stood in the way of rectification of the register. Such is not the case before us. The result is that We do not think that the respondent has made out a case for defeating the clearly expressed intentions of the donor coupled with the authority with which the donee was armed by reason of the signed blank transfer forms. We think that the implied authority was given with regard to a subject matter in which Shelat had acquired an interest. On a correct interpretation of the gift deed and the other facts mentioned above, we are of opinion that the right to obtain a transfer of shares was clearly and completely obtained by the donee appellant. There was no question here of competing equities because the donee appellant was shown to have obtained a complete legal right to obtain shares under the gift deed and an implied authority to take steps to get his name registered. This right could only be defeated by showing some obstacle which prevented it from arising or which could defeat its exercise. No such obstacle having been shown to us to exist, the rights of the donee appellant would prevail as against any legal rights which could have accrued to others if the donee had not already acquired the legal right which, as held by us above, had become vested in him. We, therefore, allow this appeal with costs and set aside the judgment and decree of the Division Bench of the High Court and restore that of the learned Single Judge.

By a registered deed, a donor gifted to the appellant shares in various limited companies. Before her death the donor had signed several blank transfer forms to enable the done to obtain transfer of the shares in the register of companies and share certificates in his name. She had signed at the correct places showing that she meant to sign transfer of shares but the transfer could not be effected before the donor 's death. The respondent claiming the shares filed an administration suit. A single Judge of the High Court held that the appellant was entitled to shares covered by the gift deed to which blank transfer forms could be related. A division bench of the High Court reversed the decision of the Single Judge on the ground that the gift was incomplete for failure to comply with the formalities prescribed by the Indian Companies Act, 1913 for transfer of shares. It further held that there was no equity in favour of the appellant so that he may claim the right to complete what was left incomplete by the donor in her life time. On appeal it was contended in this Court (1) that since the donor had signed the blank transfer forms and handed them over to the done, the gift deed and the signed blank forms had to be read together and (2) that the transfer was complete with the registration of the gift deed and even delivery of share certificates to the done was not necessary in view of section 122 of the . Allowing the appeal, HELD:(1) The respondent has not made out a case for defeating the clearly expressed intentions of the donor, coupled with the authority with which the donor was armed by reason of the signed blank transfer forms. On a correct interpretation of the gift deed and other material the right to obtain a transfer of shares was clearly and completely obtained by the donee appellant. There was no question of competing.equities because the donee appellant was shown to have obtained a complete legal right to obtain shares under the gift deed and an implied authority to take steps to get his name registered. [549B D] The fact that the relevant provisions of the and the Companies Act must be interpreted harmoniously does not mean that a provision of one Act could be nullified by any provision of the other Act. It means that the provision of the two Acts should be read consistently with each other so far as it is reasonably possible to do so. This end can be best achieved by examining the objects and the subject matter of each enactment and by viewing each relevant provision as a limb of an integrated whole meant to serve the underlying purposes. In this way their separable spheres of operation will be clarified so as to avoid possibilities of conflict between them or any unnecessary overflow of what really appertains to one field into another. [539H 540B] (2) The is an enactment meant for defining certain basic types of transfers and lays down the requirement both of substance and of form for their legal recognition and effectiveness. Section 5 of the Act gives a wide connotation to "transfer of property". Section 6 of the Act lays down that "property of any kind may be transferred" subject to certain exceptions. Shares in a company are certainly a form of property. Section 28 of the Companies says that they "shall be movable property, transferable in the manner provided by articles of the Company". A wide definition of "property" in section 6 of the includes not merely shares as transferable, movable property. but would cover as a separate form of property a right to obtain shares which may be antecedent to the accrual of rights of a shareholder upon the grant of a share certificate in accordance with the articles of association of a company. [540B E] There is a distinction between "the title to get on the register" and "the full property in the shares in a company". The first is acquired by mere delivery, with the required intention of the share certificate and a blank form signed by the transfer. The second is only obtained when the transferee, in exercise of his right to become a shareholder, gets his name on the register in place of the transferor. This antecedent right in the person to whom the share certificate is given with a signed blank transfer form under a transaction meant to confer right or title upon him to become a shareholder is enforceable so long as no obstacle to it is shown to exist in any of the articles of association of a company or a person with a superior right or title, legal or equitable, does not appear to be there. Section 6 of the T.P. Act justifies such a splitting up of rights constituting property in shares just as it is well recognised that rights of ownership of property may be split up into a right to the "Corpus" and another to the "usufruct" of the property and then separately dealt with. [541C E] M.P. Barucha & Anr. V. V. Sarabhai & Co. & Ors. 53 Indian Appeals P. 92 @ 97 98, relied on. Section 122 of the defines a "gift". Section 123 of the T. P. Act prescribes the mode of transfer by gift. No special mode of delivery is specified in the section. On the other hand it is indicated that the delivery "may be made in such a way as the goods sold are delivered". [541E G] In the instant case the registered document was signed both by the donor and donee and is attested by witnesses. The donor specified and gave particulars of the shares meant to be gifted. The donor delivered the registered gift deed together with the share certificates to the donee. On these facts the donation of the right to get share certificates made out in the name of the donee became irrevocable by registration as well as by delivery. The actual transfers in the registers of the companies concerned were to constitute mere enforcement of this right. They were necessary to enable the donee to exercise the rights of the shareholder. The mere fact that such transfers had to be recorded in accordance with the Company Law did not detract from the completeness of what was donated. [541G 542B] The broadly indicated requirements of regulation 18 of Table A of 1st Schedule to the Companies Act, 1913 were also complied with by the contents of the gift deed. It is immaterial that the gift deed deals with a number of items so long as the requirements of Regulation 18 are fulfilled. The observance of a form whether found in the or in the Companies Act is meant to serve the needs of the substance of the transaction which were undoubtedly shown to have been completely fulfilled here. There is nothing in Regulation 18 to indicate that without strict compliance with some rigidly prescribed form, the transaction must fail to achieve its purpose. The subservience of substance of a transaction to some rigidly prescribed form required to be meticulously observed, savors of archaic and outmoded jurisprudence. [543G 544A] Re Nose, Midland Bank Executer & Trustee Co. Ltd. vs Rose. , Re Rose, Rose vs Inland Renvenue Commissioners, , M/s. Howrah Trading Co. Ltd. vs The Commissioner of Income tax, Calcutta, [1959] Supp. (2) SCR 448 @ 453 referred to.

N: Criminal Appeal No. 175 of 1974. Appeal by special leave from the judgment and order dated the 18th October, 1973 of the Allahabad High Court in Crl. Appeal Nos. 1307 and 1966 of 1973. AND Criminal Appeal Nos. 367 369 of 1974. Appeals by special leave from the judgment and order dated the 18th October, 1973 of the Allahabad High Court in Criminal Appeal No. 1307 of 1973 connected with Crl. Appeal Nos. 1287 and 1566 of 1973. 47 Rajendra Singh, R.K. Garg B.P. Singh and Ranjit Kumar for the Appellant. O.P. Rana and M.V. Goswami for the Complainant. Dalveer Bhandari for the Respondent. The Judgment of the Court was delivered by BAHARUL ISLAM, J. These four Criminal Appeals are by special leave. Criminal Appeal No. 175 of 1974 is by the four appellants Maqsoodan, Madan Mohan, Prayagnath and Nando who have been convicted under Sections 302/34 and 307/34 Penal Code. The material facts may be briefly stated as follows: On 8 6.1972 at about 5.45 or 600 a.m, when Sulley (P.W. 1) along with his brother, Jadon (deceased), his son, Rajendra (C.W. 1) and his nephew Vijay Kumar (P.W. 3) were going from their house in Neem Gali, Mathura, to their Dharamshala in Mohalla Bengali Ghat, via Vishram Ghat and reached the area called Shyam Ghat, they were waylaid by the twelve persons accused in the case and were assaulted. According to the prosecution, the accused persons were variously armed with Ballams, phrases and lathis. Another group of twelve or thirteen persons who were associates of the accused was standing at Vishram Ghat and some one was constantly inciting the accused persons with the expression, "kill, kill" whereupon the accused persons attacked and assaulted Jadon, Vijay Kumar, Rajendra and Sulley. Jadon and P.W. 3 were severely injured. The condition of Jadon was very precarious. After the assault, the miscreants left. P.W. 1 arranged for a lorry belonging to one Vishnu Chaubey and carried the injured persons to the District Hospital. The driver of the lorry was one Than Singh. Jadon and P.W. 3 were removed to the operation theatre. Thereafter, P.W. 1 proceeded to the Police Station, Kotwali at Mathura and submitted a written First Information Report (FIR) about the incident. The FIR was written by his nephew, Prakash Chandra Chaturvedi (P.W. 8). The FIR was lodged at 6.30 a.m. at the Police Station and has been proved in this case as exhibit "Ka 16". After lodging the FIR, P.W. 1 came back to the hospital where the injuries of all the four injured persons were examined by Dr. B.S. Babbar. As the condition of the injured persons was serious, intimation was sent to Shri U.C. Tripathi (D.W. 7), Sub Divisional 48 Magistrate, Sahabad, for recording their statements. The Magistrate came and recorded the statements of P.W. 3 and C.W. 1 at 9.15 a.m. and 9.20 a.m. respectively. Jadon was operated upon and his condition was such that he could not make any statement. In fact, he succumbed to the injuries the next day, namely, 9.6.1972 at 3.25 p.m. The post mortem examination was conducted on the dead body of Jadon by Dr. B.S. Babbar on 10.6.1972 at 10.00 a.m. 3. The police after investigation submitted charge sheet against the twelve accused persons, all of whom pleaded not guilty. The First Additional Sessions Judge, Mathura, who tried the case, convicted eleven out of the twelve accused persons and acquitted accused No. 12, Kanhaiya. Appellant Maqsoodan was convicted under Section 302 I.P.C. and sentenced to death. The other ten accused persons were convicted under Sections 302/149 and 307/149 I.P.C. and sentenced to imprisonment for life, each under Section 302/149 Penal Code. Accused Parmatma was convicted under Section 147 I.P.C. and the rest were convicted under Section 148 I.P.C. They were sentenced to various terms of imprisonment. The sentences of imprisonment were directed to run concurrently. There was also a reference for the confirmation of the death sentence imposed on Maqsoodan. The convicts filed several appeals before the High Court of Allahabad. The High Court altered the convictions of Maqsoodan, Madan Mohan, Prayagnath and Nando, from under Sections 302/149 and 307/149 to ones under Sections 302/34 and 307/34 Penal Code. The sentence of death imposed on Maqsoodan was reduced to imprisonment for life. All of them were acquitted of the offences under Section 147 or Section 148 I.P.C. The convictions and sentences as against the other six accused persons were set aside and they were acquitted. The acquittal of Kanahaiya was affirmed. Criminal Appeals No. 367, 368 and 369 of 1974 have been filed by the State against the acquittal of the eleven accused persons of the offences under Sections 147 and 148, Penal Code; S.L.P. No. 766 of 1974 is by the State against the acquittal of Kanahaiya. All these appeals will be disposed of by this common judgment. Shri Rajendra Singh, learned counsel appearing for the appellants in Criminal Appeal No. 175 of 1974, first submits that 49 the conviction of the four appellants is unsustainable in law; he submits that the evidence of the four witnesses, namely, P.W. 1, Sulley, C.W. 1, Rajendra, P.W. 3, Vijay Kumar and P.W. 2, Jagdish, cannot form the basis of the conviction as only one witness, namely, P.W. 2, Jagdish, out of five witnesses named in the FIR has been examined; the eye witnesses examined are interested and their evidence cannot be safely relied on. The High Court has found that the testimony of the eye witnesses, namely, P.Ws 1, 2, 3 and C.W. 1 "suffer from numerous infirmities". It, therefore, sought support to their testimony from the two earlier statements erroneously called dying declarations, Exhibits Ka 22 and Ka 23 made by P.W. 3 Vijai Kumar and P.W. 2 Jagdish respectively. The infirmities referred to by the High Court consisted in, according to the High Court, improvements made by the witnesses and variations in their earlier and latter statements. In our opinion, on that ground alone, the testimony of P.Ws. 1, 2, 3 and C.W. 1 cannot be held to be infirm. It is the duty of the court to remove the grain from the chaff. These four witnesses are the injured witnesses having received the injuries during the course of the incident. Their presence at the time and place of the occurrence cannot be doubted; in fact it has not been challenged by the defence. As both the parties were inimical for a long time, it will be prudent to convict only those persons whose presence and participation in the occurrence have been proved by the prosecution beyond reasonable doubt. We agree with the finding of the High Court that the presence and participation of appellants Maqsoodan, Madan Mohan, Prayagnath and Nando, who are appellants in Criminal Appeal No. 175 of 1974 has been proved beyond reasonable doubt, despite the improvements and variations in their evidence. Shri Rajender Singh has submitted that it is not safe to rely on the testimony of P.Ws. 1, 2, 3 and C.W. 1 as the prosecution has not examined all the witnesses named in the FIR except Jagdish, nor has the prosecution examined any of the neighbours. It is not the number of witnesses examined nor the quantity of evidence adduced by the prosecution that counts. It is the quality that counts. Learned counsel has not pointed out to us that any witness better or more creditable has been omitted by the prosecution. As stated above, the eye witnesses examined in this case were the best and natural witnesses. Learned counsel also has criticized that during the course of evidence, prosecution alleged that Maqsoodan 50 gave two blows but that fact was not mentioned in the FIR. He has also criticised that the injured witnesses do not say who injured whom. This, on the contrary, shows that the witnesses examined were not tutored and they gave no parrot like stereotyped evidence. It may be remembered that P.W. 1 who lodged the FIR received as many as seven incised wounds, one of them being on the left chest; he took Jadon, who had received sd serious injuries and who later on succumbed lo them, and C.W. 1, who received five incised injuries and P.W. 3, who has also seriously injured, to the hospital. He lodged the FIR thereafter. The condition of his mind and disposition can easily be imagined. There were bound to be some errors in the FIR. It may also be remembered that the FIR was lodged within half an hour of the occurrence. There was little time lost. The occurrence took place at about 6.00 a.m. on 8.6.1972 It is nobody 's case that the witnesses were unable to recognise the real culprits. The accused persons were well known to the witnesses from before. They did not have any reason to omit the real culprits and implicate falsely the accused persons. The evidence of P.Ws. 1, 2, 3 and C.W.1 could have been accepted even without corroboration. Even so, the High Court rightly pressed into service the earlier statements of P.W. 3 and C.W.1 (exhibit Ka 22 and Ka 23) respectively. Ka 22 and Ka 23 have been wrongly called dying declarations. The statement written or verbal, of relevant facts made by a person who is dead, is called a dying declaration; it is relevant under Section 32 of the Evidence Act, when the statement is made by the person as to the cause of his death, or as to any of the circumstances of the transaction which resulted in his death, in case, in which that person 's death comes into question. When a person who has made a Statement, may be in expectation of death, is not dead, it is not a dying declaration and is not admissible under Section 32 of the Evidence Act. In the instant case, the makers of the statements exhibit Ka 22 and Ka 23, are not only alive but they deposed in the case. Their statements, therefore,, are not admissible under Section 32; but their statements however are admissible under Section 157 of the Evidence Act as former statements made by them in order to corroborate their testimony in the Court. In the instant case, exhibit Ka 22 and Ka 23 respectively corroborate the testimony in Court of P.W. 3 and C.W. 1 respectively. The High Court has found that the witness later on improved the story and roped in some other persons. As a rule of 51 caution, the High Court has found that the participation of the four appellants in the offence has been proved beyond reasonable doubt and the presence and participation of the other eight accused persons named by them have not been proved beyond doubt. We do not find valid reason to interfere with this finding of fact of the High Court, in these appeals under Article 136 of the Constitution. As the number of accused persons present and participating in the occurrence have not been proved to be five or more, the High Court has rightly held that the common object necessary for constituting an unlawful assembly has not been proved, and therefore in the facts and circumstances of the case, the High Court correctly held that common intention has not been proved and as such the four appellants were rightly acquitted of the offence under section 302 read with section 149 I.P.C., and also rightly acquitted all the other accused persons of the offences under Sections 147 and 148 I.P.C. 10. Shri Rajinder Singh next submits that if any offence at all has been committed by the appellants of Criminal Appeal No. 175 of 1974, the offences may be under Section 326 I.P.C. depending on the medical evidence and circumstances of the case and that Section 34 I.P.C. cannot apply as no common intention has been proved. We cannot accept this submission. Dr. B.S. Babbar, P.W . 3, who held the post mortem examination on the dead body of Jadon found a number of wounds out of which the following were serious: 1. Incised wound 2" x 1/4" x scalp deep on head. Incised wound 3" x 1/4" x scalp deep on the head 3. Stiched wound with draining tube 3" towards upper portion of the stomach on right side. Stiched wound 1.1/2" on the upper portion of the left side of the stomach. In his opinion, death was due to cyncope following shock and Haemorrhage as a result of the injuries. According to him, injuries No. 1 & 2 separately was sufficient to cause death in the ordinary course of nature. It, therefore, cannot be argued that the offence committed was not murder. 52 Common intention is a question of fact. It is subjective. But it can be inferred from facts and circumstances. In this case, the appellants were related. All of them were armed with deadly weapons. They were together. There was an order by some one, "kill, kill", when all of them simultaneously attacked the deceased and P.Ws. 1, 2, 3, and C.W. 1. After the occurrence, they left together; they were later arrested from the same place. The High Court therefore rightly held that the appellants caused the injuries with the common intention, and was justified in convicting the appellants under Section 302/34 of the Penal Code. We, therefore, affirm the conviction and sentences inflicted by the High Court on Maqsoodan, Madan Mohan, Prayagnath and Nando, appellants in Criminal Appeal No. 175 of 1974 and dismiss the appeal. As held above that the High Court rightly held that the prosecution failed to prove the common object and therefore it rightly acquitted all the accused persons of the offences under Sections 147 and 148. In the result, the State appeals are also dismissed. P. B. R. Appeal dismissed.

The prosecution case against the 12 accused persons was that, armed with deadly weapons, they waylaid and assaulted the deceased and three others accompanying him, and that someone among another group of 12 of their associates standing at some distance constantly incited the accused with the words "kill, kill". The deceased received serious injuries and died on the following morning. While the appellant was convicted under section 302 Indian Penal Code and sentenced to death, ten other accused were convicted and sentenced variously. One of them was acquitted. On appeal the High Court reduced the sentence of death passed on the appellant to imprisonment for life. Convictions of four of the 11 accused were altered from under section 302/149 and section 307/149 to one under sections 302/34 and 307/34 I.P.C. All of them were however acquitted of the offences under section 147 or section 148 I.P.C. The convictions and sentences against the other six accused were set aside and they were acquitted. It was contended on behalf of the appellants that their conviction was unsustainable in law because the evidence of the eye witnesses, who were interested parties, could not be safely relied upon. Dismissing the appeal, ^ HELD: The High Court erred in stating that the testimony of the four eye witnesses suffered from numerous infirmities, that they made improvements in their testimony and that there were variations in their earlier and later statements. On that count alone their testimony could not be held to be infirm. It is the duty of the Court to remove the grain from the chaff. [49 C D] 46 The parties were inimical for a long time. The four witnesses were the injured persons and therefore, their presence at the time and place of occurrence could not be doubted. The presence of all the four accused in the scene of occurrence and their participation in the crime had been proved beyond reasonable doubt despite the improvements and variations in the evidence of witnesses. [49 E F] In a case of this kind it is not the number of witnesses examined or the quantity of evidence adduced by the prosecution that counts. It is the quality that counts. Eye witnesses, examined in the case were the best and natural witnesses. The accused persons were known to the witnesses and they did not have any reason to omit the real culprits and implicate falsely accused persons. [49 G H; 50 C] A statement, written or verbal, of relevant facts made by a person who is dead, is called a dying declaration and is admissible in evidence under section 32 of the Evidence Act. But when a person who has made a statement, even if it be in expectation of death but is not dead, it is not a dying declaration. It is not admissible under section 32 of the Evidence Act. [50 E F] In the instant case the two witnesses whose statements were erroneously called dying declarations by the High Court were alive and deposed in the case. Such statements are admissible under section 157 of the Evidence Act as former statements made by them to corroborate their testimony in the Court. [50 F G] Common intention is a question of fact and is subjective. It can be inferred from facts and circumstances. In the instant case the appellants who were related to one another were armed with deadly weapons when they waylaid and attacked the deceased and his companions, someone incited them to "kill", and after the assault they left the scene of occurrence together and they were arrested from the same place. There was the therefore common intention and the High Court was justified in convicting them under section 302/34, IPC. [52 A C]

Appeal No. 2128 of 1969. From the Judgment and Order dated 4th May, 1968 of the Madhya Pradesh High Court in First Appeal No. 88/67. M.S. Gupta for the Appellants. Ram Panjwani and H.S. Parihar for Respondent. The Judgment of the Court was delivered by SARKARIA, J. This appeal on certificate is directed against a judgment, dated May 4, 1968, of the High Court of Madhya Pradesh. It arises out of these facts: The appellants were owners of 7.35 acres of land being a part of Khasra No. 47/1 in the area of village Manglipeth District Seoni, Madhya Pradesh. On November 4, 1963, a notification under section 4 read with Sub section (1) of section 17 of the Land Acquisition Act, 1894 (to be hereinafter referred to as the Act) was published in the Government Gazette stating that this land was needed by the State Government for imple mentation of Seoni Water Supply Scheme. The declaration under section 6 of the Act was published on December 18, 1963, and notices under section 9 of the Act were issued by the Collec tor on December 28, 1963. In response to that notice, the appellants filed a claim 758 that they were willing to accept compensation in respect of this land at the rate of Rs.1500/ per acre, "as the lands adjoining this land and situated in a lesser advantageous position are sold at this rate". The Collector made his award on August 17, 1964, whereby he awarded compensation for this land at the rate of Rs.450/ per acre. The total amount awarded for this piece of land after adding solatium at the rate of 15%, was Rs.2,904/ . He also awarded inter est at the rate of 4% from September 19, 1964, on which date, the Collector had taken over possession of the land. Dissatisfied with the Collector 's award, the appellants made an application under section 18 of the Act for reference to the District Court for enhancement of the compensation. The Collector accordingly made a reference. The Additional District Judge, Seoni, who heard the reference, enhanced the compensation to Rs.11,000/ per acre. In this way, after adding solatium, he awarded to the appellants, herein, a total amount of Rs.80,850/ together with interest at the rate of 6%. Against that judgment, dated May 2, 1967, of the Additional District Judge, an appeal was preferred by the Collector, to the High Court. The High Court accepted the appeal, set aside the award of the Additional District Judge and restored that of the Collector. The High Court however, granted a certificate under Art; 133 of the Constitution. The first contention of Shri M.S. Gupta, appearing for the appellants, is that the appeal flied in the High Court against the award of the Additional District Judge was not an appeal in the eye of law inasmuch as the Collector, who flied it, was not competent to do so. It is stressed that no appeal was filed by the State as such, and consequently, the incompetent appeal fired by the Collector should have been dismissed summarily on this preliminary ground without entering upon the merits. This objection was raised before the High Court, also. The High Court fully considered it against the background of this case, and found no substance in it. In the interests of justice we are not disposed to interfere with that find ing. On merits, we find, in agreement with the High Court, that the District Judge was palpably wrong inasmuch as he awarded compensation at a rate far higher than what had been claimed by the appellants themselves, pursuant to the notice under section 9 of the Act. The learned Additional District Judge acted contrary to the legislative mandate contained in section 25 (1) of the Act, according to which, the Court "shall not award" compensation to an applicant in excess of the amount claimed by him pursuant to any notice under section 9. The only question that remains for our decision is, whether the High Court was right in scaling down the compen sation to Rs.450/ per acre ? 759 Mr. Gupta contends that the High Court was not right in holding that there was no evidence to show that the land in question had potential value as building sites. It is submitted that the High Court has simply ignored that evi dence. In this connection Counsel has referred to the evidence on record showing that the appellants had before the acquisition, paid diversion charges to the Government, at the rate of Rs.500/ per acre in respect of the adjoining land, for bringing it into use as building sites. Counsel has further referred to the evidence showing that the land in question is close to a built up quarter of the town, and is within the Municipal limits. Shri Ram Panjwani, appearing for the Respondent, submits that this evidence was much too insufficient to establish the potential value of the land as building sites, because the existing buildings in the vicinity of this land are old buildings, and the deposit of Rs.500/as diversion charges for the adjacent land made by the appellants, was only a speculative investment with an eye on the distant future In support of his contention, Shri Panjwani has referred to the decision of this Court in R.N. Singh vs U.P. Government(1). In our opinion, there is evidence on the record which unmistakably shows that from the view point of a willing purchaser, at the relevant time, this land had potential value as building sites. Firstly, it was admitted even by Gokul Prasad who was examined by the Respondents as their Witness No. 1, that in front of the land in question there are buildings which are being used as the office of the Range Officer and as residential quarters for the employees of that Department. Adjoining the Range Office is the house of Dewan Najaf Ali in which the Additional District Judge was residing. The witness further admitted that the land in dispute abutts on Seoni Chhindwara Road. Dadu Yogendra Nath Singh, appellant, testified in the witnessstand that apart from the office and the quarters of the Forest Department, there were other buildings also, near this land. At a short distance was the bungalow of Shri Bhargava, Barrister. The Municipal Octroi Post was adjacent to this land. The land in question is within the Municipal limits of Seoni. The appellant further stated that he intended to parcel out this land into plots and sell the same as building sites and that was why for the adjacent land, he had obtained for that purpose, the permission of the Government by depositing diversion charges at the rate of Rs.500/ per acre. He added that negotiations for the sale of two plots had already been completed at the rate of 12 annas per foot. He also cited other instances of sales of land in the vicinity at rates ranging from 4 annas per foot to 6 annas per foot. The oral evidence of Dadu Yogendra Nath Singh with regard to the fact that the adjoining land had been laid out into plots for building purposes, receives full corrobo ration from unimpeachable documentary evidence on record, which shows that the appellants had (1)[1967] 1 S.C.R 489. 760 before this acquisition, in 1963, made an application to the Sub Divisional Officer, Seoni, for permission to bring 6.16 acres of agricultural land out of Kh. No. 47/1, "in non agricultural use viz., for construction of houses". The order of the officer concerned was that such permission. was granted to him on depositing diversion charges in respect of that area at the rate of Rs.500/ per acre. It is signifi cant to note that this piece of 6.16 acres was also a part of Khasra No. 47/1, out of which Khasra, the land, admeasur ing 7.35 acres, is in question. This circumstance unerring ly indicates that the land in question was suitable for being used as building sites, and had for that purpose, a potential value substantially in excess of Rs.500/ per acre. The High Court has not at all discussed this evi dence. It is difficult to accept the argument advanced on behalf of the respondent that the appellant had paid Rs.500/ per acre as diversion charges for the adjacent land, merely as speculative business in the hope of making money in the remote future. No prudent person would make such an investment if there was no reasonable chance of a good return over that investment in the present, or immedi ate future. In our opinion this circumstance coupled with the other facts, namely, that the land in question is within the Municipal limits and is located just on the edge of an inhabited locality of the town, having other buildings in the immediate vicinity, was sufficient to establish its potential value as building sites. The observations made by this Court in R.N. Singh vs U.P. Government (supra) do not advance the case of the respondent. In that case, Shelat J. quoted these observa tions from an earlier decision, in N.B. Jeejabhoy vs The District Collector, Thana (C.A. Nos. 313 to 315 of 1965 decided on August 30, 1965): "A vendor willing to sell his land at the market value will take into consideration a particular potentiality or special adapt ability of the land in fixing the price. It is not the fancy or the obsession of the vendor that enters the market value, but the objective factor namely, whether the said potentiality can be turned to account within a reasonably near future. The question there fore turns upon the facts of each case. In the context of building potentiality many questions will have to be asked and answered, whether there is pressure on the land for building activity, whether the acquired land is suitable for building purposes, whether the extension of the said activity is towards the land acquired, what is the pace of the progress and how far the said activity has extended and within what time, whether build ings have been put up on lands purchased for building purposes, what is the distance be tween the built in land and the land acquired and similar other questions will have to be answered. It is the over all picture drawn on the said relevant circumstances that affords the solution. " What has been extracted above are broad guidelines and not immutable absolutes. The essence of the whole thing is in the sentence which has been underlined. It shows that in the ultimate 761 analysis, the question, whether or not a land has potential value as building site, is primarily one of fact. in the present case, the circumstance that the appellants had voluntarily paid Rs.500/ per acre as diversion charges, for laying out the adjoining land into plots as building sites, was of a clinching character, and taken in conjunction with the other facts, noticed above, conclusively showed that its potential value as building sites was much more than the rate of Rs.450/ per acre awarded by the Collector and the High Court. In their application dated 17 10 1964, under section 18 of the Act, the appellants stated that similar land in the immediate vicinity had been sold at the rate of Rs.1,250/ per acre and another plot at the rate of Rs.1,350/ per acre. These lands are close to the area for which they had paid the diversion charges at the rate of Rs.500/ per acre. They filed a map also, showing the location of those lands. On an over all view, after taking into account the potential value of the land, we think it will be reasonable to award compensation to the appellants at the rate of Rs.1,250/ per acre with interest at 6% per annum till payment, from the date on which the possession was taken over by the Collec tor. The appellants shall also be entitled to solatium at 15% on the compensation amount awarded for the land. Accordingly, we allow the appeal with proportionate costs and modify the decree of the High Court to the extent indicated above. M.R. Appeal allowed.

Responding to a notice under section 9 of the Land Acquisi tion Act, 1894, the appellants flied a claim for Rs.1500/ per acre at which rate the adjoining lands were sold. The Collector awarded compensation at the rate of Rs.450/ per acre. At the instance of the appellants under section 18 of the Act, the matter was referred to the District Judge who enhanced the compensation to Rs.11,000/per acre. An appeal by the Collector was allowed by the High Court on the ground that the District Judge had acted contrary to the mandate contained in section 25(1) of the Act, by awarding compensation in excess of the amount claimed. The appellants contended that their land had building potentiality and its value was substantially more than Rs.500/ per acre, which had been paid by them to the Government as diversion charges for permission t.o use the adjoining land for building houses. Allowing the appeal by certificate, the Court, HELD: The circumstance that the appellants had volun tarily paid Rs.500/per acre as diversion charges, for laying out the adjoining land into plots as building sites, taken in conjunction with the other facts, namely, that the land in question is within the municipal limits and is located just on the edge of an inhabited locality of the town, having. other buildings in the immediate vicinity, show that its potential value as building sites is much more than the rate of Rs.450/ per acre, awarded by the Collector and the High Court. [760 C D, 761 A B]

minal Appeal No. 162 of 1959. Appeal by special leave from the judgment and order dated January 13, 1959, of the Rajasthan High Court in D. B. Criminal Revision No. 47 of 1957. 267 N. C. Chatterjee, J. L. Datta and C. P. Lal, for the appellant. Mukat Behari Lal Bhargava and Naunit Lal, for respondent No.2. April 24. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. On June 13,1950, the Municipal Committee, Ajmer, respondent 2, issued a notice against the appellant, the Durgah Committee, Ajmer, under section 153 of the Ajmer Merwara Municipalities Regulation, 1925 (VI of 1925) (hereafter called the Regulation) calling upon it to carry out certain repairs in the Jhalra Wall which was in a dilapidated condition. The appellant did not comply with the said requisition and so respondent 2 served another notice on the appellant under section 220 of the Regulation inti mating to it that the required repairs would be carried out at the expense of respondent 2 and that the cost incurred by it would be recovered from the appellant. This notice was served on July 3, 1950. Even so the appellant took no steps to make the repairs and so respondent 2 proceeded to get the repair work done at its expense which amounted to Rs. 17,414. Under section 222(4) of the Regulation this sum became recoverable from the appellant as a tax. A notice of demand in that behalf was issued on the appellant on April 1, 1952, and in pursuance of the said notice respondent 2 applied to the Additional Tehsildar and Magistrate II Class, Ajmer, for the recovery of the said amount under section 234 of the Regulation. In the proceedings before the learned Magistrate the appellant raised certain pleas. These pleas were rejected and an order was passed calling upon the appellant to pay the dues in question by August 30, 1956. Against this order the appellant preferred a criminal revision application in the Court of the Sessions Judge, Ajmer. The learned Sessions Judge considered the contentions raised by the appellant and held that the view taken by the Magistrate cannot be said to be incorrect and so there was no ground to interfere in revision. Feeling aggrieved by the dismissal of its 268 revision application the appellant moved the High Court of Judicature for Rajasthan in its revisional jurisdiction. Before the High Court, on behalf of respondent 1, the State of Rajasthan, as well as respondent 2, a preliminary objection was raised that the criminal revision application filed by the appellant was incompetent since the Magistrate who entertained respondent 2 's application made under section 234 ",as not an inferior criminal court under section 439 of the Code of Criminal Procedure. This preliminary objection was upheld by the High Court and the criminal revision application dismissed on that ground. It is against this order that the appellant has come to this Court by special leave; and the short question which the appeal raises for our decision is whether the Magistrate who entertained the application made before him by respondent 2 under section 234 was an inferior criminal court under section 439 of the Code of Criminal Procedure. Before dealing with this point it is relevant to refer to the scheme of the material provisions of the Regulation. Section 153 confers power on the Municipality to order removal or repair of buildings which may be found in a dangerous state. Under this section the Committee may by notice require the owner of the building, wall or structure to remove the same forthwith or cause such repairs as the Committee may consider necessary for the public safety. This section also empowers the Committee to take at the expense of the owner any steps which it thinks necessary for the purpose of averting imminent danger. If the owner on whom a notice is served under section 153 complies with the requisition nothing more need be done. If, however, the owner does not comply with the requisition served on him the Committee is empowered to cause the repairs to be made after six hours notice to the owner under section 220. This section provides that whenever the terms of any notice issued under this Regulation have not been complied with the Committee may, after six hours ' notice, cause the act to be done by its officers. As a corollary to this provision, and indeed as its consequence, section 222 empowers the Committee to recover the cost of the work done 269 under section 220. Section 222(1) authorises the Committee to recover the cost of the work from the person in default. Sub sections (2) and (3) of section 222 then deal with the question as to which person should be held to be in default, the owner or the occupier; with that question we are not concerned in the present appeal. Sub section (4) of section 222 provides that where any money recoverable by the Committee under this section is payable by the owner of the property, it shall be charged thereon and shall be recoverable as if it were a tax levied by the Committee on the property. By sub section (5) it is provided that the contract between the owner and the occupier is not affected by this section. It is under section 222(4) that a demand notice was served on the appellant by respondent 2. That takes us to section 234 which provides for the machinery of recovery of municipal claims. This section provides, inter alia, that any tax claimable or recoverable by a Committee under this Regulation, after demand has been made therefor in the manner prescribed by rule, be recovered on application to a Magistrate having jurisdiction within the limits of the Municipality or in any other place where the person by whom the amount is payable may for the time being reside, by the distress and sale of any movable property within the limits of such Magistrate 's jurisdiction belonging to such person. The proviso to this section prescribes that nothing in this section shall prevent the Committee at its discretion from suing for the amount payable in any competent Civil Court. It would thus be seen that the object of making an application to the Magistrate is to obtain an order from the Magistrate direct ing the recovery of the tax claimable or recoverable by distress and sale of any movable property belonging to the defaulter. It is under this section that tile Magistrate was moved by respondent 2. That in brief is the scheme of the material provisions of the Regulation. The main argument which Mt . Chatterjee, for the appellant, has pressed before us is that in determining the nature of the proceedings under section 234 and the character of the Magistrate who entertains an application made under the said section, it is important to 35 270 bear in mind that a person in the position of the appellant has no other opportunity to challenge the validity of the notice as well as the validity of the claim made against him by the Committee. The argument is that it would be open to the owner to contend that the notice issued under section 153 is invalid or frivolous. It would also be open to him to contend that the amount sought to be recovered from him is excessive and that even if the repairs were carried out they could not have cost as much, and since the scheme of the Regulation shows that it provides no opportunity to the owner to raise those contentions except in proceedings under section 234 the nature of the proceedings and the character of the Magistrate who entertains them should be liberally construed. The proceedings should be deemed to be judicial proceedings and the Magistrate should be held to be an inferior criminal court when he entertains the said proceedings. If the assumption on which the argument proceeds that the Regulation provides no other opportunity to the owner to challenge the notice or to question the amount claimed from him were sound then there would be some force in the contention that section 234 should be liberally construed in favour of the appellant. But is that assumption right? The answer to this question would depend upon the examination of three relevant provisions of the Regulation; they are sections 222(4), 93 and 226. We have already seen that section 222(4) provides that any money recoverable by the Committee under section 222(1) shall be recovered as if it were a tax levied by the Committee on the property and shall be charged thereon. Section 93 provides for appeals against taxation. Section 93(1) lays down, inter alia, that an appeal against the assessment or levy of any tax under this Regulation shall lie to the Deputy Commissioner or to such officer as may be empowered by the State Government in this behalf. The remaining five subsections of section 93 prescribe the manner in which the appeal should be tried and disposed of. If the amount recoverable by respondent 2 from the appellant is made recoverable as if it were 271 a tax levied by the Committee, then against the levy of such a tax an appeal would be competent under section 93(1). Mr. Chatterjee argues that section 93(1) provides for an appeal against the levy of a tax, and he draws a distinction between the amount made recoverable as if it were a tax and the amount recoverable as a tax. His contention is that the amount which is recoverable under section 222(1) is no doubt by fiction deemed to be a tax but against an amount thus deem.s. 93(1). We are not impressed by this argument. If by the fiction introduced by section 222(4) the amount in question is to be deemed as if it were a tax it is obvious that full effect must be given to this legal fiction; and in consequence just as a result of the said section the recovery procedure prescribed by section 234 becomes available to the Committee so would the right of making an appeal prescribed by section 93(1) be available to the appellant. The consequence of the fiction inevitably is that the amount in question can be recovered as a tax and the right to challenge the levy of the tax accrues to the appellant. This position is made perfectly clear by section 226. This section provides, inter alia, that where any order of a kind referred to in section 222 is subject to appeal, and an appeal has been instituted against it, all proceedings to enforce such order shall be suspended pending the decision of the appeal, and if such order is set aside on appeal, disobedience thereto shall not be deemed to be an offence. It is obvious that this section postulates that an order passed under section 222 is appealable and it provides that if an appeal is made against such an order further proceedings would be stayed. It is common ground that there is no other provision in the Regulation providing for an appeal against an order made under section 222(1); and so inevitably we go back to section 93 which provides for an appeal against the levy of a tax. It would be idle to contend that though section 226 assumes that an appeal lies against an order made under section 222(1) the Legislature has for. gotten to provide for such an appeal. Therefore, in our opinion, there can be no doubt that reading 272 sections 222, 93 and 226 together the conclusion is inescapable that an appeal lies under section 93(1) against the demand made by the Committee on the owner of the property under section 222(1). If that be so, the main, if not the sole argument, urged in support of the liberal construction of section 234 turns out to be fallacious. ow, looking at section 234 it is clear that the proceedings initiated before a Magistrate are no more than recovery proceedings. All questions which may legiti mately be raised against the validity of the notice served under section 153 or against the validity of the claim made by the Committee under section 222 can and ought to be raised in an appeal under section 93(1), and if no appeal is preferred or an appeal is preferred and is dismissed then all those points are concluded and can no more be raised in proceedings under section 234. That is why the nature of the enquiry contemplated by section 234 is very limited and it prima facie partakes of the character 'of a ministerial enquiry rather than judicial enquiry. In any event it is difficult to hold that the Magistrate who entertains the application is an inferior criminal court. The claim made before him is for the recovery of a tax and the order prayed for is for the recovery of the tax by distress and sale of the movable property of the defaulter. If at all, this would at best be a proceeding of a civil nature and not criminal. That is why, we think, whatever may be the character of the proceedings, whether it is purely ministerial or judicial or quasi judicial, the Magistrate who entertains the application and holds the enquiry does so because he is designated in that behalf and so he must be treated as a persona designata and not as a Magistrate functioning and exercising his authority under the Code of Criminal Proce dure. He cannot therefore be regarded as an inferior criminal court. That is the view taken by the High Court and we see no reason to differ from it. In the present appeal it is unnecessary to consider what would be the character of the proceedings before a competent Civil Court contemplated by the proviso. Prima facie such proceedings can be no more than execution proceedings. 273 Mr. Chatterjee also attempted to argue that the proceedings under section 234 taken against the appellant by respondent 2 were incompetent because a demand, has not been made by respondent 2 on the appellant in the manner prescribed by rule as required by section 234. It does appear that rules have not been framed under the Regulation and so no form has been prescribed for making a demand under section 222(1). Therefore the argument is that unless the rules are framed and the form of notice is prescribed for making a demand under section 222(1) no demand can be said to have been made in the manner prescribed by rules and so an application cannot be made under section 234. There are two obvious answers to this contention. The first answer is that if the revisional application made by the appellant before the High Court was incompetent this question could not have been urged before the High Court because it was part of the merits of the case and so cannot be agitated before us either. As soon as it is held that the Magistrate was not an inferior criminal court the revisional application filed by the appellant before the High Court must be deemed to be incompetent and rejected on that preliminary ground alone. Besides, on the merits we see no substance in the argument. If the rules are not prescribed then all that can be said is that there is no form prescribed for issuing a demand notice; that does not mean. that the statutory power conferred on the Committee by section 222(1) to make a demand is unenforceable. As a result of the notice served by respondent 2 against the appellant respondent 2 was entitled to make the necessary repairs at its cost and make a demand for reimbursement of the said cost. That is the plain effect of the relevant provisions of the Regulation; and so, an amount which was claimable by virtue of section 222(1) does not cease to be claimable just because rules have not been framed prescribing the form for making the said demand. In our opinion, therefore, the contention that the application made under section 234 was incompetent must be rejected. It now remains to consider some decisions to which 274 our attention was drawn. In Crown through Municipal Committee, Ajmer vs Amba Lal (1), the Judicial Commissioner Mr. Norman held that a Magistrate entertaining an application under section 234 of the Regulation is an inferior criminal court. The only reason given in sup port of this view appears to be that the Magistrate before whom an application under the said section is made is appointed under the Code of Criminal Procedure, and so he is a criminal court although he is not dealing with crime. That is why it was held that he had jurisdiction to decide whether the conditions under which the Municipality can resort to the Magistrate are fulfilled. Having come to this conclusion the learned Judicial Commissioner held that a revision against the Magistrate 's order was competent. In our opinion this decision does not correctly represent the true legal position with regard to the character of the proceedings under section 234 and the status of the Magistrate who entertains them. In Re Dinbai Jijibhai Khambatta (2) the Bombay High Court held that the order made, by a Magistrate under section 161(2) of the Bombay District Municipalities Act, 1901 (Bombay III of 1901) can be revised by the High Court under section 435 of the Code of Criminal Procedure. This decision was based on the ground that the former part of section 161 was purely judicial and it was held that the latter part of the said section though not clearly judicial should be deemed to partake of the same character as the former part. Thus the decision turned upon the nature of the provisions contained in section 161(2). In V. B. D 'Monte vs Bandra Borough Municipality(1) a Full Bench of the Bombay High Court, while dealing with a corresponding provision of the Bombay Municipal Boroughs Act XVIII of 1925, namely, section 110, has held that in exercising its revisional jurisdiction under section 110 the High Court is exercising a special jurisdiction conferred upon it by the said section and not the jurisdiction conferred under section 435 of the Code of Criminal Procedure. According to this (1) Ajmer Merwara Law journal, Vol. V, P. 92. (2) Bom. (3) I.L.R. 275 decision the matter coming before the High Court in such revision is of civil nature and so the revisional application would lie to the High Court on its civil side and not on its criminal side. It is significant that the decision in the case of Emperor vs Devappa Ramappa (1) which took a contrary view was not followed. In Re Dalsukhram Hurgovandas (2) the Bombay High Court had occasion to consider the nature of the proceedings contemplated by section 86 of the Bombay District Municipal Act III of 1901. Under the said section a Magistrate is empowered to hear an appeal specified in the said section; and it was held that in hearing the said appeals the Magistrate is merely an appellate authority having jurisdiction to deal with questions of civil liability. He is therefore not an inferior criminal court and as such his orders are not subject to the revisional jurisdiction of the High Court under section 435 of the Code of Criminal Procedure. The Madhya Bharat High Court had occasion to consider a similar question under section 153 of the Gwalior Municipal Act (1993 Smt.) in Municipal Committee, Lashkar vs Shahabuddin (3). Under the said section an application can be made by the Municipality for recovering the cost of the work from the person in default. It was held that the order passed in the said proceedings cannot be revised by the High Court under section 435 because the order is an administrative order and that there was no doubt that the Magistrate was not an inferior criminal court. In Mithan Musammat vs The Municipal Board of Agra & Anr., (4) the Allahabad High Court has held that a Magistrate passing an order under section 247(1) of the United Provinces Municipalities Act, 1926 does not do so as an inferior criminal court within the meaning of section 435 of the Code of Criminal Procedure. To the same effect is the decision of the Allahabad High Court in Madho Ram vs Rex (1). We have referred to these decisions only to illustrate that in dealing with similar provisions under the (1) (3) A.I.R. (39) 1952 M.B. 48. (2) (4) I.L.R. (1956) 2 All. (5) I.L.R. (1950) All. 276 municipal law different High Courts seem to have taken the view that Magistrates entertaining recovery proceedings under the appropriate statutory provisions are not inferior criminal courts under the Code of Criminal Procedure. Though we have referred to these decisions we wish to make it clear that we should not be taken to have expressed any opinion about the correctness or otherwise of the views taken by the different High Courts in regard to the questions raised before them. The result is the appeal fails and is dismissed. Appeal dismissed.

On the failure of the appellant to carry out the requisition by the Municipality to execute certain repairs to its property the Municipality carried out the said repairs after giving due notice, the cost of which became recoverable from the appellant as tax under section 222(4) of the Ajmer Merwara Municipalities Regulation. The Municipality applied under section 234 Of the Regulation to the Additional Tehsildar and Magistrate, II Class, Ajmer for the recovery of the amount of cost incurred by them, and the magistrate passed an order calling upon the appellant to pay the dues. Against this order the appellant preferred a criminal revision application in the court of Sessions judge which was rejected as there was no ground to interfere in revision. The appellant then moved the High Court in its revisional jurisdiction wherein the respondents raised preliminary objection that the criminal revision application filed by the appellant was incompetent since the Magistrate who entertained respondent No. 2 Municipal Committee 's application under section 234 was not an inferior criminal court under section 439 of the Criminal Procedure 266 Code, the said objection was upheld and the criminal revision application dismissed on that ground. The question was whether the Magistrate who entertained the application made before him by the Municipality under section 234 of the Regulation was an inferior criminal court under section 439 Of the Code of Criminal Procedure, and also whether an application under section 234 could be made unless the rules were framed and the forms of the notice for making a demand under section 222 were prescribed. Held, that the Proceedings initiated before a Magistrate under section 234 of the Ajmer Merwara Municipalities Regulation were merely in the nature of recovery proceedings and no other questions could be raised in the said proceedings. The nature of the enquiry contemplated by section 234 was very limited; it prima facie partook of the character of a ministerial enquiry rather than judicial enquiry and at the best could be treated as a proceeding of a civil nature but not a criminal proceeding and the Magistrate who entertained the application was not an inferior criminal court. Whatever may be the character of the proceedings, whether it was purely ministerial or judicial or quasi judicial, the Magistrate who entertained the application and held the enquiry did so because he was designated in that behalf and so he must be treated as a persona designate and not as a Magistrate functioning and exercising his authority under the Code of Criminal Procedure. He could not therefore be regarded as an inferior criminal court. Held, further, that if the rules were not prescribed as required by section 234 of the Regulation then all that could be said was that there was no form prescribed for issuing a demand notice, that did not mean that the statutory power conferred on the committee by section 222(1) to make a demand was unenforceable and an amount which was claimable by virtue of section 222(1) did not cease to be claimable just because rules had not been framed prescribing the form for making the said demand. Crown through Municipal Committee, Ajmer vs Amba Lal, Ajmer Merwara Law journal, Vol. V, 92, Re Dinbai Jijibhai Khambatta, Bom. 864, V. B. D 'Monte vs Bandra Borough Municipality, I.L.R. , Emperor vs Devappa Ramappa, , Re Dalsukhram Hurgovandas, and Municipal Committee, Lashkay vs Shahbuddin, A.I.R. 1952 M. B. 48, referred to.

ition No. 801 of 1986 & Etc. (Under Article 32 of the Constitution of India) K. Parasaran, Attorney General, B. Dutta, Additional Solicitor General, D.D. Thakur, G.L. Sanghi (N.P.) M.S. Gujral, Anil Dev Singh, E.C. Agrawala, V.K. Pandian, Atul Sharma, A.K. Sanghi, N.D. Garg, Pankaj Kalra, H.K. Puri, S.K. Bisaria, R.P. Gupta, Ms. A. Subhashini, R. Venkatarama ni, S.K. Sinha, A.D. Malhotra, P.P. Rao and Sushil Kumar Jain for the appearing parties. The Judgment of the Court was delivered by DUTT, J. These Writ Petitions and Civil Miscellaneous Petitions have been filed by the employees of the Supreme Court praying for their pay hike. Two events, which will be stated presently, seem to have inspired the employees of the Supreme Court to approach the Court by filing Writ Peti tions. The first of the two events is the report of a Com mittee of Five Judges of this Court consisting of Mr. Jus tice P.N. Bhagwati (as he then was) as the Chairman, Mr. Justice V.D. Tulzapurkar, Mr. Justice D.A. Desai, Mr. Jus tice R.S. Pathak (as he then was) and Mr. Justice section Murtaza Fazal Ali. The second event, which is the most important one, is the judgments of the Delhi High Court passed in writ proceedings instituted by its employees. The Five Judge Committee in its report stated, inter alia, that no attempt had been made to provide a separate and distinct identity to the ministerial staff belonging to the Registry of the Supreme Court. According to the Commit tee, the borrowed designations without any attempt at giving a distinct and independent identity to the ministerial staff in the Registry of the Supreme Court led to invidious com parison. The committee observed that the salary scale ap plicable to various categories to staff in the Registry would show that at least since the Second Pay Commission appointed by the Central Government for Central Government servants, the pay scales devised by the Pay 495 Commission were practically bodily adopted by the Chief Justice of India for comparable categories in the Supreme Court. This was repeated after the recommendations of the Third Pay Commission were published and accepted by the Central Government. Further, it is observed that apparently with a view to avoiding the arduous task of devising a fair pay structure of various categories of staff in the Regis try, this easy course, both facile and superficial, was adopted which led to the inevitable result of linking the pay structure for the various categories of staff in the Registry with the pay structure in the Central Services for comparable posts and the comparison was not functional but according to the designations. No attempt was made to really ascertain the nature of work of an employee in each category of staff and determine the pay structure and then after framing proper rules invite the President of India to ap prove the rules under Article 146 of the Constitution. The Committee pointed out that the slightest attempt had not been made to compare the workload, skill, educational quali fications, responsibilities and duties of various categories of posts in the Registry and that since the days of Rajad hyakhsa Commission the work had become so complex and the work of even a clerk in the Supreme Court had such a dis tinct identity that it would be necessary not only to fix the minimum remuneration keeping in view the principles for determination of minimum remuneration but also to add to it the functional evaluation of the post. This, according to the Committee, required a very comprehensive investigation and the Committee was ill equipped to do it. The Committee, inter alia, recommended that the Chief Justice of India might appoint a Committee of 'experts to devise a fair pay structure for the staff of the Supreme Court keeping in view the principles of pay determination and on the recommenda tions of the Committee, the Chief Justice of India might frame rules under Article 146 of the Constitution and submit them for the approval of the President of India. The Commit tee also took notice of the fact that the Fourth Central Pay Commission appointed by the Central Government and presided over by a former Judge of the Supreme Court, Mr. Justice P.N. Singhal, was then examining the question of pay scales and other matters referred to it in respect of the stuff of the Central Government. According to the Committee, it was an ideal situation that a former Judge of this Court was heading the Panel and he was ideally situated for examining the question of independent pay structure for the staff in the Registry of the Supreme Court. The Committee recommended that the Chief Justice of India with the concurrence of the Central Government might refer the case of the Supreme Court staff to the Fourth Pay Panel presided over by Mr. Justice P.N. Singhal. 496 Several Writ Petitions were filed before the Delhi High Court by various categories of its employees, namely, the Private Secretaries and Readers to the Judges, Superintend ents, Senior Stenographers, Assistants, Junior Readers, Junior Stenographers, Joint Registrars, Assistant Regis trars, Deputy Registrars and certain categories of Class IV employees. In all these Writ Petitions, the Delhi High Court revised their respective pay scales. With regard to certain categories of Class III and Class IV employees, the Delhi High Court revised their pay scales also and granted them Punjab pay scales and Central Dearness Allowance, the de tails of which are given below: SI. Date of Revised scale No. Judgment No. of W.P. Post of pay Rs. 1. 3.2.86 & W.P. No. 1376/84 Restorer 400 600 23.5.86 2. 11.11.86 W.P. No. 1865/86 L.D.Cs. 400 600 3. 4.12.86 W.P. No. 2236/86 Class IV Sweepers Ushers etc. 300 430 4. 8.1.87 W.P. No. 2318/86 Gestetner Operator 400 600 5. 6.2.87 W.P. 2402/87 Staff Car Drivers 400 600 6. 20.8.87 W.P. No. 1656/87 Despatch Van Drivers 400 600 Several Special Leave Petitions were filed on behalf of the Government to this Court, but all these Special Leave Petitions were summarily rejected by this Court. The Supreme Court employees have approached this Court by filing the instant Writ Petitions and the Civil Miscella neous Petitions for upward revision of their pay scales as were allowed in the case of the employees working in the Delhi High Court. According to the petitioners, the duties and the job assignments in respect of the staff of the Supreme Court being more onerous and arduous compared to the work done by the staff of the Delhi High Court, the peti tioners 497 claimed that they are entitled to equal pay for equal work and. therefore, they are approaching this Court for redres sal of their grievances by means of the present Writ Peti tions. The Writ Petition No. 801 of 1986 has been filed by the Supreme Court Employees Welfare Association seeking higher pay scales parity in the pay scales with Delhi High Court employees in the corresponding categories. On July 25, 1986, this Court passed an interim order which provides as fol lows: "By way of an interim arrangement, pending final disposal of the Writ Petition, we direct that the Officers and staff of the Supreme Court Registry may be paid same pay scales and allowances which are at present being enjoyed by the Officers and the members of the staff of the High Court of Delhi belonging to the same category with effect from the date from which such scales of pay have been allowed to the Officers and the members of the staff of the High Court of Delhi, if and in so far as they are higher or better than what the Offi cers and the members of the Registry of the Supreme Court are getting, as proposed by Respondent No. 2. The Statement showing the posts in the Registry of the Supreme Court and the corresponding posts in the Delhi High Court, which is annexed to the proposal made by Respondent No. 2 will be annexed to this order also. Learned Addl. Solicitor General submits that the Petition for interim direc tions may be adjourned for a period of four weeks since the Government is actively consid ering the matter and to his information the Government is inclined to agree with the proposals made by the second respondent. We do not think, it is necessary to postpone the interim directions. The question of interim directions with regard to the categories of the Officers and the members of the staff not covered by the Delhi High Court scales of pay will be considered separately after two weeks. Mr. S.N. Kacker, Counsel for the petitioner, Mr. P.P. Rao for respondent No. 2, Supreme Court of India, and the learned Addl. Solicitor General are requested to assist us to arrive at a suitable formula in regard to them. The Writ Petition is adjourned for four weeks. In the 498 meanwhile, respondent Nos. 1 & 2 may take steps to refer the question of revision of pay scales to the Fourth Pay Commission as sug gested by the Committee consisting of Hon 'ble Mr. Justice V.D. Tulzapurkar, Hon 'ble Mr. Justice D.A. Desai, Hon 'ble Mr. Justice R.S. Pathak and Hon 'ble Mr. Justice section Murtaza Fazal Ali. " It appears from the interim order extracted above that this Court directed that the officers and the members of the staff of the Registry might get the same pay and allowances which were then being enjoyed by the officers and the mem bers of the staff of the Delhi High Court belonging to the same category with effect from the date from which such scales of pay had been allowed to the officers and the members of the staff of the Delhi High Court. This Court also by the same interim order directed the respondents Nos. 1 and 2 to take steps to refer the question of revision of pay scales to the Fourth Pay Commission as suggested by the Five Judge Committee. Another interim order dated August 14, 1986 was passed by this Court in Writ Petition No. 801 of 1986. The said interim order reads as follows: "Those employees who are not covered by our earlier order will be paid by way of an inter im arrangement, a sum equal to 10% of their basic pay, subject to a minimum of Rs.50. The order will take effect from 1.1.1986. The matter was left to us by counsel for all the parties and we have made this interim arrangement. This interim order will be subject to the result of final order in the writ peti tion. The writ petition is adjourned and will be listed for further hearing in usual course. " The said interim order dated August 14, 1986 was, howev er, modified by a subsequent interim order dated November 14, 1986. The modification was to the effect that the 10 per cent interim relief, subject to a minimum of Rs.50 per month, which was granted with effect from January 1, 1986, was directed to be granted with effect from January 1, 1978, in respect of Class IV staff. Some other interim orders were also passed by this Court. This Court passed interim orders 499 giving higher pay scales to certain categories of employees holding Group B, C and D posts. The Court also ordered that certain Group C posts, that is to say, Junior Clerks, Senior Library Attendants, etc. would be given the same pay scales of Rs.400 600 from 1.1.1978 as given to Lower Division Clerks in the Delhi High Court. The Court also ordered that Class IV employees would be given the same payscale of Rs.300 430 from 1.1.1978 as given to Class IV employees of the Delhi High Court. The scales of pay of Rs.400 600 and Rs.300 430 were Punjab pay scales. All these employees, who were given the Punjab pay scales, were also granted the Central D.A., which brought them at par with the Delhi High Court employees. Sub clause (1) of clause 2 of the terms of reference of the Fourth Central Pay Commission provides as under: "2(1). To examine the present structure of emoluments and conditions of service, taking into account the total packet of benefits, including death cum retirement benefits, available to the following categories of Government employees and to suggest changes which may be desirable and feasible: (i) Central Government employees industrial and nonindustrial. (ii) Personnel belonging to the All India Services. (iii) Employees of the Union Territories." Pursuant to the interim order of the Supreme Court dated July 25, 1986, the Ministry of Finance, Department of Ex penditure,published a Resolution dated December 24, 1986 in the Gazette of India, Extraordinary, Part I Section I. By the said Resolution, the terms of reference were amended by the addition of a new sub clause (iv) below paragraph 2(1)(iii) which is as follows: "(iv) Officers and employees of the Supreme Court of India. " It thus appears that although initially the cases of the employees of the Supreme Court were not referred to the Fourth Pay Commission, the Government, however, in obedience to the order of this Court referred their cases by the amendment of the terms of reference. 500 After the reference of the cases of the Supreme Court employees to the Fourth Pay Commission, the Registry of this Court sent to the Fourth Pay Commission a copy of the report of the Five Judge Committee and also copies of all the interim orders passed by this Court. A team of officers of the Commission visited various sections of the Registry of the Supreme Court and spent a number of days for a proper understanding of the working of the various categories of the employees. The FoUrth Pay Commission also visited the Registry to familiarize itself with the nature of their work. The Commission requested the Registrar to bring to the notice of the Associations as also individual employees of the Supreme Court to submit their Memoranda to the Commis sion. The Commission had also some discussions with Hon 'ble Mr. Justice Y.V. Chandrachud and Hon 'ble Mr. Justice P.N. Bhagwati, two former Chief Justices of India, and also with Hon 'ble Mr. Justice D.A. Desai, Chairman Law Commission, on various aspects of the pay structure etc. of the employees of the Supreme Court. The Commission had also met Hon 'ble Mr. Justice R.S. Pathak (as he then was) in his chamber on May 18, 1987. The Fourth Pay Commission submitted its recommendations with regard to the Supreme Court employees. The recommenda tions are contained in Part III of its report. It is not necessary to state in detail as to the revision of pay scales made by the Fourth Pay Commission with regard to the employees of the Supreme Court. In a nut shell, it may be stated that the Fourth Pay Commission reduced the existing 153 pay scales to 36 pay scales. The Commission, however, did not revise the pay scales of the employees of the Su preme Court on the basis of the pay~scales granted to them by the interim orders passed by this Court in the Writ Petitions following the payscales as revised by the Delhi High Court by its judgments passed in the Writ Petitions filed by its employees. A copy of the Fourth Pay Commission 's report relating to the pay structure of the officers and employees of the Supreme Court was first sent to the Ministry of Finance, Government of India. The Ministry of Finance forwarded the said copy to the Chief Justice of India. After the receipt of the said copy of the report of the Fourth Pay Commission with regard to the Supreme Court employees, the Registrar General of this Court, by his letter dated July 22, 1987 addressed to the Secretary, Government of India, Ministry of Finance, Department of Expenditure, New Delhi, stated inter alia that if the pay scales as proposed by the Fourth Pay Commission were accepted, and implemented, it would result in a number of anomalies and the 501 Supreme Court would encounter some difficulties in imple menting the same. The Registrar General was of the opinion that the Pay Commission should not have made any such recom mendation which had the effect of reducing the pay scales than what had been given by this Court by its various inter im orders dated 25.7.1986, 15.1.1987, 19.2. 1987, etc. to different categories of employees. Further, it was stated by him that the Pay Commission should not also have made recom mendation which had the effect of taking away the benefit accrued to other categories of employees by the Court 's order dated August 14, 1986. It is not necessary for us to refer to the anomalies as pointed out by the Registrar General in his said letter. Suffice, it to say that the Registrar General dealt with the case of each category of employees affected by the report of the Fourth Pay Commis sion and stressed that while accepting the pay scales pro posed by the Fourth Pay Commission for the officers and employees of the Supreme Court, the Ministry must give full consideration to the anomalies and difficulties pointed out and the suggestions made in his letter and representations enclosed therewith and intimate its decision to the Registry at an early date. The Joint Secretary to the Government of India, Ministry of Finance, by her letter dated November 23, 1987 addressed to the Registrar General, communicated to him the sanction of the President of India to the revised pay scales in respect of posts as shown in column 4 of the annexure to the said letter. In other words, the scales of pay as revised and/or recommended by the Fourth Pay Commission in respect of the posts mentioned in the annexure to the said letter, were accepted by the Government. Further, it was stated that such scales of pay would have effect from January 1, 1986. In the last paragraph of the said letter, it has been stated that the revision of pay scales for the remaining posts in the Supreme Court Registry, mentioned in Part III of the Report of the Fourth Central Pay Commission, is separately under consideration of the Government. The pay scales of Junior Clerks and Class IV employees of the Supreme Court, which have not been mentioned in the annexure, are therefore under consideration of the Government. Nothing has been produced before us to show that the Government has separate ly considered the revision of pay scales of the Junior Clerks and Class IV employees of the Supreme Court. All the parties including the learned Attorney General, however, proceeded on the assumption that the Government has not sanctioned the pay scales of the Junior Clerks and the Class IV employees as granted to them by this Court by the interim orders and/or the Government has accepted the pay scales as recommended 502 by the Fourth Pay Commission. Indeed, the learned Attorney General vehemently opposed the granting of Punjab pay scales and also the Central Government D.A. to the Junior Clerks and the Class IV employees. In view of the submissions made on behalf of the Government, it is clear that although it is stated in the said letter dated November 23, 1987 that the revision of pay scales of the Junior Clerks and the Class IV employees of the Supreme Court is under consideration of the Government and although no communication has been made to this Court as to the result of such consideration, yet the Government has made up its mind not to allow the pay scales given to them by the interim order of this Court. Be that as it may, we may now proceed to consider the contentions of the respective parties in these proceedings. Mr. Thakur, learned Counsel appearing in Writ Petition No. 801 of 1986 on behalf of the Supreme Court Employees ' Welfare Association, has made his submissions in two parts. The first part relates to the Junior Clerks and the Class IV employees of the Supreme Court and the second part relates to the other employees of the Supreme Court, who are members of the Supreme Court Employees ' Welfare Association. It may be stated here that the Class IV employees have filed a separate Writ Petition, that is, the Writ Petition No. 1201 of 1986. We shall first of all deal with the submissions of Mr. Thakur with regard to the Junior Clerks and Class IV employ ees of the Supreme Court. The learned Counsel has placed much reliance upon the judgments of the Delhi High Court in revising the pay scales of certain categories of Class III and Class IV employees, as stated hereinbefore, granting the pay scales of Rs.400 600 and Rs.300 430 respectively to L.D.Cs. and Class IV employees. It is submitted that the Delhi High Court was fully empowered under Article 226 of the Constitution to issue appropriate writs, if in its opinion the recommendations of the Third Pay Commission as adopted by the Government of India and as reflected in the revised pay Rules of 1973, in so far as these Rules related to the staff of the Delhi High Court, amounted to discrimi nation and consequently violated Article 14 of the Constitu tion of India. Counsel submits that the Special Leave Peti tions filed by the Government against the judgments of the Delhi High Court having been dismissed by this Court, the Delhi High Court judgment revising the pay scaleS of its employees including the pay scales of the L.D.Cs. annd Class IV employees have attained finality and operate as res judicata between the parties, namely, the employees of the Delhi High Court and the Union of India. It is submitted that this Court was fully 503 justified in passing the interim orders on the basis of the judgments of the Delhi High Court which had become final and conclusive between the parties and binding on them, and that the pay scales granted by this Court by the interim orders were consonant to justice and equity. It is urged that it was not open to the Fourth Pay Commission while revising the pay scales of the staff of the Supreme Court to take a pay scale lower than the one prescribed by this Court by the interim orders, as the basis for revision, as that would amount to negativing and nutralising the effect of the orders passed by this Court. It is submitted by the learned Counsel that the recommendations of the Fourth Pay Commis sion, if allowed to prevail, would result in the reduction of the salaries of the Junior Clerks and Class IV employees to a level lower than what they were receiving on the date of the revision and it would be highly discriminatory and violative of Article 14 of the Constitution. On the other hand, the learned Attorney General appear ing on behalf of the Union of India, in the first instance, points out that the Delhi High Court judgments, particularly the judgment in C.W.P. No. 1376 of 1984, Shri Kamalanand vs Union of India and others, are based on the doctrine of 'equal pay for equal work ' as enshrined in Article 39(d) of the Constitution of India. The learned Attorney General has made elaborate submissions as to the applicability of the said doctrine to the cases of the employees of the Delhi High Court and also of the Supreme Court. We shall, of course, consider the submissions of the learned Attorney General in regard to the doctrine of 'equal pay for equal work ', but before we do that we may consider his other submissions. It is urged by him that the judgments of the Delhi High Court are absolutely erroneous and that, in any event, they are neither final nor do they operate as res judicata, between the parties as contended on behalf of the petition ers. It is pointed out by him that the scales of pay of Rs.400 600 and Rs.300 430 are Punjab pay scales. Punjab payscales were higher than the Central pay scales because the Punjab pay scales were linked to higher Consumer Price Index (for short 'CPI ') 320 as on 1.1.1978 instead of CPI 200. On the other hand, the Central pay scales were linked to CPI 200 as on 1.1.1973. The Punjab High Court employees were getting higher pay scales because the Dearness Allow ance up to 1.1.1978 had been merged in the pay scales which related to CPI 320 as on 1.1.1978 instead of CPI 200. The Delhi High Court employees were given the higher Punjab scales of pay linked to CPI 320 and also got the benefit of the difference between 504 CPI 200 and CPI 320 according to the Central Government D.A. formula which came into effect from 1.1.1973. The Punjab D.A. formula is correspondingly lower than the Central D.A. which is clear from the letter dated April 16, 1980 of the Government of Punjab. It is submitted by the learned Attor ney General that the employees of the High Court as also of the Supreme Court cannot have the best of both the worlds, that is to say, they cannot get both the Punjab pay scales merging into it the Dearness Allowance between CPI 200 and CPI 320 and, at the same time, the Central Government D.A. Accordingly, it is submitted that the Delhi High Court judgments are absolutely erroneous and should not be relied upon. The question whether the High Court judgments relating to the L.D.Cs. and the Class IV employees are right or wrong. may not be necessary to be considered. But, the relevant question that requires consideration is whether the said judgments of the Delhi High court have become final and conclusive and binding on the parties. In case it is held that the judgments have not attained finality and do not operate as res judicata between the parties, the question as to the correctness of the judgments may be considered. Let us, therefore, advert to the contention of Mr. Thakur that the Delhi High Court judgments have become final and conclu sive between the parties and operate as res judicata. It has been already noticed that the Special Leave Petitions filed on behalf of the Union of India against the said judgments of the Delhi High Court were summarily dis missed by this Court. It is now a well settled principle of law that when a Special Leave Petition is summarily dis missed under Article 136 of the Constitution, by such dis missal this Court does not lay down any law, as envisaged by Article 141 of the Constitution, as contended by the learned Attorney General. In Indian Oil Corporation Ltd. vs State of Bihar, ; it has been held by this Court that the dismissal of a Special Leave Petition in limine by a non speaking order does not justify any inference that, by necessary implication, the contentions raised in the Special Leave Petition on the merits of the case have been rejected by the Supreme Court. It has been further held that the effect of a non speaking order of dismissal of a Special Leave Petition without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that the Supreme Court had decided only that it was not a fit case where Special Leave Petition should be granted. In Union of India vs All India Services Pensioners Association, AIR 1988 SC 50 1 this Court has given reasons for dismissing the Special Leave 505 Petition. When such reasons are given, the decision becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. It, therefore, follows that when no reason is given, but a Special Leave Petition is dismissed simpliciter, it cannot be said that there has been a declaration of law by this Court under Article 14 1 of the Constitution. It is true that by the dismissal of a Special Leave Petition in limine, this Court does not lay down any law under Article 141 of the Constitution, but the question is whether after the dismissal of the Special Leave Petition the judgment against which the Special Leave Petition was filed becomes final and conclusive so as to operate as res judicata between the parties thereto. In repelling the contention of the petitioners that the Delhi High Court judgments relating to the L.D. Cs. and Class IV employees operate as res judicata between the parties, the learned Attorney General has strongly relied upon the decision of this Court in Mathura Prasad Rajoo Jaiswal vs Dossibai N.B. Jeejeebhoy; , In that case, this Court observed as follows : "The previous decision on a matter in issue alone is res judicata: the reasons for the decision are not res judicata. A matter in issue between the parties is the right claimed by one party and denied by the other, and the claim of right from its very nature depends upon proof of facts and application of the relevant law thereto. A pure question of law unrelated to facts which give rise to a right, cannot be deemed to be a matter in issue. When it is said that a previous decision is res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be placed in contest between the same parties. A previous decision of a competent Court on facts which are the foundation of the right and the relevant law applicable to the deter mination of the transaction which is the foundation of the right and the relevant law applicable to the determination of the trans actions which is the source of the right is res judicata. A previous decision on a matter in issue is a composite decision: the decision of law cannot be dissociated from the decision on facts on which the right is founded. A decision on an issue of law will be as res judicata in a subsequent proceeding between the same parties, if the cause of action of the subsequent proceeding be the same as in the 506 previous proceeding, but not when the cause of action is different, nor when the law has since the earlier decision been altered by a competent authority, nor when the decision relates to the jurisdiction of the Court to try the earlier proceeding, nor when the earlier decision declares valid a transaction which is prohibited by law." . . . . . . . . . . . . . . "It is true that in determining the applica tion of the rule of res judicata the Court is not concerned with the correctness or other wise of the earlier judgment. The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be reopened. A mixed question of law and fact determined in the earlier pro ceeding between the same parties may not, for the same reason, be questioned in a subsequent proceeding between the same parties. But, where the decision is on a question of law, i.e. the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same, for the expression "the matter in issue" in section 11 Code of Civil Proce dure means the right litigated between the parties, i.e. the facts on which the right is claimed or denied and the law applicable to the determination of that issue. Where, howev er, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule or res judicata a party affected by the decision will not be precluded from challenging the validity of that order under the rule of res judicata, 'for a rule of procedure cannot supersede the law of the land." Thus, a decision on an abstract question of law unrelat ed to facts which give rise to a right, cannot operate as res judicata. Nor also can a decision on the question of jurisdiction be res judicata in a subsequent suit or pro ceeding. But, if the question of law is related to the fact in issue, an erroneous decision on such a question of law may operate as res judicata between the parties in a subse quent suit or proceeding, if the cause of action is the same. The Delhi High Court judgments do not decide any abstract question of law and there is also no question of 507 jurisdiction involved. Assuming that the question of juris diction involved. Assuming that the judgments of the Delhi High Court are erroneous, such judgments being on questions of fact would still operate as res judicata between the same parties in a subsequent suit or proceeding over the same cause of action. In Kirit Kumar Chaman Lal Kundaliya vs State of Gujarat, 18 it has been laid down by this Court that the doctrine of res judicata or the principles of finality of judgment cannot be allowed to whittle down or override the express constitutional mandate to the Supreme Court enshrined in Article 32 of the Constitution. On the basis of this principle, it has been argued by the learned Attorney General that the judgments of the Delhi High Court might operate as res judicata, but they cannot override the provi sion of Article 14 of the Constitution. In other words, in spite of the judgments of the Delhi High Court, it is per missible to contend that if the judgments are given effect to the employees of the Supreme Court, it would be discrimi natory inasmuch as those who are similarly situated will be getting lesser pay. In Kirit Kumar 's case, the order of detention of the petitioner under the Conservation of For eign Exchange and Prevention of Smuggling Activities Act was upheld by the High Court. The petitioner filed a Special Leave Petition against the impugned order of the High Court and also a petition under Article 32 of the Constitution urging certain additional grounds which were not taken before the High Court. A preliminary objection was raised on behalf of the State that the points not taken in the High Court by the detenu could not be agitated in the Writ Peti tion under Article 32 of the Constitution because that would be barred by the principle of constructive res judicata. In the context of the facts of that case, this Court laid down the above proposition of law that the doctrine of res judi cata or the principles of finality of judgment could not be allowed to whittle down or override the express constitu tional mandate to the Supreme Court enshrined in Article 32 of the Constitution. It is, however, the contention of the petitioners, that is, the employees of the Supreme Court, that they are being discriminated against by the Union of India because while the Delhi High Court employees are given a higher scale of pay, the Supreme Court employees who perform at least the same duties are paid a lower scale of pay. The observation that has been made in Kirit Kumar 's case was in the context of the facts of that case, namely, that even though certain points were not raised before the High Court that would not preclude the detenu from urging those points in a petition under 508 Article 32 of the Constitution relating to the violation of a provision of Article 22(5) of the Constitution. The fact remains that the Delhi High Court employees would be getting higher scale of pay than the employees of the Supreme Court. It is not the case of the Union of India that the Delhi High Court employees are not similarly situated as the Supreme Court employees and that, therefore, there is a reasonable justification for making a discrimination between these two classes of employees. In this connection, we may consider the contention of Mr. P.P. Rao, learned Counsel appearing on behalf of the Registrar of the Supreme Court. His contention is that the judgments of the Delhi High Court cannot be collaterally challenged and should be treated as res judicata between the parties, even though the said judgments will be violative of Article 14 of the Constitution. In support of this conten tion, the learned Counsel has placed much reliance upon the decision of this Court in Thakore Sobhag Singh vs Thakur Jai Singh, What happened in that case was that the Board of Revenue rejected the claim of the respondent to be recognised as an adopted son on the ground that under the Jaipur Matmi Rules the adoption, without the previous sanc tion of the Ruler, could not be recognised for the purpose of determining succession to the jagir. In the Writ Petition filed by the respondents, the High Court held that the Jaipur Matmi Rules had no statutory force because the Ruler had not given his assent to them. The High Court sent the case back on remand to the Board of Revenue to decide the case in accordance with law declared by the High Court. After the case was sent back on remand by the High Court, Validation Act, 1961 was passed validating the Matmi Rules. The Board of Revenue, however, held after remand that the respondent was the adopted son. On appeal to this Court, it has been held that even though the said Validation Act declared that the Matmi Rules shall have and shall be deemed always to have had the force of law, notwithstanding any thing contained in any judgment in any court, the Act did not supersede the judgment of the High Court. It could not be contended that the judgment of the High Court should not be treated as res judicata on that ground that if it was regarded as binding between the parties the equal protection clause of the Constitution would be violated if another person, similarly situated, was to be differently treated by the Board of Revenue. The decision in Thakore Sobhag Singh 's case is an answer to the contention of the learned Attorney General. The doctrine of res judicata is a universal doctrine laying down 509 the finality of litigation between the parties. When a particular decision has become final and binding between the parties, it cannot be set at naught on the ground that such a decision is violative of Article 14 of the Constitution. So far as the parties are concerned, they will always be bound by the said decision. In other words, either of the parties will not be permitted to reopen the issue decided by such decision on the ground that such decision violates the equality clause under the Constitution. There is no question of overruling the provision of Article 14, as contended by the learned Attorney General. The judgment which is binding between the parties and which operates as res judicata between them, cannot be said to overrule the provision of Article 14 of the Constitution even though it may be, to some extent, violative of Article 14 of the Constitution. So far as the Supreme Court employees are concerned in these proceedings the only enquiry to be made is whether the judgments of the Delhi High Court relating to the L.D.Cs. and the Class IV employees have become final and conclusive between the employees of the Delhi High Court and the Union of India. It is the contention of the learned Attorney General that the judgments of the Delhi High Court are erroneous on the face of them inasmuch as by these judgments the Delhi High Court has granted to the Restorers L.D.Cs. and the Class IV employees Punjab pay scales as also the Central D.A. It is urged by the learned Attorney General that such judgments should not be given effect to so far as the Junior Clerks and Class IV employees of the Supreme Court are concerned. It is submitted that because the Special Leave Petitions against the Delhi High Court judgments have been dismissed by this Court, the judgments may be final between the parties, but the benefit of that wrong decision should not be conferred on the employees of the Supreme Court or persons similarly situated. The Delhi High Court has made an error and that error should not be perpetuated. In support of that contention, the learned Attorney General has placed reliance upon a decision of this Court in State of Orissa vs Durga Charan Das, ; In that case, the respondent claimed that he was discriminated by the State of Orissa is not fixing the amount of his pension on the basis of his confirmation as the Registrar of the High Court on August 28, 1956, that is, the date on which his junior had been confirmed as Registrar. The re spondent relied upon the fact that one Mr. Beuria was held entitled to get the pay of the Registrar from December 1, 1958 and his junior was promoted. to the rank of Registrar on that date. It was held by this Court 510 that granting to Mr. Beuria the salary of the Registrar with effect from December 1, 1948 was erroneous, as it was grant ed to him on the misconstruction of the relevant rule and, thereafter, it was observed as follows: "If the respondent 's plea of discrimination was accepted on the strength of the single case of Mr. Beuria, it would follow that because the appellant placed a misconstruction on the relevant Rule, it is bound to give effect to the said misconstruction for all times; that, plainly cannot be said to be sound." The learned Attorney General has also relied on the decision of this Court in G.V. Ramanaiah vs The Superintend ent of Central Jail, Rajahmundry; , In that case, this Court observed as follows: "Mr. P.K. Rao next contends in a somewhat half hearted manner that even if the State Government had extended the benefit of its G.O. owing to a mistake to four other persons, similarly placed, it was not fair to deny the same treatment to the petitioner. This conten tion must be repelled for the obvious reason that two wrongs never make a right. " It is submitted that this Court is both a court of law and a court of equity, as held in Chandra Bansi Singh vs State of Bihar; , The equitable principles require that the court should not apply the result of an erroneous decision in regard to the pay scales to the em ployees of the Supreme Court. The learned Attorney General has also placed reliance upon the doctrine of prospective overruling and points out that this Court has given effect to the doctrine of prospec tive overruling in Waman Rao vs Union of India, ; ; Minor P. Rajendran vs State of Madras, ; and State of M.P.v. Ram Raghubir Prasad Agarwal; , We are pressed to hold that the judgments of the Delhi High Court are wrong and even though the benefit which has been conferred under the judgments may not be interfered with in respect of those who have got the same, but such benefits may not be conferred on the future employees of the Delhi High Court and on the employees of this Court. 511 It is also submitted by the learned Attorney General that if this Court is of the opinion that the judgments of the Delhi High Court are erroneous, this Court should ignore that by such judgments a certain section of the employees of the Delhi High Court has been benefitted and also the hard ship that may result in not giving effect to such judgments, so far as the employees of the Supreme Court are concerned. In support of that contention, the learned Attorney General has placed reliance upon a decision of this Court in Roshan lal Kuthiala vs R.S. Mohan Singh Oberai, ; In that case, it has been observed by Krishna Iyer, J. that our equitable jurisdiction is not hidebound by tradition and blinkered by precedent, though trammelled by judicially approved rules of conscience. In this connection, we may refer to another observation of Krishna Iyer, J. in Tamil Nadu Education Department Ministerial & General Subordinate Service Association vs State of Tamil Nadu, ; It has been observed that once the principle is found to be rational the fact that a few freak instances of hard ship may arise on either side cannot be a ground to invali date the order or the policy. At the same time, the learned Attorney General submits that the benefit which has been conferred on the employees of the Supreme Court should not be taken away all at a time but, as a court of equity, this Court may by way of recon ciliation direct freezing of the payscales of the Supreme Court employees, which they are getting by virtue of the interim order of this Court, to be adjusted or neutralised against increments, and if that be done, they would not suffer any appreciate hardship. We are unable to accept the suggestion of the learned Attorney General that reconciliation can be made by freezing the pay scales of Supreme Court employees, which they are getting by virtue of the interim orders of this Court, to be adjusted or neutralised against the increments. It is not the business of this Court to fix the pay scales of the employees of any institution in exercise of its jurisdiction under Article 32 of the Constitution. If there be violation of any fundamental right by virtue of any order or judgment, this Court can strike down the same but, surely, it is not within the province of this Court to fix the scale of pay of any employee in exercise of its jurisdiction under Article 32 of the Constitution. So far as the judgments of the Delhi High Court are concerned, they do not infringe the fundamen tal rights of the employees of the Supreme Court or any of the petitioners, who are the petitioners before us in the Writ Petitions, and so the question of considering whether the judgments of the Delhi High Court are 512 right or wrong does not arise. If the judgments of the Delhi High Court had in any manner interfered with the fundamental rights of the petitioners before us, in that case, the question as to the correctness of those judgments would have been germane. The petitioners, far from making any complaint against the judgments of the Delhi High Court, have strongly relied upon them in support of their respective cases for pay hike and, accordingly, we do not think that we are called upon to examine the propriety or validity of the judgments of the Delhi High Court. We may also deal with the contention of the learned Attorney General as to the doctrine of 'equal pay for equal work ' which we have so long deferred consideration. It is urged by him that the doctrine of equal pay for equal work ', as enshrined in Article 39(d) of the Constitution of India, cannot be relied on by the petitioners in support of their claim for the same pay scales as granted by the Delhi High Court by the said judgments. Article 39(d) being a provision contained in Part IV of the Constitution dealing with Direc tive Principles of State Policy is not enforceable by any court in view of Article 37 of the Constitution. He submits that as laid down in Kishori Mohanlal Bakshi vs Union of India, AIR 1962 SC 1139 and State of Punjab vs Joginder Singh, [1963] Supp. 2 SCR 169 the abstract doctrine of 'equal pay for equal work ' has nothing to do with Article 14. In Randhir Singh vs Union of India, ; this Court has considered the decision in Kishori Mohanlal Bakshi 's case and came to same view that the principle of 'equal pay for equal work ' was not an abstract doctrine but one of substance. Thereafter, this Court observed as fol lows: "The Preamble to the Constitution of the International Labour Organisation recognises the principle of 'equal remuneration for work of equal value ' as constituting one of the means of achieving the improvement of condi tions "involving such injustice, hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled". Constru ing Articles 14 and 16 in the light of the Preamble and Article 39(d), we are of the view that the principle 'equal pay for equal work ' is deducible from those Articles and may be properly applied to cases of unequal scales of pay based on no classification or irrational classification though those drawing the dif ferent scales of pay do identical work under the same employer. " 513 It follows from the above decisions that although the doctrine of 'equal pay for equal work ' does not come within Article 14 of the Constitution as an abstract doctrine, but if any classification is made relating to the pay scales and such classification is unreasonable and/or if unequal pay is based on no classification, then Article 14 w411 at once be attracted and such classification should be set at naught and equal pay may be directed to be given for equal work. In other words, where unequal pay has brought about a discrimi nation within the meaning of Article 14 of the Constitution, it will be a case of 'equal pay for equal work ', as envis aged by Article 14 of the Constitution. If the classifica tion is proper and reasonable and has a nexus to the object sought to be achieved, the doctrine of 'equal pay for equal work ' will not have any application even though the persons doing the same work are not getting the same pay. In short, so long as it is not a case of discrimination under Article 14 of the Constitution, the abstract doctrine of 'equal pay for equal work ', as envisaged by Article 39(d) of the Con stitution, has no manner of application, nor is it enforce able in view of Article 37 of the Constitution. Dhirendra Chamoli vs State of U.P., is a case of 'equal pay for equal work ', as envisaged by Article 14, and not of the abstract doctrine of 'equal pay for equal work '. The learned Attorney General has also placed reliance on some recent decisions of this Court on the question as to the applicability of the doctrine of 'equal pay for equal work '. In State of Andhra Pradesh vs G. Sreenivasa Rao, ; it has been observed that 'equal pay for equal work ' does not mean that all the members of a cadre must receive the same pay packet irrespective of their seniority, source of recruitment, educational qualifications and various other incidents of service. In V. Markendeya vs State of Andhra Pradesh; , it is laid down that on an analysis of the relevant rules, orders, nature of duties, functions, measure of responsibility and educational qualifications required for the relevant posts, if the Court finds that the classification made by the State in giving different treatment to the two classes of employees is rounded on rational basis having nexus to the object sought to be achieved, the classification must be upheld. In State of U.P. v J.P. Chaurasia, ; this Court observed as follows: "The first question regarding entitlement to the pay scale admissible to Section Officers should not detain us longer. 514 The answer to the question depends upon sever al factors. It does not just depend upon either the nature of work or volume of work done by Bench Secretaries. Primarily it re quires among others, evaluation of duties and responsibilities of the respective posts. More often functions of two posts may appear to be the same or similar, but there may be differ ence in degrees in the performance. The quan tity of work may be the same, but quality may be different that cannot be determined by relying upon averments in affidavits of. interested parties. The equation of posts or equation of pay must be left to the Executive Government. It must be determined by expert bodies like Pay Commission. They would be the best judge to evaluate the nature of duties and responsibilities of posts. If there is any such determination by a Commission or Commit tee, the Court should normally accept it, The Court should not try to tinker with such equivalent unless it is shown that it was made with extraneous consideration. " Relying upon the decision in Chaurasia 's case, it has been urged by the learned Attorney General that in the instant case also this COurt should accept the recommenda tions of the Fourth Pay Commission. Normally, when a Pay Commission has evaluated the nature of duties and responsi bilities of posts and has also made the equation of posts, the Court should not interfere with the same. The question is not whether the Court should interfere with such findings or not, but it will be discussed presently that the Chief Justice of India, who is the appropriate authority, is entitled to accept or reject the recommendations or any finding of the Pay Commission. Again, in Urnesh Chandra Gupta vs Oil and Natural Gas Commission, AIR 1989 SC 29 it has been observed by this Court that the nature of work and responsibilities of the posts are matters to be evaluated by the management and not for the Court to determine by relying upon the averments in the affidavit in the interest of the parties. It has been observed by us earlier in this judgment that it is not the business of this Court to fix the pay scales in exercise of its jurisdiction under. Article 32 of the Constitution. It is really the business of the Government or the management to fix the pay scales after considering various other mat ters and the Court can only consider whether such fixation of pay scales has resulted in an invidious discrimination or is arbitrary or patently erroneous in law or in fact. 515 The last case that has been relied on by the learned Attorney General is the decision in Tarsem Lal Gautam vs State Bank of Patiala, AIR 1989 SC 30. In that case, this Court held that it was not an instance to which principle of 'equal pay for equal work ' could straightaway be applied inasmuch as the qualitative differences in regard to degrees of reliability and responsibility could not be put aside as irrelevant. So far as the judgments of the Delhi High Court are concerned, we find that the High Court has taken into con sideration the decision of this Court on the doctrine of 'equal pay for equal work '. In one of these judgments in Civil Writ Petition No. 1376 of 1984 relating to the pay scale of the petitioner, who was a Restorer which is equiva lent to L.D.C./Junior Clerk, the learned Judges of the Delhi High Court have held that the principle of 'equal pay for equal work ' would be squarely available to the petitioner, particularly having regard to the admitted fact that of the two High Courts in relation to which parity is claimed one was the predecessor of this Court and the other its succes sor. The Delhi High Court before applying the doctrine of 'equal pay for equal work ' has come to the finding that if the Restorers working in the Delhi High Court are given a pay scale lower than the Restorers working in the Punjab High Court, which is a predecessor of the Delhi High Court and in Himachal Pradesh High Court which is a successor of the Delhi High Court, it will be discriminatory and viola tive of Article 14 of the Constitution. It has been already stated by us that we are not called upon to consider the correctness or otherwise of the judgments of the Delhi High Court, but what we would like to point out is that the Delhi High Court has not straightaway applied the doctrine of 'equal pay for equal work ' as an abstract doctrine, as envisaged by Article 39(d) of the Constitution. Elaborate submissions have been made by the learned Counsel of the parties as to the interpretation and scope of Article 146(2) of the Constitution of India. Article 146(2) provides as follows: "146(2). Subject to the provisions of any law made by Parliament, the conditions of service of officers and servants of the Supreme Court shall be such as may be prescribed by rules made by the Chief Justice of India or by some other Judge or officer of the Court authorised by the Chief Justice of India to make rules for the purpose: Provided that the rules made under this clause shall, 516 so far as they relate to salaries, allowances, leave or pensions, require the approval of the President. " Under Article 146(2) the conditions of service of offi cers and servants of the Supreme Court shall be such as may be prescribed by the rules made by the Chief Justice of India or by some other Judge or officer of the Court autho rised by the Chief Justice of India to make rules for the purpose. This is, however, subject to the provisions of any law that may be made by Parliament. It is apparent from Article 146(2) that it is primarily the responsibility of Parliament to lay down the conditions of service of the officers and servants of the Supreme Court, but so long as Parliament does not lay down such conditions of service, the Chief Justice of India or some other Judge or officer of the Court authorised by the Chief Justice of India is empowered to make rules for the purpose. The legislative function of Parliament has been delegated to the Chief Justice of India by Article 146(2). It is not disputed that the function of the Chief Justice of India or the Judge or the officer of the Court authorised by him in framing rules laying down the conditions of service, is legislative in nature. The condi tions of service that may be prescribed by the rules framed by the Chief Justice of India under Article 146(2) will also necessarily include salary, allowances, leave and pensions of the officers and servants of the Supreme Court. The proviso to Article 146(2) puts a restriction on the power of the Chief Justice of India by providing that the rules made under Article 146(2) shall, so far as they relate to sal aries, allowances, leave or pensions, require the approval of the President of India. Prima facie, therefore, the conditions of service of the employees of the Supreme Court that are laid down by the Chief Justice of India by framing the rules will be final and conclusive, except that with regard to salaries, allowances, leave or pensions the ap proval of the President of India is required. In other words, if the President of India does not approve of the salaries, allowances, leave or pensions, it will not have any effect. The reason for requiring the approval of the President of India regarding salaries, allowances, leave or pensions is the involvement of the financial liability of the Government. One important thing that is to be noticed is that under clause (3) of Article 146 the administrative expenses of the Supreme Court including all salaries, allowances, leave and pensions payable to or in respect of the officers and serv ants of the Court shall be charged upon the Consolidated Fund of India. In view of the provision of clause (3), such administrative expenses shall not be submitted to the vote of Parliament, as provided in Article 113 of the Constitu tion. It is appa 517 rent that in order to maintain the independence of the judiciary, the framers of the Constitution thought it wise and expedient to make such a provision as contained in clause (3) of Article 146. It is contended by the learned Attorney General that the function of the President of India approving of the rules framed by the Chief Justice of India relating to salaries, allowances, leave or pensions is legislative in character and it is analogous to the President of India giving assent to a Bill. It is difficult to accept the contention that the function of the President of India approving of the rules is analogous to giving assent to a Bill. The rules framed by the Chief Justice of India though it is a piece of subordi nate legislation, it is not a fullfledged legislative act requiring assent of the President of India. In this connec tion, we may refer to the statement of law as to the dele gated legislation in Foulkes ' Administrative Law, Sixth Edition, Page 57 which reads as follows: "It is common for Parliament to confer by Act on ministers and other executive bodies the power to make general rules with the force of law to legislate. Parliament is said to delegate to such bodies the power to legis late. Thus the phrase 'delegated legislation ' covers every exercise of a power to legislate conferred by Act of Parliament. The phrase is not a term of art, it is not a technical term, it has no statutory definition. To decide whether the exercise of a power constitutes 'delegated legislation ' we have to ask whether it is a delegated power that is being exer cised and whether its exercise constitutes legislation. Clearly an Act, public or pri vate. is not delegated: it is primary legisla tion. When a minister or other authority is given power by Act of Parliament to make rules, regulations etc. the power has been delegated to him, and insofar as the rules made by that authority are legislative in their nature. they comprise delegated legisla tion. If the contents of the document (made under delegated powers) are not legislative the document will obviously not be a piece of (delegated) legislation. Ministers and others are in fact given power to make orders, give directions, issue approvals and notices etc. which one would not, because of their lack of generality. classify as legislative but rather as administrative . ." It has been observed in the statement of law that if the contents 518 of the document made under delegated powers are not legisla tive, the document would obviously not be a piece of dele gated legislation. Again, it is stated that Ministers and others are, in fact, given powers to make orders, give directions, issue approval and notices etc. which one would not, because of their lack of generality, classify as legis lative but rather as administrative. In view of the said statement of law, it may be contended that the function of the President of India is not strictly legislative in na ture, but an administrative act. We do not think it neces sary to come to any final decision on the question and we propose to proceed on the assumption that the function of the President of India in approving the rules framed by the Chief Justice of India relating to salaries, allowances, leave or pensions is a legislative act. It is vehemently contended by the learned Attorney General that as the President of India performs a legisla tive act in approving the rules framed by the Chief Justice of India, no writ can lie to compel him to give the approval or to withhold the approval. In support of his contention, reliance has been placed on a decision of this Court in Narinder Chand Hem Raj vs Lt. Governor, Administrator, Union Territory, Himachal Pradesh, ; In that case, Hegde, J. speaking for the Court observed as follows: "What the appellant really wants is a mandate from the court to the competent authority to delete the concerned entry from Schedule A and include the same in Schedule B. We shall not go into the question whether the Government of Himachal Pradesh on its own authority was competent to make the alteration in question or not. We shall assume for our present pur pose that it had such a power. The power to impose a tax is undoubtedly a legislative power. That power can be exercised by the legislature directly or subject to certain conditions, the legislature may delegate that power to some other authority. But the .exer cise of that power, whether by the legislature or by its delegate is an exercise of a legis lative power. The fact that the power was delegated to the executive does not convert that power into an executive or administrative power. No court can issue a mandate to a legislature to enact a particular law. Simi larly no court can direct a subordinate legis lative body to enact or not to enact a law which it may be competent to enact. " There can be no doubt that no court can direct a legislature to 519 enact a particular law. Similarly, when an executive author ity exercises a legislative power by way of subordinate legislation pursuant to the delegated authority of a legis lature, such executive authority cannot be asked to enact a law which he has been empowered to do under the delegated legislative authority. The next decision which has been relied on by the learned Attorney General is the decision in State of Andhra Pradesh vs T. Gopalakrishnan Murthi, ; This case relates to the proviso to Article 229(2) of the Consti tution of India. Provision of Article 229(2) including the proviso thereto is a similar to Article 146(2) and its proviso. Under Article 229(2), it is the Chief Justice of the High Court or his delegate who frames rules relating to the conditions of service of officers and servants of the High Court. Under the proviso to Article 229(2), if the rules framed by the Chief Justice of the High Court or his delegate relate to salaries, allowances, leave or pensions, it shall require the approval of the Governor of the State. So far as the two provisos are concerned, while under provi so to Article 229(2) the rules relating to salaries, allow ances, leave or pensions require the approval of the Gover nor of the State, under the proviso to Article 146(2) it will require the approval of the President of India. In Gopalakrishnan 's case it has been observed that it is not possible to take the view that merely because the State Government does not see its way to give the required approv al, it will justify the issuance of a writ of mandamus under Article 226 of the Constitution, as if the refusal of the State Government was ultra vires or made mala fide and arbitrarily. Another case which has been cited and relied upon by the learned Attorney General in this regard is the decision in A.K. Roy vs Union of India, ; What happened in that case was that by a Notification the Central Govern ment had brought into force all the sections of the Forty fourth Amendment act except section 3. The question before this Court was whether this Court could issue a writ of mandamus directing the Central Government to bring into force section 3 of the Fortyfourth Amendment Act. It has been observed by Chandrachud, C.J. delivering the majority judgment that a mandamus cannot be issued to the Central Government compelling it to bring the provisions of section 3 of the Fortyfourth Amendment Act into force. On the basis of the principles of law laid down in the above 520 decisions, it is urged by the learned Attorney General that this Court cannot issue a mandate to the President of India to grant approval to the rules framed by the Chief Justice of India relating to salaries, allowances, leave and pen sions of the officers and servants of the Supreme Court. In other words, the President of India cannot be compelled to grant approval to the proposals of the Registrar General of the Supreme Court, as contained in his letter dated July 22, 1987. There can be no doubt that an authority exercising legislative function cannot be directed to do a particular act. Similarly the President of India cannot be directed by the Court to grant approval to the proposals made by the Registrar General of the Supreme Court, presumably on the direction of the Chief Justice of India. It is not also the contention of any of the parties that such a direction can be made by the Court. The real question is how and in what manner the Presi dent of India should act after the Chief Justice of India submits to him the rules framed by him relating to the salaries, allowances, leave and pensions of the officers and servants of the Supreme Court. The President of India is the highest dignitary of the State and the Chief Justice of India also is a high dignitary of the State. Upon a compara tive study of some other similar provisions of the Constitu tion, we find that under Article 98(3), the President of India has been empowered to make rules regulating the re cruitments and the conditions of service of persons appoint ed to the secretarial staff of the House of the People or the Council of States, after consultation with the Speaker of the House of the People or the Chairman of the Council of States, as the case may be. Article 148(5) provides that the conditions of service of persons serving in the Indian Audit and Accounts Department and the administrative powers of the Comptroller and Auditor General shall be such as may be prescribed by rules made by the President of India after consultation with the Comptroller and Auditor General. Similarly, the Governor has been empowered under Article 187(3) to make rules regulating the recruitment, and the conditions of service of persons appointed to the secretari al staff of the Assembly or the Council after consultation with the Speaker of the Legislative Assembly or the Chairman of the Legislative Council, as the case may be. Thus, it appears that except in the cases of the officers and serv ants of the Supreme Court and those of the High Courts, in other cases either the President of India or the Governor has been empowered to frame rules. So far as the Supreme Court and the High Courts are con cerned, 521 the Chief Justice of India and the Chief justice of the concerned High Court, are empowered to frame rules subject to this that when the rules are framed by the Chief Justice of India or by the Chief Justice of the High Court relating to salaries, allowances, leave or pensions, the approval of the President of India or the Governor, as the case may, is required. It is apparent that the Chief Justice of India and the Chief Justice of the High Court have been placed at a higher level in regard to the framing of rules containing the conditions of service. It is true that the President of India cannot be compelled to grant approval to the rules framed by the Chief Justice of India relating to salaries, allowances, leave or pensions, but it is equally true that when such rules have been framed by a very high dignitary of the State, it should be looked upon with respect and unless there is very good reason not to grant approval, the approv al should always be granted. If the President of India is of the view that the approval cannot be granted, he cannot straightaway refuse to grant such approval, but before doing there must be exchange of thoughts between the President of India and the Chief Justice of India. In Gopalakrishnan 's case (supra), relied on by the learned Attorney General, it has been observed that one should expect in the fitness of things and in view of the spirit of Article 229 that ordinarily and generally the approval should be accorded. Although the said observation relates to the provision of Article 229(2), it also equally applies to the provision of Article 146(2) relating to the grant of approval by the President of India. In this connec tion, we may also refer to a decision of this Court in Gurumoorthy vs Accountant General Assam & Nagaland, , which was also considered in Gopalakrish nan 's case (supra). In Gurumoorthy 's case, this Court took the view that the unequivocal purpose and obvious intention of the framers of the Constitution in enacting Article 229 is that in the matter of appointments of officers and serv ants. of a High Court, it is the Chief Justice or his nomi nee who is to be the supreme authority and there can be no interference by the Executive except to the limited extent that is provided in that Article. The same observation will apply to the rules framed by the Chief Justice of India under Article 146(2) of the Constitution. At this stage, it may be noticed that it has been conceded by the learned Attorney General that the validity of the subordinate legislation as provided in Article 146(2) of the Constitution can be challenged on such grounds as any other legislative acts can be challenged. So, if the rules framed by the Chief Justice of India and approved by 522 the President of India relating to the salaries, allowances, leave or pensions offend against Article 14 or 16, the same may be struck down by the Court. In Wade 's Administrative Law, Sixth Edition, Page 863 it is stated as follows: "Acts of Parliament have sovereign force, but legislation made under delegated power can be valid only if it conforms exactly to the power granted. Even where, as is often the case, a regulation is required to be approved by resolutions of both Houses of Parliament, it still fails on the 'subordinate ' side of the line, so that the court may determine its validity. " Again, at page 868 it is observed that just as with other kinds of administrative action, the courts must some times condemn rules or regulations for unreasonableness. Thus a delegated legislation or a subordinate legisla tion must conform exactly to the power granted. So far as the question of grant of approval by the President of India under the proviso to Article 146(2) is concerned, no such conditions have been laid down to be fulfilled before the President of India grants or refuses to grant approval. By virtue of Article 74(1) of the Constitution, the President of India shall, in exercise of his functions, act in accord ance with the advice of the Council of Ministers. In other words, it is the particular Department in the Ministry that considers the question of approval under the proviso to article 146(2)of the Constitution and whatever advice is given to the President of India in that regard, the Presi dent of India has to act in accordance with such advice. On the other hand, the Chief Justice of India has to apply his mind when he frames the rules under Article 146(2) with the assistance of his officers. In such circumstances, it would not be unreasonable to hold that the delegation of the legislative function on the Chief Justice of India and also on the President of India relating to the salaries, allow ances, leave and pensions of the officers and servants of the Supreme Court involve, by necessary implication, the application of mind. So, not only that the Chief Justice of India has to apply his mind to the framing of rules, but also the Government has to apply its mind to the question of approval of the rules framed by the Chief Justice of India relating to salaries, allowances, leave or pensions. This condition should be fulfilled and should appear to have been so fulfilled from the records of both the 523 Government and the Chief Justice of India. The application of mind will include exchange of thoughts and views between the Government and the Chief Justice of India and it is highly desirable that there should be a consensus between the two. The rules framed by the Chief Justice of India should normally be accepted by the Government and the ques tion of exchange of thoughts and views will arise only when the Government is not in a position to accept the rules relating to salaries, allowances, leave or pensions. It has been already noticed that this Court by its interim order directed the respondents Nos. 1 and 2 to refer the question of revision of pay scales of the Supreme Court employees to the Fourth Pay Commission pursuant to the recommendation in that regard by the Five Judge Committee and as directed such reference was made. The report of the Fourth Pay Commission was not sent directly to the Chief Justice of India, but it came through the Ministry of Fi nance, Department of Expenditure, Government of India. It is significant to note that this is the first time that a reference has been made to the Pay Commission for the revi sion of the pay scales of the employees of the Supreme Court. If we are to go strictly by Article 146(2) of the Constitution, the question of any reference to the Pay Commission does not arise. The Chief Justice of India has to frame rules with the aid and assistance of his own officers and other Judges. The Chief Justice of India may appoint a Committee of Judges or a Committee of experts for the pur pose of assisting him in framing the rules relating to the conditions of service of the employees of the Supreme Court. Although there is no such provision in Article 146(2), but that is implied and it may be said that the reference to the Fourth Pay Commission was made so that the report or the recommendations of the Fourth Pay Commission relating to the revision of the pay scales of the Supreme Court employees will be of some assistance to the Chief Justice of India to frame rules. What should go to the President of India for his approval under the proviso to Article 146 is not the report or the recommendation of the Fourth Pay Commission, but the rules framed by the Chief Justice of India. In considering the rules framed by the Chief Justice of India relating to salaries, allowances, leave and pensions, it will not be the concern of the President of India how and in what manner the Chief Justice of India has laid down the rules. Be that as it may, after the report or recommendation of the Fourth Pay Commission, was forwarded by the Ministry of Finance to the Chief Justice of India, the Registrar General of the Supreme Court, presumably under the authority of the Chief Justice of India, by 524 his letter dated July 22, 1987, addressed to the Secretary, Government of India, Ministry of Finance, Department of Expenditure, did not agree with some of the recommendations of the Fourth Pay Commission relating to the revision of pay scales including the revision of pay scales of Junior Clerks and Class IV employees of the Supreme Court. It does not appear that there was any exchange of thoughts or views between the Government Department and the Registry of the Supreme Court. The Government has not produced before us any material showing that there was exchange of thoughts and views. But whether that was done or not, is not the question at the present moment. The most significant fact is that no rules were framed by the Chief Justice of India in accord ance with the provision of Article 146(2) of the Constitu tion. Instead, what was done was that the Registrar General made certain proposals to the Government and those proposals were turned down as not acceptable to the Government. There is a good deal of difference between rules framed by the Chief Justice of India under Article 146(2) and certain proposals made by the Registrar General of the Supreme Court, may be under the instructions of the Chief Justice of India. The provision of Article 146(2) requires that rules have to be framed by the Chief Justice of India and if such rules relate to salaries, allowances, leave or pension, the same shall require the approval of the President of India. This procedure was not followed. So, the stage for the consideration by the President of India as to the question of granting approval, as required under the proviso to Article 146(2), had not then reached. Indeed, it is still in the preliminary stage, namely, that the rules have to be framed by the Chief Justice of India. We have also noticed that after the Registrar General 's letter a communication in the form of a letter dated Novem ber 23, 2987 was made by the Joint Secretary to the Govern ment of India, Ministry of Finance, Department of Expendi ture, addressed to the Registrar General. By that letter, the Registrar General was informed of the sanction of the President of India to the revised scales as shown in column 4 of the annexure to the said letter in respect of certain posts. The revised scales of pay, stated to have been sanc tioned by the President of India, were at par with the recommendations of the Fourth Pay Commission. The sanction of the President of India, as communicated by the said letter, does not relate to all categories of employees of the Supreme Court. The most significant fact that should be taken notice of is that contained in paragraph 5 of the said letter which is extracted below: 525 "5. The revision of pay scales, for the re maining posts in the Supreme Court Registry, mentioned in Part III of the Report of the Fourth Central Pay Commission, is separately under consideration of the Government." The remaining posts referred to in paragraph 5 includes ,the posts held by Junior Clerks and Class IV employees. Even assuming ;that the Chief Justice of India had prepared the rules as per the provision of Article 146(2) of the Constitution and submitted the same for the approval of the President of India relating to the salaries, allowances. leave or pensions, the question of approval of the revision of payscales of the remaining posts including the posts held by the Junior Clerks and Class IV employees, is still under consideration of the Government. It is curious that although the question as to the revision of pay scales of the remain ing posts is still under consideration of the Government, before us the Government proceeded on the basis that upon such consideration the revision of pay scales, as suggested by the Registrar General in his said letter, has been turned down. In other words, the President of India has not granted approval to the payscales, as suggested by the Registrar General on behalf of the Chief Justice of India in respect of the Junior Clerks and Class IV employees of the Supreme Court. It is, thus, apparent that the provision of Article 146(2) has not been complied with. No rules have been framed by the Chief Justice of India as per the provision of Arti cle 146(2) and, accordingly, the question of granting ap proval to the rules by the President of India under Article 146(2) does not at all arise because that stage has not yet reached. We are, therefore, of the view that the Chief Justice of India should frame rules under Article 146(2) after taking into consideration all relevant factors includ ing the recommendations of the Fourth Pay Commission and submit the same to the President of India for his approval, It has been strenuously urged by Mr. Thakur that the staff and the servants of the Supreme Court of India consti tute a class by themselves totally distinct in the civil services under the Union and the States, having a totally distinct personality and a culture, both because of the nature of the functions assigned to them and because of their being an integral part of the institution which stands on a wholly different pedestal. Counsel submits that it is because of this distinctive function and locational status of the staff and servants of the Supreme Court that the Constitution treated them as a class by themselves, 526 apart from the other services under the Union and the States by providing that unlike other services the Chief Justice of India and not the President of India or the Governor will prescribe their service conditions. We have been pressed to hold that the staff and servants of the Supreme Court con stitute a class by themselves having a totally distinct personality. It is submitted that the pay scales of the employees of the Supreme Court shall be fixed on the basis of their distinct personality, qualifications and the ardu ous nature of work performed by them and not by a mere comparison with the designations of Government employees. In this connection, our attention has been drawn to the obser vation of the Five Judge Committee. According to the Commit tee, the borrowed designations without any attempt at giving distinct and independent identity to the staff in the Regis try of the Supreme Court have led to invidious comparison. The Committee took the view that no attempt was made to really ascertain the nature of the work of the employees in each category of staff and to determine the pay structure and then after framing proper rules invite the President of India to approve the rules under Article 146 of the Consti tution. It also appears from paragraph 4.6 of Chapter IV of Part III of the report of the Fourth Central Pay Commission that the Commission could not undertake a detailed study of the job contents and different functions in the Supreme Court. On the other hand, it is the contention of the learned Attorney General that the fact that this Court is the apex Court where the Judges lay down the law for the country and whose independence has been ensured by the Constitution cannot, in any manner, lead to the conclusion that the Supreme Court employees should be treated as a separate class having a distinct and separate identity and that should be done by giving them higher pay scales than the rest of the employees of the Government and that to provide them with different pay scales on the basis of the alleged separate identity of the institution would be contrary to the basic tenets of equality enshrined in the Constitution. The learned Attorney General has drawn our attention to the Constituent Assembly debates on the draft Article. 122 which is the same as Article 146 of the Constitution. In particu lar, the learned Attorney General has drawn our attention to the statements of Shri T.T. Krishnamachari and Dr. B.R. Ambedkar made in course of the debate. Shri T.T. Krishnama chari stated before the Constituent Assembly as follows: "At the same time. Sir, I think it should be made clear that it is not the intention of this House or of the framers of this 527 Constitution that they want to create special ly favoured bodies which in themselves become an Imperium in Imperio, completely independent of the Executive and the legislature and operating as a sort of superior body to the general body politic. If that were so, I think we should rather chary of introducing a provi sion of this nature, not merely in regard to the Supreme Court but also in regard to the Auditor General, in regard to the Union Public Service Commission, in regard to the Speaker and the President of the two Houses of Parlia ment and so on, as we will thereby be creating a number of bodies which are placed in such a position that they are bound to come into conflict with the Executive in every attempt they make to superiority. In actual practice, it is better for all these bodies to more or less fall in line with the regulations that obtain in matters of recruitment to the public services, conditions of promotion and salaries paid to their staff. " The submission of Dr. B .R. Ambedkar is also extracted below: "But it seems to me that there is another consideration which goes to support the propo sition that we should retain the phrase "with the approval of the President" and it is this. It is undoubtedly a desirable thing that salaries, allowances and pensions payable to servants of the State should be uniform, and there ought not to be material variations in these matters with regard to the civil serv ice. It is likely to create a great deal of heart burning and might impose upon the treas ury an unnecessary burden. Now, if you leave the matter to the Chief Justice to decide, it is quite conceivable I do not say that it will happen but it is quite conceivable that the Chief Justice might fix scales of allow ances, pensions and salaries very different from those fixed for civil servants, who are working in other departments besides the judiciary, and I do not think that such a state of things is desirable thing." Another contention of the learned Attorney General is that if the Junior Clerks and the Class IV employees are given the Punjab scales of pay and the Central D.A., there would be a heavy financial liability of the Central Govern ment. The Junior Clerks and Class IV employees of the Su preme Court have already been given the Punjab scales and the Central D .A. with effect from January 1, 1978 and this 528 has cost the exchequer Rs.2 crores. It is submitted that other employees of the Supreme Court who have not been given this benefit as well as all other Central Government employ ees including armed forces personnel numbering about 50 lakhs may also demand similar benefit and if they are to be given the same benefit with effect from 1.1.1978 to 21.12.1985, it would involve an expenditure of Rs.8,640 crores. Further, this D.A. would get merged in the pay scale from 1.1.1986 and would also qualify for D.A. after 1.1.1986 leading to a huge additional expenditure. At this stage, it may be stated that in the course of the hearing, we enquired from Mr. P.P. Rao, learned Counsel appearing on behalf of the Registrar of the Supreme Court, as to whether the Chief Justice of India was agreeable to prescribe the rules relating to the salaries, allowances, etc. of the Supreme Court employees. We are glad to record that Mr. Rao has informed us that the Chief Justice of India has agreed to make necessary amendments to the existing rules relating to the salaries and allowances of the Supreme Court employees in accordance with Article 146 of the Con stitution after considering the recommendations of the Fourth Pay Commission and all other relevant materials, and that the said amendments will be forwarded to the President of India for approval. Mr. Rao has filed a statement in writing signed by the Registrar General, which is extracted below: "After obtaining instructions from the Hon 'ble the Chief Justice, I hereby state that neces sary amendments to the existing rules relating to the salaries and allowances of the Supreme Court employees will be made in accordance with Article 146 of the Constitution after considering the recommendations of the Fourth Pay Commission in respect of the Supreme Court employees and all other relevant materials and that the said amendments to the Rules will be forwarded to the President of India for ap proval and after obtaining the approval of the President, in terms of the proviso to Clause (2) of Article 146 of the Constitution, the same will be implemented. " In view of the said statement, our task has become easy. It appears from the said statement that the Chief Justice of India has agreed to prescribe the rules relating to salaries and allowances in accordance with Article 146(2) of the Constitution and has further agreed to forward the same to the President of India for approval and to implement the same after obtaining the approval of the President of 529 India in terms of the proviso to Article 146(2). In our opinion, the Chief Justice of India is the proper authority to consider the question as to the distinctive nature and personality of the employees of the Supreme Court, keeping in view the statements made by Shri T.T. Krishnamachari and Dr. B.R. Ambedkar in course of the de bates in the Constituent Assembly on the draft Article 122 which is the same as Article 146 of the Constitution. Fur ther, before laying down the pay structure of the employees of the Supreme Court, it may be necessary to ascertain the job contents of various categories of employees and the nature of duties which are performed by them. There can be no doubt that at the time of preparing the rules for pre scribing the conditions of service including fixing of the pay scales, the Chief Justice of India will consider the representations and suggestions of the different categories of employees of the Supreme Court also keeping in view the financial liability of the Government as pointed out by the learned Attorney General. All this can be done by the Chief Justice of India or by some other Judge or officer of this Court authorised by the Chief Justice of India. The Chief Justice of India may appoint a Committee of Judges to submit a report relating to all relevant matters and, thereafter, the Chief Justice of India may frame rules after taking into consideration the report of the Committee. It will be abso lutely in the discretion of the Chief Justice of India or his nominee as to how and in what manner the rules will be framed. Before we conclude, it may be recorded that Mr. Kalra, Mr. Gujral, Mr. Ravi Prakash Gupta, Mr. A.K. Sanghi and Mr. A.D. Malhotra have, besides adopting the arguments of Mr. Thakur, made their own submissions. Mr. Kalra and Mr. Aggar wal have, in particular, drawn our attention to different pay scales sanctioned to the employees of the Central Secre tariat, Lok Sabha and Rajya Sabha and submit that the Su preme Court employees have been discriminated, although their nature of work is more arduous and they are better qualified. In view of our decision that the rules have not been framed as per Article 146(2) of the Constitution, we do not think we are called upon to decide the question raised by the learned Counsel. In the circumstances, as agreed to by the Chief Justice of India he may, after considering the recommendations of the Fourth Pay Commission and other materials that would be available to him and the representations of the employees of the Supreme Court and other matters, as stated hereinbefore, frame rules by making necessary amendments to the existing rules relating to salaries and allowances of 530 the Supreme Court employees and forward the same to the President of India for his approval. The parties are directed to maintain status quo as regards the scales of pay, allowances and interim relief, as on this day, till the framing of the rules by the Chief Justice of India and the consideration by the President of India as to the grant of approval of such rules relating to salaries, allowances, leave or pensions, and the interim orders passed by this Court will also continue till such consideration by the President of India. All the Writ Peti tions and the Civil Miscellaneous Petitions are disposed of as above. There will, however, be no order as to costs in any of them. THOMMEN, J. I agree with the judgment of my learned brother, M.M. Dutt, J. I add the following observations with particular reference to the scope and ambit of clause (2) of Article 146 of the Constitution of India. This Court has, by order dated 25.7.1986, directed, in the present proceedings, that the officers and servants of the Supreme Court should be placed on the same scales of pay as in the case of the staff of the Delhi High Court. To the employees of this Court not falling within any of the cate gories of employees corresponding to those of the Delhi High Court, this Court directed payment of a sum equal to 10 per cent of their basic pay subject to a minimum of. Rs.50 per month. Counsel appearing for the petitioners in these cases submit that the interim orders of this Court which were made with a view to introducing parity between the employees of this Court and those of the Delhi High Court in regard to pay scales must be made absolute, without prejudice to the claim of the employees of this Court to be placed on a higher scale of pay than the employees of the Delhi High Court by reason of their more arduous duties and responsi bilities and functional and locational distinctions. The Fourth Central Pay Commission (the "Pay Commission"), coun sel point out, had ignored the legitimate claims of the officers and servants of the Supreme Court. It is contended on behalf of the Government that it has issued sanction to implement the recommendations of the Pay Commission, and all categories of employees of this Court have benefited by the recommendations except those belonging to Classes III and IV. Employees of those two Classes, constituting about 60 per cent of the 531 total strength of the Supreme Court Staff, claim pay scales in parity with their counterparts in the Delhi High Court who are paid, by virtue of various judgments of that Court, salary and allowances on the basis of the Punjab pay scales coupled with the Central dearness allowance. The Class III and Class IV employees of this Court also receive the Punjab pay scales and the Central dearness allowance, notwithstand ing the revised pay scales recommended by the Pay Commis sion, because of the interim orders of this Court in the present proceedings. The Attorney General contends that the Punjab pay scales of Rs.400600 in the case of Class III employees and Rs.300 430 in the case of Class IV employees are higher than the corresponding Central pay scales because the Punjab pay scales are linked to the higher price index of 320 as on 1.1.1978 while the Central pay scales are linked to the price index of 200 as on 1.1.1973. The higher Punjab scales have already absorbed all the D.A. instalments sanctioned upto 1.1.1978. The Punjab D .A. formula is, therefore, correspondingly lower. There is no justification in linking the Punjab pay scales with the Central D.A. The decision of the Delhi High Court, although final being res judicata between the parties, is based on wrong reasoning and cannot, therefore, form a legitimate basis for paying the Class III and Class IV employees of this Court the Punjab pay scales and the Central D.A. Their legitimate entitlement is to the Central Pay scales with the Central D .A. This has been recommended by the Pay Commission. Referring to the Delhi High Court employees, the Attor ney General, in his written submissions, points out: "His counterpart in the Punjab High Court enjoyed higher scale of pay but lesser allow ances than he, because the D.A. upto 1978 had been merged with pay scales of employees of the Punjab High Court by taking into account the higher price index of 320 as on 1.1. 1978 whereas the Delhi High Court employees ' pay scales had been fixed as on 1.1. 1973 by linking to price index of 200 but giving him D.A. for the higher price index of the differ ence between 200 and 320. " This contention of the Attorney General is sought to be met by counsel appearing for the Class IV Employees ' Associ ation in his written submissions in the following words: "The Delhi High Court in Kamalanand 's case has decided that the Class IV employees of that court will get Punjab 532 pay scales and Central D.A. It is submitted that D.A. has relationship with the place and not with the scale. As the Delhi High Court happens. to be located in Delhi it is the Delhi D.A. which is Central D A. which will apply and the same will be the position of the Supreme Court employees who are also in Delhi. " The Attorney General refutes the petitioners ' contention that the Supreme Court employees, by virtue of the special nature of their work or locational or institutional distinc tion, can legitimately claim higher scales of pay than those applicable to corresponding categories of employees in other sectors of public life. Any such contention, the Attorney General points out, is contrary to the intent of the Consti tution makers. The fact that the Delhi High Court has, on a mistaken assumption of law and fact, directed payment to its employees on the basis of Punjab scales of pay with Central D.A. does not justify repetition of the same mistake in respect of other employees, for two wrongs never make a right. To perpetuate any such error, he contends, is not in conformity with Article 14 of the Constitution. In any view of the matter, the Attorney General submits, the exercise of power by the Constitutional authorities under Article 146 of the Constitution is beyond judicial scrutiny on grounds other than those relevant to judicial review of legislation. The President 's approval or disapproval of rules made by the Chief Justice of India is an exercise of legislative power and no direction can be issued to the President as regards the exercise of that power. The genesis of the recommendations of the Pay Commission regarding the employees of the Supreme Court lies in the suggestions of the Committee of Judges of the Supreme Court in may, 1985 to the effect: "The Chief Justice of India may (a) appoint a Committee of Judges, and experts to devise a fair pay structure for the staff of the Supreme Court of India keeping in view the principles of pay determination; or (b) refer the matter to the 4th Pay Commission which is. at present considering the question of revision of pay scalas of the Central Government employees and ask it to examine: the question of independent pay structure for the staff of 533 the Supreme Court Registry and submit a sepa rate report in this respect to the Chief Justice of India." Pursuant to the above suggestions and the decision taken thereon, the Government amended; the terms of reference of the Pay Commission to include officers and employees of the Supreme Court of India. A. copy of the Report of the Commit tee of Judges was made available to the Pay Commission. The Committee of Judges had pointed out the functional differ ences between the Central Secretariat Services and the Service in the Registry of the Supreme Court. The Pay Com mission visited the Registry of the Supreme Court to famil iarise themselves with the nature of the work in the Court. They say: "The Judges Committee had observed that the pay structure for the Supreme Court employees should be devised keeping in view the inde pendent identity of tile Registry of the Su preme Court, in evolving the pay structure, the workload, skill, educational qualifica tions, responsibilities and duties of various categories of posts in the Registry need to be taken into account. We considered it necessary to collect information about these matters by a small team comprising officers from the Secretariat of the Commission ' and the Regis try of the Supreme Court. The team spent a number of days visiting various sections in the Registry for a proper understanding of the work of different functionaries. They had discussions with the concerned staff and the officers in charge of the sections and also observed in, detail the work being performed by different task holders. The work done by the team of officers within the short: time available and our own visit proved very useful in acquainting ourselves with the role and functions of the personnel in the Supreme Court Registry. While it has not been possible for us to undertake a detailed study, of the job contents of different functionaries in the Supreme Court, we have examined the duties and responsibilities of various catego ries of posts with the help and assistance of senior officials of the Supreme Court." (emphasis supplied) This observation of the Pay Commission shows that while an earnest attempt had been made by them to study the dis tinctive characteristics of the job contents of the Supreme Court employees at 534 various levels, and they had borne in mind the observations of Judges ' Committee as regards the independent identity of the Registry of the Supreme court, no detailed study of the various aspects of the problem could be undertaken by the Pay Commission within the short time available to them. The Report of the Pay Commission is apparently not based on any thorough study of the job contents of the different func tionaries of the Supreme Court Registry. The main thrust of the contentions of the employees of the Supreme Court is not that they should be paid the Punjab scales of pay and the Central D.A. as such, as in the case of the Delhi High Court employees, but that they should be paid at least as much as, if not better than, the employees of the Delhi High Court. The Supreme Court employees, they say, have to be paid a higher scale of pay than what is paid to the corresponding categories of employees in the Central Government Secretariat or the Secretariat of the Central Legislature because of the functional and institutional distinction of the Supreme Court. Although the employees of the Central Government Secretariat and those of the Supreme Court Registry at various levels are designated alike, there is no functional similarity between them, the nature and quality of their work being dissimilar. If a proper compari son is possible, they say, the Supreme Court employees must be compared with the employees of the Delhi High Court. It would be an anomaly, and a source of discontent, if the Supreme Court employees are not paid at least as much as, if not better than, what the employees of the Delhi High Court are paid. The fact that the judgment of the Delhi High Court, pursuant to which the employees of that court are placed on a higher scale of pay, may be regarded as wrong in law and fact does not make any difference because those judgments have become final and binding, and consequently the employees of the Delhi High Court, in the absence of any law made by the legislature to the contrary, are entitled to be paid according to the Punjab scales of pay and the Cen tral D.A. It is neither just nor fair, they say, to deny the Supreme Court employees at least the same salary scale as is now current in respect of the Delhi High Court employees. In the written submissions on behalf of the Assistant Registrars and Deputy Registrars, it is pointed out that the recommendations of the Pay Commission have resulted in their being subjected to invidious discrimination vis a vis the Section Officers. It is further contended that there is no justification to place these two categories of Officers on a lower scale of pay than what is applicable to the Under Secretaries and Deputy Secretaries in the Secretariat of the Lok Sabha or the 535 Rajya Sabha. They contend that the Pay Commission, in view of the admitted constraint of time, did not make an exhaus tive and proper study of the nature of the functions per formed by different categories of employees of the Supreme Court Registry in comparison to those working in the Central Government Secretariat and that of the Lok Sabha and the Rajya Sabha. These are weighty arguments and they require thorough investigation. In this connection, reference may be made to Part II, Chapter I, of the Report of the Committee of Judges stating that despite the functional distinctions, no attempt had been made to provide a separate and distinct identity to the ministerial staff of the Supreme Court Registry. The Committee pointed out that even the designations of various posts had been borrowed from the Central Secretariat Service with marginal modifications. So stating the Committee ob served: "These borrowed designations without any attempt at giving a distinct and independent indentity to the ministerial staff in the Registry of the Supreme Court led to invidious comparison and as a sequel to an unacceptable outcome. History with regard to the salary scale applicable to various categories of staff in the Registry would show that at least since the Second Pay Commission appointed by the Central Government for Central Government servants, the payscales devised by the Pay Commission were practically bodily adopted by the Chief Justice of India for comparable categories in the Supreme Court. This was repeated after the recommendations of the Third Pay Commission were published and ac cepted by the Central Government. Apparently with a view to avoiding the arduous task of devising a fair pay structure for various categories of staff in the Registry, this easy course both facile and superficial was adopted which led to the inevitable result of linking the pay structure for the various categories of staff in the Registry with the pay structure in the Central Services for comparable posts. And the comparison was not functional but according to the designations. No attempt was made to really ascertain the nature of work of an employee in each category of staff and determine the pay structure and then after framing proper rules invite the President to approve the rules under article 146 of the Constitution. " The Committee further pointed out: 536 "Equal pay for equal work postulates scientific determina tion of principles of fair comparison and primarily it must be functional and not by designation because a comparison by designation is more often misleading . . not the slight est attempt has been made to compare the workload, skill, educational qualification, responsibilities and duties of various categories of posts in the Registry." The Committee concluded: "article 146(2) casts a duty on the Chief Justice of India to frame rules for determining the conditions of service of officers and servants of the Supreme Court. This is undoubt edly subject to the provisions of any law that may be made by Parliament but so far none has been made. This power conferred on the Chief Justice of India precludes and pro hibits the Central Government from undertaking any exercise unless the Parliament enacts a law on the subject to deter mine conditions of service of officers and staff of the Supreme Court. Whenever therefore the Central Government decides to set up a Pay Panel for revising the pay structure of the Central Government staff, the terms of reference do not include the officers and servants of the Supreme Court. As a necessary corollary they cannot appear before the Pay Panel because their case is not covered by the terms of reference of the Pay Panel. However, when the Pay Panel completes its task and submits its recommendations and the Govt. after accepting the recommendations devises a revised pay structure, the same is bodily applied to the staff of the Supreme Court of India by comparison by designation. Consequently the staff of the Supreme Court of India without any opportunity to influence the thinking of the Pay Panel by its representations and submissions has the unenviable misfortune of being bound by the recommendations of the Pay Panel." (emphasis supplied) For these reasons the Committee of Judges recommended that in order to assist the Chief Justice in making the rules under Article 146, either a Committee of Judges and experts should be appointed to devise a fair pay structure for the staff of the Supreme Court or refer the whole ques tion to the Pay Commission for theft recommendations. It is pursuant to the recommendations of the Committee of Judges that 537 the matter was, as stated earlier, referred to the Pay Commission. The Pay Commission 's report was forwarded by the Government to the Registrar of the Supreme Court for his comments on the pay structure of the Supreme Court employees as recommended by the Pay Commission. The Registrar General of this Court wrote to the concerned Secretary of the Cen tral Government a detailed letter pointing out various anomalies and difficulties if the recommendations of the Pay Commission were implemented. He pointed out that implementa tion of such recommendations would have the unfortunate effect of reducing the pay scales of certain categories of employees of the Supreme Court whose pay has already been enhanced by reason of various orders of this Court. This anomaly, he pointed out,. was glaringly striking in respect of Class IV and Class III employees and certain other cate gories. The various suggestions of the Registrar General were rejected by the Government except his suggestion for the enhancement of the salaries of the Private Secretaries to the Judges of this Court. This is what is stated on the point by Shri section Ghosh, Additional Registrar, in his affida vit sworn on 3rd March, 1989: "That except the enhancement of the salaries of the Private Secretaries of the Judges of the Supreme Court of India, the rest of the anomalies and infirmities as pointed out by the Registrar General, on behalf of the Chief Justice of India were not appreciated by the Ministry of Finance and the pay 'scales recommended by the Registrar General in respect of various cadres on behalf of the Chief Justice of India were not approved as those recommended by the Pay Commission were sanctioned." In the light of these facts, which my learned brother, Dutt, J. has discussed more elaborately, I must now examine the scope and ambit of Article 146 of the Constitution of India so far as it concerns the salaries, allowances, leave or pensions of the officers and servants of this Court. The relevant portion of this Article is clause (2) which reads: "Subject to the provisions of any law made by Parliament, the conditions of service of officers and servants of the Supreme Court shall be such as may be prescribed by rules made by the Chief Justice of India or by some other Judge or officer of the Court authorised by the Chief Justice of India to make rules for the purpose: 538 Provided that the rules made under this clause shall, so far as they relate to salaries, allowances, leave or pensions, require the approval of the President. " It is clear from clause (2) that, subject to the provisions of any law made by Parliament, the conditions of service of officers and servants of the Supreme Court are governed by rules made by the Chief Justice of India or by some other Judge or officer of the Court duly authorised by him. Howev er, these rules, to the extent that they relate to the salaries, allowances, leave or pensions, require the approv al of the President of India. These provisions, albeit subject to the abovesaid conditions, are intended to protect the special position of the Court. Rules were made in this regard by the Chief Justice of India with the approval of the President of India and they are contained in Part II of the Supreme Court Officers ' and Servants ' (Conditions of Service and Conduct) Rules, 1961 as amended upto 16th Decem ber, 1985. No amendment of these Rules has been made subse quent to 1985 and consequently the Rules do not reflect the enhanced pay scales adopted on the basis of the interim orders of this Court or the pay scales recommended by the Pay Commission. The regulation of the conditions of service of the Supreme Court employees is thus the constitutional responsi bility and power of the Chief Justice of India, subject, of course, to the two conditions postulated in clause (2) of Article 146. The Pay Commission was in the past not con cerned with this category of employees because of the spe cial position of the latter under the Constitution. These employees, however, came to be included within the purview of the Pay Commission on account of the recommendations of the Committee of Judges. The Judges had intended the Pay Commission to study all aspects of the matter in depth and make their recommendations to the Chief Justice of India to aid him in the discharge of his constitutional function under clause (2) of Article 146. In this respect the Chief Justice must necessarily act on the basis of data made available to him by persons he might in that regard appoint, or, as has been done in the present case, by the Pay Commis sion themselves to whom a reference was made by the Govern ment pursuant to the recommendations of the Judges ' Commit tee. The cardinal function of the Pay Commission, while duly acting in connection with the employees of the Supreme Court, is to render effective assistance to the Chief Jus tice of India to discharge his responsibility of formulating rules under Article 146(2). This is the first step towards the final adoption of the rules governing the conditions of service in relation to salaries, allowances, etc. It is only by 539 formulating specific rules in that respect can the President (that means the Government of India) exercise the mind over the question and approve or disapprove the rules. The ap proval of the President follows the making of the rules, and unless and until rules are made by the Chief Justice of India specifically in regard to salaries, allowances, etc., the President, acting as a constitutional authority, does not and cannot exercise the power of granting or refusing approval. Similar provisions are contained in the Constitu tion in relation to the High Court (see Article 229). These constitutional requirements are not an empty formality, but are prescriptions required to be strictly complied with to insulate the judiciary from undue executive interference with a view to according it, subject to any law made by the competent legislature, a special position of comparative independence in accordance with the fundamental constitu tional scheme of maintaining a harmonious balance between the three organs of State. [See M. Gurumoorthy vs Accountant General Assam & Nagaland & Ors., ,429]. In the present case, as stated earlier, no rules have been so far made with reference to the recommendations of the Pay Commission or with reference to the pay scales of the Delhi High Court employees, which have been extended to the Class III and Class IV employees of this Court, pursuant to the interim orders of this Court, and consequently the disapproval of the Registrar General 's proposals was not an exercise of power by the constitutional authority in terms of clause (2) of Article 146. That this is the correct position is not seriously disputed by any party to the present proceedings. The Attorney General does not dispute that rules have not been so far made by the Chief Justice of India, although certain suggestions had been received from the Registrar General by the concerned Ministry. A statement dated 5.5. 1989 has been filed by the Registrar General of this Court reading as follows: "After obtaining instructions from the Hon 'ble the Chief Justice, I hereby state that necessary amendments to the existing rules relating to the salaries and allowances of the Supreme Court employees will be made in accordance with Article 146 of the Constitution after considering the recom mendations of the Fourth Pay Commission in respect of the Supreme Court employees and all other relevant materials and that the said amendments to the Rules will be forwarded to the President of India for approval and after obtaining the approval of the President, in terms of the proviso to 540 clause (2) of Article 146 of the Constitution, the same will be implemented. " It is not and cannot be disputed that the Chief Justice of India, by virtue of the constitutional grant, exercises legislative power when he makes rules under Article 146(2). Those rules are in the nature of subordinate legislation having .the force of law to the extent, and subject to the conditions, prescribed by the Constitution. Like all statu tory instruments, they are subordinate to the parent law. The power of the President under the proviso to clause (2) of Article 146 to approve or disapprove the rules made by the Chief Justice of India (relating to salaries, allowances etc.) is likewise legislative in character. It is the ap proval of the President that stamps such rules, so far as they relate to salaries, allowances, etc,, with the authori ty of subordinate legislation. The making of the rules by the Chief Justice of India in that respect is a step indeed a vital step in the process of law making, but they assume the character of subordinate legislation only on their approval by the President. The Attorney General strenuously contended that the power of the President under the proviso to clause (2) of Article 146 to grant or refuse approval tantamounts to a legislative function comparable in its nature, ambit and quality to the President 's power under Article 111 to assent to, or withhold assent from, a Bill passed by the Houses of Parliament, and consequently his actions in that regard are beyond judicial review. No court can, he says, sit in judg ment over the validity or correctness or reasonableness of the President 's act of approval or disapproval of the rules. This comparison of the President 's power under Article 146 with his power under Article 111 is, with great respect to the Attorney General, misplaced. The power of the President under Article 111 is primary and plenary and not delegated and subordinate. He exercises legislative power under Article 111 in his capacity as a part of the legislature (see Article 79) and not as a dele gate. On the other hand, he acts as a delegate when he acts under the proviso to Article 146(2). This power is no doubt legislative in character, but subordinate in quality and efficacy. The Constitution envisages that the President is not only a part of the legislature, but he is also the ultimate repository of the executive power of the Union (see Article 53(1). It is in the latter capacity that the Presi dent acts as a delegate. In the exercise of this function, he does not assume the mantle of the legislature, but func tions as the head of the executive to whom the Constitution has delegated specific legisla 541 tive power to make subordinate legislation. This power is limited by the terms, and subordinate to the objects, of delegation. On the advice of his Council of Ministers, the President grants or refuses approval of the rules made by the Chief Justice of India. It is indeed this power of approval, which the Constitution has under the proviso to clause (2) of Article 146 delegated to the President that can vitalise and activate the rules, so far as they relate to salaries, allowances etc. , as subordinate legislation. In the making of such instruments, both the Chief Justice and the President act as delegates by virtue of the constitu tional conferment of power. They must in this regard neces sarily act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts. The fact that the power exercised by the Chief Justice of India or the President under Article 146(2) is derived directly from the Constitution, and not from a statute, makes no difference to the power of judicial review by a competent court. Any action taken (or refusal to act) on the strength of power derived directly by constitutional delega tion is as much justiciable or reviewable upon the same grounds and to the same extent as in the case of any statu tory instrument. The fundamental question in determining whether the exercise of power by an authority is subject to judicial review is not whether the source of his power is the Constitution or a statute, but whether the subject matter under challenge is susceptible to judicial review. Pure questions of facts or questions which cannot be decided without recourse to elaborate evidence or matters which are generally regarded as not justiciable such as, for example, those relating to the conduct of the external affairs or the defence of the nation are not amenable to judicial review. See in this connection the principle enunciated in C.C.S.U. & Ors. vs Minister for the Civil Service, [1984] 3 All E.R. 935,948,950. Rules made under Article 146 being subordinate legisla tion do not partake of the character of ordinances which are legislation in the true sense for the limited period of their operation, K. Nagaraj & Ors. vs State of A.P. & Anr. , [1985] I SCC 523; 548; A.K. Roy vs Union India. ; , 291 and R.K. Garg vs Union of India, ; ,687. While ordinances cannot perhaps be questioned on any ground which is not relevant to the validity of legisla tion, it is not so in the case of rules made by virtue of power granted under the Constitution which are, as stated above, liable to be declared void for any of the reasons for which instruments made by virtue of delegation by Acts of Parliament can be declared void. Rules, whether made under the 542 Constitution or a statute, must be intra vires the parent law under which power has been delegated. They must also be in harmony with the provisions of the Constitution and other laws. If they do not tend in some degree to the accomplish ment of the objects for which power has been delegated to the authority, courts will declare them to be unreasonable and, therefore, void. There is indeed a higher degree of presumption of con stitutionality in favour of subordinate legislation than in respect of administrative orders. This.is especially the case where rules are made by virtue of constitutional con ferment of power. Rules made directly under the Constitution may have in a certain sense greater legislative efficacy than rules made under a Statute; within the field demarcated by the Constitution, the former can, if so provided, operate retrospectively. These rules are, of course, as in the case of all statutory instruments, controlled by the Constitution and the laws: see K. Nagaraj vs State of A.P., (supra); Raj Kumar vs Union of India, , 14 and B.S. Vadera vs Union of India, Where the validity of a subordinate legislation (whether made directly under the Constitution or a statute) is in question, the Court has to consider the nature, objects and scheme of the instrument as a whole, and, on the basis of that examination, it has to consider what exactly was the area over which, and the purpose for which, power has been delegated by the governing law. Rules are liable to be declared invalid if they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end or violative of the general principles of the law of the land or so vague that it cannot be predi cated with certainty as to what is prohibited by them or so unreasonable that they cannot be attributed to the power delegated or otherwise disclose bad faith. In the words of Lord Russel of Kilowen, C.J. in Kruse vs Johnson, , 99: "If, for instance, they were found to be partial or unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justifica tion in the minds of reasonable men, the Court might well say, "Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires. " 543 In Union of India & Anr. vs Cynamide 'India Ltd. & Anr., , 734 Chinnappa Reddy, J. observed that price fixation being a legislative activity, it was: "neither the function nor the forte of the court. We concern ourselves neither with the policy nor with the rates. But we do not totally deny ourselves the jurisdiction to enquire into the question, in appropriate proceedings, whether relevant considerations have gone in and irrelevant consid erations kept out of the determination of the price." (emphasis supplied) In S.I. Syndicate Ltd. vs Union of India, ; this Court stated: "Reasonableness, for purposes of judging whether there was an 'excess of power ' or an 'arbitrary ' exercise of it, is really the demonstration of a reasonable nexus between the matters which are taken into account in exercising a power and the purposes of exercise of that power." In P.C.S. Mills v,. Union of India; , , this Court, referring to statutory fixation of fair price, stat ed: ". But this does not mean that Government can fix any arbitrary price or a price fixed on extraneous considera tions or such that it does not secure a reasonable return on the capital employed in the industry. Such a fixation would at once evoke a challenge, both on the ground of its being inconsistent with the guidelines build in the sub section and its being in contravention of articles 19(1)(f) and (g)." (emphasis supplied) See also observation to the same effect in Shree Meenakshi Mills vs Union of India, ; Any arbitrary exercise of power by a public authority, whether or not it is in the nature of subordinate legisla tion, is liable to be condemned as violative of Article 14. As stated in E.P. Royappa vs State of Tamil Nadu, ; " . . equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to 544 the whim and caprice of an absolute monarch . " See also Maneka Gandhi vs Union of India, AIR 1978 SC 597 Ajay Hasia vs Khalid Mujib, AIR (1981) SC 485 and D.S. Nakara vs Union of India, ; An act is ultra vires either because the authority has acted in excess of its power in the narrow sense, or because it has abused its power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasona bleness: see the principle stated by Lord Greene M.R. in Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ,885. Power is exercised in bad faith where its repository is motivated by personal animosity towards those who are directly affected by its exercise. Power is no less abused even when it is exercised in good faith, but for an unauthorised purpose or on irrele vant grounds, etc. As stated by Lord Magnaghten in Westmin ster Corporation vs London and North Western Railway, , 430: " . It is well settled that a public body invested with statutory powers such as those conferred upon the Corpora tion must take care not to exceed or abuse its powers. 1t must keep within the limits of the authority committed to it. It must act in good faith. And it must act reasonably. The last proposition is involved in the second, if not in the first . " This principle was restated by this Court in Barium Chemi cals Ltd. vs Company Law Board, ; ; " . Even if (the statutory order) is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extra neous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts. 545 The true position thus appears to be that, just as in the case of an administrative action, so also in the case of subordinate legislation (whether made directly under the Constitution or a Statute), its validity is open to question if it is ultra vires the Constitution or the governing Act or repugnant to the general principles of the laws of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it. See the test adopted by Lord Russet in Kruse vs Johnson, and by Lord Greene M.R. in Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; See also Mixnam Properties Ltd. vs Chertsey U.D.C., ; Commissioners of Customs and Excise vs Cure and Deeley Ltd., ; Meeldowney vs Forde, [1971] AC 632; Carltona Ltd. vs Commissioners of Works and others, [19431 , 564; Point of Ayr. Collieries Ltd. vs Lloyd George, ; Scott vs Glasgow Corpo ration, , 492; Robert Baird L.D. and others vs City of Glasgow, , 42; Manhattan General Equip ment Co. vs Commissioner, ; , 134; Yates (Arthur) & Co. Pty. Ltd. vs Vegetable Seeds Committee, ; ; Bailey vs Conole, [1931] 34 W.A.L.R. 18; Boyd Builders Ltd. vs City of Ottawa, [1964] 45 D.L.R. (2d) 211; Re Burns and Township of Haldimand, and Lynch vs Tilden Produce Co., ; ,320 322. Even if it were to be assumed that rules made by virtue of power granted by a provision of the Constitution are of such legislative efficacy and amplitude that they cannot be questioned on grounds ordinarily sufficient to invalidate the generality of statutory instruments, they are neverthe less liable to be struck down if found to be intrinsically arbitrary or based on an irrational classification or other wise repugnant to constitutional principles. As stated by this Court in E.P. Royappa vs State of Tamil Nadu, (Supra): "Where an act is arbitrary, it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of Article 14 and if it affects any matter relating to public employment, it is also violative of Article 16. Articles 14 and 16 strike at arbi trariness in State action and ensure fairness and equality of treatment. They require that State action must be based on valid relevant principles applicable alike to all simi larly situate and it must not be guided by any extraneous or irrelevant considerations because that would be denial of equality. Where the operative reason for State action, as distin 546 guished from motive inducing from the antechamber of the mind, is not legitimate and relevant but is extraneous and outside the area of permissible considerations, it would amount to malla fide exercise of power and that is hit by Articles 14 and 16. Mala fide exercise of power and arbi trariness are different lethal radiations emanating from the same vice; in fact the latter comprehends the former. Both are inhibited by Articles 14 and 16. " These are some of the general principles which must guide the repository of power in all his actions. They apply with equal force to the exercise of power contemplated under Article 146(2), including its proviso. These principles must, therefore, necessarily weigh with the court whenever the action of a constitutional or statutory authority is under challenge. These principles are, however, subject, as stated earlier, to the overriding consideration as to the amenability of the impugned subject matter to judicial review. That of course is a question which must in each case, when challenged, be decided by the court with refer ence to the facts in issue. As stated earlier, the constitutional process envisaged under Article 146(2) has not been completed. Initial steps had indeed been taken in that regard and to that end. Con stituting the Committee of Judges and their suggestion to refer the question to the Pay Commission, the decision to refer the matter to the Pay Commission, the recommendations of the Pay Commission, and, consideration of the same by the Registrar General and his letter to the Government contain ing certain suggestions, form the components of a link in the chain leading to the ultimate end; but they are not themselves the ultimate end, which means the making of the rules by the Chief Justice and submitting the same to the President for approval, and the final decision of the. President in that behalf. The Registrar General 's letter and the Government 's reaction to that letter were at best only the process of consultation preceding the rule making act. The ultimate authority in this regard being the Chief Justice of India, he alone is competent to make, or autho rise the making of the rules. Until the rules are made by him (or by a Judge or officer of the court authorised by him), the question of approval or disapproval by the Presi dent does not arise. In making the rules, the Chief Justice would no doubt take into account the recommendations of the Pay Commission or of any other body or experts he may have consulted. He will also take into account the objections raised by the Government 547 to the suggestions made by the Registrar General who, of course, acted as an agent of the Chief Justice. But the refusal of the Government to accede to the proposals of the Registrar General is not a refusal of the President under Article 146(2), for such refusal or approval can arise only upon submission to him of duly framed rules. It is of course true that no court will direct the President to grant approval, for a writ of mandamus will not lie to compel a person to exercise a legislative function in a particular fashion (See A.K. Roy etc. vs Union of India and Anr., (supra) Narinder Chand Hem Raj & Ors. vs Lt. Governor, Administrator, Union Territory, Himachal Pradesh & Ors., ; 945. But the President must, upon submission to him of the Rules made by the Chief Justice of India under Article 146(2), exercise his mind as to whether or not he would grant approval, and, without undue delay, come to a decision on the point: See Aeltemesh Rein, Advo cate Supreme Court of India vs Union of India and Others, ; In the present case, the time for decision by the President has of course not come. The approval of the President is not a matter of mere formality. It would, of course, be wrong to say that in no case can the President, which means the Government, refuse to accord approval. However, once the rules are duly framed by so high a constitutional dignitary as the Chief Justice of India, it will only be in the truly exceptional cases that the President would withhold assent. It is but proper and appropriate that, in view of the spirit of the constitu tional provision, approval would be accorded in all but the exceptional cases: see the observations of this Court in State of Andhra Pradesh & Anr. vs T. Gopalakrishna Murthi & Ors., ; In this connection the observation of Mukharji, J. in State of U.P. & Ors. vs Renusagar Power Co. & Ors., ; , 104 is apposite: "The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. Similarly, if the power has been exercised on a non consideration or non application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administra tive) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. " 548 We place on record the statement made by the Registrar General that necessary amendments to the existing rules relating to the salaries and allowances of the Supreme Court employees will be made in accordance with Article 146 of the Constitution after considering the recommendations of the Pay Commission in respect of the Supreme Court employees and all other relevant materials, and that the said amendments to the Rules will be forwarded to the President of India for approval, and, after obtaining the approval of the President in terms of the proviso to clause (2) of Article 146 of the Constitution, the same will be implemented. In the circumstances, no further order is required in the present proceedings ', apart from directing that, until rules are properly made by way of amendments to the existing rules in accordance with Article 146 of the Constitution, the interim orders of this Court dated 25.7.1986, 14.8.1986 and 15.1.1987 shall remain in full force and the status quo as on this day as regards pay and allowances shall be main tained. Accordingly, I agree that there shall be a direction as stated by my learned brother in the final paragraph of his judgment. Y. Lal. Petitions Disposed of.

These writ Petitions have been filed by the employees of the Supreme Court through their Welfare Associations pray ing, in substance, for enhancement of their present pay scales. Writ Petition No. 801 of 1986 has been filed by the Welfare Association representing class II and class 111 employees whereas Writ Petition No. 1201/86 has been filed by Welfare Association representing class IV employees and the third Writ Petition has been filed by retired employees. In order to deal with and make recommendations in regard to various representations highlighting grievances regarding service conditions made by the staff. of the Supreme Court, the Chief Justice of India constituted a committee consist ing of five Judges of the Supreme Court. The committee was also asked to make recommendations whether the pay scales of different categories of the staff warranted 489 upward revision. The Committee after consideration of the issues raised, made several recommendations but as regards the pay scale revision, it recommended that the matter be referred to the Third Pay Commission, then sitting. However in the meanwhile, the High Court of Delhi, allowed various Writ Petitions filed before it by the members of the staff of Delhi High Court belonging to different categories. The result of the Orders passed by the Delhi High Court was. that the staff of that High Court started drawing more pay in some categories of class IV, class Il & III employees, than the employees of the Supreme Court similarly placed. Taking cue from the orders of the Delhi High Court, the petitioners have filed these petitions invoking in aid the principle of "Equal pay for equal work". It is urged by the petitioners that the duties performed by the staff of the Supreme Court are similar rather more responsible, arduous and onerous to those performed by the members of the staff of Delhi High Court, hence they are entitled to pay like similar if not enhanced pay scales. It is urged that Special Leave Petition filed by the Government before this Court against the orders of the Delhi High Court having been dismissed by this Court, the order of Delhi High Court has became final. In Writ Petition No. 801 of 1986, by an interim order dated 25.7.86 this Court directed that the officers and members of the staff of the registry should get the same pay and allowances which were then being enjoyed by the officers and the members of the staff of the Delhi High Court belong ing to the same category with effect from the date from which such scales of pay has been allowed to the officers and the members of the staff of the Delhi High Court. The Court also by the same order directed Respondent Nos. 1 and 2 to take necessary steps to refer the question of revision of pay scales to the Fourth Pay Commission as suggested by the five Judges Committee. Some other interim orders were also passed giving higher pay to certain categories of employees, as was done by Delhi High Court. The Fourth Pay Commission to which the question of revision of pay scales of the staff of Supreme Court was referred did not grant any enhancement. It did not even grant the benefit of higher pay given under the interim orders of this Court. After the report of Fourth Pay Commis sion, the petitions have been listed for final hearing. Disposing of the Writ Petitions, this Court 490 HELD: Per M. M. Dutt, J. When no reason is given, but a Special Leave Petition is dismissed simpliciter, it cannot be said that there has been a declaration of law by this Court under Article 141 of the Constitution. [505B] Indian Oil Corporation Ltd. vs State of Bihar, ; ; Union of India vs All India Services Pensioner Association, ; A decision on an abstract question of law unrelated to facts which give rise to a right cannot operate as res judicata. Nor, also can a decision on the question of juris diction be res judicata in a subsequent suit or proceeding but, if the question of law is related to the fact in issue, an erroneous decision on such a question of law may operate as res judicata between the parties in a subsequent, suit or proceeding, if the cause of action is the same. [506G H; 507A B] Mathura. Prasad Rajoo Jaiswal vs Dossibai N.B. Jeejeeb hoy; , and Thakore Sobhag Singh vs Thakur Jai Singh, The doctrine of res judicata is a universal doctrine laying down the finality of litigation between the parties. When a particular decision has become final and binding between the parties, it cannot be set at naught on the ground that such a decision is violative of Article 14 of the Constitution. So far as the parties are concerned, they will always be bound by the said decision. In other words, either of the parties will not be permitted to reopen the issue decided by such decision on the ground that such decision violates the equality clause under the Constitu tion. [508H; 509A B] From Article 146(2) it is apparent that it is primarily the responsibility of Parliament to lay down the conditions of service of the officers and servants of the Supreme Court, but so long as Parliament does not lay down such conditions of service. the Chief Justice of India or some other Judge or officer of the Court authorised by the Chief Justice of India is empowered to make rules for the purpose. [516B C] The conditions of service that may be prescribed by the rules framed by the Chief Justice of India under Article 146(2) will also necessarily include salary. allowances, leave and pensions of the officers and servants of the Supreme Court. [516D] 491 The proviso to Article 146(2) puts a restriction on the power of the Chief Justice of India by providing that the rules made under Article 146(2) shall. so far as they. relate to salaries, allowances, leave or pensions, require the approval of the President of India. [516E] The rules framed by the Chief Justice of India though it is a piece of subordinate legislation, it is not a full fledged legislative act requiring assent of the President of India. [517C] Going strictly by Article 146(2) of the Constitution, the question of any reference to the Pay Commission does not arise. The Chief Justice of India has to frame rules with the aid and assistance of his own officers and other Judges. The Chief Justice of India may appoint a Committee of Judges or a Committee of experts for the purpose of assisting him in framing the rules relating to the conditions of service of the employees of the Supreme Court. Although there is no such provision in Article 146(2), but that is implied and it may be said that the reference to the Fourth Pay Commission was made so that the report or the recommendations of the Fourth Pay Commission relating to the revision of the pay scales of the Supreme Court employees will be of some as sistance to the Chief Justice of India to frame rules. [523D F] What should go to the President of India for his approv al under the proviso to Article 146(2) is not the report or the recommendation of the Fourth Pay Commission, but the rules framed by the Chief Justice of India. In considering the rules framed by the Chief Justice of India relating to salaries, allowances, leave and pension, it will not be the concern of the President of India how and in what manner the Chief Justice of India has laid down the rules. [523F G] All this can be done by the Chief Justice of India or by some other Judge or officer of this Court authorised by the Chief Justice of India. The Chief Justice of India may appoint a Committee of Judges to submit a report relating to all relevant matters and, thereafter, the Chief Justice of India may frame rules after taking into consideration the report of the Committee. It will be absolutely in the dis cretion of the Chief Justice of India or his nominee as to how and in what manner the rules will be framed. [529D E] Per Thommen, J. The regulation of the conditions of service of the Supreme Court 492 employees is the constitutional responsibility and power of the Chief justice of India, subject. of course, to the two conditions postulated in clause (2) of Article 146. [538E] Rules were made in this regard by the Chief Justice of India with the approval of the President of India and they are contained in Part II of the Supreme Court Officers and Servants ' (Conditions of Service and Conduct) Rules, 1961 as amended upto 16th December, 1985. No amendment of these Rules has been made subsequent to 1985 and consequently the Rules do not reflect the enhanced pay scales adopted on the basis of the interim Orders of this Court or the pay scales recommended by the Pay Commission. [538C D] Rules are liable to be declared invalid if they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end/or violative of the general principles of the law of the land or so vague that it cannot be predi cated with certainty as to what is prohibited by them or so unreasonable that they cannot be attributed to the power delegated or otherwise disclose bad faith. [542F] Union of India & Ant. vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720, 734; S.I. Syndicate Ltd. vs Union of India, ; ; P.C.S. Mills vs Union of India, ; ; Shree Meenakshi Mills ' vs Union of India, ; ; E.P. Royappa vs State of Tamil Nadu. ; ; Maneka Gandhi vs Union of India, AIR (1978) SC 597; Ajay Hasia vs Khalid Mujib, AIR (1981) SC 485; D.S. Nakara vs Union of India, ; ; Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; ; Westminster Corporation vs London and North Western Railway, 430; Barium Chemi cals Ltd. vs Company Law Board, ; referred to. Until the rules are made by the Chief Justice (or by a Judge or Officer of the Court authorised by him), the ques tion of approval or disapproval by the President does not arise. In making the rules, the Chief Justice would no doubt take into account the recommendations of the Pay Commission or of any other body of experts he may have consulted. He will also take into account the objections raised by the Government to the suggestions made by the Registrar General who, of course. acted as an agent of the Chief Justice. But the refusal of the Government to accede to the proposals of the Registrar General is not a refusal of the President under Article 146(2), 1or such refusal or approval can arise only upon submission to him to duly framed rules. [546G H; 547A B] 493 The approval of the President is not a matter of mere formality. It would, of course, be wrong to say that in no case can the President, which means the Government, refuse to accord approval. However. once the rules are duly framed by so high a constitutional dignitary as the Chief Justice of India, it will only be in the truly exceptional cases that the President would withhold assent. [547D E] Kirit Kumar Chaman Lal Kundaliya vs State of Gujarat, ; State of Orissa vs Durga Charan Das, ; ; G.V. Ramanaiah vs The Superintendent of Central Jail. Rajahmundry. ; ; Chandra Bansi Singh vs State of Bihar, ; ; Waman Rao vs Union of India; , ; Minor P. Rajendran vs State of Madras, ; ; State of M.P.v. Ram Raghubir Prasad Agarwal; , ; Roshanlal Kuthiala vs R.B. Mohan Singh Oberai. ; ; Tamil Nadu Education Department Ministerial & General Subordinate Service Associ ation vs State of Tamil Nadu; , ; Kishori Mohanlal Bakshi vs Union of India, AIR 1962 SC 1139; State of Punjab vs Joginder Singh. [1963] Supp. 2 SCR 169; Randhir Singh vs Union of India, ; ; Dhirendra Chamoli vs State of U.P., [1986] 1 SCC 687; State of Andhra Pradesh vs G. Sreenivasa Rao, [1989] 1 .IT 615; V. Markendeya vs State of Andhra Pradesh; , ; State of U.P. vs J.P. Chaurasia; , ; Umesh Chandra Gupta vs Oil & Natural Gas Commission, AIR 1989 SC 29; Tarsera Lal Gautam vs State Bank of Patiala, AIR 1989 SC 30;Narinder Chand Hem Raj vs Lt. Governor, Administrator, Union Territory, Hima chal Pradesh; , ; State of Andhra Pradesh vs T. Gopalakrishnan Murthi; , ; A.K. Roy vs Union of India,, ; ; Gurumoorthy vs Accountant General Assam & Nagaland, ; K. Nagaraj & Ors. vs State of A.P. & Anr. , ; , 548; R.K. Garg vs Union of India, ; , 687; Aeltemesh Rein, Advocate Supreme Court of India vs Union of India & Ors. , ; ; State of U. P. & Ors. vs Renusagar Power Co. & Ors., ; , 104; Kruse vs Johnson, ; Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; ; Mixnam Properties Ltd. vs Chertsey U.D.C., ; Commissioners of Customs & Excise vs Cure & Deeley Ltd., ; Mceldowney vs Forde, [1971] AC 632; Carltona Ltd., vs Commissioners of Works & Ors., , 564; Point of Ayr. Collieries Ltd. vs Lloyd George, ; Scott vs Glasgow Corporation. ,492; Robert Baird L.D. & Ors. vs City of Glas gow, ; Manhattan General Equipment Co. vs Commissioner. ; , 134; Yates (Arthur) & 494 Co. Pty Ltd., vs Vegetable Seeds Committee, ; Bailey vs Conole, ; ; Boyd Build ers Ltd. vs City of Ottawa, [1964] 45 D.L.R. (2nd) 211; Re Burns &. Township of Haldimand, and Lynch vs Tilden Produce Co., ; , 320 322, referred to.

Appeal No. 61 of 1954. Appeal under Article 132(1) of the Constitution of India from the Judgment and Order dated the 4th November 1953 of the High Court of Judicature at Nagpur in Civil Miscellaneous Petition No. 174 of ' 1953. N. C. Chatterjee, Bakshi Tek Chand and Veda Vyas, (section K. Kapur and Ganpat Rai, with them), for the appellant. G. section Pathak, (Rameshwar Nath and Rajinder Narain, with him), for respondent No. 1. 1954. December 9. The Judgment of the Court was delivered by VENKATARAMA AYYAR J. The appellant and respondents 1 to 5 herein were duly nominated for election to the House of the People from the Hoshangabad Constituency in the State of Madhya Pradesh. Respondents 4 and 5 subsequently withdrew from the election, leaving the contest to the other candidates. At the polling the appellant secured 65,201 votes the first respondent 65,375 votes and the other candidates far less; and the Returning Officer accordingly declared the first respondent duly elected. The appellant then filed Election Petition No. 180 of 1952 for setting aside the election on the ground inter alia that 301 out of the votes counted in favour of the first respondent were liable to be rejected under Rule 47 (1) (c) of Act No. XLIII of 1951 on the ground that the ballot papers did not have the distinguishing marks prescribed under Rule 28, and that by reason of their improper reception, the result of the election had been materially affected. Rule 28 is as follows: "The ballot papers to be used for the purpose of voting at an election to which this Chapter applies shall contain a serial number and such distinguishing marks as the Election Commission may decide". Under this rule, the Election Commission had decided that the ballot papers for the Parliamentary Consti 142 1108 tuencies should bear a green bar printed near the left margin, and that those for the State Assembly should bear a brown bar. What happened in this case was that voters for the House of the People in polling stations Nos. 316 and 317 in Sobhapur were given ballot papers with brown bar intended for the State Assembly, instead of ballot papers with green bar which had to be used for the House of the People. The total number of votes so polled was 443, out of which 62 were in favour of the appellant, 301 in favour of the first respondent, and the remaining in favour of the other candidates. Now, Rule 47(1)(c) enacts that "a ballot paper contained in a ballot box shall be rejected if it bears any serial number or mark different from the serial numbers or marks of ballot papers authorised for use at the polling station or the polling booth at which the ballot box in which it was found was used". In his election petition, the appellant contended that in accordance with this provision the ballot papers received at the Sobhapur polling stations not having the requisite mark should have been excluded, and that if that had been done, the first respondent would have lost the lead of 174 votes, and that he himself would have secured the largest number of votes. He accordingly prayed that he might be declared duly The first respondent contested the petition. He pleaded that the Returning Officer at Sobbapur had rightly accepted the 301 votes, because Rule 47 was directory and not mandatory , and that further the votes had been accepted as valid by the Election Commission, and the defect, if any, had been cured. He also filed a recrimination petition under section 97 of Act No. XLIII of 1951, and therein pleaded inter alia that at polling station No. 299 at Malkajra and at polling station No. 371 at Bammangaon ballot papers intended for use in the State Legislature election had been wrongly issued to voters to the House of the People by mistake of the polling officers, that all those votes had been wrongly rejected by the Returning Officer, and that if they had been counted, he would 1109 have got 117 votes more than the appellant. He accordingly challenged the right of the appellant to be declared elected. The Election Tribunal held by a majority that Rule 47(1)(c) was mandatory, and that the 301 ballot papers found in the box of the first respondent bearing the wrong mark should not have been counted; while the third Member was of the opinion that rule was merely directory, and that the Returning Officer had the power to accept them. The Tribunal, however, was unanimous in holding that the result of the election had not been materially affected by the erroneous reception of the votes, and on that ground dismissed the petition. The appellant then moved the High Court of Nagpur under articles 226 and 227 of the Constitution for the issue of a writ of certiorari or other order or direction for quashing the decision of the Election Tribunal on the ground that it was illegal and without jurisdiction. Apart from supporting the decision on the merits, the first respondent contended that having regard to article 329(b) the High Court was not competent to entertain the petition, as in substance it called in question the validity of an election. The petition was heard by a Bench consisting of Sinha, C. J., Mudholkar and Bhutt, JJ., who differed in their conclusions. Sinha, C. J., and Bhutt, J., held that no writ could be issued under article 226, firstly because the effect of article 329(b) was to take away that power, and secondly, because the Election Tribunal had become functus officio after the pronouncement of the decision, and that thereafter there was no Tribunal to which directions could be issued under that article. Mudholkar, J., agreed with this conclusion, but rested it on the second ground aforesaid. As regards article 227, while Sinha, C. J. and Bhutt, J. held that it had no application to Election Tribunals, Mudholkar, J. was of the view that they were also within the purview of that article, but that in view of article 329(b), no relief could be granted either setting aside the election of the first respondent, or declaring the appellant elected, and that the only 1110 order that could be made was to set aside the decision of the Tribunal. On the merits, Sinha, C.J. and Bhutt, J. took the view that the decision of the Tribunal that the result of the election had not been materially affected by the erroneous reception of votes was one within its jurisdiction, and that it could not be quashed under article 226, even if it had made a mistake of fact or law. But Mudholkar, J. held that as in arriving at that decision the Tribunal had taken into consideration irrelevant matters, such as the mistake of the polling officer in issuing wrong ballot papers and its effect on the result of the election, it had acted in excess of its jurisdiction. He was ac cordingly of opinion that the decision should be quashed leaving it to the Election Commission "to perform their statutory duties in the matter of the election petition". The petition was dismissed in accordance with the majority opinion. The learned Judges, however, granted a certificate under article 132(1), and that is how this appeal comes before this Court. The first question that arises for decision in this appeal is whether High Courts have jurisdiction under article 226 to issue writs against decisions of Election Tribunals. That article confers on High Courts power to issue appropriate writs to any person or authority within their territorial jurisdiction, in terms absolute and unqualified, and Election Tribunals functioning within the territorial jurisdiction of the High Courts would fall within the sweep of that power. If we are to recognise or admit any limitation on this power, that must be founded on some provision in the Constitution itself. The contention of Mr. Pathak for the first respondent is that such a limitation has been imposed on that power by article 329(b), which is as follows: "Notwithstanding anything in this 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 1111 as may be provided for by or under any law made by the appropriate Legislature". Now, the question is whether a writ is a proceeding in which an election can properly be said to be called in question within the meaning of article 329(b). On a plain reading of the article, what is prohibited therein is the initiation of proceedings for setting aside an election otherwise than by an election petition presented to such authority and in such manner as provided therein. A suit for setting aside an election would be barred under this provision. In N. P. Ponnuswami vs Returning Officer, Namakkal Constituency and Others(1) it was held by this Court that the word "election" in article 329(b) was used in a comprehensive sense as including the entire process of election commencing with the issue of a notification and terminating with the declaration of election of a candidate, and that an application under article 226 challenging the validity of any of the acts forming part of that process would be barred. These are instances of original proceedings calling in question an election, and would be within the prohibition enacted in article 329(b). But when once proceedings have been instituted in accordance with article 329(b) by presentation of an election petition, the requirements of that article are fully satisfied. Thereafter when the election petition is in due course heard by a Tribunal and decided, whether its decision is open to attack, and if so, where and to what extent, must be determined by the general law applicable to decisions of Tribunals. There being no dispute that they are subject to the supervisory jurisdiction of the High Courts under article 226, a writ of certiorari under that article will be competent against decisions of the Election Tribunals also. The view that article 329 (b) is limited in its operation to initiation of proceedings for setting aside an election and not to the further stages following on the decision of the Tribunal is considerably reinforced, when the question is considered with reference to a candidate, whose election has been set aside (1) ; 1112 by the Tribunal. If he applies under article 226 for a writ to set aside the order of the Tribunal, he cannot in any sense be said to call in question the election; on the other hand, he seeks to maintain it. His application could not, therefore, be barred by article 329(b). And if the contention of the first respondent is well founded, the result will be that proceedings under article 226 will be competent in one event and not in another and at the instance of one party and not the other. Learned counsel for the first respondent was unable to give any reason why this differentiation should be made. We cannot accept a construction which leads to results so anomalous. This question may be said to be almost concluded by authority. In Durga Shankar vs Raghuraj Singh(1) the contention was raised that this Court could not entertain an appeal against the decision of an Election Tribunal under article 136 of the Constitution, as that would be a proceeding in which an election is called in question, and that could be done only before a Tribunal as provided in article 329(b). In overruling this contention, Mukherjea, J. observed: "The 'non obstante ' clause with which article 329 of the Constitution begins and upon which the respondent 's counsel lays so much stress, debars us, as it debars any other court in the land, to entertain a suit or a proceeding calling in question any election to the Parliament or the State Legislature. It is the Election Tribunal alone that can decide such disputes and the proceeding has to be initiated by an election petition and in such manner as may be provided by a statute. But once that Tribunal has made any determination or adjudication on the matter, the powers of this Court to interfere by way of special leave can always be exercised". By parity of reasoning it must be held that the power of the High Court under article 226 to issue writ of certiorari against decisions of Election Tribunals remains equally unaffected by article 329(b). It is next contended that even if there is jurisdic (1) [1955] S.C.R. 267. 1113 tion in the High Court under article 226 to issue certiorari against a decision of an Election Tribunal, it is incapable of exercise for the reason that under the scheme of Act No. XLIII of 1951, the Tribunal is an ad hoc body set up for determination of a particular election petition, that it becomes functus officio when it pronounces its decision, and that thereafter there is no authority in existence to which the writ could be issued. The question thus raised is of considerable importance, on which there is little by way of direct authority; and it has to be answered primarily on a consideration of the nature of a writ of certiorari to quash. At the outset, it is necessary to mention that in England certiorari is issued not only for quashing decisions but also for various other purposes. It is issued to remove actions and indictment pending in an inferior court for trial to the High Court; to transfer orders of civil courts and sentences of criminal courts for execution to the superior court; to bring up depositions on an application for bail when the prisoner has been committed to the High Court for trial; and to remove the record of an inferior court when it is required for evidence in the High Court. These are set out in Halsbury 's Laws of England, Volume IX, pages 840 to 851. It is observed therein that the writ has become obsolete in respect of most of these matters, as they are now regulated by statutes. That is also the position in America appears from the following statement in Corpus Juris Secundum, Volume 14, at page 151: "At common law the writ of certiorari was used both as a writ of review after final judgment and also to remove the entire cause at any stage of the proceeding for hearing and determination in the superior court. In the United States it is now the general rule that the writ will be refused where there has been no final determination and the proceedings in the lower, tribunal are still pending". As we are concerned in this appeal with certiorari to quash a decision, it is necessary only to examine whether having regard to its nature such a writ for 1114 quashing can be issued to review the decision of a Tribunal, which has ceased to exist. According to the common law of England, certiorari is a high prerogative writ issued by the Court of the King 's Bench or Chancery to inferior courts or tribunals in the exercise of supervisory jurisdiction with a view to ensure that they acted within the bounds of their jurisdiction. To this end, they were commanded to transmit the records of a cause or matter pending with them to the superior court to be dealt with there, and if the order was found to be without juirsdiction, it was quashed. The court issuing certiorari to quash, however, could not substitute its own decision on the merits,, or give directions to be complied with by the court or the tribunal. Its work was destructive; it simply wiped out the order passed without jurisdiction, and left the matter there. In T. C. Basappa vs T. Nagappa(1), Mukherjea, J. dealing with this question observed: "In granting a writ of 'certiorari ' the superior court does not exercise the power of an appellate tribunal. It does not review or reweigh the evidence upon which the determination of the inferior tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substitute its own view for those of the inferior tribunal. The offending order or proceeding so to say is put out of the way as one which should not be used to the deteriment of any person. Vide per Lord Cairns in Walsall 's Overseers vs L. and N. W. Ry. Co.(2)". In Corpus Juris Secundum, Volume 14 at page 123 the nature of a writ of certiorari for quashing is thus stated: "It is not a proceeding against the tribunal or an individual composing it; it acts on the cause or proceeding in the lower court, and removes it to the superior court for reinvestigation". The writ for quashing is thus directed against a record, and as a record can be brought up only (1) ; (2) [1879] 4 A.C.30, 39. 1115 through human agency, it is issued to the person or authority whose decision is to be reviewed. If it is the record of the decision that has to be removed by certiorari, then the fact that the tribunal has become functus officio subsequent to the decision could have no effect on the jurisdiction of the court to remove the record. If it is a question of issuing directions, it is conceivable that there should be in existence a person or authority to whom they could be issued, and when a certiorari other than one to quash the decision is proposed to be issued, the fact that the tribunal has ceased to exist might operate as a bar to its issue. But if the true scope of certiorari to quash is that it merely demolishes the offending order, the presence of the offender before the court, though proper, is not necessary for the exercise of the jurisdiction or to render its determination effective. Learned counsel for the first respondent invites our attention to the form of the order nisi in a writ of certiorari, and contends that as it requires the court or tribunal whose proceedings are to be reviewed, to transmit the records to the superior court, there is, if the tribunal has ceased to exist, none to whom the writ could be issued and none who could be compelled to produce the record. But then, if the writ is in reality directed against the record, there is no reason why it should not be issued to whosoever has the custody thereof. The following statement of the law in Ferris on the Law of Extraordinary Legal Remedies is apposite: "The writ is directed to the body or officer whose determination is to be reviewed, or to any other person having the custody of the record or other papers to be, certifled". Under section 103 of Act No. XLIII of 1951 the Tribunal is directed to send the records of the case after the order is pronounced either to the relative District Judge or to the Chief Judge of the Court of Small Causes, and there is no legal impediment to a writ being issued to those officers to transmit the record to the High Court. We think that the power to issue a 143 1116 writ under article 226 to a person as distinct from an authority is sufficiently comprehensive to take in any person who has the custody of the record, and the officers mentioned in section 103 of Act No. XLIII of 1951 would be persons who would be amenable to the jurisdiction of the High Court under the article. It is argued that the wording of article 226 that the High Court shall have power to issue writs or directions to any person or authority within its territorial jurisdiction posits that there exists a person or authority to whom it could be issued, and that in consequence, they cannot be issued where no such authority exists. We are of opinion that this is not the true import of the language of the article. The scope of article 226 is firstly that it confers on the High Courts power to issue writs and directions, and secondly, it defines the limits of that power. This latter it does by enacting that it could be exercised over any person or authority within the territories in relation to which it exercises its jurisdiction. The emphasis is on the words "within the territory", and their significance is that the jurisdiction to issue writ is co extensive with the territorial jurisdiction of the court. The reference is not to the nature and composition of the court or tribunal but to the area within which the power could be exercised. The first respondent relied on the decision in Clifford O 'Sullivan(1) as authority for the position that no writ could be issued against a Tribunal after it had ceased to exist. There, the facts were that the appellants had been tried by a military Court and convicted on 3 5 1921. They applied on 10 5 1921 for a writ of prohibition against the officers of the Court, and that was refused on the ground that they bad become functi officio. The respondent contended that on the same reasoning certiorari against the decision of an Election Tribunal which bad become functus officio should also be refused, and he further relied on the observations of Atkin, L.J. in Rex vs Electricity Com missioners; London Electricity Joint Committee Co. (1920), Exparte(2) as establishing that there was no (1) (1921] 2 A.C. 570. (2) , 204, 205. 1117 difference in law between a writ of prohibition and a writ of certiorari. What is stated there is that both writs of prohibition and certiorari have for their object the restraining of inferior courts from exceeding their jurisdiction, and they could be issued not merely to courts but to all authorities exercising judicial or quasi judicial functions. But there is one fundamental distinction between the two writs, and that is what is material for the present purpose. They are issued at different stages of the proceedings. When an inferior court takes up for hearing a matter over which it has no jurisdiction, the person against whom the proceedings are taken can move the superior court for a writ of prohibition, and on that, an order will issue forbidding the inferior court from continuing the proceedings. On the other band, if the court hears that cause or matter and gives a decision, the party aggrieved would have to move the superior court for a writ of certiorari, and on that, an order will be made quashing the decision on the ground of want of jurisdiction. It might happen that in a proceeding before the inferior court a decision might have been passed, which does not completely dispose of the matter, in which case it might be necessary to apply both for certiorari and prohibition certiorari for quashing what had been decided, and prohibition for arresting the further continuance of the proceeding. Authorities have gone to this extent that ,in such cases when an application is made for a writ of prohibition and there is no prayer for certiorari, it would be open to the Court to stop further proceedings which are consequential on the decision. But if the proceedings have terminated, then it is too late to issue prohibition and certiorari for quashing is the proper remedy to resort to. Broadly speaking, and apart from the cases of the kind referred to above, a writ of prohibition will lie when the proceedings are to any extent pending and a writ of certiorari for quashing after they have terminated in a final decision. Now, if a writ of prohibition could be issued only if there are proceedings pending in a court, it must follow that it is incapable of being granted when the 1118 court has ceased to exist, because there could be then no proceeding on which it could operate. But it is otherwise with a writ of certiorari to quash, because it is directed against a decision which has been rendered by a court or tribunal, and the continued existence of that court or tribunal is not a condition of its decision being annulled. In this context, the following passage from Juris Corpus Secundum, Volume 14, page 126 may be usefully quoted: "Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be distinguished from prohibition by the fact that it. . is directed to the cause or proceeding in the lower court and not to the court itself, while prohibition is a pre ventive remedy issuing to restrain future action and is directed to the court itself". The decision in Clifford O 'Sullivan(1) which was concerned with a writ of prohibition is, therefore, inapplicable to a writ of certiorari to quash. It has also to be noted that in that case as the military Court had pronounced its sentence before the application was filed, a writ of prohibition was bound to fail irrespective of the question whether the Tribunal was functus officio or not, and that is the ground on which Viscount Cave based his decision. He observed: "A further difficulty is caused to the appellants by the fact that the officers constituting the so called military Court have long since completed their investigation and reported to the commanding officer, so that nothing remains to be done by them, and a writ of prohibition directed to them would be of no avail. [See In re Pope(2) and Chabot vs Lord Morpeth(3)]". In this connection, reference must be made to the decision in B. vs Wormwood Scrubbs (Governor)(4). There., the applicant was condemned by a court martial sitting in Germany, and in execution of its sentence,, he was imprisoned in England. He applied for a writ of habeas corpus, and contended that the military Court had no jurisdiction over him. The Court (1) (3) 118481 15 Q. B. 446. (2) (1833] ; (4) , 1119 agreed with this contention, and held that the conviction was without jurisdiction and accordingly issued a writ of habeas corpus. But as he was in the custody of the Governor of the Prison under a warrant of conviction, unless the conviction itself was quashed no writ of habeas corpus could issue. In these circumstances, the Court issued a writ of certiorari quashing the conviction by the court martial. It is to be noted that the military Court was an ad hoc body, and was not in existence at the time of the writ, and the respondents to the application were the Governor and the Secretary for War. The fact that the court martial was dissolved was not considered a bar to the grant of certiorari. Our attention has also been invited to a decision of this Court in The Lloyds Bank Ltd. vs The Lloyds Bank Indian Staff Association and others(1). In that case, following the decision in Clifford O 'Sullivan(2) the Calcutta High Court had refused applications for the issue of writs of certiorari and prohibition against the decision of the All India Industrial Tribunal (Bank Disputes) on the ground, amongst others, that the Tribunal had ceased to exist. In appeal to this Court against this judgment, it was contended for the appellant that on a proper construction of section 7 of the Industrial Disputes Act, the Tribunal must be deemed to be not an ad hoc body established for adjudication of a particular dispute but a permanent Tribunal continuing "in a sort of suspended animation" and "functioning intermittently". This Court agreeing with the High Court rejected this contention. But the point was not argued that certiorari could issue even if the Tribunal had become functus officio, and no decision was given on the question which is now under consideration. Looking at the substance of the matter, when once, it is held that the intention of the Constitution was to vest in the High Court a power to supervise decisions of Tribunals by the issue of appropriate writ and directions, the exercise of that power cannot be (1) Civil Appeal No. 42 of 1952. (2) (1921] 2A. C. 570. 1120 defeated by technical considerations of form and procedure. In P. C. Basappa vs T. Nagappa(1), this Court observed: "In view of the express provisions in our Constitution we need not now look back to the early history or the procedural technicalities of these writs in English law, nor feel oppressed by any difference or change of opinion expressed in particular cases by English Judges. We can make an order or issue a writ in the nature of 'certiorari ' in all appropriate cases and in appropriate manner, so long as we keep to the broad and fundamental principles that regulate the exercise of jurisdiction in the matter of granting such writs in English law". It will be in consonance with these principles to hold that the High Courts have power under article 226 to issue writs of certiorari for quashing the decisions of Election Tribunals, notwithstanding that they become functus officio after pronouncing the decisions. We are also of opinion that the Election Tribunals are subject to the superintendence of the High Courts under article 227 of the Constitution, and that superintendence is both judicial and administrative. That was held by this Court in Waryam Singh and another vs Amarnath and another(2), where it was observed that in this respect article 227 went further than section 224 of the Government of India Act, 1935, under which the superintendence was purely administrative, and that it restored the position under section 107 of the Government of India Act, 1915. It may also be noted that while in a certiorari under article 226 the High Court can only annul the decision of the Tribunal, it can, under article 227, do that, and also issue further directions in the matter. We must accordingly hold that the application of the appellant for a writ of certiorari and for other reliefs was maintainable under articles 226 and 227 of the Constitution. Then the question is whether there are proper grounds for the issue of certiorari in the present case. (1) (1955] S.C.R. 250. (2) ; 1121 There was considerable argument before us as to the character and scope of the writ of certiorari and the conditions under which it could be issued. The question has been considered by this Court in Parry & Co. vs Commercial Employees ' Association, Madras(1), Veerappa Pillai vs Raman and Raman Ltd. and Others(2), Ibrahim Aboobaker vs Custodian General(3) and quite recently in T. C. Basappa vs T. Nagappa(4). On these authorities, the following propositions may be taken as established: (1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it. (2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. (3) The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous. This is on the principle that a Court which has jurisdiction over a subject matter has jurisdiction to de cide wrong as well as right, and when the Legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy, if a superior Court were to re hear the case on the evidence, and substitute its own findings in certiorari. These propositions are well settled and are not in dispute. (4) The further question on which there has been some controversy is whether a writ can be issued, when the decision of the inferior Court or Tribunal is erroneous in law. This question came up for consideration in Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Shaw(5), and it was held that when a Tribunal made a "speaking order" and the reasons given in that order in support of the decision (1) ; (2) ; (3) ; (4) (1955] S.C.R. 250. (5) 1122 were bad in law, certiorari could be granted. It was pointed out by Lord Goddard, C. J. that had always been understood to be the true scope of the power. Walsall Overseers vs London and North Western Ry. Co.(1) and Rex vs Nat Bell Liquors Ld. (2) were quoted in support of this view. In Walsall Overseers vs London and North Western Ry. Co.(1), Lord Cairns, L.C. observed as follows: "If there was upon the face of the order of the court of quarter sessions anything which showed that order was erroneous, the Court of Queen 's Bench might be asked to have the order brought into it, and to look at the order, and view it upon the face of it, and if the court found error upon the face of it, to put an end to its existence by quashing it". In Rex vs Nat Bell Liquors Ld. (2) Lord Sumner said: "That supervision goes to two points; one is the area of the inferior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of the law in the course of its exercise". The decision in Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Shaw(3) was taken in appeal, and was affirmed by the Court of Appeal in Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Shaw(4). In laying down that an error of law was a ground for granting certiorari, the learned Judges emphasised that it must be apparent on the face of the record. Denning, L.J. who stated the power in broad and general terms observed: "It will have been seen that throughout all the cases there is one governing rule: certiorari is only available to quash a decision for error of law if the error appears on the face of the record". The position was thus summed up by Morris, L.J. "It is plain that certiorari will not issue as the cloak of an appeal in disguise. It does not lie in order to bring an order or decision for rehearing of the issue raised in the proceedings. It exists to correct error of law where revealed on the face of an order or decision, (1) (3) (2) (4) ; 1123 or irregularity, or absence of, or excess of, jurisdiction where shown". In Veerappa Pillai vs Raman & Raman Ltd. and Others(1), it was observed by this court that under article 226 the writ should be issued "in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record". In T. C. Basappa vs T. Nagappa(2) the law was thus stated: "An error in the decision or determination itself may also be amenable to a writ of 'certiorari ' but it must be a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by 'certiorari ' but not a mere wrong decision". It may therefore be taken as settled that a writ of certiorari could be issued to correct an error of law. But it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record. The real difficulty with reference to this matter, however, is not so much in the statement of the principle as in its application to the facts of a particular case. When does an error cease to be mere error, and become an error apparent on the face of the record? Learned Counsel on either side were unable to suggest any clear cut rule by which, the boundary between the two classes of errors could be demarcated. Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla, C. J. in Batuk K. Vyas vs Surat Municipality(3) that no error could be said to be apparent on the face of the record if it was not self evident, and if it required an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases. But there must be cases in (1) ; (2) ; (3) A.I.R. 1953 Bom. 144 1124 which even this test might break down, because judicial opinions also differ, and an error that might be considered by one Judge as self evident might not be so considered by another. The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case. These being the principles governing the grant of certiorari, we may now proceed to consider whether on the facts found, this is a fit case for a writ being issued. The Tribunal, as already stated, held by a majority that Rule 47 (1) (c) was mandatory, and that accordingly the 301 ballot papers found in the box of the first respondent should have been rejected under that rule on the ground that they had not the distinguishing marks prescribed by Rule 28. It bad also held under section 100(2) (c) of Act No. XLIII of 1951 that the result of the election had not been materially affected by the failure of the Returning Officer to comply with Rule 47(1)(c). It accordingly dismissed the petition. Now the contention of Mr. N. C. Chatterjee for the appellant is that in reaching this conclusion the Tribunal had taken into account matters which are wholly extraneous to an enquiry under section 100(2)(c), such as the mistake of the polling officer in issuing wrong ballot papers and its possible effect on the result of the voting, and that accordingly the decision was liable to be quashed by certiorari both on the ground of error of jurisdiction and error in the construction of section 100(2) (c) apparent on the face of the record. The first respondent, on the other hand, contended that the decision of the Tribunal that the 301 ballot papers found in his box should have been rejected under Rule 47 (1) (c) was erroneous, because that rule was only directory and not mandatory and because the Election Commission had validated them, and that its decision was final. He also contended that even if the ballot papers in question were liable to be rejected under Rule 47 (1) (c), for the purpose of deciding under section 100(2)(c) 1125 whether the result of the election had been materially affected the Tribunal had to ascertain the true intention of the voters; and the mistake of the polling officer under Rule 23 and its effect on the result of the election were matters which were within the scope of the enquiry under that section. The correctness of these contentions falls now to be determined. On the question whether Rule 47(1) (c) is mandatory, the argument of Mr. Pathak is that notwithstanding that the rule provides that the Returning Officer shall reject the ballot papers, its real meaning is that he has the power to reject them, and that on that construction, his discretion in the matter of accepting them is not liable to be questioned. He relies on certain well recognised rules of construction such as that a statute should be construed as directory if it relates to the performance of public duties, or if the conditions prescribed therein have to be performed by persons other than those on whom the right is conferred. In particular, he relied on the following statement of the law in Maxwell on Interpretation of Statutes, 10th Edition, pages 381 and 382: "To hold that an Act which required an officer to prepare and deliver to another officer a list of voters on or before a certain day, under a penalty, made a list not delivered till a later day invalid, would in effect, put it in the power of the person charged with the duty of preparing it to disfranchise the electors, a conclusion too unreasonable for acceptance". He contended that to reject the votes of the electors for the failure of the polling officer to deliver the correct ballot papers under Rule 23 would be to disfranchise them, and that a construction which involved such a consequence should not be adopted. It is well established that an enactment in form mandatory might in substance be directory, and that the use of the word "shall" does not conclude the matter. The question was examined at length in Julius vs Bishop of Oxford(1), and various rules were (1) 1126 laid down for determining when a statute might be construed as mandatory and when as directory. They are well known, and there is no need to repeat them. But they are all of them only aids for ascertaining the true intention of the legislature which is the determining factor, and that must ultimately depend on the context. What we have to see is whether in Rule 47 the word "shall" could be construed as meaning "may". Rule 47(1) deals with three other categories of ballot papers, and enacts that they shall be rejected. Rule 47(1) (a) relates to a ballot paper which "bears any mark or writing by which the elector can be identified". The secrecy of voting being of the essence of an election by ballot, this provision must be held to be mandatory, and the breach of it must entail rejection of the votes. That was held in Woodward vs Sarsons(1) on a construction of section 2 of the Ballot Act, 1872. That section had also a provision corresponding to Rule 47(1) (b), and it was held in that case that a breach of that section would render the vote void. That must also be the position with reference to a vote which is hit by Rule 47 (1) (b). Turning to Rule 47(1) (d), it provides that a ballot paper shall be rejected if it is spurious, or if it is so damaged or mutilated that its identity as a genuine ballot paper cannot be established. The word "shall" cannot in this sub rule be construed as meaning "may", because there can be no question of the Returning Officer being authorized to accept a spurious or unidentifiable vote. If the word "shall" is thus to be construed in a mandatory sense in Rule 47(1) (a), (b) and (d), it would be proper to construe it in the same sense in Rule 47(1) (c) also. There is another reason which clinches the matter against the first respondent. The practical bearing of the distinction between a provision which is mandatory and one which is directory is that while the former must be strictly observed, in the case of the latter it is sufficient that it is substantially complied with. How is this rule to be worked when the Rule provides that a ballot paper shall be rejected? There can be no degrees (1) 1127 of compliance so far as rejection is concerned, and that is conclusive to show that the provision is mandatory. It was next contended that the Election Commission had validated the votes in question, and that in consequence the acceptance of the ballot papers by the Returning Officer under Rule 47 (1) (c) was not open to challenge. It appears that interchange of ballot papers had occurred in several polling stations where election was held both for the House of the People and the State Assembly, and the Election Commission had issued directions that the rule as to the distinguishing mark which the ballot paper should bear under Rule 28 might be relaxed, if its approval was obtained before the votes were actually counted. The Returning Officer at Hoshangabad reported to the Chief Electoral Officer, Madhya Pradesh that wrong ballot papers had been issued owing to the mistake of the polling officers, and obtained the approval of the Commission for their being included, before the votes were counted. It is contended by Mr. Pathak that the power of the Election Commission to prescribe a distinguishing mark includes the power to change a mark already prescribed, and substitute a fresh one in its stead, and that when the Election Commission approved of the interchange of ballot papers at Hoshangabad, it had, in effect, approved of the distinguishing mark which those ballot papers bore, and that they were therefore rightly counted as valid by the Returning Officer. There is no dispute that the Election Commission which has the power to prescribe a distinguishing mark for the ballot papers has also the power to change it. But the question is, was that done? The Commission did not decide in terms of Rule 28 that the ballot paper for election to the House of the People should bear a brown bar and not a green bar. The green bar continued to be the prescribed mark for the election under that rule, and the overwhelming majority of the ballot papers bore that mark. What the Commission has done is to condone the defects in a specified number of ballot papers issued in the 1128 Hoshangabad polling stations. That is not prescribing a distinguishing mark as contemplated by Rule 28, as that must relate to the election as a whole. There can be no question of there being one distinguishing mark for some of the voters and another for others with reference to the same election and at the same polling station. There is another difficulty in the way of accepting the contention of the first respondent. The approval of the Election Commission was subsequent to the actual polling, though it was before the votes were counted. Rule 23 throws on the polling officer the duty of delivering a proper ballot paper to the voter. If a distinguishing mark had been prescribed under Rule 28, the ballot paper to be delivered must bear that mark. Therefore, if any change or alteration of the original distinguishing mark is made, it must be made before the commencement of the poll, and the ballot paper should contain the new distinguishing mark. The approval by the Election Commission ' subsequent, to the polling, therefore, cannot render valid the 301 ballot papers which did not bear the distinguishing mark prescribed for the election, and they are liable to be rejected under Rule 47 (1) (c). The conclusion of the majority of the Tribunal that in accepting the ballot papers in question the Returning Officer had contravened that rule must therefore be accepted. It remains to deal with the contention of the appellant that the decision of the Election Tribunal under section 100(2)(c) that the result of the election bad not been materially affected is bad, as it is based on considerations extraneous to that section. This opens up the question as to the scope of an enquiry under section 100(2)(c). That section requires that before an order setting aside an election could be made, two conditions must be satisfied: It must firstly be shown that there had been improper reception or refusal of a vote or reception of any vote which is void, or noncompliance with the provisions of the Constitution or of the Act (No. XLIII of 1951) or any rules or orders made under that Act or of any other Act or rules re 1129 lating to the election or any mistake in the use of the prescribed form. It must further be shown that as a consequence thereof the result of the election had been materially affected. The two conditions are cumulative, and. must both be established, and the burden of establishing them is on the person who seeks to have the election set aside. That was held by this Courtin Vashist Narain vs Dev Chandra(1). The Tribunal has held in favour of the appellant that Rule 47 (1) (c) is mandatory, and that accordingly in accepting the 301 ballot papers which had not the requisite distinguishing marks the Returning Officer had contravened that rule. So, the first condition has been satisfied. Then there remains the second, and the question is whether the appellant has established that the result of the election had been materially affected by contravention of Rule 47(1)(c). The contention of Mr. Chatterjee is that when once he has established that the Returning Officer had contravened Rule 47 (1) (c), he has also established that the result of the election had been materially affected, because the marginal difference between the appellant and the first respondent was only 174 votes, and that if the ballot papers wrongly counted under Rule 47 (1) (c) had been excluded and the valid votes alone counted, it was be and not the first respondent that should have been declared elected under Rule 48, and that the result of the election bad thus been materially affected. In reply, Mr. Pathak contends that this argument, though it might have proved decisive if no other factor had intervened, could not prevail in view of the other facts found in this case. He argued that Rule 47 was not the only rule that had been broken; that owing to the mistake of the polling officer wrong ballot papers had been issued, and thus Rule 23 had been broken; that the printing of the distinguishing mark was faint and that Rule 28 had not also been properly complied with; that there was thus a chain of breaches all linked together, the final phase of it being the breach of Rule 47 (1) (c) and the effective cause thereof being the violation of Rule 23, and that (1) ; 1130 in judging whether the result of the election had been affected, these were matters relevant to be taken into consideration. The object of the election, be contended, was to enable the majority of the voters to send a representative of their choice and for that purpose it was necessary to ascertain the intention of the voters from the ballot papers, irrespective of the question whether they were formally defective or not; that it was accordingly open to the Tribunal to look behind the barriers created by Rules 23, 28 and 47 (1) (c), discover the mind of the voters, and if that was truly reflected in the result of the election as declared under Rule 48, dismiss the petition under section 100(2) Mr. Chatterjee disputes this position, and contends that the enquiry under that section must be limited to the matters raised in the election petition, and that as there was no complaint about the breach of Rule 23 in that petition, it was outside the scope of the enquiry. It is unnecessary to consider whether it was open to the Tribunal to enquire into matters other than those set out in the petition, when the returned candidate merely seeks to support the declaration. He has in this case presented a recrimination petition tinder section 97 raising the question of breach of Rule 23, and that is therefore a matter which has to be determined. The Tribunal has gone into that question, and has held that there was a violation of that rule, and its conclusion is not open to attack in these proceedings, and has not, in fact, been challenged. The real controversy is as to the effect of that finding on the rights of the parties. The answer to this is to be found in section 97. Under that section, all matters which could be put forward as grounds for setting aside the election of the petitioner if be had been returned under Rule 48 could be urged in answer to the prayer in his petition that he might be declared duly elected. And the result of this undoubtedly is that the first respondent could show that if the appellant had been returned under Rule 48 his election would have been liable to be set aside for breach of Rule 23, and that therefore he should not be declared 1131 elected. That according to the Tribunal having been shown, it is open to us to hold that by reason of the violation of Rule 23, the appellant is not entitled to be declared elected. Can we go further, and uphold the election of the first respondent under section 100 (2) (c) on the ground that if Rule 23 had not been broken, the wasted votes would have gone to him? The argument of the appellant is that would, in effect, be accepting the very votes which the Legislature says in Rule 47(1) should be rejected, and that it is not warranted by the scheme of the Act. We think that this contention is well founded. Section 46 of the Act provides that "when the counting of the votes has been completed, the Returning Officer shall forthwith declare the result of the election in the manner. provided by this Act or the rules made thereunder". The rule contemplated by this section is Rule 48. That provides that the Returning Officer should after counting the votes "forthwith declare the candidate or candidates to whom the largest number of valid votes has been given, to be elected". Under this rule quite clearly no candidate can be declared elected on the strength of votes which are liable to be rejected under Rule 47. The expression "the result of the election" in section 100(1) (c) must, unless there is something in the context compelling a different interpretation, be construed in the same sense as in section 66, and there it clearly means the result on the basis of the valid votes. This conclusion is further fortified when the nature of the duties which a Returning Officer has to perform under Rule 47 is examined. Under that Rule, the Returning Officer has to automatically reject certain classes of votes for not being in conformity with the rules. They are set out under Rule47(1)(b) and (c). In other cases, the rejection will depend on his decision whether the conditions for their acceptance have been satisfied. Thus in Rule 47 (1) (a) he must decide whether the mark or writing is one from which the elector could be identified; under Rule 47 (1) (d), 145 1132 whether the ballot paper is spurious or mutilated beyond identification; and under Rule 47(2), whether more than one ballot paper has been cast by the voter. Rule 47 (4) is important. It provides that "the decision of the Returning Officer as to the validity of a ballot paper. .shall be final subject to any decision to the contrary given by a Tribunal on the trial of an election petition calling in question the election". Under this provision, the Tribunal is constituted a Court of appeal against the decision of the Returning Officer, and as such its jurisdiction must be co extensive with that of the Returning Officer and cannot extend further. If the Returning Officer had no power under Rule 47 to accept a vote which had not the distinguishing mark prescribed by Rule 28 on the ground that it was due to the mistake of the presiding officer in delivering the wrong ballot paper it is not contended that he has any such power, and clearly he has not the Tribunal reviewing this decision under Rule 47(4) can have no such power. It cannot accept a ballot paper which the Returning Officer was bound to reject under Rule 47. It is argued with great insistence that as the object of the Election Rules is to discover the intention of the majority of the voters in the choice of a representative, if an elector has shown a clear intention to vote for a particular candidate, that must be taken into account under section 100(2) (c), even though the vote might be bad for non compliance with the formalities. But when the law prescribes that the intention should be expressed in a particular manner, it can be taken into account only if it is so expressed. An intention not duly expressed is, in a Court of law, in the same position as an intention not expressed at all. The decision in Woodward vs Sarsons(1) was cited in support of the contention that for deciding whether the result of the election had been affected it was permissible to take into account votes which bad been rendered invalid by the mistake of the polling officer. That was a decision on section 13 of the Ballot Act, (1) 1133 1872 which provided that no election should be declared invalid by reason of non compliance with the rules, if it appeared to the Tribunal "that the election was conducted in accordance with the principles laid down in the body of this Act, and that such noncompliance or mistake did not affect the result of the election". What happened in that case was that all the ballot papers issued at polling station No. 130 had been marked by the polling officer and bad become invalid under section 2 of the Act. It was con. tended on behalf of the unsuccessful candidate that the mistake of the polling officer rendered the whole election void, without reference to the question whether the result of the election had been affected. In repelling this contention, the Court observed at page 750: "Inasmuch, therefore, as no voter was prevented from voting, it follows that the errors of the presiding officers at the polling stations No. 130 and No. 125 did not affect the result of the election, and did not prevent the majority of electors from effectively exercising their votes in favour of the candidate they preferred, and therefore that the election cannot be declared void by the common law applicable to parliamentary elections". This was merely a decision on the facts that the departure from the prescribed rules of election at the polling stations was not so fundamental as to render the election not one "conducted in accordance with the principles laid down under the body of this Act" Reliance was placed on certain observations in Re South Newington Election Petition(1). In that case, the ballot paper had been rejected by the Returning Officer on the ground that it did not bear the requisite official mark. The Court in a petition to set aside the election held on an examination of the ballot paper that the official stamp had been applied, though imperfectly, and that it should have been accepted. The actual decision is in itself of no assistance to the respondent; but the Court observed in the course of its judgment: (1) (1948] 2 All E.R 503. 1134 "We think that, in a case where the voter is in no sense to blame, where he has intended to vote and has expressed his intention of voting in a particular way, and, so far as his part of the transaction is concerned, has done everything that he should, and the only defect raised as a matter of criticism of the ballot paper is some defect on the part of the official machinery by which the election is conducted, special consideration should (and, no doubt, would) be given, in order that the voter should not be disfranchised". These observations are no authority for the proposition that if there was no mark at all on the ballot paper it could still be accepted on the ground of intention. On the other hand, the whole of the discussion is intelligible only on the hypothesis that if there was no mark at all on the ballot paper, it must be rejected. In the result, we must bold that in maintaining the election of the first respondent on the basis of the 301 votes which were liable to be rejected under Rule 47(1)(c) the Tribunal was plainly in error. Mr. Chatterjee would have it that this error is one of jurisdiction. We are unable to take this view, because the Tribunal had jurisdiction to decide whether on a construction of section 100 (2) (c) it could go into the fact of breach of Rule 23, and if it committed an error, it was an error in the exercise of its jurisdiction and not in the assumption thereof. But the error is mani fest on the face of the record, and calls for interference in certiorari. We have held that the election of the first respondent should be set aside. We have further held that if the Returning Officer had, after rejecting the 301 ballot papers which did not bear the correct marks, declared the appellant elected, his election also would have to be declared void. The combined effect of section 97 and section 100(2)(c) is that there is no valid election. Under the circumstances, the proper order to pass is to quash the decision of the Tribunal and remove it out of the way by certiorari under article 226, and to set aside the election of the first respondent in exercise of the powers conferred by article 1135 227. As a result of our decision, the Election Commis sion will now proceed to hold a fresh election. This appeal must accordingly be allowed, the decisions of the High Court and the Tribunal quashed and the whole election set aside. The parties will bear their own costs throughout. Appeal allowed.

Article 226 of the Constitution confers on High Courts power to issue appropriate writs to any person or authority within their territorial jurisdiction, in terms absolute and unqualified, and Election Tribunals functioning within the territorial jurisdiction of the High Courts would fall within the sweep of that power. The power of the High Court under article 226 to issue writ of certiorari against decisions of Election Tribunals remains unaffected by article 329(b) of the Constitution. The High Courts have power under article 226 of the Constitu tion, to issue writs of certiorari for quashing the decisions of Election Tribunals, notwithstanding that they become functus officio after pronouncing the decisions. The writ of certiorari for quashing the offending order or proceeding is directed against a record, and as a record can be brought up only through human agency, it is ordinarily issued to the person or authority whose decision is to be reviewed. If it is the record of the decision that has to be removed by certiorari, then the fact that the tribunal has become funtus officio subsequent to the decision could have no effect on the jurisdiction of Court to remove the record. As the true scope of the writ of certiorari to quash is that it merely demolishes the offending order, the presence of the offender before the court, though proper, is not necessary for the exercise of the jurisdiction or to render its determination effective. The writ of certiorari being in reality directed against the record, there is no reason why it should not be issued to whosoever has the custody thereof. The writ of certiorari is directed to the body or officer whose determination is to be reviewed, or to any other person having the custody of the record or other papers to be certified. 1105 The scope of article 226 of the Constitution is firstly that it confers on the High Courts power to issue writs and directions and secondly it defines the limits of that power. This latter it does by enacting that it could be exercised over any person or authority within the territories in relation to which it exercises its jurisdiction. The emphasis is on the words "within the territory", and their significance is that the jurisdiction to issue writs is coextensive with the territorial jurisdiction of the court. The reference is not to the nature and composition of the court or tribunal but to the area within which the power could be exercised. There is one fundamental distinction between a writ of prohibition and a writ of certiorari. A writ of prohibition will lie when the proceedings are to any extent pending and a writ of certiorari for quashing will lie after the proceedings have terminated in a final decision. If a writ of prohibition could be issued only if there are proceedings pending in a court, it must follow that it is incapable of being granted when the court has ceased to exist, because there could be then no proceeding on which it could operate. But it is otherwise with a writ of certiorari to quash, because it is directed against a decision which has been rendered by a Court or tribunal, and the continued existence of that court or tribunal is not a condition of its decision being annulled. Election Tribunals are subject to the superintendence of the High Courts under article 227 of the Constitution, and that superintendence is both judicial and administrative. While in a certiorari under article 226 the High Court can only annul the decision of the Tribunals, it can, under article 227 do that, and also issue further directions in the matter. As respects the character and scope of the writs of certiorari the following propositions may be taken as well established: (1) Certiorari will be issued for correcting errors of jurisdiction,as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it. (2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. (3) The court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the court will not review findings of facts reached by the inferior Court or Tribunal, even if they be erroneous. (4) An error in the decision or determination itself may also be amenable to a writ of "certiorari" if it is a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by "certiorari" but not a mere wrong decision. What is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element 1106 of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case. It is well established that an enactment in form mandatory might in substance be directory, and that the use of the word "shall" does not conclude the matter. There are well known rules for determining when a statute should be construed as mandatory and when directory. All of them are only aids for ascertaining the true intention of the legislature which is the determining factor, and that must ultimately depend on the context. The word "shall" in Rule 47(1)(c) of the Representation of the People (Conduct of Elections and Election Petitions) Rules, 1951 which enacts that "a ballot paper contained in a ballot box shall be rejected if it bears any serial number or mark different from the serial numbers or marks of ballot papers authorised for use at the polling station or the polling booth at which the ballot box in which it was found was used", cannot be construed as meaning "may". The provisions of Rule 47(1)(c) are mandatory like the provisions of Rule 47(1)(a), Rule 47(1)(b) and Rule 47(1)(d). Held, that in maintaining the election of the first respondent in the present case on the basis of the 301 votes which were liable to be rejected under Rule 47(1)(c) the Tribunal was plainly in error. As the error was manifest on the face of the record, it called for interference in certiorari. Held further, that the prayer of the appellant to be declared elected must be refused under section 97, as the respondent had pleaded in his recrimination petition that there had been violation of Rule 23, and that by reason thereof the election of the appellant was liable to be set aside, if he had been declared elected and that plea had been established. In the result the entire election was set aside. N. P. Ponnuswami vs Returning Officer, Namakkal Constituency and Others ([1952] S.C.R. 218), Durga Shankar vs Raghuraj Singh ([1955] S.C.R. 267), T. C. Basappa vs T. Nagappa ([1955] S.C.R. 250), Clifford O 'Sullivan ([1921) 2 A.C. 570), Rex vs Electricity Commissioners ([1924] 1 K.B. 171), B. vs Wormwood Scrubbs (Governor) ([1948] 1 All E.R. 438), Waryam Singh and another vs Amarnath and another ([ ; , Parry & Co. vs Commercial Employees ' Association, Madras ([1952] S.C.R. 519), Veerappa Pillai vs Raman and Raman Ltd. and Others ([1952] S.C.R. 583), Ibrahim Aboobaker vs Custodian General ([1952] S.C.R. 696), Rex vs Northumberland Compensation Appeal Tribunal; Ex parte Show ([1951] ; 1 K.B. 711; , Rex vs Nat Bell Liquors Ltd. ([1922] 2 A.C. 128), Batuk K. Vyas vs Surat Municipality (A.I.R. , Julius vs Bishop of Oxford ([1880] L.R. 5 A.C. 214), Woodward vs Sarsons ([1875) , Vashist Narain v Dev Chandra ([1955] S.C.R. 509) and In Be South Newington Election Petition ([1948] 2 A.E.R. 503), referred to.

ition (Civil) No. 422 of 1987. (Under Article 32 of the Constitution of India). Dr. Y.S. Chitale, K.J. John, Atul Chitale and Miss Naina for the Petitioners. 577 K. Parasaran, Attorney General, T.S. Krishnamoorthy Iyer, G.A. Shah, V. Jagannatha Rao Advocate General, B.B. Ahuja, Miss A. Subhashini, T.V.S.N. Chari, Miss Vrinda Grover, Badri Nath, Dr. N.M. Ghatate, M. Veerappa, A.M. Khanwilkar, A.S. Bhasme, R. Mohan, R. Ayyam Perumal, A. Subha Rao, M.N. Shroff, J.R. Das, D.K. Sinha, S.N. Khare, T.C. Sharma, S.K. Bhattacharya, Kailash Vasudev and Probir Choudhary for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. The India Cement Limited, Chettinad Cement Corporation, Dalmia Cement (Bharat) Limited and Tamil Nadu Cement Corporation Limited being petitioners 1, 6, 9 and 12 in this application under Article 32 of the Constitution are manufacturers of cement, each of them having its manufacturing unit as also registered offices located within the State of Tamil Nadu; petitioners 2, 7, and 10 are shareholders of petitioners 1, 6 and 9 respectively and are citizens of India, while the remaining petitioners are authorised stockists of the different manufacturers having their places of business at different places located in the States of Karnataka, Kerala and Tamil Nadu. Manufacturer petitioners have been selling their cement in the States of Karnataka and Kerala and for such purpose they have places of business within those States. The State of Andhra Pradesh in exercise of powers conferred under sub section ( 1) of Section 9 of the Andhra Pradesh General Sales Tax Act, 1957 made an order on January 27, 1987 (Annexure A) reducing the rate of tax on sale of cement made to the manufacturing units of cement products in the State of Andhra Pradesh. That order runs thus: "In exercise of the powers conferred by sub section ( 1) of Section 9 of the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act, No. VI of 1957), the Governor of Andhra Pradesh hereby directs that the tax leviable under clause (a) of sub section (2) of Section 5 read with Item 18 in the First Schedule to the said Act, shall, in respect of Cement manufactured by Cement Factories situated in the State and sold to the manufacturing units situated within the State for the purpose of manufacture of Cement products such as Cement sheets, Asbestos Sheets, Cement flooring stones, Cement concrete pipes, hume pipes, Cement water and sanitary fitting, concrete poles and other Cement products, be at the reduced rate of four paise in the rupee at the point of first sale in the State with effect on 578 and from the Ist January, 1987. " On the same day, another order was made to the following effect: "In exercise of the powers conferred by sub section (5) of Section 8 of the (Central Act 74 of 1956), Governor of Andhra Pradesh hereby directs that the tax leviable under the said Act, shall, in respect of the sales of cement in the course of inter State trade or commerce be at a lower rate of two per cent with or without 'C ' Form, with effect from 1st January, 1987. " The State of Karnataka issued the following notification on 28.2.1987: "In exercise of the powers conferred by sub section (5) of Section 8 of the (Central Act 74 of 1956), the Government of Karnataka, being satisfied that it is necessary so to do in public interest, hereby reduces with immediate effect the rate of tax payable under the said Act on the sale of cement made in the course of inter State trade or commerce from 15% to 2%. " Petitioners in this application challenge the vires of Section 8(5) of the (Central Act 74 of 1956) and the notifications referred to above as ultra vires the provisions contained in Part XIII of the Constitution providing that trade, commerce and inter course throughout the territory of India shall be free. According to the petitioners the three orders referred to above create trade barriers and directly impinge upon the freedom of trade, commerce and inter course provided for in Article 301 of the Constitution. Since the vires of Section 8(5) of the Central Act 74 of 1956 had been assailed, notice had been issued to the Union of India and learned Attorney General. Notice was also directed to all the States. Pursuant to the notice, the State of Madhya Pradesh and Sikkim have filed their affidavits with reference to the challenge against Section 8(5) of the Act. At the hearing of the writ petition, however, learned counsel for the petitioners gave up that challenge. In that view of the matter, reference to the counter affidavits of the States of Madhya Pradesh and Sikkim becomes irrelevant and the petition has to be con fined to the challenge against the two notifications of the State of T 579 Andhra Pradesh and the lone notification of the State of Karnataka. The return to the rule nisi on behalf of the State of Andhra Pradesh is made by the Commercial Tax officer, Company Circle 11, Hyderabad. He has stated that the State of Andhra Pradesh has surplus production of cement. In 1986 87, the production of cement was around six million tonnes out of which local consumption was to the tune of about three million tonnes. In 1987 88 and 1988 89, production was likely to go up by 1.5 million tonnes and three million tonnes respectively and the local consumption was estimated to be within the range of 40% of the production. 60% of the manufactured cement had, therefore, to be marketed out. Within the State there were certain bulk consumers of cement who use the commodity as raw material for manufacturing Cement sheets, Asbestos sheets, hume pipes, Cement bricks, tiles etc. Such bulk consumers found products of cement from outside the State to be cheaper in view of the higher incidence of local State tax. In this background Government considered it necessary to reduce the tax rate under the Andhra Pradesh General Sales Tax Act to help the Cement Industries in easing out their marketing difficulty. Keeping in view the fact that marketing of indigenous cement had to be inside the State, Government decided to reduce the rate of tax under the Andhra Pradesh General Sales Tax Act to 4%. That is how the first notification was made reducing the rate of tax in respect of sale of cement to local manufacturers as aforesaid. Government by the second notification reduced the rate of tax leviable under the in course of inter State trade or commerce to 2% with or without 'C ' Form with effect from 1.1.1987. In another place of the same affidavit, it has been pleaded: " The classification of the manufacturers and dealers in cement of Andhra Pradesh vis a vis the other States is a reasonable classification and it is not violative of Articles 14 and 19(1)(g)". "The concession in the rate of tax extended by the State of Andhra Pradesh to the manufacturers and dealers of Andhra Pradesh is well within the statutory powers of the State. It does not effect the business interest of the manufacturers and dealers of other States. It is the policy of the State of Andhra Pradesh to help the cement Industries to organise the marketability of their full production to improve the overall industrial activity of the country. Hence this contention tenable". 580 "As already mentioned earlier, the notifications were issued in public interest and in the interest of State revenue". Yet at another place in the return. it has been stated: "The contention that the policy of the Legislature is to promote sales only through registered dealers is not based on correct appreciation of the law. Any law to that effect would impose a restriction on the rights of the common man and would result in the violation of the provisions of the Constitution which ensures certain fundamental rights to the common man. ' ' The State of Karnataka chose not to make any return to the rule nisi but its counsel joined at the hearing and contended that the order made by the Karnataka State did not affect the provisions in Part XIII of the Constitution. In view of the fact that counsel for petitioners gave up the challenge to the vires of Section 8(5) of the , learned Attorney General confined his submissions to the scope of of the Constitution and the effect of the notifications on the scheme contained in that part. In case the notifications operate against the provisions of Article 3o1 of the Constitution, they have got to satisfy the requirements contained in that Part. We shall now refer to the relevant Articles and to several decisions of this Court which are binding precedents. The title for Part XIII is "Trade, Commerce and Inter course within the Territory of India. " The relevant Articles in that Part are 30 1, 302, 303 and 304. We may now reproduce them: "3o1. Subject to the other provisions of this part, trade, commerce and intercourse throughout the territory of India shall be free. Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest (underlining is ours) 303 . ( 1) Notwithstanding anything in Article 302, 581 neither Parliament nor the legislature of a State shall have power to make any law giving, or authorising the giving, or any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule. (2) Nothing in clause (1) shall prevent Parliament from making any law giving, or authorising the giving of. any preference or making, or authorising the making of. any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. Notwithstanding anything in Article 30 1 or Article 303, the Legislature of a State may by law: (a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. " Judicial authority in regard to interpretation of this Part of the Constitution is abundant. We shall presently refer to some of the decisions of this Court . In Ataibari Tea Co. Ltd. vs The State of Assam & Ors., [1961] I SCR 609 a Constitution Bench of this Court was testing the validity of the provisions of the Assam Taxation (on goods carried by Roads and Inland Waterways) Act, 1954 by applying the provisions of this Part of the Constitution. At page 830 of the Reports. Sinha, CJ, stated: "Article 301,with which part III commences,con 582 tains the crucial words shall be free and provides the key to the solution of the problems posed by the whole Part. The freedom declared by this Article is not an absolute freedom from all legislations. As already indicated, the several entries in the three Lists would suggest that both Parliament and State Legislatures have been given the power to legislate in respect of trade, commerce and intercourse, but it is equally clear that legislation should not have the effect of putting impediments in the way of free flow of trade and commerce. In my opinion, it is equally clear that the freedom envisaged by the Article is not an absolute freedom from the incidence of taxation in respect of trade, commerce and intercourse, as shown by entries 89 and 92A in the List I, entries 52, 54 and 56 to 6() in List II and entry 35 in List III. All these entries in terms speak of taxation in relation to different aspects of trade, commerce and intercourse. The Union and State Legislature, therefore, have the power to legislate by way of taxation in respect of trade, commerce and intercourse, so as not to erect trade barriers, tariff walls or imposts, which have a deleterious effect on the free flow of trade, commerce and intercourse. That freedom has further been circumscribed by the power vested in Parliament or in the Legislature of a State to impose restrictions in public interest. Parliament has further been authorised to legislate in the way of giving preference or making discrimination in certain strictly limited circumstances indicated in clause (2) of Article 303. Thus, on a fair construction of the provisions of Part XIII, the following propositions emerge: (1) trade, commerce and intercourse throughout the territory of India are not absolutely free, but are subject to certain powers of legislation by Parliament or the Legislature of a State; (2) the freedom declared by Article 301 does not mean freedom from taxation simpliciter, but does not mean freedom from taxation which has the effect of directly impeding the free flow of trade, commerce and intercourse; (3) the freedom envisaged in Article 301 is subject to non discriminatory restrictions imposed by Parliament in public interest (Article 302); (4) even discriminatory or preferential legislation may be made by Parliament for the purpose of dealing with an emergency like a scarcity of goods in any part of India (Article 303(2)); (5) reasonable restrictions may be imposed by the Legislature of a State in the public interest 583 (Article 304(b)); (6) non discriminatory taxes may be imposed by the Legislature of a State on goods imported from another State or other States, if similar taxes are imposed on goods produced or manufactured in that State (Article 304(a)); and lastly (7) restrictions imposed by existing laws have been continued, except in so far as the President may by order otherwise direct (Article 305)"; Gajendragadkar, J., as he then was, at page 843 of the Reports observed: "In drafting the relevant Articles of Part XIII, the makers of the Constitution were fully conscious that economic unity was absolutely essential for the stability and progress of the federal policy which had been adopted by the Constitution for the governance of the country. Political freedom which had been won, and political unity which had been accomplished by the Constitution, had to be sustained and strengthened by the bond of economic unity. It was realised that in course of time, different political parties believing in different economic theories or idealogies may come in power in the several constituent units of the Union, and that may conceivably give rise to local and regional pulls and pressures in economic matters. Local or regional fears or apprehensions raised by local or regional problems may persuade the State legislatures to adopt remedial measures intended solely for the protection of the regional interests without due regard to their effect on the economy of the nation as a whole. The object of Part XIII was to avoid such a possibility. Free movement and exchange of goods throughout the territory of India is essential for the economy of the nation and for sustaining and improving living standards of the country. The provision contained in Article 301 guaranting the freedom. Of trade, commerce and intercourse is not a declaration of a mere platitude, or the expression of a pious hope of declaratory character; it is not also a mere statement of a Directive Principle of State Policy; it embodies and enshrines a principle of paramount importance that the economic unity of the country will provide the main sustaining force for the stability and progress of the political and cultural unity of the country . . " 584 Then came the case of The Automobile Transport (Rajasthan) Limited vs The State of Rajasthan & orS., [1963] SCR 491 Das, J. who spoke for the Constitution Bench referred to the views expressed in Atiabari Tea Company 's case (supra) and proceeded to say: "We have tried to summarise above the various stand points and views which were canvassed before us and we shall now proceed to consider which, according to us, is the correct interpretation of the relevant Articles in Part XIII of the Constitution. We may first take the widest view, the view expressed by Shah, J. in the Atiabari Tea C0mpany 's case, a view which has been supported by the appellants and one or two of the interveners before us. This view we apprehend, is based on a purely textual interpretation of the relevant Articles in Part XIII of the Constitution and this textual interpretation proceeds in the following way. Article 30 I which is in general terms and is made subject to the other provisions of Part XIII imposes a general limitation on the exercise of legislative powers, whether by the Union or the States, under any of the topics taxation topics as well as other topics enumerated in the three Lists of the Seventh Schedule, in order to make certain 'trade commerce and intercourse throughout the territory of India shall be free '. Having placed a general limitation on the exercise of legislative powers by Parliament and the State Legislatures, Article 302 relaxes that restriction in favour of Parliament by providing that that authority 'may by law impose such restrictions on the freedom of trade, commerce and intercourse between one State and another or within any part of the territory of India as may be required in the public interest '. Having relaxed the restriction in respect of Parliament under Article 302, a restriction is put up on the relaxation by Article 303(1) to the effect that Parliament shall not have the power to make any law giving any preference to any one State over another or discriminate in between one State and another by virtue of any entry relating to trade and commerce in Lists I and III of the Seventh Schedule. Articles 303( 1) which places a ban on Parliament against the giving of preferences to one State over another or of discriminating between one State and another, also provides that the same kind of ban should be placed upon the State Legislature also legislating by virtue of any entry relating to trade and commerce in Lists II and 585 III of the Seventh Schedule. Article 303(2) again carves out an exception to the restriction placed by Article 303( 1) on the powers of Parliament by providing that nothing in Article 303(a) shall prevent Parliament from making any law giving preference to one State over another or discriminating between one State and another, if it is necessary to do so tor the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. This exception applies only to Parliament and not to the State Legislatures. Article 304 comprises two clauses and each clause operates as a proviso to Articles 301 and 303. Clause (a) of that Article provides that the Legislature of a State may 'impose on goods imported from other States and any tax to which similar goods manufactured or produced in that State are subject so, however, as not to discriminate between goods so imported and goods so manufactured or produced '. This clause, therefore, permits the levy on goods from sister States any tax which similar gods manufactured or produced in that State are subject to under its taxing laws. In other words, goods imported from sister States are placed on par with similar goods manufactured or produced inside the State in regard to State taxation within the State allocated field. Thus the States in India have full powers of imposing what in American State Legislation is called the use tax, gross receipts tax etc., not to speak of the familiar property tax, subject only to the condition that such tax is imposed on all goods of the same kind produced or manufactured in the taxing State, although such taxation is undoubtedly calculated to fetter interstate trade and commerce . Now clause (b) of Article 304 provides that notwithstanding anything in Article 301 or 303 the Legislature of a State may by law imposes such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest. The proviso to clause (b) says that no bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. This provision appears to be the State analogue to the Union Parliament 's authority defined by Article 302, in spite of the omission of the word 'reasonable ' before the word 'restrictions ' in the latter Article. Leaving aside the pre requisite of previous Presidential sanction for the validity of State 586 Legislation under clause (b) provided in the proviso thereto, there are two important differences between Arti cles 302 and 304(b) which require special mention. The first is that while the power of Parliament under Article 302 is subject to the prohibition of preferences and discrimina tions decreed byArticle 303(1) unless Parliament makes the declaration contained in Article 303(2), the State 's power contained in Article 304(b) is made expressly free from the prohibition contained in Article 303(1), because the open ing words of Article 304 contain a non obstante clause both to Article 30 1 and Article 303. The second difference spr ings from the fact that while Parliament 's to impose restricC tions under Article 302 upon freedom of commerce in the public interest is not subject to the requirement of reason ableness, the power of the State to impose restrictions on the freedom of commerce in the public interest under Arti cle 304 is subject to the condition that they are reason able". The next authority to which we may now refer is the case of State of Madras vs N.K. Nataraja Mudaliar, ; Shah, J., as he then was, referred to Part XIII of the Constitution at page 839 of the Reports. On page 841 of the Reports, the learned Judge proceeded to say: "Tax under the on inter State sales, it must be noticed, is in its essence a tax which encumbers movement of trade or commerce, since by the definition in section 3 of the Act a sale or purchase of goods is deemed to take place in the course of inter State trade or commerce, if it (a) occasions the movement of goods from one State to another; (b) is effected by a transfer of docu ments of title to the goods during their movement from one State to another. The question which then falls to be determined is whether the tax imposed in the present case is saved by the operation of the other provisions of Part XIII. Article 302 of the Constitution provides that Parlia ment may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Thereby the Parliament is, notwithstanding the protection conferred by Article 30 1, authorised to impose restrictions on the freedom of trade, 587 commerce or intercourse in the public interest. The expression "between one State and another ' does not imply that it is only intended to confer upon the Union Parliament the power to remove the fetter upon legislative authority only so as to keep trade, commerce or intercourse free between one State Government and another. It is intended to declare trade, commerce and intercourse free between residents in one State and residents in another State. That is clear because Article 302 expressly provides that on the freedom of trade restrictions may be imposed not only as between one State and another, but also within any part of the territory of India. As we have already observed, Article 30I does not merely protect inter State trade or operate against inter State barriers: all trade is protected whether it is intra State or inter State by the prohibition imposed by Article 30I, and there is nothing in the language or the context for restricting the power of the Parliament which it otherwise possesses in the public interest to impose restrictions on the freedom of trade, commerce or intercoursc, operative only as between one State and another as two entities. There is also no doubt that exercise of the power to tax may normally be presumed to be in the public interest . . It is worthwhile to refer to tne observations made by Hegde, J. At page 855 of the Reports, the learned Judge observed with reference to section 8(5) of the as follows; "Sub section (5) of section 8 provides for giving individual exemptions in public interest. Such a power is there in all taxation measures. It is to provide for unforeseen contingencies. Take for example, when there was famine in Bihar, if a dealer in Punjab had undertaken to sell goods to a charitable society in that State at a reasonable price for distribution to those who were starving, it would have been in public interest if the Punjab Government had exempted that dealer from paying sales tax. Such a power cannot immediately or directly affect the free flow of trade. The power in question cannot be said to be bad. If there is any misuse of that power, the same can be challenged. " The true purpose of the provisions contained in of the Constitution. as elucidated in the different decisions of the constitution 588 Benches, is that the restriction provided for in Article 30 I can within A the ambit be limited by law made by the Parliament and the State Legislature. No power is vested in the executive authority to act in any manner which affects or hinders the very essence and thesis contained in the scheme of Part XIII of the Constitution. It is equally clear that the declaration contained in Part XIII of the Constitution is against creation of economic barriers and/or pockets which would stand against the free flow of trade, commerce and intercourse There can be no dispute that taxation is a deterrent against free flow. As a result of favourable or unfavourable treatment by way of taxation, the course of flow of trade gets regulated either adversely or favourably. If the scheme which Part XIII guarantees has to be pre served in national interest, it is necessary that the provisions in theArticle must be strictly complied with. One has to recall the farsighted observations of Gajendragadkar, J. in Atiabari Tea Co. case (supra) and the observations then made obviously apply to cases of the type which is now before us. The two notifications of the Andhra Pradesh Government may now be referred to. Under the first notification made under section 9(1) of the Andhra Pradesh General Sales Tax Act, the rate of tax has been reduced to 4 per cent in respect of sales made by indigenous cement manufacturers to manufacturers of cement products. Admit tedly, the Tamil Nadu producers have sales officers in Andhra Pradeshand in regard to their sale to such manufacturers of cement products the benefit of reduced rate of taxation is not applicable. The prescribed rate of tax under the Andhra Act is 13.75 per cent on cement. Thus under the Andhra Notification in regard to the local tax the indigenous producers of cement have a benefit of 9.75 per cent. The return made to the Court admits of the position that preference has been shown to local manufacturers. Two reasons have been advanced by way of justification. One is that it is beneficial to the State revenue and secondly it protects the local manufacturers too. The counsel for the State Government has not been able to demonstrate to us how the reduction in the rate of sales tax is beneficial to the State revenue. The other justification is what provisions of Part XIII of the Constitution do not permit. The reasonable restrictions contemplated in Part XIII have to be backed by law and not by executive action provided the same are within the limitations prescribed under the scheme of Part Xlll. Coming to the second notification relating to inter state transac 589 tions, the justification pleaded by the State of Andhra Pradesh has already been extracted by us. We may usefully refer to the decision of the Constitution Bench in the case of Gwalior Rayon Silk Mfg. (Wvg) Co. Ltd. vs The Assistant Commissioner of Sales Tax & orS., [ ; At page 883 of the Reports, Khanna, J. speaking for the Court observed: "It has been argued on behalf of the appellants that the fixation of rate of tax is a legislative function and as the Parliament has, under section 8(2)(b) of the Act, not fixed the rate of central sales tax but has adopted the rate applicable to the sale or purchase of goods inside the appropriate State in case such rate exceeds lO per cent, the Parliament has abdicated its legislative function. The above provision is consequently stated to be constitutionally invalid because of excessive delegation of legislative power. This contention, in our opinion, is not well founded. Section 8(2)(b) of the Act has plainly been enacted with a view to prevent evasion of the payment of the central sales tax. The Act prescribed a low rate of tax of 3 per cent in the case of inter State sales only if the goods are sold to the Government or to a registered dealer other than the Government. In the case of such a registered dealer, it is essential that the goods should be of the description mentioned in subsection (3) of section 8 of the Act. In order, however, to avail of the benefit of such a low rate of tax under section 8(1) of the Act, it is also essential that the dealer selling the goods should furnish to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer, to whom the goods are sold, containing the prescribed particulars in prescribed form obtained from the prescribed authority, or if the goods are sold to the Government not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government. In cases not falling under sub section (1), the tax payable by any dealer in respect of inter State sale of declared goods is the rate applicable to the sale or purchase of such goods inside the appropriate state vide section 8(2) of the Act. As regards the goods other than the declared goods, section 8(2)(b) provides that the tax payable by any dealer on the sale of such goods in the course of inter State trade or commerce shall be calculated at the rate of lO per cent or at the rate 590 applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher. The question with which we are concerned is whether the Parliament is not fixing the rate itself and in adopting the rate applicable to the sale or purchase of goods inside the appropriate State has not laid down any legislative pol icy and has abdicated its legislative function. In this con nection we are of the view that a clear legislative policy can be found in the provisions of section 8(2)(b) of the Act. The policy of the law in this respect is that in case the rate of local sales tax be less than 10 per cent, in such an event the dealer, if the case does not fall within section 8(1) of the Act, should pay central sales tax at the rate of 10 per cent. If, however, the rate of local sales tax for the goods con cerned be more than 10 per cent, in that event the policy is that the rate of the central sales tax shall also be the same as that of the local sales tax for the said goods. The object of law thus is that the rate of the central sales tax shall in no event be less than the rate of local sales tax for the goods in question though it may exceed the local rate in case thas t rate be less than 10 per cent. For example, if the local rate of tax in the appropriate State for the non declared goods be 6 per cent, in such an event a dealer, whose case is not covered by section 8(1) of the Act, would have to pay cent ral sales tax at a rate of lO per cent. In case, however, the rate of local sales tax for such goods be 12 per cent, the rate of central sales tax would also be 12 per cent because otherwise, if the rate of central sales tax were only lO per cent, the unregistered dealer who purchases goods in the course of inter State trade would be in a better position than an intra State purchaser and there would be no disin centive to the dealers to desist from selling goods to unre gistered purchasers in the course of inter State trade. The object of the law apparently is to deter inter State sales to unregistered dealers as such inter State sales would faciliG tate evasion of tax. It is also not possible to fix the max imum rate under section 8(2)(b) because the rate of local sales tax varies from State to State. The rate of local sales tax can also be changed by the State legislatures from time to time. It is not within the competence of the Parliament to fix the maximum rate of local sales tax. The fixation of the rate of local sales tax is essentially a matter for the State 591 Legislatures and the Parliament does not have any control in the matter. The Parliament has therefore necessarily, if it wants to prevent evasion of payment of central sales tax, to tag the rate of such tax with that of local sales tax, in case the rate of local sales tax exceeds a particular limit. " Reference may also be made to another decision of the Constitution Bench in the case of State of Tamil Nadu etc. vs Sitalakshmi Mills etc. ,[1974]1 1 SCR 1. At page 6 of the Reports, Mathew, J. stated: "As already stated, section 8(2)(b) deals with sale of goods other than declared goods and it is confined to interState sale of goods to persons other than registered dealers or Governments. The rate of tax prescribed is 10 per cent or the rate of tax imposed on sale or purchase of goods inside the appropriate State, whichever is higher. The report of the Taxation Inquiry Committee would indicate that the main reason for electing the provision was to canalize inter State trade through registered dealers, over whom the appropriate Government has a great deal of control and thus to prevent evasion of tax: Where transactions take place between registered dealers in one State and unregistered dealers or consumers in another, this low rate of levy will not be suitable, as it is likely to encourage avoidance of tax on more or less the same scale as the present provisions of Article 286 have done. If this is to be prevented, it is necessary that transactions of this type should be taxable at the same rates which exporting States impose on similar transactions within their own territories. The unregistered dealers and consumers in the importing States will then find themselves unable to secure any advantage over the consumers of locally purchased articles; nor of course will they, under this system, be able to escape the taxation altogether, as many of them do at present. " (See Report of the Taxation Enquiry Commission, 195354, Vol.3, p. 57) In other words it was to discourage inter State sale to unregistered dealers that Parliament provided a high rate of tax, namely, IO%. But even that might not serve the 592 purpose if the rate applicable to intra State of such goods was more than 10%. The rate of 10% would then be favour able and they would be at an advantage compared to local cosumers. It is because of this that Parliament provided, as a matter of legislative policy that the rate of tax shall be 10% or the rate applicable to intra State sales whichever is higher. If prevention of evasiorl of tax is a measure in the public interest, there can be no doubt that Parliament is competent to make a provision for that purpose under Article 302 even if the provision would impose restrictions on the inter State trade or commerce. Variation of the rate of inter State sales tax does affect free trade and commerce and creates a local preference which is contrary to the scheme of Part XIII of the Constitution. The notification extends the benefit even to unregistered dealers and the observations of Hegde, J. on this aspect of the matter are relevant. Both the notifications of the Andhra Pradesh Government are, therefore, bad and are hit by the provisions of Part XIII of the Constitution. They cannot be sustained in law. Now coming to. the notification of the Karnataka State, we have already pointed out that no return has been made and no attempt has been made, therefore, to place facts and circumstances to justify the action. The notification suffers from the same vice as the second notification of the State of Andhra Pradesh suffers and no distinction can be drawn. We accordingly hold that the notification of the Karnataka Government is also bad in law. It may be pointed out that the rate of sales tax in Karnataka is 19.5 per cent.in regard to intra State sales. In view of what we have indicated above, the writ petition has to succeed and the two impugned notifications of the Andhra Pradesh Government and the impugned notification of the Karnataka Government are quashed. The writ petition is accordingly allowed with costs. Hearing fees is assessed at Rs.5,OOO and this shall be shared equally by the States of Andhra Pradesh and Karnataka. section L. Petition allowed.

% The State of Andhra Pradesh in exercise of powers conferred under sub section (1) of section 9 of the Andhra Pradesh General Sales Tax Act, 1957, made an order on January 27, 1987, reducing the rate of tax on sale of Cement made to the manufacturing units of Cement products in the State. On the same date, the State of Andhra pradesh made another order in exercise of the powers conferred by sub section (5) of section 8 of the , reducing the tax leviable under the said Act in respect of sales of Cement in the course of the inter State trade or commerce. The State of Karnataka in exercise of the powers conferred by sub section (5) of section 8 of the , issued a notification on 28.10.1987, reducing the rate of tax payable under the said Act on the sale of Cement in the course of the inter State trade or commerce. The petitioners cement manufacturing concerns, their shareholders and their authorised stockists filed this writ petition, challenging the vires of section 8(5) of the (Central Act 74 of 1956) and the notifications referred to above as ultra vires the provisions contained in Part XIII of the Constitution providing that trade, commerce and inter course throughout the territory of India shall be free. According to the petitioners the three orders referred to above created trade barriers and directly impinged upon the freedom of trade, commerce and inter course provided for in Article 301 of the constitution. Since the vires of section 8(5) of the Central Act 74 of 1956 had been assailed, notice had been issued to the Union of India, Attorney General, and all the States but at the hearing of the writ petition, the 575 petitioners gave up the challenge against section 8(5) of the Central Act. In view of that, the writ petition was confined to the challenge against the two notification of the State of Andhra Pradesh and the lone notification of the State of Karnataka. The return to the rule nisi was made on behalf of the State of Andhra Pradesh. The State of Karnataka chose not to make any return to the rule nisi, but its counsel joined at the hearing and contended that the order made by the Karnataka State did not affect the provisions in Part XllI of the Constitution. The Attorney General confined his submission to the scope of Part III of the Constitution and the effect of the notifications on the scheme contained in that part. Allowing the writ petition, the Court, ^ HELD: The title for Part XIII. which contains the relevant Articles 30 l, 302, 303 and 304 is "Trade Commerce and inter course within the Territory of India. " The true purpose of the provisions contained in Part Xlll of the Constitution, as elucidated in the different decisions of the Constitution Benches of this Court, is that the restriction provided for in Article 301 can within the ambit be limited by law made by the Parliament and the State legislature. No power is vested in the executive authority to act in any manner affecting or hindering the very essence and thesis contained in the scheme of Part XIII of the Constitution. lt is equally clear that the declaration contained in Part XIIl of the Constitution is against the creation of economic barriers and or pockets which stand against the free now of trade, commerce and inter course. [580F; 587H; 588A B] Taxation is a deterrent against free flow. As a result of favourable or unfavourable treatment by way of taxation, the course of flow of trade gets regulated either adversely or favourably. If the scheme which Part XIII guarantees has to be preserved in national interest, it is necessary that the provisions in the Article must be strictly complied with. One has to recall the far sighted observations of Gajendragadkar. J. in Atiabari Tea Co. Ltd. vs The State of Assam & Ors., [1961] 1.S.C.R. 609 and the observations then made obviously apply to cases of the type now before the Court.[588C D] Under the first notification made under section 9(1) of the Andhra Pradesh General Sales Tax Act, the rate of tax was reduced to 4 percent in respect of the sales made by the indigenous cement manufacturers to manufacturers of Cement products. The Tamil Nadu producers had sales officers in Andhra Pradesh and in regard to their sale to such manufacturers of cement products, the benefit of the reduced rate of 576 taxation was not applicable. Two reasons were advanced by way of justification. One was that it was beneficial to the State revenue and secondly, that it protected the local manufacturers too. It could not be demonstrated to the Court how the reduction in the rate of sales tax was beneificial to the State revenue. The other justification was what the provisions of Part XIII of the Constitution did not permit. The reasonable restriction contemplated in Part XIII have to be backed by law and not by executive action, provided the same are within the limitations prescribed under the Scheme of Part XIII.[588D H] The second notification related to the inter State transactions. Variation of the rate of inter State sales tax does affect free trade and commerce and creates a local preference which is contrary to the scheme of Part XIII of the Constitution. The notification extended the benefit even to the unregistered dealers. Both the notifications of the Andhra Pradesh Government were bad and hit by the provisions of Part Xlll of the Constitution. They could not be sustained in law.[592D] In the case of the notification of the Karnataka State, as already said, no return had been made and no attempt had been made to place the facts and circumstances to justify the action. The notification suffered from the same vice as the second notification of the State of Andhra Pradesh suffered, and no distinction could be drawn. The notification of the Karnataka Government was also bad in law. [597E F] The writ petition succeeded and the two impugned notifications of the Andhra Pradesh Government and the impugned notification of the Karnataka Government were quashed. [592G] Atiabari Tea Co. Ltd. vs The State of Assam & Ors., ; The Automobile Transport (Rajasthan) Limited vs The State of Rajasthan & Ors., [1963] S.C.R. 491; State of Madras vs N.K. Nataraja Mudaliar., [1968] 3 S.C.R. 829; Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. vs The Assistant Commissioner of Sales Tax & Ors., [1974] 2 S.C.R. 879 and State of Tamil Nadu, etc. vs Sitalakshmi Mills, etc.; , , referred to.

Appeal No. 350 of 1970. Appeal by special leave from the judgment and order dated March 21, 1966 of the Madras High Court in O.S. Appeal No. 11 of 1962. B. R. L. lyengar, M. V. Goswami, section R. Agarwala, A. T. M. Sampat and E. C. Agrawala, for the appellant. U. P. Singh, Santok Singh, Ugra Shankar Prasad and Shiva Pujan Singh, for respondent No. 1. section P. Sinha and M. I. Khowaja, for respondents Nos. 2 and 3. The Judgment of the Court was delivered by Ray, J. This appeal is by special leave from the judgment dated 21 March, 1966 of the Madras High Court dismissing the appeal preferred by the appellant against the decree holders ' application for execution of the decree. The appellant is one of the judgment debtors brought on record as legal representative of a deceased judgment debtor Lala Baijnath Prasad. Respondent No. 1 Lakshman Prasad Gupta was one of the plaintiffs. Pratap Chand and Basudeb Prasad respondents Nos. 2 and 3 respectively are the sons of a judgment debtor Girdharilal Agarwala. The plaintiff respondent Lakshman Prasad Gupta was married to the sister of Lala Bansilal. Bansilal belonged to the joint family which consisted inter alia of the appellant 's father. There were five 366 branches of the said joint family of the judgment debtors, three whereof were at Banaras, Calcutta and Naini and the other two were the branches of the descendants of Mohanlal and of Lala Baijnath Prasad, father of the appellant, respectively. The said joint family had valuable properties in and around the town of Arrah in Bihar. There are alleged to be valuable properties of the joint family also at Allahabad, Banaras, Bombay, Calcutta and Madras. Some time in the year 1926 Lala Pratap Chand, one of the descendants of Mohanlal who was a grand uncle of Lala Bansilal filed a partition suit in the court of the Subordinate Judge at Allahabad. A preliminary decree was passed in the said partition suit on 14 February, 1927. An appeal was preferred and it was dismissed. An amicable settlement was arrived at in the partition suit on 13 January, 1931 for partition of the properties into five equal lots and allotment of the shares. Thereafter a Commissioner was appointed in the partition suit to go into accounts and prepare five lots. The branches inter se raised disputes as to liability for loans alleged against the joint family. The Commissioner prepared his report on 18 May, 1936. Final decree was passed on 13 January, 1939. An appeal was preferred against the said final decree in the partition suit to the High Court at Allahabad. The appeal was disposed on 6 December, 1949. The plaintiff Lakshman Prasad Gupta and six others filled suit No. 76 of 1937 in the Court, of the First Subordinate Judge at Arrah in Bihar and obtained a decree on 20 July, 1938 for Rs. 18,540 and for costs Rs. 1,840/4/ aggregating Rs. 20,380/4/ . This decree was against Banwarilal and other members of the joint family to which the appellant 's father belonged. The decree was transferred from Arrah to the Court of the Civil Judge at Allahabad where. on 2 June, 1941 the decree holder commenced execution proceedings marked as Execution Petition No. 38 of 1941. In that execution petition the decree holder prayed for attachment and sale of Shri Krishna Desi Sugar Works at Jhusi known as the Jhusi Sugar Mills in the District of Allahabad which belonged to the joint family. The execution proceedings were according to the decree holders stayed under orders of the Allahabad High Court and after the stay order was vacated the execution proceedings were revived on 13 May, 1950. The jhusi Sugar Mill was attached on 1 1 July, 1952 and it was sold on 19 February, 1955. The sale was set aside on 31 May, 1955 pursuant to objections of the judgment debtors that the Jhusi Sugar Mill could not be sold because of the provisions of the U.P. Encumbered Estates Act, 1934. It may be stated here that some time in the month of September, 1935 367 Baijnath Prasad filed an application before the Collector of Allahabad for protection and relief under the U.P. Encumbered Estates Act of 1934 and it was registered as Encumbered Estates, Suit No. 25 of 1935. Thereafter the decree holders on 17 March, 1956 made an application in the Arrah Court for transfer of the decree. On 6, June, 1956, the Subordinate, Judge, at Arrah transferred the decree to the Madras High Court. On 13 August, 1956 the decree holders, filed in the Madras High Court an application for attaching the properties of the joint family. This application in the Madras High Court is the subject matter of the present appeal. The matter was heard first by the Master of the High Court of Madras who held that the application for execution was barred by limitation. An appeal from the decision of the Master was heard by the learned Single Judge of the Madras High Court who held that the application was not within the mischief of bar of limitation Thereafter Letters Patent Appeal was heard by a Division Bench of the Madras High Court. The appeal is from the Bench decision upholding the judgment of the learned Single Judge. Before the Master of the Madras High Court the contention on behalf of the judgment debtors was that the decree was passed on 20 July, 1 9 3 8 and therefore the execution petition filed on 1 3 August, 1956 was barred by limitation. The decree holders on the other hand contended that the execution of the decree which commenced on 2 June, 1941 before the Civil Judge at Allahabad was stayed till the end of 1949 and was revived on 13 May, 1950 and finally disposed on 31 May, 1955, and, therefore, the execution petition filed on 13 August, 1956 was within time. 'he Master held that the decree holders had failed to prove as to from what point of time the execution of the decree was stayed pursuant to the order of the Allahabad High Court and also the time when the stay was vacated. The application for execution was therefore found by the Master of the Madras High Court to be barred by limitation. The learned Single Judge of the Madras High Court referred to the revival of execution proceedings before the Civil Judge at Allahabad on 13 May, 1950 and also the finding of the Civil Judge at Allahabad who in passing the final order on 31 May, 1955 setting aside the sale of the Jhusi Sugar Mill stated that the execution proceedings were stayed by orders of the High Court at Allahabad., The Civil Judge at Allahabad set aside the Sale because of the mandatory provisions of sections 7(2) and 9(5) of the U.P. Encumbered Estates Act. The Madras High Court placed reliance on Exhibits P 2, P 3 and P 3A on the question of stay of execu tion proceedings. It may also be stated here that the judgment 3 68 debtor did not dispute the translation of those Exhibits P 3 and P 3A. The Exhibits set out the orders of the Civil Judge at Allahabad. Exhibit P. 2 is the judgment dated 31 May, 1955 passed by the Civil Judge setting aside the sale of the Jhusi Sugar Mill. Exhibits P 3 and P 3A comprise the orders passed by the Civil Judge. The three relevant orders in Exhibits P 3 and P 3A are dated 18 August, 1941, 23 August, 1941 and 30 August, 1941 in the said execution proceedings. The order dated 18 August, 1941 was to the effect that the receivers were to be informed about the execution proceedings and their objections, if any. The receivers were the receivers in the partition suit No. 4 of 1926. The said order further recited that the orders of the High Court at Allahabad in the, partition suit were also received in the executing court. The order dated 23 August, 1941 recited that the execution application of the decree holder was presented in the presence of the lawyers of the decree holder and the receivers. Further, the order was that the request for permission should be submitted in suit No. 4 of 1926 namely, the partition suit of the defendants judgment debtors. The order dated 30 August, 1.941 recorded by the Civil Judge at Allahabad was inter alia as follows : "The proceedings remain stopped on account of the injunction of the High Court. Hence it was ordered that receivers should be informed accordingly. Further steps will be taken after getting permission . These orders are relied on by the decree holder to substantiate the case of stay of execution proceedings. The contention which was advanced before the Madras High Court and repeated in this Court was that there was no absolute stay of the execution of the decree. It was amplified to mean that the execution proceedings before the Civil Judge at Allahabad related only to one property and therefore the decree holders would not be entitled to claim benefit of exclusion of time by reason of partial stay of execution proceedings at Allahabad. The Madras High Court rightly found that there was no evidence that the judgment debtors were possessed of other properties in Allahabad where the decree was being executed. The Madras High Court rightly held that the decree holders were restrained by injunction issued by the Allahabad High Court from executing the decree and were therefore entitled to claim the benefit of section 15 of the Limitation Act in respect of the period of stay of execution of the decree. It was contended by counsel for the appellant that the decree holder could start execution proceedings in Madras or in other States where the judgment debtors had properties. Simultaneous 3 6 9 execution proceeding in more places than one is possible but the power is used sparingly in exceptional cases by imposing proper terms so that hardship does not occur to judgment debtors by allowing several attachments to be proceeded with at the same time. In the present case, however, the important features are that a partition suit was instituted in the year 1926 among the defendants. and receivers were appointed of the properties. The judgment of the Allahabad High Court dated 6 December, 1949 disposing the appeals filed by the parties in the partition suit directed inter alia "that the parties will be put in possession of the immoveable properties at once, but the two receivers will be legally discharged only after they have accounted for the period they were in charge of the properties". Counsel for the decree holder rightly relied on this portion of the judgment of the Allahabad High Court that this would fortify the construction that there was stay of execution of the decree. In the present case, the effect of the order passed by the Allahabad High Court was recorded by the Civil Judge, Allahabad in his judgment dated 31 May, 1955 to amount to stay of execution proceedings. The order of the Civil Judge, Allababad dated 30 August, 1941 was that "proceedings remain stopped on account of the injunction order issued by the High Court. in the Madras High Court the parties proceeded on thee basis of the order as corded by the Civil Judge at Allahabad. The order indicates that the stay of execution proceedings was in unqualified terms, namely, that the execution proceedings were stopped. It is not possible to spell out any order of partial stay in the facts and circumstances of the present case as was contended by counsel for the appellant. The order is on the contrary to the effect that there was an absolute, stay of execution proceedings. It is, therefore, manifest that the execution proceedings before the Civil Judge at Allahabad were stayed and the decree holder was rightly found by the Madras High Court to the benefit of exclusion of time during which the execution, was stayed, Though the judgment debtors did not question before the Master of the Madras High Court the bona fides of the decree holder in prosecuting the execution proceedings, that contention was advanced before the learned Single Judge of the Madras High Court. The learned Single Judge of the Madras High Court held that the decree holders commenced execution proceedings for sale of the Jhusi Sugar Mill for realisation of the decretal amount but the attempt of the decree holder failed because of the objections of R the judgment debtors under the provisions of the U.P. Encumbered Estate Act. The sale was set a side by reason of the mandatory provisions of the statute. The learned Single Judge of the Madras High Court rightly held that the decree holders prosecuted the exe 370 cution case in good faith and with due diligence and were entitled to protection under section 14 of the Limitation Act. Before the Division Bench of the Madras High Court no argu ment was advanced touching the bona fides or good faith with which the execution proceedings were carried on. Counsel for the appellant repeated the contention that the decree holders were guilty of lack of good faith and diligence. It is not open to the judgment debtors to advance that contention having abandoned the same before the Division Bench of the Madras High Court. We are furthermore of opinion that the conclusion of the learned Single Judge of the Madras High Court on that point is correct. The other question which arise before the Madras High Court was whether section 15 of the Limitation Act, 1908 would apply to limitation prescribed in statutes other than the Limitation Act. Section 48 of the Code of Civil Procedure until its amendment on the passing of the enacted that the decrees of the Civil Courts were to be executed within 12 years and not after that. The present case is governed by section 48 of the Code of Civil Procedure as it stood prior to the deletion of that section along with the passing of the . In section 15 of the Limitation Act, 1908 it is enacted that in computing the period of limitation prescribed for any suit or application for a decree execution of which has been stayed by injunction, the time of the continuance of the injunction shall be excluded. In the Madras High ,Court it was argued that the word 'prescribed ' occurring in section 15 of the Limitation Act could apply only to cases of limitation prescribed by the First Schedule to the Limitation Act, 1908 with the result that the benefit of exclusion of time by reason of operation of stay could not be availed of in cases of limitation prescribed by section 48 of the Code of Civil Procedure. The Madras High Court relied on the decision in Kandaswami Pillai vs Kannappa Chetty(1) which held that the expression 'prescribed ' in section 15(1) of the Limitation Act would apply not only to limitation prescribed in the First Schedule to the Limitation Act but also to limitation prescribed in general statutes like the Code of Civil Procedure. That is the correct statement of law and counsel for the appellant did not advance any contention to the contrary. It may, however, be stated that the effect of section 48 of the Code of Civil Procedure is not to supersede the law of limitation with regard to execution of decrees. The Limitation Act prescribes a period of limitation for execution of decrees. Section 48 of the Code of Civil Procedure dealt with the maximum limit of time provided for execution, but it did not prescribe the period within (1) 3 7 1 which each application for execution was to be made. An application for execution was to be made within three, years from any of the dates mentioned in the third column of Article 182 of the Limitation Act 1908. An application for execution of a decree would first have to satisfy Article 182 and it would also have to be found out as to whether section 48 of the Code of Civil Procedure operated as a further bar. In the present case, there was stay of execution proceedings. On 13 May, 1950 the execution proceedings were revived. The judgment debtors did not challenge the order dated 13 May, 1950. The judgment debtors impeached the sale only on a ground covered by the U.P. Encumbered Estates Act, 1934. The judgment debtor further in impeaching the sale of Jhusi Sugar Mill did not advance before the Civil Judge at Allahabad any contention that any of the orders,of the Civil Judge at Allahabad reviving the execution proceedings, attaching the Jhusi Sugar Mill and directing the sale of the Sugar Mill was barred by limitation. The principle of res judicata applies to execution procedings. The judgment debtors in the present case did not raise any objection as to limitation in regard to execution of the decree before the Civil Judge at Allahabad. On the contrary the judgment debtors asked for setting aside the sale on the basis of revival of execution proceedings. The revival of execution was not challenged and the judgment debtors are thereby barred by the principle of rem judicate from questioning directly or indirectly the order dated 13 May, 1950 reviving the execution proceedings. When the appellant made the application for special leave, the appellant referred to an affidavit affirmed by the appellant 's father on 12 February, 1957 in the execution proceedings in the Madras High Court. The copy of the said affidavit annexed to the petition for special leave in this Court is in seven paragraphs. In paragraph 6 of the said affidavit it is alleged that the decree is against 5 bran ches and the plaintiff Lakshman Prasad in collusion with the other branches excluded the other four branches and chose to proceed only against the appellant 's branch though the other four branches were possessed of vast properties. The further allegations in paragraph 6 of the said affidavit are that the object of the plaintiff is to harass only one branch and the application is not bonafide. The plaintiff respondent in answer to the petition for special leave affirmed an affidavit in this Court that paragraph 6 in the said affidavit was an interpolation and was not at all in existence in the affidavit filed in the Madras High Court. The plaintiff respondent ti obtained a photostat copy of the said affidavit filled in the Madras High Court. The photostat copy established that paragraph 6 was not there and further that the affidavit was affirmed at Allahabad bad on 12 February, 1957 and not at Madras. Furthermore, the 372 affidavit was explained to the deponent Baijnath Prasad as will appear from the photostat copy as annexed to the petition whereas in the copy annexed to the petition for special leave there was no such statement. It is a serious matter that the appellant asked for relief on the basis of false copies of affidavits. An explanation was suggested in the affidavit of the appellant that the copy was annexed in accordance with the draft that had been sent by the Madras lawyer. It is beyond comprehension as to how an incorrect copy would be sent by the Madras lawyer. Counsel for the appellant realised the gravity of the situation and conceded that the matter should be proceeded, with on the basis as it paragraphs did not exist. The appellant is guilty of lack of uberrimae fidei. We have therefore proceeded on the basis that paragraph 6 did not exist in the copy of the said affidavit. The Madras High Court upheld the order of the learned Single Judge entitling the decree holder to the exclusion of the period spent in prosecuting prior infructuous execution proceedings before the Civil Judge at Allahabad. The decree holder was allowed to proceed with the execution proceedings and t he Madras High Court remitted the matter to the Master to consider the questions indicated in the judgment and the judgment debtors were allowed to raise objections to the executability of the decree apart from that of limitation as indicated in the judgment of the learned Single Judge. We are of opinion that the Madras High Court is right in holding that the decree holder is entitled to the benefit of exclusion of time during which the execution proceedings were stayed by the order of the Allahabad High Court and the decree holder proceeded with the said execution proceedings in good faith and with the deligence. For these reasons we are of opinion that the appeal fails. The appellant will pay the costs to the respondents. Y.P. Appeal dismissed.

The first respondent, in 1938, obtained a decree against the appellants branch of a joint family, and in 1941, commenced proceedings for the execution of the decree in Allahabad. Meanwhile, in 1939, a final decree had been passed in a suit for partitioning the family properties among the members of the joint family, and the matter was taken up in appeal to the High Court of Allahabad. Certain orders were passed by the High Court which were construed by the executing court in the years 1941 and 1942 as stay orders of the execution proceedings commenced by the respondent. The High Court passed a final decree in the partition suit in December 1949, but did not immediately discharge the Receivers who were appointed during the pendency of the suit. The respondent revived the execution proceedings in May 1,950 and a mill belonging to the joint family was attached and sold 'but the sale was set 'aside in 1955 as the appellant 's branch applied for relief under the U.P. Encumbered Estates Act, 1934. Thereafter, in ' 1956, the decree in favour of the respondent was transferred to Madras High Court for execution and on 13th August, 1956, the respondent filed an execution application, for attainment of certain properties which fell to the appellant 's share. High Court of Madras in Letters Patent Appeal held that the execution application was in time. On the question whether the execution application dated 13th August, 1956, was in time, or barred by limitation, HELD : (i) The respondent bonafide pursued execution against the mill and since his good faith was not questioned before the Appellate Court it was not open to the appellant to do so in this Court. [370 A, C] (ii) It was not possible to spell out any order of partial stay on the facts and circumstances of the present case. The facts that the Receivers were not finally discharged in 1949 when the final decree by the High Court was passed in the partition suit, and the understanding of the parties and the executing court that execution was stayed by the High Court, indicate that the stay was in unqualified terms. Therefore, the respondent could not have applied earlier 'for execution with respect to other property of the joint family either at Allahabad or at Madras. [369 A C, D G] (iii) Further, when the execution proceedings were revived in May 1950 the executing court held that execution proceedings had been stayed till December 1949 and the appellant did not challenge the order of attachment and sale of mill on the ground that the proceedings were barred by limitation. Therefore, the appellant was barred by the principle of res judicata from questioning the order of May 1950 on the ground of limitation. [371 D E] 365 (iv) Section 15 of the Limitation Act states that in computing the period of limitation prescribed the time of the continuance of the injunction staying execution shall be excluded. The word "prescribed" would apply not only to Limitation Act but also to the limitation prescribed in general statutes like the Civil Procedure Code. Section 48 of the Code, as it then stood, laid down 12 years as the maximum limit of the period of execution but it did not prescribe the period within which each application for execution was to be made. Such an application was to be made within three years from the dates mentioned in third column of Article 182 of the Limitation Act, 1908. Therefore, an application for execution of a decree must first satisfy Article 182 and it would then have to be found out as to whether section 48 of the Civil Procedure Code operated as a further bar. [370 C H; 371 A B] (v) Since the execution proceedings were stayed in the present case, the 'respondent was entitled to claim its benefit of section 15 of the Limitation Act in respect of the period of stay of the execution of his decree, from June 194.1 till end of 1949; and since the execution application of 1950 was finally disposed of in 1955, the present application filed in 1956 was within time. [372 E]

s Nos. 98, 99, 100 and 101 of 1950. 139 Appeals from the orders of the High Court of Judicature at Patna (Manohar Lall and Imam JJ.) in Miscellaneous Ap peals Nos. 108 to 111 of 1948. Shambhu Barmeswar Prasad and Ramanugrah Prasad for the appellants. H.J. Umrigar for the respondents. January 12. The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J. The decision of these four ap peals, which are connected with each other and which have arisen out of orders made by the High Court of Patna in four Miscellaneous Appeals, depends on the interpretation of section 7 of the Bihar Moneylenders (Regulation of Transac tions) Act, 1939. The facts which have led to the appeals are found brief ly stated in the petition filed by the present appellants in the 3rd Court of Sub Judge, Patna, and may be re stated here for convenient reference : "The father of the petitioners borrowed Rs. 40,000 from the guru (ancestor) of the decree holder under mortgage bond, dated 11 1 1893. Out of Rs. 40,370 7 6 interest and compound interest up to 4 1 1910, Rs. 32,370 7 6 was paid in cash and for the balance Rs. 8,000 interest and Rs. 40,000 principal, i,e., for Rs, 48,000 a Mortgage Suit No. 14 of 1910 was filed in1st Court of the Sub Judge, Patna, and in lieu of the claim and cost of the said suit two fresh mortgage bonds were executed on 11 7 1910, viz., one for Rs. 40,000 and the other for Rs. 9,488 and the latter bond was satisfied by payment of Rs. 15,835 in cash. With respect to the above bond of Rs. 40,000, dated 11 7 1910 the petitioners paid Rs. 38,530 13 6. Mort , gage Suit No. 110 of 1927 was brought in the 3rd Court of the Sub Judge, Patna, and a decree for Rs. 58,012 2.0 was passed on 9 7 1929. Out of this Rs. 5,000 was paid in cash and for the balance of Rs. 53,012 12 0 one mortgage bond dated 6 10 1931 was executed for Rs. 42,000 and on the same date two 140 hand notes were executed, viz., one for Rs. 5,000 and one for Rs. 6012 2 0. One Suit No. 14 of 1933 for both the hand notes was brought in 3rd Court of the Sub Judge and a decree for Rs. 15,008 2 0 was passed on 28 2 1935. This decree is under execution. " When the decree holder sought to execute the money decree by attachment and sale of the judgmentdebtors ' properties stating that they were subject to a mortgage lien of Rs. 62,272 13 0 under the mortgage bond dated 6 10 1931, the two judgment debtors, who are brothers, filed objec tions under sections 11 and 16 of the earlier Bihar Money lenders Act III of 1938 and section 47 of the Civil Procedure Code. The petitions (two by each of them) were filed separately by the brothers. They urged that on a proper calculation under section 11 no lien was subsisting on the properties owing to payments made towards the mort gage debt amounting to Rs. 92,394 2 0. The Subordinate Judge held that this plea of the judgment debtors could not be entertained in the Miscellaneous case before him relating to the execution and all that could be done was to notify the mortgage encumbrance without deciding anything as to the correctness of the amount claimed to be due under it; and this conclusion was partly based on the fact that section 16 of the Act had been declared by the High Court void. Ap peals taken to the High Court were dismissed. The judgment debtors thereupon preferred an appeal to the Feder al Court, contending that sections 7 and 13 of the new Act (corresponding to sections 7 and 11 of the old Act)were applicable and that it was the duty of the court to estimate the value of the property after making the necessary calcu lations under section 7 with reference to the lien. The decision of the Federal Court is reported in Ramnandan Prasad Narain Singh and Another vs Kulpati Shri Mahanth Goshwarni Madhwanand Ramji(1). The case was remitted back to the High (1) 141 Court, giving liberty to the appellants to file an applica tion under section 13. In answer to a fresh application for execution dated 2 7 1042, the two brothers filed the same objections as before. Miscellaneous Cases Nos. 45 and 46 of 1942 related to sections 7 and 13 of the Bihar Money lenders Act and Miscellaneous Cases Nos. 50 and 52 of 1042 related to the objections under section 47 of the Code of Civil Procedure. The Subordinate Judge held that the amount of the loan should be taken as the amount mentioned in the mortgage deed of 1931 and not the amount advanced in 1893 and that a sum of Rs. 70,840 was still due on the bond. He determined the market value of the several properties given as security, adopting 16 times the net income as the basis. Appeals to the High Court were numbered as M.A. 108 to 111 of 1943 and they were heard by Manohar Lall and Imam JJ. They modified the order of the lower Court in certain re spects. Even according to them the amount of the loan was what was mentioned in the mortgage bond of 6 10 1931, but as a sum of Rs. 11,855 3 0 had been repaid expressly towards the principal amount after the date of the bond, that amount became reduced to Rs. 28,150. Adding an equal sum by way of interest which according to them was the maximum amount, permitted to be allowed under section 7 of the Act, the total liability was stated to be Rs. 56,300 and a charge was declared on the property for this amount. They also directed that the valuation of the property should be fixed at twenty times the net income and not sixteen times. It is from this order that the present appeals have been preferred. Two points were urged on behalf of the appellants, namely (a) that the decree holder was barred by construc tive res judicata from contending that the construction placed upon section 7 by the judgmentdebtors was wrong; and (b) that in applying section 7, we must consider the origi nal amount of loan of Rs. 40,000 given in the year 1893 and allow the claim 142 of interest only for that maximum sum, after taking into account all sums paid by the appellants and their predeces sors towards interest since 1893. The first point is entirely without substance. When the decree holder contended that section 11 of the Bihar Money lenders Act, 1938, was declared void and ultra vires and that therefore section 7 of the new Act which corresponded to section 11 was also inapplicable, the judgment debtors pleaded that they were entitled to the benefit of section 7 of the new Act. The Federal Court held in Ramnandan Prasad Narain Singh and Another vs Kulpati Shri Mahanth Goshwami Madhwanand Ramji(1) that the judgment debtors (present appellants) were entitled to claim the benefit of the provi sions of the new Act when the executing court proceeded under section 13 to determine the value of the properties to be sold. The correct interpretation of section 7 was not in question between the parties. To say that the appellants were entitled to take advantage of the provisions of section 7 is entirely different from the contention that the inter pretation sought to be put by them on section 7 was the right one. The Federal Court was not dealing with any question of interpretation at all. It is impossible to see where the doctrine of constructive res judicata comes in, so as to be of help to the appellants. The second question raised on their behalf relates to the true meaning of section 7 of the Bihar Moneylenders (Regulation of Transactions) Act VII of 1939, which is in these terms: "7. Notwithstanding anything to the contrary con tained in any other law or in anything having the force of law or in any agreement, no Court shall, in any suit brought by a money lender before or after the commencement of this Act in respect of a loan advanced before or after the com mencement of this Act or in any appeal or proceedings in revision arising out of such suit, pass a decree for an amount of interest for the period preceding the institution of the suit, (1) 143 which together with any amount already realised as interest through the court or otherwise, is greater than the amount of loan advanced, or, if the loan is based on a document, the amount of loan mentioned in, or evidenced by, such document. " In the present case, the original loan of Rs. 40,000 was advanced as early as 11 1 1893. The appellants j contend that for the purposes of calculating the interest to be decreed prior to the date of the suit the loan advanced must be taken to be the original sum and that if an account is taken of all the sums received by the creditor as interest from that date up to the date of the suit, there would be nothing due for interest. On the other hand, the decree holder urges that having regard to the latter part of the section, the loan must be taken to be the amount mentioned in the mortgage bond dated 8 10 1931, namely Rs. 42,000. Whichever method of calculation is adopted, it must be remembered that it has to be made not for the purposes of passing any decree on the mortgage loan, but for estimating under section 13 of the Act the value of the properties to be brought to sale in execution of the money decree against the appellants. As pointed out by Sir Maurice Gwyer C.J. in Surendra Prasad Narain Singh vs Sri Gajadhar Prasad Sahu Trust Estate and Otherse), "Section 7 of the Act of 1937 is no doubt extremely obscure and illdrawn. " The true intention of the framers of the Act is somewhat difficult to gather. But the Patna High Court has been consistently placing upon the section an interpretation which is opposed to the contention of the appellant in these proceedings. The point came up expressly for decision in Singhesh war Singh and Others vs Madni Prasad Singh Others(2) where a mortgage bond was executed on 31 8 1922 for a sum of Rs. 2,000 which was the balance of the principal and inter est due under a mortgage bond of the 11th of October, 1912, for (1) (2)A.T.R. 1940 Pat. 65. 19 144 Rs. 1,391. The judgment debtors raised the plea that the court should go back to the earlier bond of 1912 and that as a sum of Rs. 1,512 had been paid as and by way of interest towards that bond, no decree could be passed against them for more than the principal sum of Rs. 1,391. The learned Judges rejected this contention and took the amount stated in the document of 1922, namely Rs. 2,000, as the loan and they held that the plaintiffs were entitled to get a decree for interest for a sum not larger than Rs. 2,000 as no payment had been proved to have been made after the execution of the bond. The same view was taken in Lal Singh vs Ramnarain Ram and Others(1) and the plain tiffs were awarded a decree on the basis that the loan was to be taken as Rs. 2,909 8 0 which was the amount for which the hand note sued upon was executed and not Rs. 1,000 which was the original amount advanced upon an earlier hand note of the year 1924. The case reported in Madho Prasad Singh vs Mukutdhari Singh and Others(2) lays down the same position. The Full Bench decision in Deo Nandan Prasad vs Ram Prasad (3) rei terates the same view, pointing out the distinction between sections 7 and 8 of the Act and stating that while under section 8 we can go to the original loan in spite of a later document, under section 7, the loan must relate to the document on which the suit is based, that is, the final document and not the original one. In each one of these cases, the question of the true meaning of section 7 was pointedly considered. This construction no doubt enables a creditor to circumvent the beneficent provisions of the Act by taking a document for the interest due and adding it to the principal amount. Gwyer C.J. points out this difficulty at page 59 in the case Surendra Prasad Narain Singh vs Sri Gajadhar Prasad Sahu Trust Estate and Others(4). If the interpretation does not carry out the intentions of the framers of the Act by reason of unhappy or ambiguous phrasing, it is for the Legis lature to intervene. But far from doing so, it has (1) , Patna 618. (2) (1941) 193 I.C.661. (4) [1940] F.C.R.39. 145 acquiesced, during all these years in the construction which the Patna High Court has been placing upon the section from the very next year after the enactment of the statute. Having regard to the great obscurity in the language em ployed in the relevant provisions and the inaction of the Legislature, it is, in our opinion, legitimate to infer that the view expressed by the Patna High Court is in accord with the intention of the Legislature. The appeals fail and are dismissed with costs, only one set in all of them together. Appeals dismissed. Agent for the respondent ': R.C. Prasad.

Where a fresh document is executed for the amount remaining due on account of principal and interest under a loan ad vanced prior document, and a suit is brought for recovery of the amount due under the later document with interest due thereunder, "the amount of loan mentioned in, or evidenced by, such document" for the purposes of section 7 of the Bihar Money Lenders Regulations and Transactions) Act, 1939, is the amount mentioned, or evidenced by, the later document and not that mentioned in the original document which was renewed; and the court can pass a decree for an amount of interest for the period preceding the institution of the suit, which together with any amount realised as interest after the date of the later document, is not greater than the amount of loan mentioned in the later document. The maximum amount that can be so decreed is not the amount which together with the interest realised from the date of the original loan does not exceed the original loan. Singheswar Singh and Other 's vs Nadni Prasad Singh and Others (A.I.R. 1940 Pat. 65), Lal Singh vs Ramnarain Ram and Others (,A.I.R 1942 Pat 138), Madho Prasad Singh vs Mu kutdheri Singh and Others , Deo Nandan Prosad vs Ram Prasad (I.L.R 23 Pat. 618), Ram Nandan Prasad Narain Singh vs Kulpati Shri Mahanth Goshwami Madhwanand Ramji ([1940] F.C.R. 1), Surendra Prasad Narain Singh vs Sri Gajadhar Prasad Sahu Trust Estate and Others ([1940] F.C.R. 39) referred to.

ivil Appeal Nos.3033 34 of 1989. From the Judgment and Order dated 28.2.1989 of the Punjab Haryana High Court in C.W.P. No. 7209 of 1987 (in L.P.A. No. 748/87) and C.W.P. No. 7607 of 1987. WITH Special Leave Petition (C) Nos. 4483 4485 of 1989. D.V. Sehgal, R.D.Upadhyaya, Ashok Sharma, Nabhyawala, D.S. Tewatia and Ms. Madhu for the Appellants. Ms. B. Rana and N.S. Das Behl (for the State) for the re spondents. The Judgment of the Court was delivered by K RAMASWAMY, J. Leave granted in Special leave Petitions and heard alongwith the appeals. Common questions of facts and law arise in the appeals and hence are disposed of by a common judgment. It is not necessary to restate the facts, preceding the decision of the High Court of Punjab & Haryana in Gurjit Singh & Ors. vs State of Punjab & Ors. (WP No. 2374 of 1985). Suffice to state that the High Court in the said judgment, while allow ing the ad hoc appointments made by the Government of Punjab to the posts of Patwaris under the Punjab Revenue Patwari Class II1 Service Rules, 1963, for short 'the Rules ' to continue for six months, directed the State Government to make regular appointments in accordance with the rules within the said period from the date of the judgment or else the ad hoc arrangement would lapse. Pursuant thereto, since the Service Selection 155 Board, Punjab was not constituted, the Government of Punjab by a notification dated August 26, 1986 amended rule 2(a) and empowered the State Govt. to authorise "other authori ties" to make recruitment to the service. Accordingly the Govt. constituted a Committee for each District, by proceed ing dated May 27, 1986 to make selection. For the District Committee of Patiala, the Dy. Commissioner, Patiala was the Chairman, the District Revenue Officer, Patiala, District Sainik Welfare Officer and District 'Social Welfare Officer (Scheduled Caste) were nominated as members of the Commit tee. to the pending names of the candidates before the S.S. Board were sent to the Committee for selection. The Dis trict Collector invited applications ' from special catego ries, namely, children effected by the riots at Delhi, terrorists effected families in Punjab, etc. and issued call letters to 1210 candidates for interview. By the date of the interview Shri Piara Singh, the District Revenue Officer was transferred and his successor had participated in the selec tion. Out of 821 candidates appearing for interview, 189 candidates were selected; the list was prepared in their order of merit; and the Distt. Collector appointed 146 candidates and sent them for Patwari training and on their completion of it in a period of one year, they were appoint ed as Patwaris on probation. The selections were challenged by unsuccessful candidates in several writ petitions and by judgment dated February 28, 1989, the High Court dismissed the L.P. Appeal and the Writ Petitions. On leave under Article 136, the appeals arise from that batch. The first contention of the appellants that the Commit tee was not properly constituted and, therefore, the selec tion of the candidates are invalid has no force. Under rule 4(1) of the rules, as per amended rule 2(a) the authority authorised by the Govt. is entitled to make recruitment to the service of Patwaris. The Committee constituted consists of Dy. Commissioner as Chairman, the District Revenue Offi cer, Patiala, District Sainik Welfare Officer and District Social Welfare Officer (S.C.) as members. Undoubtedly, at the time when the Committee was constituted, Piara Singh was the District Revenue Officer. On his transfer, his successor had participated in the selection. We have seen the notifi cation. The Distt. Revenue Officer, Patiala was nominated in official capacity. Therefore, the member having been nomi nated by virtue of his office, the incumbent in office was, therefore, entitled to participate in the selection of the candidates. It is true that the representation of the sched uled castes need be by an officer belonging to Scheduled Caste. The District Social Welfare Officer (Scheduled Caste) as required should be an officer belonging to the members of the scheduled caste. It is not uncommon that the Social Welfare Officer may be an officer other than one from the scheduled castes. But here in this case it is not the contention that the 156 District Social Welfare Officer was not a scheduled caste officer representing the scheduled castes. Therefore, we find that the committee constituted was properly composed of the representatives enumerated therein. The composition of the committee and the selection of the candidates, there fore, are legal and valid. It is next contended that the District Collector was not competent to invite applications afresh and selection of the candidates from out of those applicants is illegal. It is true that he is bound by the instructions issued by the Government in Annexure 'D ' wherein it was stated that since the number of applicants are quite large in number, it would not be necessary to solicit candidate afresh from Employment Exchange or through public advertisement. But in paragraph 4 therein it was stated that priority categories listed in the proceeding dated April 24, 1986 will have to be given prece dence over candidates from all other sources other than the regularisation of the existing ad hoc Patwaris. It had given room to the District Collector to invite applications from those categories. Though it was a mistaken compliance on wrong impression, the selection of the candidates, so apply ing does not become illegal. It was next contended that. instead of calling the applications by publication in the newspapers, only notice was put on the Notice Board of the Collector 's office and some candidates submitted their applications in pursuance thereof and that is not a proper notification. Though we find that the procedure adopted by the Collector, in inviting applications is not ommendable, but the grievance would be voiced only by the persons who did not have the opportunity to make applications within the prescribed period. But no such grievance could be raised by persons like the appellants. Under those circumstances, the procedure adopted, though irregular, does not vitiate the selection of candidates, ultimately made by the Committee. It is next sought to raise a contention that none of the candidates from the priority categories were selected and this was used only as a lever to invite applications from the candidates other than those, some of which were ulti mately selected and it is irregular. We find no substance in it. That apart it is a factual position to be investigated and that no such plea was raised nor argued in the High Court. Therefore, we cannot permit the appellants to raise this contention for the first time in this Court. It is next contended that there was no proper opportuni ty given to the appellants in the interview. Only 15 hours were spent to interview 821 candidates and the selection, therefore, is a farce. This contention also was not raised before the High Court, but raised in these appeals for the first time. In the counter filed in this court, it was refuted. It was stated that they had spent 35 hours in total at the rate of 7 hours per day. That 157 means they spent 5 days in selecting the candidates. The selection is for the Patwaris in the Class III service. The ratio in Ashok Yadav vs State of Haryana, [1985] Suppl. 1 SCR 657 has no application to the facts in this case. There in the selection was to the Class I service of the State service and sufficient time was required to interview each candidate. In this case, on calculation, we found that on an average three minutes were spent for each candidate for selection. Rule 7 of the rules provides the qualifications, namely, pass in the Matriculation or Higher Secondary Exami nation; knowledge in Hindi and Punjabi upto the Middle Standard and good knowledge of rural economy and culture. The educational qualifications are apparent from record and need no interview in this regard. It could be seen that candidates normally hailing from rural backgrounds had presumptively good knowledge of rural economy and culture. Therefore, there is no need for special emphasis to ascer tain their knowledge of the rural economy or culture. Under those circumstances much time need not be spent on each candidate for selection except asking some questions on general knowledge and aptitude for work as Patwari etc. It is then contended that the written test, conducted by the previous Service Selection Board, was abandoned and only oral interviews were conducted. The selection, therefore, is illegal. Normally it may be desirable to conduct written test and in particular hand writing that which is vital for a Patwari whose primary duty is to record clearly entries in revenue records followed by oral interview. The rules do not mandate to have both. Options were given either to conduct written test or viva voce or both. In this case the Commit tee adopted for viva voca as a method to select the candi dates which cannot be said to be illegal. It is next contended that the appellants have now become over aged and that they are 22 in all. Therefore, direc tions may be given to the Government to relax their age qualification and given appointments to them. We find no justification to give such a direction. Admittedly, the appellants have taken the chance for selection and they were not selected on the basis of comparative merits. Therefore, merely because appellants are carrying on the litigation, there cannot be any justification to give direction to the Govt. to consider their cases by relaxing the age qualifica tion for appointment as Patwari. It is not in dispute that hundreds of candidates who could not be selected would in that event seek similar relief. Under these circumstances we do not find any cause to add to the selection and appoint ment of the candidates as Patwaris. The High Court, though for different reasons, has rightly dismissed the writ peti tions. The appeals are accordingly dismissed, but without costs. R.P. Appeals dismissed.

In a writ petition decided by the High Court of Punjab and Haryana, it allowed the ad hoc appointments made by the Government of Punjab to the posts of Patwaris, to continue for six months from the date of the judgment and directed the Government to make regular appointment of Patwaris within that period. Since the Service Selection Board, Punjab was not constituted at the relevant time, the Govern ment of Punjab by a Notification dated 26.8.86 amended Rule 2(a) of the Punjab Revenue Patwari Class III Services Rules, 1963, and empowered the State Government to authorise "other authorities" to make recruitment to the service. According ly, the Government constituted a selection committee for each district. The District Committee of Patiala consisted of the Dy. Commissioner, Patiala as Chairman, and District Revenue Officer, the District Sainik Welfare Officer and the District Social Welfare Officer (Scheduled Caste) as its Members. The pending names of the candidates before the Service Selection Board were sent to the Committee for selection. The District Collector also invited applications from children affected by the riots at Delhi, terrorists affected families in Punjab and the like special categories. By the date of the interview the District Revenue Officer was transferred and his successor participated in the Selec tion. The selections were challenged by unsuccessful candi dates in several writ petitions which were dismissed by the High Court. Aggrieved the petitioners filed appeals before this Court by special leave. 153 It was contended on behalf of the appellants that the selection was bad because: the Committee was not properly constituted; the District Collector was not competent to invite applications afresh; written test was abandoned and only oral interviews were conducted; no proper opportunity was given to appellants in the interview inasmuch as 821 candidates were interviewed in 15 hours. It was also prayed that since the appellants had meanwhile become overage, the Government should be directed to relax their age and to give appointments to them. Dismissing the appeals, this Courts, HELD 1.1 On the transfer of the member having been nominated by virtue of his office, the incumbent in office was entitled to participate in the selection of the candi dates. The committee constituted was properly composed of the representatives enumerated therein, and the selection of the candidates, therefore, was legal and valid. [pp. 155 F G; 156 A] 1.2 Although the representation of the Scheduled Castes need be by an officer belonging to Scheduled Caste, and the District Social Welfare Officer (Scheduled Caste), as re quired should be an officer belonging to the members of the Scheduled Castes, yet it is not uncommon that the Social Welfare Officer may be an officer other than one from the Scheduled Castes. [p. 155 G,H] 2. If applications from candidates are invited and they are called for interview though under a mistaken compliance on wrong impression, the selection of the candidates, so applying, does not become illegal. [p. 156 D] 3. Normally it may be desirable to conduct written test and in particular hand writing that which is vital for a Patwari whose primary duty is to record clearly entries in revenue records followed by oral interview. The rules did not mandate to have both. Options were given either to conduct written test or viva voce or both and the committee adopted viva voce as a method to select the candidates which could not be said to be illegal. [p.157 D E] 4. On an average three minutes were spent for each candidate for selection. Keeping in view the facts that educational qualifications were apparent from the record, the candidates normally hailing from rural background had presumptively good knowledge of rural economy and 154 culture, under the circumstances, much time need not be spent on each candidate for selection except asking some questions on general knowledge and aptitude for work as Patwari etc. [p. 157 B D] Ashok Yadav vs State of Haryana, [1985] Suppl. 1 SCR 657, held inapplicable. The appellants had taken the chance for selection and they were not selected on the basis of comparative merits. Merely because they were carrying on the litigation, there could not be any justification to give direction to the Government to consider their cases by relaxing the age qualification for appointment as Patwari. [157 F G]

ivil Appeal No.678 of 1957. Appeal from the judgment and order dated August 1, 1956 of the Patna High Court, in Misc. Judicial Case No. 188 of 1955. WITH Civil Appeals Nos. 546 of 1958 and 115 of 1959. 333 Appeals from the judgment and order dated March 8, 1957, of the Patna High Court, in Misc. Judicial Cases Nos. 116 and 215 of 1956. Lal Narayan Sinha and section P. Varma, for the appellant. C. K. Daphtary, Solicitor General of India and R. C. Prasad, for respondent No. 1 in C. A. No. 678 of 57. B. C. Ghose and P. K. Chatterjee, for the intervener. H. N. Sanyal, Additional Solicitor General of India and C. P. Lal, for respondent No. 1 in C.A. No. 546 of 58. H. N. Sanyal, Additional Solicitor General of India and P. K. Chatterjee, for respondent No. 1 in C.A. No. 115 of 1959. November 26. The Judgment of the Court was delivered by GAJENDRAGADKAR J. This is a group of three appeals which have been filed in this Court by the State of Bihar (hereinafter called the appellant) against three separate registered dealers with a certificate issued by the Patna High Court Under article 132(1) of of the Constitution that they involve a substantial question of law as to the interpretation of article 20(1) of the Constitution. The facts in each one of the three appeals are similar, though not exactly the same, but they raise a common question of law under the proviso to section 14A of the Bihar Sales Tax Act, 1947 (Act XIX of 1947) (hereinafter called the Act). Orders of forfeiture have been passed against the three registered dealers in the three appeals respectively, and they raise a common question of law in regard to the validity of the said orders. By consent Civil Appeal No. 678 of 1957, has been argued before us as the principal appeal and it has been conceded that our decision in that appeal will govern the two other appeals. We would,, therefore, set out the facts in Civil Appeal No, 678 of 1957 and deal with the merits of the points raised for our decision in that appeal. Rai Bahadur Hurdut Roy Motilal Jute Mills, Katihar (hereinafter called the first respondent) was at the, 43 334 material time registered as a dealer under the Act and was carrying oil business of manufacture and sale of gunny bags, Hessian and other jute products at Katihar in the district of Purnea. During the period April 1, 1950, to March 31, 195 1, the said respondent sold and despatched its ware worth about Rs. 92,24,386 to dealers outside the State of Bihar and realised a sum of Rs. 2,11,222 9 6 as sales tax from such dealers. The said respondent 's assessment to sales tax for the relevant period was taken up by the Superintendent of Sales Tax, Purnea (hereinafter called the second respondent) on May 31, 1953; and in consequence of these proceedings the impugned order of forfeiture came to be passed. Meanwhile article 286 of the Constitution along with other articles was considered by this Court in the State of Bombay & Anr. vs The United Motors (India) Ltd. & Ors. The question which this Court bad to consider in that case was about the vires of the impugned provisions of the Bombay Sales Tax Act, 1952 (Act XXIV of 1952), and for the decision of the said question article 286 fell to be Considered. According to the majority judgment in that case article 286(1)(a) read with the explanation thereto and construed in the light of article 301 and article 304 prohibits the taxation of sales or purchases involving inter State elements by all States except the State in which the goods are delivered for the purpose of consumption therein. The latter State is left free to tax such sales or purchases and it derives this power not by virtue of the explanation to article 286(1) but under article 243(3) read with Entry 54 of List 11. The view that the explanation does not deprive the State in which the property in the goods passed of its taxing power and that consequently both the State in which the property in the goods passes and the State in which the goods are delivered for consumption have the power to tax is not correct. When the first respondent 's assessment was taken up by the second respondent his attention was invited to this Court 's decision in the case of the United Motors (1); he followed the said decision and held that (1) ; 335 the turn over of Rs. 92,24,386 1 6 on account of despatch of manufactured jute products to out of Stat buyers was exempted from the levy of tax; this meant, a deduction of the said amount from the amount of Rai Bahadur the total turnover shown by the first respondent in the return submitted by him according to the provisions of the Act. Subsequently the second respondent proceeded against the first respondent under section 14A of the Act" and issued a notice in that behalf on June 18, 1954. By this notice the first respondent was called upon to show cause why the entire amount of Rs. 2,11,222 9 6 which had been recovered by him as sales tax from the dealers should not be forfeited to Government. The first respondent showed cause but the second respondent was not satisfied with the explanation given by the first respondent, and so he directed the first respondent to deposit the said amount into the Government treasury and produce the proof of payment before him within a month of the receipt of his order. This order was passed on February 10, 1955. It shows that the second respondent thought that the matter raised for his decision was simple; the first respondent had collected the amount in question as tax under the Act from his customers for and on behalf of the appellant, and so he could not retain the said amount ; it must go to the State coffers. He also held that the first respondent had represented to the, purchasers that the amount was chargeable as sales tax under the Act and as such the first respondent had clearly contravened the explicit provisions of section 14A of the Act read with r. 19 of the Bihar Sales Tax Rules (hereinafter called the Rules). It is on these findings that the second respondent passed the impugned order of forfeiture. The first respondent then applied to the Patna High Court, tinder articles 226 and 227 of the Constitution challenging the validity of the said order. It was urged on his behalf that the proviso to section 14A under which the impugned order was purported to have been passed did not apply to the case of the first respondent, and as such the order was Dot justified 336 by the said proviso. It was also contended that if it is held that the said proviso justified the impugned order it was ultra vires the State Legislature inasmuch as it violates article 20(1) and article 31(2) of the Constitution. The High Court did not consider the first contention raised before it; it dealt with the two constitutional points urged by the first respondent and found in his favour on both of them. On these findings the petition filed by the first respondent was allowed, the impugned order of forfeiture was set aside and the proceedings taken against the first respondent under section 14A were quashed. The appellant then applied for and obtained a certificate from the said High Court under article 132(1) of the Constitution. On behalf of the appellant Mr. Lal Narain Sinha has contended that the High Court was in error in holding that the proviso to section 14A violates either article 20(1) or article 31(2) of the Constitution. He has addressed us at length in support of his case that neither of the two articles is violated by the impuged proviso. On the other hand, the learned SolicitorGeneral has sought to support the findings of the High Court on the said two constitutional points; and he has pressed before us as a preliminary point his argument that on a fair and reasonable construction, the proviso cannot be applied to the case of the first respondent. We would, therefore, first deal with this preliminary point. In cases where the vires of statutory provisions are challenged on constitutional grounds, it is essential that the material facts should first be clarified and ascertained with a view to determine whether the impugned statutory provisions are attracted; if they are, the constitutional challenge to their validity must be examined and decided. If, however, the facts admitted or proved do not attract the impugned provisions there is no occasion to decide the issue about the vires of the said provisions. Any decision on the said question would in such a case be purely academic. Courts are and should be reluctant to decide constitutional points merely as matters of academic importance. 337 Before considering the preliminary point raised by the first respondent it is necessary to refer briefly the relevant scheme of the Act. The Act was originally passed in 1947 because the Legislature thought it necessary to make an addition to the revenue of Bihar, and for that purpose to impose a tax on the sale of goods in Bihar. The provisions of the Act as well as the statutory Rules framed under it have been subsequently modified from time to time. In our present discussions we would refer to the provisions and the Rules which were in operation at the material time. The goods the sale of which is taxed under the Act are defined by section 2(d) as meaning all kinds of moveable property other than those specifically excepted. Section 2(g) defines " sale " inter alia as meaning any transfer of property in goods for cash or other considerations and the second proviso to it prescribes that the sale of any goods (1) which are actually in Bihar at the time when, in respect thereof the contract of sale as defined in section 4 of that Act is made, or (2) which are produced or manufactured in Bihar by the producer or manufacturer thereof, shall wherever the delivery or contract of sale is made, be deemed for the purposes of this Act to have taken place in Bihar. The tax leviable Linder the Act is defined by section 2(hh) as including a fee fixed in lieu of the tax under 'the ' first proviso to section 5, whereas under section 2(i) " turnover " means the aggregate of the amounts of sale prices received and receivable by a dealer in respect of sale or supply of goods or carrying out of any contract, effected or made during the given period, or, where the amount of turnover is determined in the prescribed manner, the amount so determined. Section 4 which is the charging section provides that every dealer whose gross turnover during the specified period on sales which have taken place both in and outside Bihar exceeds Rs. 10,000 shall be liable to pay tax on sales which have taken place in Bihar oil and from the date of the commencement of the Act. This section shows that the incidence of taxation can be attracted only where the gross turnover of the dealer exceeds Rs. 10,000 and in 338 determining this prescribed minimum. sales which take place both in Bihar and outside are taken into account. Section 5, prescribes the rate of tax at six pies in a rupee on the taxable turnover. The provisos to this section confer specific powers on the State Government; the first proviso which is relevant for our purpose empowers the State Government by notification to fix a higher rate of tax not exceeding one anna in a rupee or any lower rate of tax in respect of sale of any goods or class of goods specified in such notification subject to such conditions as it may impose. The explanation to this section indicates what the taxable turnover for the purpose of the section means. " Taxable turnover " according to this explanation means that part of a dealer 's gross turnover on sales which have taken place in Bihar during any period which remains after deducting therefrom the items specified in cls. (a) and (b) of the explanation. The sale of any goods declared from time to time as tax free goods under section 6 is one of those items. Section 6 empowers the State Government to exempt sale of any goods or class of goods from the levy of tax under this Act subject to the conditions specified in the section, whereas section 7 empowers the Government to exempt dealers from tax, and section 8 authorises the Government to prescribe points at which goods may be taxed or exempted. Section 9 deals with the question of registration of dealers and provides that no dealer who is liable to pay tax under section 4 shall carry on business unless he has been registered under the Act and possesses a registration certificate. Under section 11 a list of registered dealers is published, and by section 12 such registered dealers are required to furnish such returns by such dates and to such authorities as may be prescribed. Section 13 prescribes the procedure for assessment, and section 14 requires that the tax payable under the Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed. Section 14(2) requires the registered dealer to pay into a Government treasury the full amount of tax due from him according to the returns which he has to file and has to 339 furnish along with the said return a receipt from the treasury showing the payment of such amount. Having thus provided for the recovery of the tax charged under section 4, section 14A in effect authorises registered dealers to reimburse their dues by making collections of the tax payable by them in accordance with the restrictions and conditions as may be prescribed. It provides that no dealer who is not a registered dealer shall realise any amount by way of tax on sale of goods from purchasers nor shall any registered dealer make any collection of tax except in accordance with such restrictions and conditions as may be prescribed. That takes us to the proviso to section 14A with which we are directly concerned in the present appeal. It reads thus: " Provided that if any dealer collects any amount by way of tax, in contravention of the provision of this section or the conditions and restrictions prescribed thereunder, the amount so collected shall, without prejudice to any punishment to which the dealer may be liable for an offence under this Act, be forfeited to the State Government and such dealer shall pay such amount into the Government treasury in accordance with a direction issued to him by the Commissioner or any officer appointed under section 3 to assist him and in default of such payment, the amount shall be recovered as an arrear of land revenue. " The effect of this proviso is clear. A dealer is authorised to collect amounts by way of tax from the purchasers only in accordance with the provision of section 14A and the conditions and restrictions prescribed thereunder. The conditions and restrictions referred to in the proviso are to be found in the material Rules framed under the Act. If it is shown that a dealer has collected an amount by way of tax in violation of the conditions and restrictions prescribed by the Rules he incurs the penalty of forfeiture as specified in the proviso. There can be no doubt that before the penalty of forfeiture can be imposed upon the dealer under the proviso it must be shown that he has acted contrary to the conditions and restrictions prescribed 340 by the Rules. It would not be enough to show that the collection of the amounts in question by the dealer is otherwise illegal or improper. The contravention of the statutory provision contained in section 14A or of the Rules prescribing conditions and restrictions in that behalf alone can form the basis of the imposition of the penalty under the proviso. This position is not disputed before us. The appellant contends that the proviso is attracted to the present case because the first respondent has contravened the conditions and restrictions imposed by the proviso to r. 19, whereas the first respondent argues that a proper construction of this latter proviso does not justify the appellant 's plea. It would thus be seen that the decision of the preliminary point raised by the first respondent involves the narrow question of the construction of the proviso to r. 19. Before construing the said proviso it is, however, necessary to refer to section 33 of the Act. This section was enacted on April 4,1951, but it has been expressly made retrospective as from January 26, 1950. Therefore at the material time this section must be deemed to have been in operation. Section33(1)(a)(i)provides that notwithstanding anything contained in the Act a tax on the sale or purchase of goods shall not be imposed under the Act where such a sale or purchase takes place outside the State of Bihar. Section 33(2) makes the explanation to cl. (1) of article 286 of the Constitution applicable for the interpretation of subcl. (i) of cl. (a) of sub section It is common ground that if the relevant provision just cited is construed in the light of the decision of this Court in the case of the United Motors (1) there can be no doubt that the sales which are the subject matter of the present proceedings consist of transactions on which a tax cannot be imposed under the Act. That is why the appellant strongly relies on this provision and contends that in construing the proviso to r. 19 the true legal position in respect of the transactions in question must be borne in mind. Let us now read the proviso to r. 19. Rule 19 itself prescribes the procedure which has to be followed by (1) ; 341 a registered dealer in realising any amount by way of tax on sale of goods from purchasers. This procedure refers to the issue of a cash memo or a bill as prescribed by it. The proviso to this Rule lays down that no such registered dealer shall realise any amount by way of tax at a rate higher than the rate, at which he is liable to pay tax under the Act, or realise any amount by way of tax in respect of such part of his turnover as is allowed to be deducted from his gross turnover for the determination of his taxable turnover under the Act or these Rules. The appellant relies on the latter part of the proviso and argues that the part of the turnover of the first respondent which is in question fell within section 33(1)(a)(1) and as such was not liable to be taxed. That being so there was no justification for the first respondent to collect any amount by way of tax from his purchasers under section 14A. The scheme of section 14A is to permit the registered dealer to collect such amounts of tax from his purchasers as he in his turn is liable to pay to the appellant. Authority to collect such tax amounts given to the registered dealer inevitably postulates his liability to pay a similar amount to the appellant. Therefore the conduct of the first respondent in collecting amounts by way of tax from his purchasers amounts to a breach of section 14A itself. It is also contended that having regard to the provisions of section 33(1)(a)(i) the first respondent was entitled to claim a deduction of the transations in question from his gross turnover under the latter part of the proviso, and that clearly means the first part of the said proviso applies to his case and it prohibited him from realising the said amounts. His conduct in collecting the amounts, therefore, constitutes a breach of the conditions specified in the proviso to r. 19. In appreciating the validity of these arguments it would be relevant to remember that at the material time there was considerable confusion in the minds of the public as well as the State authorities about the true scope and effect of the provisions of article 286(1) of the Constitution. It is not disputed that during the material period and in the years preceding it registered 44 342 dealers used to pay tax in respect of transactions which were really not liable to be taxed under section 33(1)(a)(i) and such tax was being received by the appellant. In fact, as we have already pointed out section 14 of the Act imposes a liability on the registered dealer to furnish along with his return a receipt for the payment of the tax which is payable under the return. Such payments were made by registered dealers in respect of similar transactions and were accepted. It is an accident that the assessment proceedings of the first respondent were actually taken up for decision by the second respondent after the decision of this Court in the case of the United Motors (1). If the question about the first respondent 's liability to pay the tax under the Act had been decided before the date of the said decision there is no doubt that he would have been required to pay the tax for the transactions in question. Indeed it is common ground that the notification issued for the material period levied a tax at three pies on the goods in question " if the sales tax authority is satisfied that the goods have been despatched by or on behalf of the dealer to any person outside the Province of Bihar. " This notification is consistent with the definition of the word " sale " as it then stood. It is thus clear that at the material time the appellant thought that transactions like those in question in the present appeal were liable to pay the tax at the rate of three pies as prescribed by the relevant notification; the registered dealers also had no doubt on the point; and so taxes were collected in respect of such transactions by the appellant from the registered dealers and by the registered dealers in their turn from their purchasers. Nevertheless, after the enactment of section 33 the legal fiction about the retrospective operation of the said section must be given effect to and in construing the proviso to r. 19 it must be assumed that the transactions in question were outside the scope of the Act and no tax could have been imposed in respect of them. Construing the proviso on this assumption, can it be said that in respect of the part of the first respondent 's (1) ; 343 turnover which is in question a deduction was allowable within the meaning of the proviso? In our opinion this question cannot be answered in favour of the appellant. Rule 19 itself was framed in 1949 and has not been amended subsequent to the enactment of section 33. As it was framed its reference to the allowable deductions was clearly based on the provisions of sections 6, 7 and 8 of the Act. This position would be clear beyond all doubt if we read the material words in the proviso in the light of the explanation to section 5 of the Act. The explanation in terms enumerates deductions which have to be made in determining the taxable turnover of the 'registered dealer and it is to these deductions which are allowable under the three sections specified in the explanation to which the latter part of the proviso to r. 19 refers. A claim for the exclusion of a part of the first respondent 's turnover on the strength of section 33(1)(a)(i) cannot, therefore, be said to be an allowable deduction under the proviso. This question can be considered from another point of view. The provisions which allow deductions to be made or grant exemptions in respect of certain transactions obviously postulate that but for them the transactions in question would be liable to. tax under the Act; and so when such transactions are included in the return the registered dealer is allowed to claim appropriate deductions in respect of them. But, the position with regard to section 33 is entirely different ; transactions which attract the provisions of the said section are in substance outside the scope of the Act and no tax can be imposed on them at all. If that be the true position the claim which can be made by the registered dealer in respect of such transactions cannot in law be regarded as a claim for allowable deductions or exemptions properly so called; it is really a claim that the Act itself does not apply to the said transactions. Therefore, in our opinion it would be straining the language of the second part of the proviso to r. 19 to hold that the transactions in question fell within its purview. There is one more point to be considered in this connection. Form VI which has been prescribed for 344 making the returns under section 12 requires the gross turnover to be mentioned at the outset, and then it provides for the different deductions allowable under the Act. This form was prescribed in 1949 and has not been amended after the addition of section 33 to the Act. On looking at this form it seems difficult to entertain the argument that the claim for the total exclusion of the transactions in question can be made under any of the headings prescribed in the form. The appellant, however, contends that the first item of gross turnover means the whole of the gross turnover which must include all sale transactions whether they took place within Bihar or outside it, and in support of this argument reliance is placed on the definition of " turnover " contained in section 2(1). If the whole of the gross turnover has to be mentioned under item 1, it is urged, the claim for the exclusion of the transactions in question can well be adjusted under one or the other of the deduction items prescribed in the form. We are not inclined to accept this argument. The form as it has been prescribed construed in the light of the material provisions contained in sections 6, 7 and 8 does not support the case that in prescribing its several items it was intended that the transactions failing under section 33 should be first shown under item 1 and then excluded under one or the other of the remaining items of deduction. Besides it may be relevant to point out that the heading of Chapter VII which deals with the submission of returns by dealers is " return of taxable turnover " and it is arguable that the gross turnover mentioned in Form VI may mean "gross taxable turnover " and not the gross turnover including the transactions which are outside the scope of the Act. Then as to the argument about the contravention of section 14A itself it is difficult to appreciate how any provision of section 14A can be said to have been contravened. Section 14A consists of two parts both of which are put in a negative form. The second part with which we are concerned in effect means nothing more than this, that a registered dealer can make collections of such tax only as is payable by him in accordance with the restrictions and conditions as may be 345 prescribed. If the argument is that the first respondent was not liable to pay any tax and as such was not entitled to make any corresponding collection, then the collection made by him may fall outside section 14A and be otherwise unjustified or improper; but it does not amount to the contravention of any provision of section 14A as such. In fact section 14A itself refers to the restrictions and conditions which may be prescribed and, as we have already seen, these conditions and restrictions are prescribed by the Rules in general and by r. 19 in particular. So the argument urged under section 14A takes us back to the question as to whether the proviso to r. 19 has been contravened. In dealing with this question we cannot ignore the fact that the relevant provisions which fall to be construed in the present appeal impose a serious penalty on the registered dealer, and so, even if the view for which the appellant contends may perhaps be a possible view, we see no reason why the other view for which the first respondent contends and which appears to us to be more reasonable should not be accepted. In the result we hold that the proviso to section 14A cannot be invoked against the first respondent and so the order of forfeiture passed against him by the second respondent is unjustified and illegal. In view of this conclusion it is unnecessary to consider the objections raised by the first respondent against the validity of the proviso on the ground that it contravenes articles 20(1) and 31(2) of the Constitution. We may incidentally add that during the course of the arguments before us we have also heard all the learned counsel on the question as to whether the said proviso contravenes the provisions of article 19(1)(f) as well. The result is the appeal fails and is dismissed with costs. The decision of this appeal governs Civil Appeals Nos. 546 of 1958 and 115 of 1959. They also fail and are dismissed with costs. Appeal dismissed.

The respondent mills, a registered dealer under the Bihar Sales Tax Act, 1947 (Act 111 of 1947), was carrying on business of manufacture and sale of gunny bags, hessian and other jute products at Katihar. During the period April 1, 1950, to March 31, 1951, it sold and despatched its wares worth about Rs. 92,24,386 1 6 to dealers outside the State and realised a sum of Rs. 2,11,222 9 6 as sales tax from them. In assessing the sales tax payable by the said respondent for the relevant period the Superintendent of Sales Tax, Purnea, held that the said amount of sales tax had been realised in contravention of section 14A of the Act read with r. 19 of the Bihar Sales Tax Rules, and directed its forfeiture under the proviso to that section. The respondent challenged the validity of the said order under articles 226 and 227 of the Constitution. The High Court held that the proviso to section 14A of the Act was ultra vires the State Legislature as it violated articles 20(1) and 31(2) of the Constitution and set aside the order of forfeiture and quashed the proceedings under section 14A of the Act. The State of Bihar appealed to this Court. It was urged by way of preliminary objection on behalf of the respondent that since the proviso to section 14A of the Act had no application to the facts of the case, there was no occasion to decide its constitutional validity. The contention of the appellint was that the proviso did apply to the respondent inasmuch 332 as he had contravened the conditions and restrictions imposed by the proviso to r. 19. The question for determination, therefore, was whether the said respondent could be said to have realised any amount by way of tax in respect of such part of its turn over as was allowed to be deducted from his gross turn over for the determination of his taxable turn over under the Act or the rules, as contemplated by the later part of the said proviso. Held, that the preliminary objection must prevail. Held, further, that before the penalty of forfeiture could be imposed upon a dealer under the proviso to section 14A of the Bihar Sales tax Act, 1947, it had to be shown that he had acted contrary to the conditions and restrictions prescribed by the Rules and it was not enough to show that the collection of the sales tax made by him was otherwise illegal or improper. The contravention of the statutory provisions contained in section 14A or of the Rules prescribing conditions and restrictions in that behalf alone could form the basis of the imposition of the penalty of forfeiture prescribed by the said proviso. With the insertion of section 33 into the Act with retrospective operation, prohibiting the imposition of the tax on sales taking place outside the State and in view of the decision of this Court in State of Bombaay vs The United Motors (India) Ltd. ; , the proviso to r. 19 must be construed on the basis that the sales in question were outside the scope of the Act and no tax could be imposed on them. It could not, therefore, be said that that part of the respondent 's turnover which was in question was an allowable deduction within the meaning of the said proviso. Such allowable deductions as are contemplated by the proviso are clearly based on the provisions of sections 6, 7 and 8 of the Act as is quite clear from the Explanation to section 5 of the Act. State of Bombay & Another vs The United Motors (India) Ltd. An allowable deduction under the said proviso was not the same thing as exclusion of a part of the turn over on the basis of section 33(1)(a)(1) of the Act. It stands on an entirely different footing. Transactions which fall within the said section are in substance outside the Act and no tax can be imposed on them. The transaction in question did not, therefore, fall within the proviso to r.19 and the proviso to section 14A was not attracted and the order of forfeiture passed against the respondent was unjustified and illegal.

TION: Criminal AppealNo. 21 of 1976. (From the judgment and Order dated 20 8 1975 of the High Court of Madhya Pradesh in Misc. Criminal Case No. 1010/75). B. Sen, Mrs. A.K. Verma, 1. B. Dadachanji, O.C. Mathur and R. Narain, for the appellant. Nemo, for the respondents. The Judgment of the Court was delivered by RAY, C.J. This is an appeal under section 19(1)(b) of the referred to as the Act against the order dated 20 August,. 1975 of the High Court at Jabalpur convicting the appellant and sentencing him to suffer imprisonment till the rising of the Court under section 4 of the Act and to pay a fine of Rs. 100/ . The High Court however accepted the apology of the appellant for the purpose of remitting the punishment under the proviso to section 12(1) of the Act and remitted the sentence and ordered the appellant to pay the paper book costs and to bear his own costs. The appellant is a District Magistrate of District Rajnandgaon in Madhya Pradesh. A detenu Vidya Bhushan Thakur challenged in the High Court by way of a habeas corpus petition the validity of his detention order passed by the appellant under section 3(1 )(a) of the . On 1 August, 1975 the High Court directed the production of the detenu in court on 8 August, 1975. On 5 August, 1975 the appellant received a telegram from the office of the Advocate General, Madhya Pradesh intimating the appellant the order of the High Court to produce the detenu Vidya Bhushan Thakur before the High Court on 8 August, 1975 in connection with the habeas corpus petition. Immediately on receipt of the telegram from the office of the Advocate General the appellant communicated the same to the Superintendent, Central Jail, Raipur directing him to send the detenu to 100 Jabalpur under strong guard for his production before the High Court on 8 August, 1975. The order was communicated to the Superintendent, Central Jail Raipur on the same day and accordingly the Superintendent, sent the detenu on 6 August, 1975 at 5.35 p.m. to Jabalpur and thereafter the detenu was duly produced in Court on 8 August, 1975. The State Government had passed an order under section 268 of the Criminal Procedure Code which was published in the Official Gazette on 1 August, 1975. The appellant referred the matter to the Home Secretary for clarification of .the notification vide a wireless message dated 6 August, 1975 as to whether the detenus under the are to. be produced before the High Court in connection with the,habeas corpus petitions. The appellant also spoke to the Government Advocate on 6 August 1975 and brought to his notice the above notifica tion of the State Government. The Government Advocate in formed the appellant on telephone, that neither the Advocate General nor the ,High Court had so far received a copy of the said notification. The appellant then informed the Government Advocate that he would be sending a copy of the said notification by wireless for information. The appel lant despatched the wireless message to the Government AdVocate at Advocate General 's address quoting the notifica tion as received from the Government. The wireless message quoted the. notification and the request of the appellant to the Advocate General was as follows : "In the light of above Government Notifica tion he was requested to request the Court not to insist on the production of Vidya Bhushan Thakur as there is strong possibility of disturbance of public order if Vidya Bhusban Thakur is taken out from jail. Kindly inform the Government regarding the action taken. " On 6 August, 1975 after the telephonic conversation with the Government Advocate, the appellant again directed the Superintendent, Central Jail, Raipur to produce the detenu before the High Court on the date of hearing and informed the Advocate General that the detenu would be produced before the High COurt and the detenu was in fact produced before the Court. The High Court took the view that the wireless message dated 6 August, 1975 addressed to the Advocate General with a copy to the. Registrar of the High CoUrt amounted to an expression by the appellant of his inability to obey the order of the Court on account of the notification issued by the State Government published in the Official Gazette on 1 August, 1975. The High Court ordered the appellant to show cause why he should not be committed for contempt in exer cise of the ' powers of the Court under Article 215 of the Constitution read with section 10 of the Act. The appellant appeared before the High Court on 13 August, 1975. The case was adjourned to 14 August, 1975 to enable the filing of a reply which was submitted in the form of an affidavit together with some enclosures. The appel lant pleaded for the discharge of Rule 101 Nisi on the ground that no contempt of court was committed and that wireless message to the Advocate General did not constitute a contempt of court. The High Court by order dated 20 August, 1975 found the appellant guilty of contempt by holding that the appellant had sent the wireless message dated 6 August, 1975 without waiting for reply from the State Government regarding the clarification of its Notification. The appellant on 6 August, 1975 referred to the Home Secretary for clarification of the notification dated 1 August, 1975. The appellant sent a copy of the notification to the Advocate General. The appellant also directed the Superintendent, Central Jail, Raipur to produce the detenu before the Court. The detenu in fact was pro duced before the High Court. All these features indicate that the appellant throughout acted in a careful and re sponsible manner. The reply of the Government to the clarification asked for by the appellant on 6 August, 1975 was received on 8 August, 1975, that is to say two days after the wireless message had been sent to the Advocate General. The clarifi cation message of the Government reached the appellant in the afternoon of 8 August, 1975, viz., the date on which the detenu was to have been produced in court. The State Govern ment in the note clarifying the position informed the appel lant that in case the appellant was advised to produce the detenu before the High Court and if the High Court insisted on such production the High Court should be informed well before the date on which the detenu is to be produced by an affidavit sworn by an officer in charge that there is danger to public order if the detenu as produced. It appears that the appellant had acted just as the Government clarification suggested. The appellant gave the notification to the Advocate General because the latter did not have it and asked for it. The appellant asked for clarification from the State Government as to the notification because of the situation in which he was placed. The appellant sent instructions to the Superintendent, Central Jail, Raipur to produce the detenu. The detenu was produced before the High Court. The appellant took all steps in good faith. The appellant from the beginning gave directions for production of the detenu. The High Court held that the affidavit of the appellant contained no reference to the telephonic talk with the Advocate General pursuant to which a telegram had been sent and therefore it was a false affidavit. The High Court also held that sending a copy of the wireless message addressed to the Advocate General to the Registrar of the High Court for information amounted to an attempt to interfere with the order of the High Court. The appellant sent a copy of the wireless message ad dressed to the Advocate General to the Registrar for infor mation only. The appellant took all steps to produce the detenu even before the receipt of the clarification or advice by the State Government for production of the detenu before the High Court. The appellant sent the wireless message to the Advocate General only to apprise him of the notification sent by the State Government. The appellant sent that information inasmuch 102 as the Government Advocate had informed the appellant that neither the Advocate General nor the High Court was aware of the said notification issued by the State Government. The appellant requested the Advocate General to request the Court not to insist on the production having regard to the public order which request was consistent with the direction of the State Government. The absence of reference to the telephonic talk in the affidavit does not mean that no such talk in fact took place. The appellant produced the telephone bill as well as the letter of the Advocate General to show that there was in fact a telephonic conversation. The appellant communicated to the Advocate General in the discharge of his official duties the notification issued by the Government. The appellant requested the Advocate General to request the High Court not to insist on the production. The wireless. mes sage was not addressed to the Court. The original addressee was the Advocate General. A copy was sent to the Registrar for information that such a telegram had been sent to the Advocate General. The appellant tendered apology with grace and not as a coward. The appellant produced the detenu. The appellant at no stage interfered with any order of the High Court. The appellant never showed any disobedience. On the contrary the appellant acted in obedience to the order of the High Court. The High Court accepted the apology for the limited purpose of remitting the punishment. The order of the High Court cannot be sustaining in view of the tender of apology by the appellant as well as the production of the detenu. The appeal is accepted. The judgment and order of the High Court are set aside. S.R. Appeal allowed.

Pursuant to telegraphic information dated 5 August 1975 received from the Advocate General, Madhya Pradesh, communi cating the directions of the Jabalpur Bench of the, High Court of Madhya Pradesh dated 1 August 1975, for the produc tion of a detenu held under section 3(1)(a) of the MISA 1971 in the court on 8 August 1975; the appellant, a district Magistrate, instructed the Superintendent, Central Jail, Raipur, to send the detenu to Jabalpur under strong guard for his production before the High Court on 8 August 1975. The detenu was duly produced in court on 8 August 1975. While seeking a clarification from the Home Secretary, on the order passed by the State Government under section 268, Criminal Procedure Code, which was gazetted on 1 August 1975, as to whether the detenu, under the MISA is to be produced before the High Court in connection with the habeas corpus petition, the appellant also spoke to the Government advocate and the Advocate General about the notification. Since they desired the copy of the notification, the appel lant despatched a wireless message to Advocate General as follows "In the light of the above notification, he was requested to request the court not to insist on the production of VBT as there is strong. possibility of disturbance of public order if VBT is taken out from jail. Kindly inform the Government regarding the action taken. " A copy of the wireless message was endorsed to the respond ent by 'way of abundant caution. Viewing this as amounting to an expression by the appellant of his inability to obey the order of the. court on account of the notification issued by the State, Government published in the official gazette on 1 August 1975, the High Court, in exercise of the powers of the court under article 215 of the Constitution read with section 10 of the Contempt of Court Act (Act No. 70 of 1971) ordered the appellant to show cause why he should not be committed for contempt, for which the appellant submitted his reply in the form of an affidavit pleading for the discharge of rule nisi on the ground that no contempt of court was committed and that the wireless message to the Advocate General did not constitute a contempt of court. The High Court found the appellant guilty for contempt by holding that the appellant had sent the wireless message dated 6 August 1975 without waiting for the reply from the State Government regarding the clarification of its notifi cation, and convicted the appellant and sentenced him to. suffer imprisonment till the rising of the court under section 4 of the Contempt of Court Act 1971 and to pay a fine of Rs. 100/ . The High Court, however, accepted the apology of the appellant for the purpose of remitting the punishment under the proviso to section 12(1) of the Act and remitted the sentence and ordered the appellant to. pay the paper book costs and to bear his own costs. Hence the appeal under section 19(1)(b) of the Act. Accepting the appeal to this Court, HELD: The order of the High Court cannot be sustained in view of the tender of apology by the appellant as well as the production of the detenu.[102 D] All these features, namely, referring to the Home Secre tary for clarification of the notification dated 1 August 1975, sending a copy of the said notification 99 to the Advocate General, directing the Superintendent, Central Jail, to produce the detenu before the court and the detenu, in fact, having been produced before the High Court indicate that the appellant throughout acted in a careful and responsible manner and took all steps in good faith. [101 B CF] HELD FURTHER: In the instant case, the appellant from the. beginning gave directions for production of the detenu. wireless message was not addressed to the court, but to the Advocate General, only to apprise him of the notifica tion sent by the State Government so that a request may be made to the court not to insist on the production of the detenu in the interest of public order. The copy thereof to the Registrar is for information only. The absence. of reference to the. telephonic talk in the affidavit does net mean that no such talk in fact took place. The appellant tendered apology with grace and not as a coward. The appel lant at no stage interfered with any order of the High Court. The appellant never showed any disobedience. On the contrary, the appellant acted in obedience to the order of the High Court. [101 F, G H, 1012 A D]

tion No. 67 of 1965. Petition under article 32 of the Constitution of India for enforcement of the fundamental rights. M.C. Chagla, F.N. Kaka, O.P. Malhotra and J.B. Dadachanji, for the petitioner. B. Sen, T.A. Ramachandran and R.N. Sachthey, for the respondents. The Judgment of the Court was delivered by Shah, J. On ' February 25, 1965, the Income tax Officer, Companies Circle I ( 3 ), Bombay, directed that for the purpose of the Income tax Act, 1961, the Premier Automobiles Ltd. hereinafter called 'the Company be treated as an agent of M/s Dodge Brothers of United Kingdom a non resident Company. On the same day the Income tax Officer issued a notice of demand under section 156 read with section 210 of the Act calling upon the .Company to pay on or before March 1, 1965, advance tax of Rs. 11,51,235 91 as agent of the foreign principal during the financial year 1964 65. The Company then moved a petition in this Court for an order quashing and setting aside the order under section 163 and notice of demand under section 156 for the assessment year 1965 66 and for an injunction or prohibition restraining the Income tax Officer from enforcing or implementing the order under section 163 and the notice under section 156 read with section 210 of the Incometax Act, 1961. The petition was resisted by the Income tax Officer. In support of the petition counsel for the Company raised two contentions: (1) that under sections 209 and 210 of the Indian Income tax Act, 1961, no order for payment of advance tax can be made against an agent of a non resident; and (2) that a provision which authorises collection of advance tax from an agent of a non resident infringes the equality clause of the Constitution and is on that account void. Sections 207 and 208 of the Income tax Act, 1961, insofar as they are material, provide: ' 207 "(1) Tax shall be payable in advance in accordance with the provisions of sections 208 to 219 in the case of income other than income chargeable under the head "Capital gains."" 208 "Advance tax shall be payable in the financial year (a) where the total income exclusive of capital gains of the assessee referred to in sub clause (i) of clause (a) of section 209 exceeded the maximum amount not chargeable to income tax in his case by two thousand five hundred rupees; or (b) . . . . . . Section 209 sets out the rules for computation of amount of advance tax payable by an assessee in the financial year. Section 210 provides by sub section (1) "Where a person has been previously assessed by way of regular assessment under this Act or under the Indian Income tax Act, 1922, the Income tax Officer may, on or after the 1st day of April in the financial year, by order in. writing, require him to pay to the credit of the Central Government advance tax determined in accordance with the provisions of sections 207, 208 and 209. " Section, 207, 208, 209 and 210 prescribe machinery for imposition of liability for and determination of the quantum of advance tax in respect of income which is chargeable to income tax in the hands of a person on regular assessment. Under the Income tax Act, 1961 a person is liable to be. assessed to tax in respect of his own income, and also in respect of certain classes of income received by or accruing or arising others. He is also liable to be assessed to tax as a representative assessee. That is expressly so enacted by section 161 (1 ) which provides: "Every representative assessee, as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities as if "the income were income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own name in respect of 356 that income; but any such assessment shall be deemed to be made upon him in his representative capacity only, . ." A representative assessee by sub section (1 ) of section 160 includes amongst others, the agent of a non resident in respect of the income of a non resident specified in section 9 (1 )(i), and also a person who is treated as an agent under section 163. By sub section (2) a representative assessee is deemed to be an assessee for the purpose of the Act. By section 162 the representative assessee, who as such pays any sum under the Act, may recover the sum so paid from the person on whose behalf it is paid. Section 163(1) defines for the purposes of the Act an "agent" in relation to a non resident. Resort to the machinery for assessing a representative assessee is however not obligatory: it is open to the Income tax Officer to make a "direct assessment of the person on whose behalf or for whose benefit income therein referred to is receivable", or to recover "from such person the tax payable in respect of such income". On regular assessment an agent of a non resident is, by virtue of section 160.(1) read with section 163 liable to be assessed to tax and the tax so assessed may be recovered from him. The agent, if assessed to tax, has the right to recover tax paid by him from the person whom he represents: section 162. Since a non resident is in respect of income which forms part of his total income liable to be assessed to tax, he may also be called upon to pay advance tax in respect of the income accruing to. or received by him which forms part of his total income chargeable to tax by virtue of sections 4, 5 and 207. So far there is no dispute. Counsel for the Company however urged that an agent of a non resident may be assessed in regular assessment in respect of the income accruing. or arising to his principal,. but he cannot be called upon to pay advance tax even though he is by virtue of section 160(2) deemed an assessee for the purposes of the Act. Diverse reasons were suggested in support of that argument. It was said that since under section 209( 1 ) the amount of advance tax payable by an assessee in the financial year is to be computed on his total income of the latest previous year in respect of which he has been assessed by way of regular assessment, an agent cannot be directed 'to pay advance tax, the incidence of liability whereof depends upon the ,,determination of total income of the principal. We fail to see any substance in this argument. Section 207 imposes liability for payment of advance tax, and section 208 prescribes the conditions of liability to. pay advance tax. Determination of total income of the previous year of the assessee is not made a condition of the liability to pay advance tax. Advance tax payable by an assessee is computed in the manner provided by section 209 when the assessee has been previously assessed to tax. The Income tax Officer is also enjoined by section 210 to issue a notice to a person who has been 357 previously assessed"by way of regular assessment" to pay advance tax for the financial year. If the assessee has not been previously assessed by way of regular assessment, he is required by section 212(3) to make an estimate 'of his total income excluding capital gains if it is likely to exceed the maximum amount not chargeable to tax by two thousand five hundred rupees, These provisions apply to all assessees. If an assessee is chargeable to tax in respect of his own income or income of others which is chargeable to tax as his own income, those provisions indisputably apply. It is expressly enacted by section 161 that as regards income in respect of which a person is a representative assessee, he shall be subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially. It is clearly implicit therein that a representative assessee is not exempt from liability to pay advance tax. of the liability to pay advance tax it is not predicated that the previous year should have come to. an end before liability can arise. The previous year of an assessee may in some cases end. after the commencement 'but before the end of a financial year in which advance tax is payable: it may in other cases commence and end with the financial year. But the liability to pay advance tax. is not in any manner affected because the previous year ends before or with the financial year. Where an assessees previous, year is the financial year, his total income may not be determined for the previous year before the commencement of the financial year, but on that account no exemption from payment of advance tax is granted by the Act. On the commencement of a financial year, a person who. is previously assessed to tax is liable to pay advance tax on demand by the Income tax Officer under section 210. The quantum of tax will be determined by section 209 and will be adjusted in the manner provided by section 210(3). That applies to every assessee Whether the tax is liable to be paid by him on his own total income, or on the income assessed.in his hands as a representative assessee. If he has not been previously assessed in the character in which he is liable to pay tax, an obligation is imposed by section 212(3) upon him to make an estimate of his income and to pay advance tax. That provision also applies to his own income and also to the income in respect of which he is a representative assessee. There is nothing in the Act under which the liability to pay advance tax of a representative assessee depends upon determination of the total income for the previous year. An argument of hardship was also raised. It was said that an agent of a non resident may not normally have in his possession any materials on which he may estimate the income in respeet of which he may be chargeable to advance tax, if he has not been previously assessed to tax as an agent of a non resident. That again, in our judgment, is not a ground which exempts an 358 agent from liability to pay advance tax on behalf of his principal. Liability to submit an estimate necessarily implies the duty to secure the requisite information from the non resident for submitting the estimate. The tax, it must be remembered, is assessed on the agent for and on behalf of the principal, and the Act has made an express provision enabling the agent to recover from the principal the tax so paid by him. Once the Income tax Officer treats a person as an agent of a non resident, liability to pay tax on regular assessment arises; and his liability as a representative assessee to pay advance tax is not excluded by any provision of the Act. In our judgment, sections 207 and 208 which impose liability to pay advance tax in a financial year, section 210 which authorise the Income tax :Officer to make a demand for payment of advancetax from a person who is previously assessed, and section 212(3) which imposes the duty to make an estimate of the total income likely to be received or to accrue or arise and to pay advance tax if the total estimated income exceeds the maximum amount not chargeable to tax in his case by Rs. 2,500, apply to every person whether he is assessed in respect of his own income or as a representative assessee, and we are unable to imply an unexpressed limitation on the express 'words of the statute in favour of an agent of a non resident principal. In the present case by order dated February 25, 1965, for the assessment year 1964 65 the Company was treated as an agent of the non resident principal. Since the Company was treated as an agent of the non resident, it became liable to pay advancetax in the financial year 1964 65. By virtue of section 207 read with section 208 the declaration that the Company was an agent involved liability to pay advance tax as well as tax assessed on regular assessment. We are unable to hold that the liability to pay advance tax did not arise against the Company. The plea that the provisions imposing liability to pay advancetax upon an agent of a non resident infringe the equality clause of the Constitution has No. substance. As already observed, the liability to pay advance tax arises under sections 207 .and 208 and its quantum is determined by sections 209, 210 and 212(3), and it is not predicated of the accrual of liability that the total income of the previous year should be ascertained or precisely ascertainable when demand is made by the Income tax Officer under section 210, or when the assessee is required to. make an estimate. The assumption that an assessee whose year of account coincides with the financial year is not in respect of that year liable to pay advancetax is not warranted. The computation of advance tax is not dependent upon the completion of the previous year: it depends upon the rules prescribed by sections 209, 210 and 212. Every person who has been previously assessed to tax is liable when ordered 359 by the Income tax Officer to pay advance tax, subject to the right to make an estimate under section 212( 1 ). A person who has not been previously assessed but whose income is likely to exceed the specified amount is also liable to pay advance taX. The Act does not accord discriminatory treatment between different assessees. Payment of advance tax is on account and is always liable to be adjusted against the tax assessed on regular assessment. That again applies. to all assessees. It is then difficult to appreciate the grounds on which the plea of denial of equal protection may be sustained. The only ground urged, that an assessee may escape liability to pay advance tax where his previous year coincides with the financial year, is without substance, and no other ground is set up in support of the plea of violation of the guarantee of equality under article 14 of the Constitution. The petition therefore fails and is dismissed with costs. G.C. Petition dismissed.

The Income tax Officer, Companies Circle, Bombay treating the petitioner as an agent of a non resident issued a notice of demand under section 156 read with section 210 of the Indian Income tax Act, 1961. By this notice the petitioner was called upon to pay advance tax as agent of the foreign principal during the financial year 1964 65. The petitioner filed a petition under article 32 of the Constitution challenging the demand. The contentions. in support of the petition were: (i) that under sections 209 and 210 of the Indian Income tax Act, 1961 no order for payment of advance tax can be made against an agent of a non resident; (ii) that a provision which authorises collection of advance tax from an agent of a non resident infringes the equality clause of the Constitution. In support of the first contention it was urged that since under section 209(1) the amount of advance tax payable by an assessee in the financial year is to be computed on his total income of the latest previous year in respect of which he has been assessed by way of regular 'assessment, an agent cannot be directed to pay advance tax the liability whereof depends upon the determination of total income of the, principal. HELD: (i) Sections 207 and 208 which impose liability to pay advance tax in a financial year, section 210 which authorises the Income tax Officer to make a demand for payment of advance tax from a person who is previously assessed, and section 212(3) which imposes the duty to make an estimate of the total income likely to be received or to accrue or arise. and to pay advance tax if the total estimated income exceeds the maximum amount not charge.able to tax in his case by Rs. 2,500/apply to every person whether he is assessed ' in respect of his own income or as a representative assessed and it is not possible to imply in the application of these: provisions 'an unexpressed limitation on the express words of the statute in favour of an agent of a non resident principal. [358 C D] It is expressly enacted by section 161 that as regards income in respect of which a person is a representative assessee, he shall be subject to the same duties, 'responsibilities. and liabilities as if the income. were income received by or accruing to or in favour of him beneficially. It is clearly implicit therein that a representative assessee is not exempt from liability to pay advance tax. [357 C] of the liability to pay advance tax it is not predicated that the previous year should have come to. an end before the liability can anse. The previous year of an assessee may in some cases end after the commencement but before the end of a financial year in which advance tax is payable: it may in other cases commence and end with the financial year. But the liability to pay advance tax is not in any manner 354 affected because the previous year ends before or with the financial year. There is nothing in the Act under which the liability to pay advance tax of a representative assessee depends upon determination of the total for the previous year. [357 C G] Accordingly, it could not be held that the petitioner was not liable to pay advance tax on behalf of his non resident principal. [358 E F] (ii) The plea that the provisions imposing liability to pay advance tax upon an agent of a non resident infringe the equality clause of the Constitution could not be accepted. The only ground urged, that an assessee may escape liability to pay advance tax when his previous year coincides with the financial year, was without substance. [359 B C]

iminal Appeal No. 79 of 1952. Appeal by special leave from & Judgment and Order dated 16th April, 1951, of the High Court of Judicature at Allahabad Dayal and Desai JJ.) in Criminal Miscellaneous No. 17 of 1950. K. section Krishnaswami Iyengar (H. B. Asthana, with him) for the appellants. N. C. Sen for the respondent. February 5. The Judgment of the Court was delivered by MAHAJAN J. This is an appeal by special leave from the judgment and order dated the 16th April, 1951 of the Allahabad High Court in Criminal Miscellaneous Petition No. 17 of 1950. The two appellants are members of the Uttar Pradesh Civil Service. 583 In March, 1950, appellant No. 1 (Rizwan ul Hasan) was posted as District Magistrate, Jalaun, and appellant No. 2, Mohammad Munawar, was posted as a Magistrate in the same district, having officiated as District Magistrate for some time in the early part of March, 1960. On 2nd March, 1,950, one Phundi Singh commenced proceedings under section 145 of the Code of Criminal Procedure in the Court of the Sub Divisional Magistrate of Jalaun on the allegation that Kedarnath and Matadin were about to cut his standing crop by force and 'that there was an imminent danger of a breach of the peace. The magistrate issued notices to the parties complained against and ordered attachment of the standing crop. On 4th March, 1950, one Shriram, brother of Kedarnath, filed a counter application before the court making certain allegations against one Thakur Pratap Singh, said to be the real person behind the proceedings commenced by Phundi Singh. Kedarnath and Matadin, the respondents in Phundi Singh 's application, also filed an application similar to that of Shriram before the District Magistrate on the same date. This application was accompanied by a recommendatory letter written to the District Magistrate by Lalla Ram Dwivedi, Secretary, District Congress Committee. It was received by the second appellant who was then officiating as District Magistrate and was sent by him to the Sub Divisional Magistrate, Jalaun, in whose court Phundi Singh 's application was pending, for report. The Sub Divisional Magistrate returned it with the remark that a proper com plaint should be made in his court in the ordinary way on the allegations made in the application. Thereupon the second appellant returned the application to Kedarnath and Matadin and advised them to move the Sub Divisional Magistrate in as formal and proper manner. On the application of Phundi Singh made before the High Court of Allahabad under section 3 of the 584 Contempt of Courts Act, the second appellant was held guilty of contempt of the Sub Divisional Magistrate on the following reasoning Shri Mohammad Munawar opposite party No. 5 forwarded application given by the opposite parties Nos ' 2 and 3 together with introductory letter to the Sub Divisional Magistrate,Jalaun. We do not think that he had any intention to influence the Sub Divisional Magistrate with respect to his action in the case under section 145, Criminal Procedure Code. But intention is not 'of importance so far as the question of commission of contempt is concerned. He certainly acted without due circumspection and thought. It must have been clear to him that the application contained expression which affected the due considerations of the points in dispute in the proceeding under section 145, Criminal Procedure Code. He says in his affidavit and we can accept it that he sent this application to the Sub Divisional Magistrate just for taking action for the protection of opposite parties No. 2 and No. 3 and their crop about which an allegation was made that some action was to be taken by the other party the night following. He should in the circumstances either pass an order for the police himself which he could have very well done, or he could have just conveyed a gist of the complaint necessitating protection of life and property immediately. His conduct in transmitting the allegations made by the opposite parties No. 2 and 3 to the Sub Divisional Magistrate, Jalaun, in whose court the case under section 145, Criminal Procedure Code, was pending, did amount to the commission of contempt of that court." As regards the first appellant, the facts are that on 22nd March an application was received by post in the office of the District Magistrate signed by Shriram containing allegations against the trying Magistrate. On 25th March, 1950, this application was sent by the appellant for report to the Sub Divisional Magistrate with the following endorsement 585 section D.C. Please look into these allegations and let me have a report. " On 4th April, 1950, the Sub Divisional Magistrate submitted a report and the first appellant having been satisfied that the allegations were baseless passed the following order: " I do not see any reason to withdraw the case from your file." On the application of Phundi Singh mentioned above made before the High Court of Allahabad under section 3 of the Contempt of Courts Act this appellant along with others was also held guilty of contempt of the Sub Divisional Magistrate 's Court, on the following reasoning : "Similarly transmission of the application sent by Shriram on the 25th March to the Sub Divisional Magistrate, Jalaun, amounted to commission of contempt of court by opposite party No. 6. The mere fact that he had to take action in view of the allegations against the magistrate in that application would not affect this question. The application contained, as already stated, expressions showing that Phundi Singh was a history sheeter and that the case under section 145, Criminal Procedure Code, was fictitious and was instituted at the instance of Pratap Singh. He should not have transmitted the entire application. He could have necessary extracts which related to the allegations against the magistrate sent to the ' court concerned in the circumstances when the applicants introduced matter irrelevant for transfer application. It may also be mentioned here that the application could be treated as a transfer application though no such request was made in that application. The application was neither properly presented nor was it accompanied by an affidavit nor was it stamped. The applicant wanted some action for the protection of his crop from bad characters." Having found both the appellants guilty of contempt of court of the Sub Divisional Magistrate, Jalaun, the High Court took no action against them because they happened to commit contempt of court rather due to their carelessness Find lack of vigilance 586 than with any deliberate intention to commit it. It was observed that officers who have to transmit communications to courts of justice should be vigilant and careful to see that nothing is transmitted which can have any effect, even remotely on, the merits of a case. In our judgment, the proceedings for contempt of court against the two appellants on the facts stated are misconceived and have to be quashed. Both the appellants were superior officers of the Sub Divisional Magistrate at the time when they sent the applications of Kedarnath and Matadin for report. They were under a duty to supervise his work. It is difficult to see how by transmitting the applications received by them to him, and asking him for his views they were in any way interfering with the course of justice and were committing contempt of his court. Their action cannot be characterized as having a tendency to interfere with the course of justice. The applications were transmitted to the Sub Divisional Magistrate in the usual and normal course of the official practice and we 'cannot subscribe to the view of the High Court that only extracts of these applications should have been sent to him for his views and not the applications as such as they contained material which had a tendency to interfere with the course of justice. The second appellant, when he was officiating as District Magistrate, received the application of Kedarnath and Matadin with a letter of recommendation from the Secretary of the Congress Committee. This application was in the nature of a counter complaint, and the appellant acted properly in sending it to the magistrate who was seised of the original application. He was under no duty to censor it and to out it into pieces and then forward the relevant parts only to the magistrate. The recommendatory letter was an annexure to the application and it had to go with it. The conduct of the Secretary of the Congress Committee in writing a recommendatory letter about the facts of the case to the District 587 Magistrate was undoubtedly a communication for the purpose of influencing his decision and was rightly reprobated by the High Court. Such 9, course is calculated, if tolerated, to divert the course of justice and ought more frequently than it is, to be treated as what it really is ' namely, a high contempt of court. The Congress Secretary has been rightly held guilty of contempt and punished. He has not come to this Court and we are no longer concerned with him. But we are unable to find how the conduct of the appellant in sending the application which, as we have already stated, was in the nature of counter charge to the Sub Divisional Magistrate who was seised of the original complaint in any way amounted to contempt of court. There are three different sorts of contempts known to law in such matters. One kind of contempt is scandalizing the court itself. There may likewise be a contempt of the court in abusing parties who are concerned in causes in that court. There may also be a contempt of court in prejudicing mankind against persons before the cause is heard. The act of the appellant could not fall in either of these three categories. So far as the first appellant is concerned, under the provisions of section 528 of the Code of Criminal Procedure, he had authority to withdraw the case under section 145 of the Code pending in the court of the Sub Divisional Magistrate. On the application of 22nd March made by Kedarnath and Matadin containing allegations against the Sub Divisional Magistrate he was entitled to use his powers under that section if the allegations contained therein were substantiated. It is usual to send such applications to the court concerned for its remarks and that is precisely what he did. and as soon as the remarks were received and he was satisfied that the allegations were baseless, he declined to withdraw the case. We have not been able to see how such an action on the part of the District Magistrate, done in the normal and usual course of the discharge of his duties as such magistrate, could be held to interfere with the 76 588 course of administration of justice or to create pre re judice of any kind against the complainant in the proceedings under section 145 of the Code of Criminal Procedure. There is nothing in section 528 of the Criminal Procedure Code which disables a magistrate from taking action unless he is set in motion by the petition of one of the parties and nothing in the Code prevents any person from bringing facts to the notice of the District Magistrate which might suggest to that magistrate that it was advisable to see whether the magistrate should remain in charge of a particular case. In our judgment, therefore, the High Court was in error in thinking that the two appellants acted without due circumspection and thought and were guilty of contempt of the court of the Sub Divisional Magistrate. We are further of the opinion that it was not possible to hold on those facts that any prejudice &rose in the case by these two applications being sent by the appellants to the Sub Divisional Magistrate or that any action was necessary for the protection of the tribunal which was engaged in hearing the case under section 145, Criminal Procedure Code. As observed by Rankin C.J. in Anantalal Singha vs Alfred Henry Watson (1), the jurisdiction in contempt is not to be invoked unless there is real prejudice which can be regarded as a, substantial interference with the due course of justice and that the purpose of the court 's action is a practical purpose and it is reasonably clear on the authorities that the court will not exercise its juris diction upon a mere question of propriety. The result is that we allow the appeal, set aside the judgment of the High Court against the two appellants and acquit them of the charge under section 3 of the Contempt of Courts Act. Appeal allowed. Agent for the appellant : section Subramanian.

The jurisdiction in contempt of court is not to be invoke a unless there is real prejudice which can be regarded as a substantial interference with the due course of justice. The purport of the court 's action is a practical purpose and the Court will not exercise its jurisdiction upon a mere question of propriety. During the pendency of proceedings against A and B under section 145, Criminal Procedure Code, in the court of a Sub Divisional Magistrate, A and B made an application to the District Magistrate alleging that the proceedings were not bona fide and 582 containing statements in the nature of a countercharge. The 2nd appellant who was then officiating as the District Magistrate sent this application to the Sub Divisional Magistrate for report and on receiving a report from him that A and B should be asked to file a formal complaint before him, advised them to do so. A brother of A sent a similar petition to the District Magistrate containing also allegations against the trying Magistrate. The 1st appellant, who was the District Magistrate, forwarded them to the Sub Divisional Magistrate for report, and on receiving his report passed an order that he saw no reason to withdraw the file from the Sub Divisional Magistrate. The High Court of Allahabad held that as the applications contained allegations which might interfere with the course of the trial of the proceedings under section 145, in transmitting the applications the appellants had acted without due circumspection and thought though they had no intention to influence the Sub Divisional Magistrate and the appellants were therefore guilty of contempt of court: Held, (i) that in transmitting the applications received by them to the Sub Divisional Magistrate and calling for a report the appellants were not in any way interfering with the course of justice but were only doing their duty as superior officers; (ii) it was not possible to hold that any prejudice had been caused by the two applications being sent by the appellants to the Sub,Divisional Magistrate or that any action was necessary to protect the Sub Divisional Magistrate who was hearing the case and the appellants were not guilty of any contempt of court. Anantalal Singha vs Alfred Henry Watson ([1931] I.L.R. referred to.

ivil Appeal No. 3178 of 1986. From the Judgment and Order dated 19.6.1986 of the Punjab and Haryana High Court in C.W.P. No. 3096 of 1986. Appellant in person. Dr. Y.S. Chitale, Harbanslal and Ravinder Bana for the Respondents. The Judgment of the Court was delivered by KHALID, J. 1. The appellant appeared in person and argued his case with clarity and competence. At times he was emotionally surcharged. He perhaps, feels that he had a raw deal at the hands of the authorities. In the Special Leave Petition he has given in great detail his high qualifica tions and meritorious achievements in the various offices he held. Shorn of these details the necessary facts, in brief, for the disposal of this appeal are as follows: 2. The appellant was appointed as Chairman of the Har yana Board of School Education as per order dated 10 12 1985. At that time he was holding the post of Professor Director of the Punjabi University Regional Centre, Bha tinda. On his appointment as the Chairman of the said Board he resigned his post as Professor Director and took over as the Chairman of the Board on 11th December, 1985. His origi nal appointment was for a period of 2 years. The order of appointment reads as follows: "In exercise of the powers conferred by sub section (4) of section 3 of the Haryana Board of School Education Act, 349 1969 (as amended from time to time), the Governor of Haryana is pleased to appoint Dr. D.C. Sexena, Professor Director, Punjabi University Regional Centre, Bhatinda, as Chairman of the Haryana Board of School Educa tion, in place of Shri Anil Razdan, I.A.S., with. immediate effect for the period of two years. The terms and conditions of his appointment will be notified later on. " While he was holding the office as Chairman of the Board thus, he received a communication dated 24 3 1986, from the Education Department of the Haryana Government informing him that the Government may curtail his tenure of office at any time. The relevant portion of the order reads as follows: "No. 19/40/83 Edu. III(5). In continuation of Haryana Government order No. 19/40/83 Edu. III(5) dated 10th December, 1985, and in exercise of the powers conferred by sub sec tion (4) of Section 3 of the Haryana Board of School Education Act, 1969 (as amended from time to time), the Governor of Haryana is pleased to prescribe the following terms and conditions of appointment of Dr. D.C. Saxena as Chairman of the Board of School Education, Haryana, from the date he took over charge as such: Tenure of Office His tenure of office shall be for a period of two years from the date of assuming charge. The Govt. may, however, curtail the tenure at any time. xxxxxxx xxxxxxx xxxxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxx xxxxxxxxxx xxxxxxxxx The appellant objected to this by his letter dated 3 4 1986, to the Commissioner cum Secretary, Education Depart ment, Haryana, Chandigarh, marking a copy of the then Chief Minister of Haryana. On 7th June, 1986, he was served with an order that his term of office had been curtailed with immediate effect and that he would cease to 350 function as Chairman from 8 6 1986. This order is extracted below: "In exercise of the powers conferred by Sec tion 4 A of the Haryana Board of School Educa tion Act, 1969, and in accordance with the terms of appointment under the heading "Tenure of Office," issued vide order No. 19/40 83 Edu. 111(5) dated the 24th March, 1986, the Governor of Haryana is pleased to curtail the tenure of office of Dr. D.C. Saxena as Chair man, Haryana Board of School Education with immediate effect and orders that he shall cease to function as such with immediate effect from 8 6 1986. Shri Vivek Mehrotra, I.A.S., Direc tor, School Education, Haryana, will hold the charge of office of the Chairman, Haryana Board of School Education in addition to his own duties till further orders. " The appellant challenged this order by filing a writ peti tion in Punjab and Haryana High Court on 10th June, 1986. A Division Bench of the High Court issued notice and directed status quo, as on that day, to continue. On 19th June, 1986, the matter was listed before another Division Bench and the writ petition was dismissed in limine. This appeal by spe cial leave arises from the said order. The appellant 's case is that his original appointment was for two years at a time when he was holding a presti gious post, that he relinquished that post and took charge of the new post, that the curtailment of the original period fixed altered his position to his detriment and that all this was done mala fide. The appellant took us through the facts in detail to highlight the case of mala fides to persuade us to accept his case that the curtailment and removal was punitive and that it was done in violation of the law as laid down by this Court in various decisions. The case of the State, as disclosed in the affidavit filed by them, is that the affairs of the Board of School Education, Haryana are governed by the Haryana Board of School Education Act, 1969 (hereinafter referred to as the Act). Sub section (4) of Section 3 of the Act stipulates that the Chairman and Vice Chairman of the Board shall be appointed by the State Government, upon such terms and conditions as it may think fit and they shall hold office at the pleasure of the State Government. It was in exercise of the powers conferred under Sub Section (4) of Section 3 of the Act that the appellant was 351 appointed Chairman. In the appointment letter, it had been specifically provided that the terms and conditions of the appointment would be notified later. Subsequently, by commu nication dated 24th March, 1986, he was told that his tenure of service could be curtailed at any time by the Government. The State Government had taken a general decision on 6th June, 1986, dispensing with the services of non official/ non MLAs as Chairman of the Boards and Corporations exclud ing Kurukshetra Development Board and Tourism Corporation, Haryana. It is stated in the Counter Affidavit that this general order was examined by the Secretary, Education Department, to see whether the consequent termination of the appellant would be legal and in public interest or whether an exception could be made in his case in the interest of the Board. After the examination of the relevant files in the Education Department, it was decided that the appel lant 's services could also be dispensed with by curtailing his tenure. Along with him, Chairmen of eleven other Boards and Corporations were also dropped. It was pursuant to this decision that his tenure of service was curtailed with immediate effect by the communication dated 7th June, 1986. It is stated that Section 4 A of the Act enabled the Govern ment to do this. In the absence of any challenge to this rule, the order of curtailment was valid in law since the appellant could be in service only during the pleasure of the Government. The first respondent in this appeal is the State of Haryana and the second respondent a member of the Legisla tive Assembly and the son of the present Chief Minister of Haryana. The appellant was appointed Chairman of the Board, when Shri Bhajan Lal was the Chief Minister. The order informing him that his tenure would be for two years and that the Government could "curtail this tenure at any time" was also issued when Shri Bhajan Lal was the Chief Minister. In the original order of appointment, it was indicated that the tenure of his office would be for two years. Only four months later he was alerted by another order that the Gov ernment could curtail his tenure at any time. He must have been aware of Section 4 A which reads as follows: "4 A. Chairman, Vice Chairman and members to hold office during pleasure of State Govern ment. Notwithstanding anything contained in Section 3 or Section 4 or any other provision of this Act, the Chairman, Vice Chairman and members of the Board shall hold office during the pleasure of the State Government." 352 An argument was attempted to be advanced before us that the procedure laid down in Section 9 was not followed in his case and that this omission rendered his removal bad. For a better appreciation of this contention, we quote section 9: "9. Power to remove members: If, in the opin ion of the State Government, the continuance in office of any person as a member is not in the interest of the Board, the State Govern ment may, in consultation with the Board, make an order removing such person from such mem bership; Provided that before making such order, the reasons for his proposed removal shall be communicated to him and he shall be given an opportunity of tendering an explanation in writing which shall be duly considered by the State Government. " It is clear that the proviso to the Section makes it obliga tory on the State Government to communicate the reasons for the proposed removal of a member and to give him an opportu nity of tendering his explanation in writing and also a duty on the State Government to consider it. It was argued that the Chairman of the Board is also a member and his removal without complying with the procedure laid down in Section 9 is against law and has to be set aside. The contention that Section 9 has been violated is wholly without force because, in our opinion, Section 9 does not come into play at all in this case. It is apparent, on a comparison of the terms of Section 4 A and Section 9, that while the former deals with the general power of the State Government to terminate the tenure of the Chairman, Vice Chairman and members, the latter carves out a special field dealing with a category of cases where the State Government may remove a member whose continuance in office is not in the interest of the Board. A case falling within Section 9 is a case where removal must be for reasons personal to the Member and flow from his conduct or such other factor which requires that, in the interest of justice and fair play, he should be given an opportunity to tender an explanation. In the view that Section 9 carves out a special field, Section 4 A is left with an abridged scope. So abridged, it deals with cases other than those where the continuance of a member calls for termination in the interest of the Board and requires that such member be given an opportunity of tendering an explanation before such removal. Section 4 A can be said to include cases where the tenure of a Chairman, 353 Vice Chairman or a member is liable to termination on grounds of general policy. On the facts and circumstances, it is clear that the termination of the appellant 's tenure was the result of the policy decision taken by the Govern ment to bring in a new class of Chairmen in different Boards in the State. From the material on record we are not satis fied that the termination of the Appellant 's tenure was prompted by mala fides or was punitive in nature. The Appel lant 's services were dispensed with because of a general decision taken by the Government dispensing with the serv ices of non officials and non MLAS as Chairmen of the Boards and Corporations excluding the Kurukshetra Development Board and the Tourism Corporation, Haryana. Similarly with the termination of the Appellant 's services the services of Chairmen of several other Boards and Organisations were terminated. It is clear, therefore, that if Section 4 A is valid the order of removal of the Appellant has to be upheld. The validity of Section has not been challenged by the Appellant either before the High Court or before us except in a casual manner in the Written Submissions filed before this Court. The High Court has rightly held that Section 4 is an insur mountable hurdle in the way of the Appellant. We have, therefore, although with extreme reluctance having regard to the personal merit of the Appellant, to uphold the Judgment of the High Court. The appellant, in desperation, put forward another plea, that the expression "terms and conditions of service" would not take within its ambit "tenure of service". In other words, his case was that the word "term" did not indicate the period of service and that therefore, the Government did not have the requisite authority to curtail his tenure. This plea was met by the respondents ' counsel saying that the word 'term ' included the tenure of service also. Both sides invited us to Dictionaries in support of their respective cases. We do not think it necessary to seek support from the Dictionary for this purpose. The expression "terms of service" clearly includes tenure of service. We regret, we cannot help the appellant on this plea either. In view of the peculiar facts of this case, we do not think it necessary to consider the various authorities cited before us regarding the violation of Article 311(2) and violation of natural justice. We are extremely unhappy that such a situation has come to pass. Perhaps, the appellant 's grievances are well founded. He left his prestigious post and joined the Board expecting to be there for two years when he had a raw deal at the hands of the authorities. However, on an application of the provisions of the Haryana Board of School Education (Amend 354 ment) Act, 1980 we find it difficult to rescue the appellant from his predicament. We trust and hope that the Punjab University will be generous enough to accommodate him prop erly. The appeal has to fail and is dismissed without any orders as to costs. M.L.A. Appeal dis missed.

The Haryana Board of School Education Act, 1969 by section 4(A) stipulates that the Chairman, Vice Chairman and Members of the Board shall hold office during the pleasure of the State Government. Section 9 of the Act provides that the State Government may remove a member whose continuance in office is not in the interest of the Board provided that before making such order, the reasons for removal shall be communicated and he shall be given an opportunity of tender ing an explanation in writing which shall be considered by 'the State Government. In exercise of powers conferred by the sub section (4) of section 3 of the Act, the appellant was appointed as Chairman of the Haryana Board of School Education for a period of two years. On his appointment as Chairman, he resigned his post as Professor Director of the Punjabi University Regional Centre, Bhatinda and took over as Chairman on 11th December, 1985. The appointment letter stated that the terms and conditions of the appointment will be notified later on. The appellant received a communication dated 24.3.86 from the Education Department that the Government may cur tail his tenure of office at any time. Subsequently he was served with an order stating that his terms of office hod been curtailed with immediate effect and that he would cease to function as Chairman from 8.6.86. Similarly, with the termination of the appellant 's services, the services of Chairmen of several other Boards and organisations were terminated. The appellant challenged the aforesaid order before the High Court in a writ petition which was dismissed in limine. 347 In appeal to this Court, he contended; (i) that the curtailment of the original period fixed, altered his posi tion to his detriment and that this was done mala fide; (ii) that the word 'term ' did not indicate the period of service and therefore, the government did not have the requisite authority to curtail his tenure; and (iii) that the proce dure laid down under section 9 of the Act was not followed and consequently his removal was void. On the other hand, it was argued by counsel for the respondents: (i) that appellant 's tenure of service could be curtailed at any time by the government; (ii) that appellant 's tenure of service was curtailed alongwith the Chairmen of 11 other Boards and corporations pursuant to a general decision taken by the State Government dispensing with the service of non offi cials; (iii) that in the absence of any challenge to Rule 4A of the Act, the order of curtailment was valid in law since the appellant can be in service only during the pleasure of the government. Dismissing the appeal, this Court, HELD: 1. Section 4A is an insurmountable hurdle in the way of the appellant. If section 4A is valid, the order of remov al of the appellant has to be upheld. The validity of the section has not been challenged by the appellant either before the High Court or before this Court. Therefore the judgment of the High Court is upheld. [353D] 2. The expression 'terms of service" clearly includes tenure of service. [353F] 3. It is apparent on a comparison of the terms of section 4A and section 9 that while the former deals with the general power of the State Government to terminate the tenure of the Chairman, Vice Chairman and Members, the latter carves out a special field dealing with a category of cases where the State Government may remove a member whose continuance in office is not in the interest of the Board. A case failing within section 9 is a case where removal must be for reasons personal to the member and flow from his conduct or such other factor which requires that, in the interest of justice and fair play, he should be given an opportunity to tender an explanation. In the view that section 9 carves out a special field, section 4A is left with an abridged scope. So abridged, it deals with cases other than those where the continuance of a member calls for termination in the interest of the Board and requires that such member be given an opportunity of tendering an explanation before such removal. Section 4A can be said to include cases where the tenure of a Chairman, Vice Chairman or a member is liable to termination on grounds of general policy. [352E H; 353A] 348 In the instant case, the termination of the appellant 's tenure was neither prompted by mala fides nor was punitive in nature. The appellant 's services were dispensed with because of a general decision taken by the government dis pensing with the services of non officials and non MLAs as Chairman of the Boards and Corporations excluding the Kuruk shetra Development Board and the Tourism Corporation, Har yana. [353B C] [The Court expressed the hope that the Punjabi Universi ty will be generous enough to accommodate the appellant properly.]

Appeal No. 31 of 1960. Appeal by special leave from the judgment and order dated March 14, 1957, of the Patna High Court in Miscellaneous Judicial Case No. 165 of 1957. P. K. Chatterjee, for the appellant. section P. Varma, for respondents Nos. 1 and 4. Nooni Coomar Chakravarti and B. P. Maheshwari, for respondent No. 2. 1960. December 12. The Judgment of the Court was delivered by DAS GUPTA, J. This appeal by special leave is against an order of the High Court of Judicature at Patna dismissing summarily an application of the present appellant under article 226 and article 227 of the Constitution. The appellant was a workman employed in the Digha factory of Bata Shoo Company (Private) Limited, since October, 1943. On January 13, 1954, the management of the company served him with a charge sheet alleging that he had been doing anti union activities inside the factory during the working hours and so was guilty under section 12B(1) of the Standing Orders and Rules of the company. On 198 January 14, he submitted a written reply denying the charge and asking to be excused. On January 15, the management made an order terminating his services with effect from January 18, 1954. An industrial dispute was raised on this question of dismissal by the Union and was referred along with a number of other disputes to the Industrial Tribunal, Bihar, by a notification dated April 29, 1955. After written statements were filed by the Union and the management, February 20, 1956, was fixed for hearing at Patna. Thereafter numerous adjournments were given by the Tribunal on the joint petition for time filed by both the parties stating that all the disputes were going to be compromised. On November 16, 1956, the Tribunal made an order fixing December 20, 1956, "for filing compromise or hearing". On December 20, 1956, however a fresh application for time was filed but it was stated that agreement had already been reached on some of the matters and opportunity was asked for to settle the other matters. The case was however adjourned to January 21, 1957, for filing a compromise or hearing. On that date a further petition was again filed and a further extension of time was allowed till February 1, 1957. On January 31, the parties, that is, the management and the Union filed a joint petition of compromise settling all points of disputes out of court. Prior to this, on January 12, 1957, the present appellant had made an application praying that D. N. Ganguli and M. P. Gupta, two of his co workers might be allowed to represent his case before the Tribunal instead of Fateh Singh, the Secretary of the Union and that he did not want his case to be represented by Fateh Singh as he had no faith in him. This application was dismissed by the Tribunal by an order dated February 26, 1957. On March 7, 1957, the appellant filed a fresh petition stating that he had not authorised Fateh Singh to enter into any agreement in his case and praying that the agreement filed in respect of his case should not be accepted and that he and his agents should be heard before the disposal 199 of the case. This prayer was not allowed by the. Tribunal and by an order dated March 11, 1957, an award in terms of the petition of compromise was made. The appellant filed his application to the Patna High Court on March 13, 1957, praying for an issue of an appropriate writ or direction quashing the Tribunal 's order of February 26, 1957, by which the Tribunal had rejected his prayer for representation by a person of his own choice in place of Fateh Singh, the Secretary of the Union. Prayer was made in this petition also for a direction on the Tribunal not to record the compromise in so far as it related to the appellant 's case and to give its award without reference to the settlement and on proper adjudication of the matter. The High Court dismissed this application summarily. It is against that order of dismissal that the present appeal by special leave has been preferred. On behalf of the appellant it is argued that the Tribunal committed a serious error in rejecting his application to be represented by a person of his own choice instead of Fateh Singh, the Secretary of the Union and thereafter in making an award on the basis of the reference. It has to be noticed that on the date the application *as made before the High Court the award had already been made and so there could be no direction as prayed for on the Tribunal not to make the award. If however the appellant 's contention that the Tribunal erred in rejecting his application for separate representation was sound he would have been entitled to an order giving him proper relief on the question of representation as well as regarding the award that had been made. The sole question that arises for our determination therefore is whether the appellant was entitled to separate representation in spite of the fact that the Union which had espoused his cause was being repre. sented by its Secretary, Fateh Singh. The appellant 's contention is that he was a party to the dispute in his own right and so was entitled to representation according to his own liking. The question whether when a dispute concerning an individual workman is taken up by the Union, of which the workman is a member, as 200 a matter affecting workmen in general and on that basis a reference is made under the Industrial Disputes Act the individual workman can claim to be heard independently of the Union is undoubtedly of some importance. The question of representation of a workman who is a party to a dispute is dealt with by section 36 of the Industrial Disputes Act. That section provides that such a workman is entitled to be represented in any proceeding under the Act, by (a) an officer of a registered trade union of which he is a member, (b) an officer of a federation of trade unions to which the trade union of which he is a member is affiliated and (c) where the workman concerned is not a member of any trade union by an officer of any trade union concerned with the industry, or by any other workman employed in that industry. The appellant was the member of a trade union; and he was actually represented in the proceedings before the Tribunal by an officer of that Union, its Secretary, Fateh Singh. The Union through this officer, filed a written statement on his behalf. Upto January 12, 1957, when the appellant filed his application for separate representation, this officer, was in charge of the conduct of the proceedings on behalf of the appellant. Never before that date, the appellant appears to have raised any objection to this representation. The question is, whether, when thereafter he thought his interests were being sacrificed by his representative, he could claim to cancel that representation, and claim to be represen. ted by somebody else. In deciding this question, we have on the one hand to remember the importance of collective bargaining in the settlement of industrial dis putes, and on the other hand, the principle that the party to a dispute should have a fair hearing. In assessing the requirements of this principle, it is necessary and proper to take note also of the fact that when an individual workman becomes a party to a dispute under the Industrial Disputes Act he is a party, not independently of the Union which has espoused his cause. It is now well settled that a dispute between an individual workman and an employer cannot be an 201 industrial dispute as defined in section 2(k) of the Industrial Disputes Act unless it is taken up by a Union of the workmen or by a considerable number of workmen. In Central Provinces Transport Service Ltd. vs Raghunath Gopal Patwardhan (1) Mr. Justice Venkatarama Ayyar speaking for the Court pointed out after considering numerous decisions in this matter that the preponderance of judicial opinion was clearly in favour of the view that a dispute between an employer and a single employee cannot per se be an industrial dispute but it may become one if it is taken up by an Union or a number of workmen. "Notwithstanding that the language of section 2(k) is wide enough to cover disputes, between an employer and a single employee", observed the learned Judge, "the scheme of the Industrial Disputes Act does appear to contemplate that the machinery provided therein should be set in motion to settle only disputes which involve the rights of workmen as a class and that a dispute touching the individual rights of a workman was not intended to be the subject of adjudication under the Act, when the same had not been taken up by the Union or a number of workmen". This view which has been re affirmed by the Court in several later decisions recognises the great importance in modern industrial life of collective bargaining between the workman and the employers. It is well known how before the days of collective bargaining labour was at a great disadvantage in obtaining reasonable terms for contracts of service from his employer. As trade unions developed in the country and collective bargaining became the rule the employers found it necessary and convenient to deal with the representatives of workmen, instead of individual workmen, not only for the making or modification of contracts but in the matter of taking disciplinary action against one or more workmen and as regards all other disputes. The necessary corollary to this is that the individual workman is at no stage a party to the industrial dispute independently of the Union. The Union or those (1)[1954] S.C.R. 956. 26 202 workmen who have by their sponsoring turned the individual dispute into an industrial dispute, can therefore claim to have a say in the conduct of the proceedings before the Tribunal. It is not unreasonable to think that section 36 of the Industrial Disputes Act recognises this position, by providing that the workman who is a party to a dispute shall be entitled to be represented by an officer of a registered trade union of which he is a member. While it will be unwise and indeed impossible to try to lay down a general rule in the matter, the ordinary rule should in our opinion be that such representation by an officer of the trade union should continue throughout the proceedings in the absence of excep tional circumstances which may justify the Tribunal to permit other representation of the workman concerned. We are not satisfied that in the present case, there were any such exceptional circumstances. It has been suggested that the Union 's Secretary Fateh Singh himself had made the complaint against the appellant which resulted in the order of dismissal. it has to be observed however that in spite of everything, the Union did take up this appellant 's case against his dismissal as its own. At that time also, Fateh Singh was the Secretary of the Union. If are Union had not taken up his cause, there would not have been any reference. In view of all the circumstances, we are of opinion, that it cannot be said that the Tribunal committed any error in refusing the appellant 's prayer for representation through representatives of his own choice in preference to Fateh Singh, the Secretary of the Union. As a last resort, learned counsel for the appellant wanted to urge that the Secretary of the Union had no authority to enter into any compromise on behalf of the Union. We find that no such plea was taken either in the appellants application before the Tribunal or in his application under articles 226 and 227 of the Constitution to the High Court. Whether in fact the Secretary had any authority to compromise is a question of fact which cannot be allowed to be raised at this stage. 203 In the application before the High Court a statement was also made that the compromise was collusive and mala fide. The terms of the compromise of the dispute regarding the appellant 's dismissal were that he would not get reemployment, but by way of "humanitarian considerations the company agreed without prejudice to pay an ex gratia amount of Rs. 1,000/ (Rupees one thousand) only" to him. There is no material on the record to justify a conclusion that this compromise was not entered in what was considered to be the best interests of the workman himself In our opinion, there is nothing that would justify us in interfering with the order of the High Court rejecting the appellant 's application for a writ. The appeal is accordingly dismissed. There will be no order as to costs. During the hearing Mr. Chakravarty, learned counsel for the company, made a statement on behalf of the company that in addition to the sum of Rs. 1,000 which the company had agreed to pay to the appellant as a term of settlement the company will pay a further sum of Rs. 500 (Rupees five hundred) only ex gratia and without prejudice. We trust that this statement by the counsel will be honoured by the company.

On the termination of the appellant 's services by his employer an industrial dispute was raised by his union and the question of his dismissal along with a number of other disputes was referred to the Industrial Tribunal. After several adjournments of the case the management and the union filed a joint petition of compromise settling all the points in dispute out of Court. Prior to this the appellant filed an application praying that he might be allowed to be represented by two of his co workers instead of the Secretary of the Union in whom he had no faith and who had no authority to enter into the compromise on his behalf. This prayer was not allowed by the Tribunal which made an award in terms of the compromise. The appellant, thereupon, made an application to the High Court praying for a writ quashing the order of the Tribunal disallowing him to be represented by a person of his own choice and 197 also for a direction to the Tribunal not to record the compromise. The High Court summarily dismissed the Writ Petition. , On appeal by special leave, Held, that the appellant was Dot entitled to separate repre sentation when already being represented by the Secretary of the union which espoused his cause. A dispute between an individual workman and an employer cannot be an industrial dispute as defined in section 2(k) of the Industrial Disputes Act unless it is taken up by a Union of workmen or by a considerable number of workmen. When an individual workman becomes a party to a dispute under the Industrial Disputes Act be is a party, not independently of the Union which has espoused his cause. Central Provinces Transport Service Ltd. vs Raghunath Gopal Palwardhan, , followed. Although no general rule can be laid down in the matter, the ordinary rule should be that representation by an officer of the trade union should continue throughout the proceedings in the absence of exceptional circumstances justifying other representation of the workman concerned.

ivil Appeal Nos. 4483 & 4484 of 1986 From the Judgment and Order dated 26.6.86 of the Bombay High Court in Notice of Motion No. 1418/86 in Appeal No. 512/86 in W.P. 1007/86. F.S. Nariman, O. Chenoy, A.K. Verma, D.N. Mishra and D.N. Bhansaria for the Appellant. Soli J. Sorabjee, M.M. Jayakar and B.R. Aggarwala for the Respondents. 935 The Judgment of the Court was delivered by VENKATARAMIAH, J. These appeals by special leave are filed against the Order dated 26.6.1986 passed in Appeal No. 512 of 1986 in Writ Petition No. 1007 of 1986 and the Order dated 26.6.1986 in Appeal No. 535 of 1986 in Writ Petition No. 1424 of 1986 of the High Court of Bombay. Since these two are connected matters, they are disposed of by this common judgment. The facts of these two cases are these. The appellant in both these appeals is the Board of Trustees of the Port of Bombay (hereinafter referred to as 'the Port Trust ') and the 1st Respondent in both these appeals is a partnership firm by name M/s. Jai Hind Oil Mills Company. The 1st Respondent imported 5 consignments of Propylene of 10 metric tons each in January, 1986 by S.S. Maribor. The general landing date of the said consignments was 20th January, 1986 and the last free date in respect of them was 23rd January, 1986. There after the said consignments were incurring demurrage. The bills of entry were submitted by the 1st Respondent to the Customs authorities in the same month. Disputes arose be tween the 1st Respondent and the Customs authorities with regard to the basic customs duty payable in excess of 32.50% (as goods were imported from the Republic of Korea which was a developing country), with regard to loading the assessable value with customs duty for calculation of the additional duty and with regard to loading the CIF value with the landing charges. Not being satisfied with the contentions of the Customs authorities the 1st Respondent filed a writ petition in Writ Petition No. 122 of 1986 for the issue of certain directions to the Customs authorities with regard to the levy of customs duty. In that Writ Petition on January 21, 1986 the High Court passed an interim order which di rected the Customs authorities not to insist on payment of the customs duty in dispute pending hearing and disposal of the Writ Petition on the 1st Respondent furnishing a Bank Guarantee to the extent of the 90 per cent of the disputed amount of duty in respect of one item and 100 per cent of the disputed amount of duty in respect of two other items in favour of the Collector of Customs. Thereafter some corre spondence ensued between the 1st Respondent and the Customs authorities in connection with the description of the above goods. It would appear that while the Bill of Lading and the Invoice described the goods as 'Propylene ' the marks on the consignments indicated that they contained 'Polypropylene '. The 1st Respondent was asked to explain the discrepancy by the Customs authorities. There was also some dispute raised as regards the invoice price. The 1st Respondent could not, however, clear the goods 936 from the Port of Bombay. Thereafter the 1st Respondent filed another Writ Petition No. 519 of 1986 for the issue of a direction to the Customs authorities to permit it to clear the consignments. On April 2, 1985 the learned Single Judge of the High Court of Bombay who heard the said Writ Petition passed an order allowing the 1st Respondent to dear the consignments on furnishing an Import Trade Control bond for the value of the consignments calculated at the rate of U.S $ 735 per metric ton and furnishing a Bank Guarantee of a nationalised bank in favour of the Collector of Customs, Bombay to the satisfaction of the Prothonotary & Senior Master, High Court, Bombay, for a sum equivalent to the difference in the value between U.S $ 7 15 and U.S $ 735 per metric ton without prejudice to the rights and contentions of the 1st Respondent. The said order provided that the Customs authorities could continue their investigation and adjudicate upon the duty payable by the 1st Respondent. On the basis of the above order the 1st Respondent was allowed to withdraw the Writ Petition with liberty to file a fresh petition, if required. Since there was a delay in the clear ance of the consignments in question and the 1st Respondent had become liable to pay demurrage to the Port Trust, the 1st Respondent addressed a letter to the Collector of Cus toms, Bombay asking him to issue a Detention Certificate stating that the goods had been detained for bona fide Import Trade Control formalities so that it could claim the remission of demurrage payable to the Port Trust. The 1st Respondent followed up the above letter by another Writ Petition No. 1007 of 1986 which was filed on or about the 17th April, 1986 against the Customs authorities for the issue of a writ directing them to issue a Detention Certifi cate in respect of all the 5 consignments. On the 24th April, 1986 the learned Single Judge passed a final order directing the Customs authorities to issue a Detention Certificate to the 1st Respondent on the 1st Respondent giving an undertaking to the Court that it would pay the amount, if it failed in Writ Petition 122 of 1986. Pursuant to the Order ' dated 24th April, 1986 passed in Writ Petition No. 1007 of 1986 the 1st Respondent gave an undertaking to the Court that it would pay the amount upon its not succeed ing in Writ Petition No. 122 of 1986. On the 21st May, 1985 the Port Trust received a letter dated 19th May, 1986 from the Assistant Collector of Customs in which it had been stated inter alia that five Detention Certificates had been sent along with the said letter. Actually no enclosures were received along with the said letter. But later on they received two Detention Certificates in respect of two out of the five consignments on that day. They related to two bills of entry bearing Nos. 3133/219 and 3 133/220. On the same day the Docks Manager of the Port Trust received a letter from the clearing agent of the 1st Respondent asking 937 the Port Trust to grant the remission of demurrage in view of the Detention Certificates issued by the Customs authori ties. Since the Port Trust was not a party to any of the Writ petitions, referred to above; and no Bank Guarantee or Demand Draft had been furnished by the 1st Respondent cover ing the 80% amount of the demurrage fees, the Port Trust wrote a letter dated 30th May, 1986 to the 1st Respondent asking the 1st Respondent to give a Bank Guarantee to the effect that in the event. of the 1st Respondent losing Writ Petition No. 122 of 1986 it would pay to the Port Trust, Bombay the entire amount of remission along with interest at 15% per annum. When the aforesaid letter was sent, the Port Trust was not aware of the Order dated 2nd April, 1986 passed in Writ Petition No. 519 of 1986. Thereupon, on June 12, 1986 the 1st Respondent and its partner Sham Lal Kishna ni, who is 2nd Respondent herein filed another Writ Petition No. 1424 of 1986 in the High Court against the Port Trust for quashing the communication dated 30th May, 1986, re ferred to above, under which the Port Trust had asked the 1st Respondent to furnish the Bank Guarantee or a Demand Draft to the extent of 80% of the demurrage fees claimed by the Port Trust and for compelling the Port. Trust to honour the Detention Certificates issued by the Customs authorities pursuant to the Order dated 24th April, 1986 and to permit the clearance of the goods without payment of demurrage and without insisting upon the furnishing of a Bank Guarantee or a Demand Draft, as stated above. They also asked for an interim order of the effect that pending hearing and final disposal of the said Writ Petition, the Port Trust should forthwith honour the Detention Certificates issued by the Customs authorities and allow the clearance of the goods without payment of demurrage and without insisting on the Bank Guarantee or the Demand Draft. In that Writ Petition an interim order was passed on the 17th June, 1986 as prayed for by the 1st Respondent. Thereafter the Port Trust was advised to file an appeal before the Division Bench against the Order dated 2nd April, 1986 passed in Writ Petition No. 519 of 1986 and the Order dated 17th June, 1986 passed in Writ Petition No. 1424 of 1986. While the Port Trust was in the process of getting the said appeals made ready for filing by their advocates, the 1st Respondent threatened the Port Trust with contempt proceedings by its letter dated 20th June, 1986. Immediately after the receipt of the said letter, the Port Trust lodged the Appeal No. 512 of 1986. By an order dated 26th June, 1986 the appeal filed against the Order dated 2nd April, 1986 passed in the Writ Petition No. 1007 of 1986 was summarily dismissed. The said order, howev er, stated as under: "It is, however, clarified that it is clear from the im pugned 938 order dated 24.4.1986 that the undertaking pertains to the demurrage charges payable to the Port Trust. if the Respond ents Nos. 1 and 2 (Petitioners) failed in Writ Petition No. 122 of 1986 on the footing that no valid detention certifi cate could have been issued in that event. Mr. Chinoy contends that the detention certificate could not be issued, if in the adjudication proceedings the Petitioners are found at fault and the question of the Petitioners giving an undertaking to provide for this does not appear to have been present in the mind of the learned Judge when the order was passed. Liberty to the Appellants 'to seek further clari fication and/or orders on this question from the learned Single Judge. " The appeal filed against the Order dated 17th June, 1986 in Writ Petition No. 1424 of 1986 was numbered as Appeal No. 535 of 1986. The said appeal was also summarily dismissed on 26th June, 1986. As the Port Trust was advised to file an appeal in this Court by special leave, the Port Trust did not apply to the learned Single Judge for clarification as suggested in the Order passed in Appeal No. 512 of 1986. It may be mentioned at this stage that the remaining three Detention Certificates relating to Bills of Entry Nos. 3133/221,222 and 223 were received by the Port Trust from the Customs authorities on 3rd July, 1986. Two out of the five consignments were cleared by the 1st Respondent on 3rd July, 1986 and the remaining three consignments were cleared by the 1st Respondent on 5th July, 1986 on payment of an aggregate amount of Rs.49,510/50 paise for the charges of the Port Trust in accordance with the Order dated 17th June, 1986 passed in Writ Petition No.1424 of 1986 as against a total amount of Rs.3,53,514.75 paise due to the Port Trust for wharfage and demurrage charges upto the dates of the clearance of goods. Thus a sum of Rs.3,04,004.25 in respect of wharfage and demurrage charges of the said five consign ments remains unpaid to the Port Trust. Aggrieved by the two orders passed on 26th June, 1986 in Appeal No. 512 of 1986 and Appeal No. 535 of 1986 the Port Trust has filed these two appeals by special leave. 939 The principal contention urged in both these appeals is that the High Court should not have directed the Customs authorities to issue Detention Certificates without the Port Trust being made a party to the Writ Petition and in any event without passing an order duly providing for the pay ment of the wharfage and demurrage charges due to the Port Trust in the event of the 1st Respondent failing in its contention in Writ Petition No. 122 of 1986. It is urged that a mere undertaking given in favour of the High Court agreeing to pay the amount was not sufficient security for the amount due to the Port Trust in the event of the 1st Respondent being held to be the party in default. It is further contended that the High Court committed an error in directing the 1st Respondent to give a Bank Guarantee only in respect of the Customs duty payable by the 1st Respondent in the event of its Writ Petition being dismissed and in not making a similar order directing the 1st Respondent to furnish a Bank Guarantee in respect of the wharfage and demurrage charges payable to the Port Trust in the event of the 1st Respondent being ultimately held as the party in default. The Port Trust is constituted under the (hereinafter referred to as the Act). Under Section 5 of the Act every Board constituted under it is declared to be a body corporate having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold or dispose of property and it may be the name by which i.t is constituted, sue or be sued. The affairs of the Port Trust are managed by the Board of Trus tees and committees appointed by it in accordance with the provisions of the Act. It is thus an independent statutory body and not just a department of Government. Under Chapter VI of the Act the Board of Trustees of a Port Trust is empowered to impose and recover rates at Ports, for services rendered by the Port Trust or other persons at the port under its jurisdiction. Sections 48 to 65 of the Act which are in Chapter VI of the Act deal with the said power of the Board of Trustees. Section 48 authorises a Board from time to time to frame a scale of rates at which and a statement of the conditions under which, any of the services specified thereunder shall be performed by itself or any person autho rised by it at the port or port approaches. Clause (d) of section 48 specifically empowers the Board to impose rates in respect of wharfage, storage or demurrage of goods on any such place. Every scale of rates and every statement of conditions framed by the Board under the foregoing provi sions are required to be submitted to the Central Government for sanction and will have effect when so sanctioned and published by the Board in the Official Gazette. It is, however, provided in section 53 of the Act that the Board of Trustees in special 940 cases and for reasons to be recorded in writing, may exempt either wholly or partially any goods or vessels or class of goods or vessels from the payment of any rate or of any charge leviable in respect thereof according to any scale in force under the Act or remit the whole or any portion of such rate or charge so levied. The Port Trust has fixed the scale of rates charged at the docks. A booklet containing the said rates which are revised upto 10.1.1985 is produced before the Court. Section III of the said booklet which commences at page 14 thereof contains the Docks scale of rates ' fixed by the Port Trust. In consultation with the Customs authorities, the Port Trust has provided for the grant of concession in the matter of payment of demurrage charges on the issue of Detention Certificate by the Customs authorities. Section III A(c) of the said booket deals with the demurrage fees chargeable by the Port Trust. Proviso (d) to the said clause (c) states that the goods detained by the Customs Department for special examination 'involving ana lytical or technical tests other than the ordinary processes of appraisement ' will be exempt from demunage fees during such period of detention as may be certified by the Collec tor of Customs to be not attributable to fault or negligence on the part of importers or exporters plus two working days and that the Certification by the Customs will be given by endorsement on relative duplicate copies of Bills of Entry or Shipping Bills. On the suggestion of the Customs Depart ment the Port Trust has accepted to allow concession in the matter of demurrage charges to the extent indicated in Paragraph 4.10 of the note which is enclosed as Ext. 'B ' to the Special Leave Petition (Civil) No. 8466 of 1986. It reads thus: "4.10 The best course seems to be to charge a rate per day which corresponds to our minimum charge for handling, stor age, care and custody or the goods after the expiry of the free days. Wharfage constitutes handling costs plus storage charges for a period of four days. Deducting handling costs, the balance represents storage charges for a period of four days. It is estimated that, excluding the handling costs, storage charges per day are equal to 20% of total wharfage. is, therefore, suggested that for the entire period of certified detention we may retain per day 20% of the wharf age to cover the services referred to herein. " The above concession is extended by the Port Trust in appropriate cases where Detention Certificates are issued by the Customs authorities. The Customs authorities have laid down the procedure for issue of Detention Certificates and the current procedure in 941 regard to the issue of Detention Certificates is embodied in the Bombay Custom House Public Notice No.111 dated 29th July, 1985. Paragraph 2.of the said notice sets out the circumstances under which a regular Detention Certificate could be issued by the Customs House for facilitating the importers to get remission of demurrage charges. They are as under: "(a) Where the goods are detained by Custom House for bona fide operation of Import Control Formalities without any default on the part of the importers. (b) Where the goods have been released on caution (a regular Detention Certificate and not a Recommendatory letter). (c) Where, the goods are detained the Custom House pending test report and the facility of clearance against provisional assessment has not been allowed. Such Detention Certificates will be issued on merits for the period for which the goods were detained for the purpose. (d) Where, the goods are detained for PHO formalities, the certificate will cover the period stretching between the date of drawal of the sample by the PHO and the date of his test results, and (e) In cases where samples have been drawn from the imported consignments by the Asstt. Drug/Controller for ensuring compliance with the provisions of Drugs and Cos metics Act, 1940 and where the Assistant Drugs Controller is of the opinion that release cannot be allowed against a Letter of Guarantee pending test. " The said Public Notice also states that Detention Cer tificates will not be issued in the following types of cases: (a) "Time taken by the Custom House Laboratory for analytical/chemical testing of samples drawn from the con signments, since the facility of clearing the goods on bond in terms of Section 18 already exists. (b) Samples drawn from the imported consignments by the 942 Assistant Drugs Controller for ensuring compliance with the provisions of and for being forwarded to the Central Drugs Laboratory, Calcutta, as the importers can avail of the facility of clearing the goods against Letters of Guarantee and need not wait till the receipt of the test report. The facility of allowing clearance of goods against letters of Guarantee is extended only on the specific recom mendations of the Assistant Drugs Controller on the Bill of Entry in each case. (c) The period taken for mutilation of woollen rags in the Docks. (d) Cases where goods are detained in the ordinary course of appraisement such as for determination of the Tariff classification of goods or their assessable value in terms of Section 14 of the Customs Act. " It is agreed between the Customs authorities and the Port Trust that no Detention Certificate would, however, be issued by the Customs Department if there has been any default on the part of the importer or exporter. It is thus clear that in the event of the importer or exporter being at fault, he would not be entitled to any concession in the matter of demurrage charges. He has to pay whatever is payable in accordance with the 'scale of rates ' charged at the docks as fixed by the Port Trust. The power of a Port Trust to fix rates of demurrage and to recover the same from an importer or exporter (although the question of an exporter paying demurrage arises rarely) under law and to show concession as regards demurrage charges in certain specified cases is recognised by this Court in the Trustees of the Port of Madras vs M/s. Amin chand Pyarelal & Others, ; and in the Board of Trustees of the Port of Bombay versus Indian Goods Sup plying Co.; , These decisions are no doubt based on the relevant laws which were in force at the mate rial time. But the decisions are still relevant insofar as cases arising under the Act because the Act also contains provisions more or less similar to the statutory provisions considered in the said decisions. Demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour. They are always fixed in such a way that they would make it unprofitable for 943 importers to use the port premises as a warehouse. It is necessary to do so because congestion in the ports affects the free movement of ships and the loading and unloading operations. As stated earlier. the Port Trust shows conces sion to the party concerned in certain types of cases. In the instant case the High Court by the order passed in the writ petition to which the Port Trust was not a party directed the Customs authorities to issue Detention Certifi cates in respect of the consignments in question. In doing so while the High Court had safeguarded the interests of the Customs authorities by. its earlier orders by directing the 1st Respondent to furnish a Bank Guarantee in respect of the duty payable to them, in respect of the demurrage charges payable to the Port Trust the High Court merely directed an undertaking to be given in favour of the High Court. In the ordinary course, the High Court should have directed the 1st Respondent to furnish Bank Guarantee in respect of the demurrage charges payable to the Port Trust in the event of the 1st Respondent being held to be in default ultimately. It is, however, to be observed that before compelling the Customs authorities to issue a Detention Certificate, the High Court should have issued notice to the Port Trust which was vitally interested in securing its own interests as regards the demurrage charges recoverable by it under law. This was necessary because on the production of the Detention Certificate issued by the Customs authorities the Port Trust was under an obligation to permit the clearance of the goods without payment of full demurrage charges. If ultimately the party concerned is found to be at fault and becomes liable to pay the full demurrage charges the Port Trust may not be in a position to recover such full demur rage charges from the party concerned, since it would have no longer any lien as provided by section 59 of the Act on the goods which are already cleared The Port Trust being a body corporate constituted under the Act is entitled to be heard by the Court before any order which affects its inter ests prejudicially is passed. This case serves as an illus tration to what is stated above. The Port Trust has been asked to permit the clearance of goods in respect of which demurrage charges of Rs.3,53,5 14.75 paise are payable in the event of the 1st Respondent being held liable in law to pay the full demurrage charges. The orders passed by the High Court in the proceedings to which the Port Trust was not a party which had the effect of prejudicially affecting the interests of the Port Trust would not be binding on it in view of the violation of the principles of natural jus tice. The High 944 Court erred in not imposing any condition on the 1st Re spondent for protecting the interests of the Port Trust even in the Writ Petition to which it was a party. The impugned orders are contrary to the public notice issued by the Customs authorities as well as the rules of the Port Trust. Having regard to the peculiar circumstances of this case in which the goods have already been cleared, the orders of the High Court of Bombay against which these appeals are filed are, therefore, to be modified appropriately in order to protect the interests of the Port Trust. Accordingly, at the conclusion of the hearing of these appeals we passed an order on 16.12.1986 before reserving the appeals for judg ment directing the 1st Respondent to furnish within eight weeks a Bank Guarantee of a Nationalised Bank in favour of the appellant for due payment of Rs.3,04,004.25 paise to the appellant on demand, without any demur, being the balance of wharfage and demurrage charges in the event of the 1st Respondent not succeeding ultimately in Writ Petition No. 127 of 1986 and on failure to furnish such Bank Guarantee within eight weeks to pay in cash Rs.3,04,004.25 paise to the appellant forthwith. This shall be the final order in these appeals. These appeals are disposed of in the above terms. The Customs authorities shall complete the adjudication proceed ings as expeditiously as possible and in any event within 16.3.1987. P.S.S. Appeals disposed of.

The empowers by cl.(d) of s.48 the Board of Trustees, constituted under that Art, to impose rates in respea of wharfage, storage or demurrage of goods at the port. Section 53 of the Act empowers and Board in special cases to exempt either wholly or partially any ' goods from payment of any rate or of any charge leviable in respect thereof or remit the whole or any portion of such rate or charge so levied. The Port Trust had in consultation with the Customs authorities provided for grant of conces sion in the matter of payment of demurrage charges on the issue of detention certificate by the latter. Paragraph 2(a) of the Bombay Customs House Public Notice No. 111 dated 29th July, 1985 provides for a regular deten tion certificate to be issued where the goods are detained by the Customs House for the bona fide operation of import control formalities. A dispute arose between the 1st respondent and the Customs authorities with regard to the basic customs duty payable on the goods imported by the former. By an interim order passed in a writ petition filed by the respondent, the High Court directed the Customs authorities to allow clear ance of the consignments on respondent furnishing a bank guarantee in respect of the disputed amount of duty payable, in favour of the Collector of Customs. The respondent, however, failed to clear the goods from the Port. Since the consignments were incurring demurrage the respondent filed another writ petition seeking a direction to the Customs authorities 933 to issue detention certificates, which was allowed by the Court on the 1st respondent giving an undertaking that it would pay the demurrage amount if it failed in the earlier writ petition. The Customs authorities were, thus, obliged to issue the detention certificates. The Port Trust was not made party to any of the writ petitions. It refused to honour the detention certificates and to grant remission of demurrage unless the respondent gave a bank guarantee to the extent of 80 per cent of the fees claimed. The High Court, however, by an interim order, in the writ petition filed against the Port Trust, directed the clearance of goods without payment of demurrage and without insisting on the bank guarantee. The appeals filed against the aforesaid orders were summarily dismissed by the High Court. In the appeals by special leave, it was contended for the appellantPort Trust, that the High Court should not have directed the Customs authorities to issue detention certifi cates without the Port Trust being made a party to the writ petition and in any event without passing an order duly providing for the payment of the wharfage and demurrage charges due to the Port Trust in the event of the first respondent failing in its contention, and that the High Court had committed an error in directing the first respond ent to give a bank guarantee only in respect of the customs duty payable and not making a similar order with regard to wharfage and demurrage charges payable to the Port Trust. Disposing of the appeals, the Court, HELD: 1. The power of the Port Trust to fix rates of demurrage and to recover the same from an importer and to show concession as regards demurrage charges in certain specified cases has been recognised. [942F G] Trustees of the Port of Madras vs M/s. Aminchand Pyare lal & Others; , and The Board of trustees of the Port of Bombay vs Indian Goods Supplying Co., ; , referred to. 2.1 The orders passed by the High Court in the proceed ings to which the Port Trust was not a party, were not binding on the Port Trust in view of the violation of the principles of natural justice. [943G H] 2.2 The Port Trust being a body corporate constituted under was entitled to he heard by the Court 934 before any order which affected its interests prejudicially was passed. The High Court, therefore, before compelling the Customs authorities to issue a detention certificate should have issued notice to the Port Trust. This was necessary because on the production of that certificate the Port Trust was under on obligation to permit the clearance of the goods without payment of full demurrage charges. If ultimately the party concerned was found to he at fault and become liable to pay the full demurrage charges the Port Trust in the absence of a bank guarantee would not be in a position to recover full demurrage charges from the party concerned since it would have no longer any lien as provided by s.59 of the Act on the goods which were already cleared. [943D F] 3. The orders of the High Court in the proceedings to which the Port Trust was a party were contrary to the public notice issued by the Customs authorities as well as the rules of the Port Trust. It erred in not imposing any condi tion on the first respondent for protecting the interests of the Port Trust. It should have directed the first respondent to furnish bank guarantee in respect of the demurrage charges payable to the Port Trust in the event of the first respondent being held to be in default ultimately, rather than merely directing an undertaking to be given in favour of the High Court. [943B D] 4. The goods having already been cleared, to protect the interests of the Port Trust the order passed on December I6, 1986 directing the first respondent to furnish bank guaran tee in favour of the appellant with regard to the balance of wharfage and demurrage charges and in default thereof to pay the amount in cash would be the final order in the matter. The customs authorities to complete the adjudication pro ceedings expeditiously and within March 16, 1987. [944B E]

Appeals Nos. 474 to 501, 503 to 505, 508 to 512, 514 and 515 of 1959. Appeals from the judgment and orders dated November, 28, 1956, in O. J. C. No. 213 of 1955 and dated December 4, 1956, of the Orissa High Court in O. J. C. Nos. 214 to 216, 218, 236 to 241, 244 to 248, 251, 261 to 264, 268, 269, 271, 279 to 282, 304 to 306, 318, 323, 324, 353, 357, 363 and 372 of 1955. A. V. Viswanatha Sastri and M. section K. Sastri, for the appellants (in C. As. 474 487, 489 501 503 505 and 508 510 of 1959). M. section K. Sastri, for the appellant ( In C. A. No. 488/1959). G. C. Mathur, for the appellants (In C. As. Nos. ,111, 512, 514 and 515 of 1959.) C. K. Daphtary, Solicitor General of India B. R. L. Iyengar and P.M. Sen, for the respondents. August 22. The Judgment of the Court was delivered by HIDAYATULLAH, J. These are 38 appeals against the judgment and orders of the High Court of Orissa dated November 28, 1956, by which 42 petitions under article 226 of the Constitution filed by the present appellants and some others were dismissed. The High Court certified the cases as fit for appeal to this Court under article 132(1) of the Constitution. The appellants are holders of pre settlement minor inams in the State of Orissa. Their grants art, different both in regard to the time when they were made and the lands involved in them. They were made for performance of services of deities and were classed as Devadayam grants in the revenue papers. The grants in all these cases were not of whole villages but of certain lands and hence their classification as minor inams, and they comprised both the melwaram and kudiwaram rights 252 in the lands. It is not necessary to refer to these cases separately, since a single argument was addressed before us involving the consideration whether Notification No.4971 XV 9154 E.A. dated July 15, 1955, issued by the Orissa State Government, and the Orissa Estates Abolition Act, 1951 (Act 1 of 1952) as amended by the Orissa Estate Abolition (Amendment) Act, 1954 (Act XXVII of 1954) were respectively beyond the competence of the State and the Orissa State Legislature. By the original Act, all estates of the intermediaries were abolished, and on a notification by the Government, such,estates vested in Government. By the amending, Act, the definition of ' "estate" was widened to cover even such;, minor inams, and then the impugned notification was issued. The appellant contend that the original Act and the amending Act were, jointly or severally beyond the competence ,of the State Legislature and that the notification above mentioned was void without any effect. The Bill resulting in the original Act was introduced on January 17, 1950, and the Act was passed by the Legislative Assembly September 28, 1951 It was reserved for the consideration of the president, Who gave his assent on January 23, 1952. In; the Act, before its amendment in 1954, "estate" was defined as follows "2(g) 'Estate ' means any and held by an intermediary and included under; one entry in any of the general registers of revenue paying lands and revenue free lands prepared and maintained under the law for the time being in force by the collector of district , and includes revenue free lands not entered in any register and all classes of tenures or under tenures or an inam estate or part of an estate" By the amending act of 1954 this definition was substituted by another which, read: 253 "2(g) 'Estate ' includes apart of an estate and means any land held by or vested in an intermediary and included under one entry in any revenue roll or any of the general registers of revenue paying lands and revenue free lands, prepared and maintained under the law relating to land revenue for the time be ing in force or under any rule, order, custom or usage having the force of law, and includes revenue free lands not entered in any register or revenue roll and all classes of tenures or under tenures and any jagir, inam, or muafi or other similar grant. " In the original Act as well as in the Act as amended, there was a general provision in s.2(q) which may be read here : "(q) All words and expressions used in this Act but not defined in it, shall have, with reference to any part of the State of Orissa, the same meaning as defined in the tenancy laws and rules for the time being in force and in the absence of written laws and rules, as recognised in the custom for the time being obtaining in that part of the State of Orissa. " In the original Act, a provision was inserted by s.3 of the amending Act to the following effect "3. For the purpose of removal of all doubts it is declared that such lands and such rights in relation thereto and such persons who hold such lands and such rights as were heretofore covered by the definitions of the words 'estate ' and 'Intermediary ' in the Orissa Estates Abolition Act, 1951, shall not cease "to be so covered merely on the ground that by virtue of the provisions of this Act the said definitions have been amended and widened in scope. " The meaning of the last provision is clear. It takes away nothing from the ambit of the old definition, 254 but only adds thereto, as indeed the new definition of "estate" introduced by the amending Act shows only too plainly in its terms. To complete the survey of the provisions which we way have to refer to in this judgment, we first set down the definition of "estate" as given in the Madras Estates Land Act, 1908, which was applied to Orissa. Section 3(2)(d) of that Act defined " 'estate" as: "Any inam village, of which the grant has been made, confirmed or recognised by the Government, notwithstanding that subsequent to the grant the village has been partitioned amongst the grantees or the successors in title of the grantee or grantees. " The argument in this case is based upon this definition, because in defining an estate ', whole villages which were inam were contemplated and not minor inams of lands only. We shall refer to this later. The amending Act was also reserved for the consideration of the President and was assented to by him. When the Constitution was brought into force, the Bill of the Original Act had already been introduced in the Assembly. On June 18, 1951, before the Act was passed by the Legislative Assembly, the Constitution (First Amendment) Act, 1951 bad been enacted, and article 31A inserted with retrospective operation in the Constitution. Article 31A provided: "31A.(1) Notwithstanding anything contained in article 13, no law providing for (a) The acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights. shall be deemed to be void on the ground that it is inconsistent with, or takes away or sbridges any of the rights 255 conferred by article 14, article 19 or article 31 ; Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the "consideration of the President, has received his assent. (2) In this article (a) the expression "estate ' shall, in relation to any local area. , have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam, or muafi or other similar grant. . Article 31, before it was amended, by the constitution (Fourth Amendment) Act, 1955, provided inter alia that no property shall be acquired for a public purpose unless the law provided for compensation, and either fixed the compensation or specified the principles on which the compensation was to be determined and given. (Cl.2). By cl. (3), it was provided that no law such as was referred, to in cl. (2) was to have effect unless such law having been reserved for the consideration of the President had received his assent. Clause (4) then provided : "(4) If any Bill pending at the commencement of this constitution in the Legislature of a State has, after it has been passed by such Legislature, been reserved for the consideration of the President and has received his assent, then, notwithstanding anything in this Constitution, the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2)." The combined effect of these provisions of the Constitution was that there could be no compulsory acquisition of property for public purposes, unless the law provided for payment of compensation; 256 but the law could not be called in question on this ground if it had been reserved for the consideration of the President and had been assented to by him. The assent, of the President was a condition precedent to the effectiveness of the law. By the amendment of the Constitution and the addition of article 31A., no such law was to be deemed to be void on the ground that it was inconsistent with or took away or abridged any of the rights conferred by Art.14, Art.19 or Art.31 , provided that it had been reserved for the consideration of the President and had received his assent. By the definition clause, article 31A(2)(a), the expression " 'estate" was to have the same meaning in any local area, which it or its equivalent had in the existing law relating to land tenures in force in that area but was to include among others any. "inam '. The contention of the appellants is really twofold. The first argument is that the benefit of article 31A might have been available to the original Act,. as it was a law for the compulsory acquisition of property for public purposes but? not to the amending Act, which was not such, a law but only amended a previous law by, enlarging the definition of estate". The second argument is that the word "estate" as. defined in s.2(g) before its amendment did. not apply to pre ,settlement minor inams of lands as it applied only to an "inam estate", and an "inam estate" bad the meaning which the definition of "estate" had in the, Madras Estates Land Act. , viz., only whole "inam villages". This, it is urged, follows from the provisions of s.2(q) of the Estates Abolition Act quoted earlier. The first argument is clearly untenable. It assumes that the benefit of Art.31A is only available to those laws which by themselves provide for compulsory acquisition of property for public purposes and not to laws amending such laws, the assent of the President notwithstanding. This means that the whole of the law, original and amending, must be passed again, and be reserved for the 257 consideration of the President, and must be freshly assented to by him. This is against the legislative practice in this country. It is to be presumed that the President gave his assent to the amending Act in its relation to the Act it sought to amend, and this is more so, when by the amending law the provisions of the earlier law relating to compulsory acquisition of property for public purposes were sought to be extended to new kinds of properties. In assenting to such law, the President assented to new categories of properties being brought within the operation of the existing law, and he, in effect assented to a law for the compulsory acquisition for public purposes of these new categories of property. The assent of the President to the amending Act thus brought in the protection of article 31A as a necessary consequence. The amending Act must be considered in relation to the old law which it sought to extend and the President asserted to such an extension or, in other words, to a law for the compulsory acquisition of property for public purposes. The argument that this was not an acquisition of an inam estate comprising a. *hole village and thus outside the Abolition Act. itself has no substance. No doubt, these minor inams, were not of whole villages but of lands and the grant included both the warms and there were thus no inter mediaries. But they were inams nevertheless, and the Constitution defined and `estate ' an including any inam ', and the amending Act merely followed that definition. The extended definition in the Constitution and a similar extended definition in the Act thus exclude resort to 'the general definition clause in s.2(q), of the Abolition let and the definition of "estate" in the Madras, Estates Land Act. The definition of estate" introduced by the amending Act is sufficiently wide to cover such minor inams, and section 2(q) only applies, if a word or expression used in the Abolition Act is not defined therein. 258 If the minor inams are already within the definition of the word "estate", there is no need to go to s.2(q) or to any local law defining the word. There can be no doubt that if the new definition of "estate" applies to minor inams then they are affected by the Abolition Act. This, indeed, was conceded. Learned counsel for the appellants also urged, through somewhat faintly, that the ejusdem generis rule should be applied to the definition of ",estate" in article 31A(2)(a) as also to the corresponding new definition in the Abolition Act. This argument proceeds upon an assumption for which there is no foundation. The ejusdem generis rule is applicable where as wide or general term has to be cut down with reference to the genus of the particular terms which precede the general words. This rule has hardly any application where certain specific categories are 'included ' in the definition. The ejusdem generis rule may be applicable to the general. words "other similar grant", which would take their colour from the particular categories, "jagir, inam, or muafi", which precede them, but the word "inam" is not subject to the same rule. Once it is held that inams of any kind were included, it makes little difference if the inams were of lands and not of whole villages. So also the fact that the holders of such inams cannot be described as intermediaries, or that they comprised both the melwaram and the kudiwaram rights. Such a distinction would have significance, if the law abolished only intermediaries and not inams which it did. Section 3 of the Abolition Act says "3(1) The State Government may, from time to time by notification, declare that the estate specified in the notification has passed to and become vested in the State free from all encumbrances. " If the definition of the word "estate" was wide enough to include a minor inam and a notification was issued, the consequences of s.3 of the Abolition 259 Act must follow. Such a law is not capable of being called in question on the ground that it abridges any fundamental right conferred by articles 14, 19 and 31, if it has been assented to by the President. the notification was thus valid, if the law was valid. In the result, the appeals fail, and are dismissed with costs, one set only. Appeals dismissed.

The appellants were holders of pre settlement minor inams. The grants were not of whole villages but of certain lands and they comprised both the melwaram and kudiwaram rights in the lands. The definition of 'estate ' in the Orissa Estates Abolition Act, 1951, did not include a minor inam. But by the Orissa Estates Abolition (Amendment) Act, 1954, the definition was enlarged to cover minor inams also. Both the Acts had received the assent of the President. The appe llants contended (i) that the Amendment Act of 1954 was not a law for the compulsory acquisition of property for a public purpose and was not saved by article 31 A of the Constitution and (ii) that the minor inams were outside the scope of the Abolition Act and could not be resumed. Held, that the Amendment Act of 1954 was valid and was within the Protection of article 31A. In assenting to this Act, the President assented to new categories of properties being brought within the operation of the abolition Act of 1951, and he, in fact, assented to the law for the compulsory acquisition for public purpose of these new categories of property. Though the minor inams were not of whole villages and included both the warams, they were nevertheless inams" and the Constitution defined an "estate" as including "any" inam and fell within the scope of Abolition Act of 1951 as amended in 1954. The ejusdem generis rule cannot be applied to Inam in the definition of "estate" in article 31A(2)(a) because particular categories like "jagir, in am or muafi", are included in the definition expressly even though the rule may apply to "other similar grants" which expression may take its colour from the categories named. The ejusdem generis rule is applicable where a wide or general term has to be cut down with reference to the genus of the particular terms which precede the general words, 251

ivil Appeals Nos. 1895 1896 1907 of 1974. (From the Judgment and Decree dated the 14 10 1974 of the Madras High Court in Election Petitions Nos. 1 and 2 of 1974). R. N. Choudhary and Mrs. V.D. Khanna, for the appellant in CAs 1896/74. Y.S. Chitley, T.N.S. Srinivasavaradacharya & G. Ramas wamy, C. Lakshminarain, S.R.L. Narain and Vineet Kumar, for the appellant in CA 1907/74. T.N.C. Srinivasavaradacharya, S.C. Lakshminarain, S.R.L.Narayan, M.S. Narasimahan, for respondent No. 10 in CA 1895, Resp. No. 6 in CA 1896 and respondent No. 7 in CA 1907. A. V. Rangam and Miss A. Subshashini, for respondent No. 1 in all the appeals and for respondent No. 2 in 1907. J. M. Khanna, for respondent No. 8 in CAs. 1895 1896. The Judgment of the Court was delivered by SARKARIA, J. The basic facts giving rise to these appeals being common, the same will be disposed of under one judgment. Notice calling for nominations to be filed before 3 P.M. 11 3 1974, for filling six vacancies to the Rajya Sabha from the State of Tamil Nadu in the biennial elections was issued on March 4, 1974, Eleven candidates filed their nominations. On scrutiny which was held on March 12, 1974. all those nominations were found to be valid. On 541 14 3 1974, which was the last date fixed for withdrawal, three candidates withdrew their nominations leaving eight in the field. The poll was held on 21 3 1974. Counting of votes took place on the same date. The result was published, according to which, the contesting candidates secured the votes noted against their names as follows: 1. Shri Khadar Sha . 3500 2. Shri Khaja Mohideen . 3700 3. Shri V. Subrahmanyam . 300 4. Shri C.D. Natarajan . 3500 5. Shri R. Mohanarangam . Nil 6 .Shri section Ranaganathan . 4100 7. G. Lakshmanan . 3600 8. D.C. John @ Valampuri John . 3700 The requisite quota to secure the election of a candidate was fixed at 22,400/(6+1) +1 =3201 and candidates mentioned at serial Nos. 1, 2, 4, 6, 7 and 8 were declared elected. Two Election Petitions were filed by the unsuccessful candidates. Election Petition 1 of 1974 was filed by Shri R. Mohan Rangam and Election Petition 2 of 1974 by Shri V. Subrahmanyam. The petitioners prayed that the election of Shri D.C. John be declared void and set aside under section 100 of the Representation of the People Act, 1951. Each of the petitioners claimed that in the event of Shri John 's elec tion being set aside, he be declared elected under section 101 of the Act. In addition to the Returning Officer, the Elec toral Registration Officer and the Chief Election Commis sioner, all the seven contestants were impleaded as respond ents. The election of Shri John was assailed on the ground that on March 9, 1974, the date of the scrutiny of his nomination, he was less than 30 years ' of age and as such, did not possess the qualification as to age laid down in Article 84(b) of.the Constitution. On these premises it was pleaded that the nomination of Shri John was improperly accepted and in consequence thereof, the result of the election has been materially affected. A recriminatory petition No. 1/74 under section 97 read with section 83 of the Act was also filed by Shri V. Subrahmanyam petitioner in E.P. 2/ 74, opposing Mohana Rangam 's relief for declaration under section 101. The recriminator alleged that since the petitioner in E.P. 1/74 had not secured any vote, he. in the event of the election of Shri John being set aside, was entitled to be declared elected in the place of Shri John. The learned trial Judge of the High Court tried all the three petitions together and decided them by a common judg ment. 8 502SCI/77 542 The trial Court held that on the date of the scrutiny of his nomination, Shri John being less than 30 years of age, was not qualified under article 84(b) of the Constitution, to contest the election to the Rajya Sabha. On this short ground his election was set aside and the Election Petitions were accepted pro tanto. The trial Court, however,declined to grant the further declaration under section 101 in favour of either of the election petitioners. Aggrieved by that judgment, Shri John, has filed in this Court Civil Appeals 1895 1896 of 1974, and Shri V. Subrah manyam Civil Appeal 1907 of 1974. The first question that fails to be determined in these appeals is: Whether Shri John Was born on May 14, 1946, as has been found by the Court below, or on May 14, 1943 as contended by him ? Mr. Chowdhary appearing for the appellant (Shri John) contends that the burden of proving that Shri John, was at the material date below 30 years of age was on the elec tion petitioner and that the latter had failed to discharge such burden. Further grievance of Shri Chowdhary is that the High Court had wrongly rejected the oral and docu mentary evidence produced by Shri John. We find these contentions wholly devoid of merit. While it is true that the onus of proving that on the date fixed for the scrutiny of nominations, Shri John was less than 30 yea.rs of age, was on the election petitioners, they had amply discharged this onus by bringing on record overwhelming documentary evidence of a cogent and convinc ing character. This documentary evidence includes no less than a dozen previous admissions and declarations made by Shri John himself about his age, between March 1964 and July 1973. These documents containing such declarations consti tuting Shri John 's admissions are: (i) exhibit P.7 Application for Pre University Examination. (ii) exhibit P 9 Application for B.A. Examination. (iii) exhibit P l4 Application for appearing in University Examination. (iv) exhibit P l5 Application for the first B.G.L. Examination. (v) exhibit P l7 Application for admission to B.G.L. Examina tion. (vi) exhibit P l8 Application for second B.G.L. Examination April 1972. (vii) exhibit P 19 Application for second BGL Examination, Octo ber 1972. (viii) exhibit P 21 Application for admission into Law Col lege. (iv) exhibit 22 Application for B.L. Degree Examination. 543 (x) Ex. P 23(a), (b) & (c) Applications dated 23 71973 for enrolment as Advocate submitted to the Bar Council. (xi) Ex. P 27 Voters Card containing declaration of his age as 28 years signed by Shri John. (xii) exhibit P 87 a Book written by Shri John, containing a passage on its page 18 suggesting the inference that Shri John was born in 1946. All these documents aforesaid contain admissions made by Shri John that he was born in 1946. In several of these documents he declared 14 5 1946 as his date of birth. It is well settled that a party 's admission as defined in Sees. 17 to 20, fulfilling the requirements of Sec. 21, Evidence Act, is substantive evidence proprio vigore. An admission, if clearly and unequivocally made, is the best evidence against the party making it and though not conclu sive, shifts the onus on to the maker on the principle that "what a party himself admits to be true may reasonably be presumed to be so" and until the presumption was rebutted the fact admitted must be taken to be established. The above principle will apply with greater force in the instant case. Here, there are a number of clear admissions in prior declarations precisely and deliberately made in solemn documents by Shri John. These admissions were made ante litem motam during the decade preceding the election in question. These admissions were entitled to great weight. They had shifted the burden on the appellant (Shri John) to show that they were incorrect. The appellant had miserably failed to show that these admissions were incor rect. Apart from the evidence of these prior admissions the election petitioners had brought other documentary evidence, also, pointing to the conclusion that Shri John was born on 14 5 1946 and not 14 5 1943. This evidence consisted of 1. (a) Exhibit P 1 an entry in the records of St. Xavier 's College School, wherein the date of Shri John 's birth is recorded as 14 5 1946; (b) exhibit P.3 which purports to have been signed by the guardian of Shri John, declar ing his age as 14 5 1946; (c) Ex. P 2, the E.Ss. L.C. signed by Rama Prabhu, the Secretary to the Commission for Government Examinations. This Certificate was issued under the authority of law. exhibit P 4 Secondary School Leaving Certifi cate wherein Shri John 's date of birth is entered as 14 5 1946. 544 3. exhibit P 50, copy of the Fort St. George Gazette, dated 19 2 1964 showing Shri John 's date of birth as 14 5 1946. (a)Ex. P 5 the transfer certificate issued by the St. Xavier 's High School. (b) exhibit P 10 transfer certificate issued by the Principal of the College. (c) exhibit P 13 entry in the admission register of the College for joining the first year B.G.L. (d) exhibit P 16 entry in the admission regis ter of the College, for admission to second year B.G.L. Class. (e) exhibit P 10 entry in admission register of the College, 5. Bar Council Records relating to exhibit 'P 23. 6. Marriage Register, exhibit P 29, containing in the column captioned "Age" as against the name of Shri John, the entry "26 years" and the date of his baptism as 19 10 1946. Ex.P.30, Periodical report from the Church es regarding marriages solemnised therein, required under the , showing that Shri John 's marriage was solemnised in St. Francis Xavier 's Church ' Madras, on 6 4 1972 by Fr. G.K. Swami, and that on the date of this marriage he was 26 years of age. Exhibits P11, P 11(a), P 12 and P l2(a) records T.E.L.C. Kabis High School showing Shri John 's date of birth as 14 6 1946. 9. Ex.p 28 Book Varalatril Kalaignar Writ ten by Shri John containing biographical sketch. Therein, his date of birth is men tioned as 14 10 1946. The petitioner had also examined witnesses who testi fied with regard to these documents and the facts appear ing therein. The learned trial Judge has carefully dis cussed and evaluated this documentary and oral evidence. No material error or illegality on the part of the learned Judge in appreciating this evidence has been pointed out. The learned Judge found that the entries, Ex.P.29, in the Marriage Register are of great evidentiary value. Mr. Chaudhury assails this finding. According to him, no legal provision or rule of practice requires that the date of Baptism should be entered in such Register. Secondly, it is urged that the date of baptism given therein is 19 10 1946, which stands falsified by the evidence of Rev. Fr. Rosario, the Parish Priest who had baptised Shri John about 7 days after his birth in 1943. It is further argued that the best evidence as to Shri John 's date of birth could be that of the entry in the Public Birth Register maintained under authority of law and that the election petitioner on whom the onus lay, did not produce that evidence. 545 We find no substance in these contentions. In the witness box both Shri John (RW. 1 ) and his eider brother (RW 3 )admitted their respective signatures on this entry (Ex.P. 29) in the Marriage Register. They however, con tended that the information about the date of baptism was not supplied by them to the Priest who solemnised the mar riage and made this entry. The eider brother (RW. 3) howev er, admitted that they had signed the Register, notwith standing the fact that the age of Shri John was mentioned therein as 26 years. Both the brothers however, admitted that Shri John 's marriage was solemnised in St. Francis Xavier Church on 6 4 1972. In view of the admissions of RWs 1 and 3, the High Court was right in holding that Ex.P.29 stood proved, and the entries therein were entitled to great weight. As regards the Birth Register of 1946, the election petitioner made repeated attempts to get the same summoned and produced in Court. The process issued by the Court was returned with the report that the Register of 1946 was untraceable. Thereafter, a direction was issued by the Court to trace and produce it. A search for this record was made by the record remained untraceable. The Election Petitioner contended before the High Court that Shri John had by the exercise of his influence, prevented the produc tion of this record. The High Court found this charge to be incorrect. Nevertheless, it held that the Public Birth Register of 1946 had been lost long ago. This being the case, the non production of the Birth Register of 1946, must be held to be a neutral circumstance. The discrepancy pointed out by Shri Choudhury as to the date of the baptism of Shri John, takes us to the evidence produced by him. Shri John brought on the record three documents, R1, R2 and R4. R 1 is an extract from the Bap tism Register kept by the Ovari Tuticorin Diocese. The document R 1 according to the High Court was induct ed in a questionable manner, without even an application for it. This was issued by the Parish Priest, Peter Royan (RW 5), and purports to be a copy of an entry in the Baptism Register, which according to the admission wrung out from RW 5, had itself been re written and copied from the original. The Parish Priest conceded that he had burnt the original because it was in a very bad condition. The High Court found and we think rightly that this explanation of non production of the original was thoroughly unsatisfactory, and unbecoming of any Christian, more so, one connected with Church affairs, that by this 'unholy act ' of burning the register which was a violation of. Canon 777, Paragraph 676, the witness (RW 5) had done great disservice to Christianity and greater disservice to the cause of truth". Since R 1 was only a copy of a copy (R 4), the prepara tion of which was itself suspect and the explanation about the non production of the original was palpably unbelieva ble, these documents were rightly ruled out of evidence. R.W. 2, Rev. Fr. Rosario stated that he positively remembered that in the year 1943 when he was the Parish Priest, he had baptised Shri John. The witness was an old man. He had no Baptism Regis 546 ter or any other contemporaneous record to refresh his memory with regard to an event which took place more than a quarter of a century back. He was deposing to a fact in issue merely from memory. Human memory being fallible, it was hazardous to accept his ipse dixit. The oral evidence of the witness could not be preferred to the entry in the Marriage Register, exhibit P 29, showing that Shri John on the date of his marriage, which took place in 1972, was 26 year old and had been baptised in 1946. It is true that there is a slight discrepancy between the date of his baptism as entered in the Marriage Register and the date of his birth as admitted by him in the various applications he submitted for admission to various classes in College or for enrolment as an Advocate. But there is no discrepancy with regard to the year of birth as well as baptism being 1946. In exhibit P. 29, the date of his baptism is entered as 19 10 1946. The biodata appearing in the book exhibit P.28, which, according to the publisher, RW 4, was entered by him on the basis of information derived from Shri John, gives his date of birth as 14 10 1946, while all the numerous public records, the declarations constituting the prior admissions of Shri John, produced in evidence by the Election Petitioner, consistent ly show Shri John 's date of birth as 24 5 1946. We have been taken through the oral evidence rendered by Shri John (RW 1) and his eider brother (RW 3). Their inter ested testimony makes interesting reading. Shri John was asked in cross examination to state how he came to contest the Rajya Sabha elections ? He replied that, as usual, in his village Ovari, he was having a dis cussion with the members of his community to settle a dispute between owners of catamaran and mechanised boats. A suggestion was made to him that he should contest an elec tion to Parliament as a representative of the fishermen community. Shri John told them that ". an election to the Council of States is fast approaching and the only thing is I cannot enter the Rajya Sabha, because I have not complet ed the age of 30 years." Shri John was further questioned by the Counsel: "Then what happened ?" He replied: "My eldest brother was one among those who were assembled there. He told me along with another elderly gentleman, whose name I am not able to recollect now: "What non sense are you talking? You have compleated 30 years positively." Moreover they told me in adition : We have to refer to the Registers kept in the Church ' ". With this idea put into his head, the witness next morning along with his brother visited the village Church and met Rev. Fr. Peter (R.W. 5) and asked for the Baptism Register relating to the witness. Rev. Fr. Peter took out the Register, exhibit R 4, and turned .the leaves, and to the surprise of the witness, he saw his date of birth noted therein as 14 5 1943. Thereafter, Shri John approached the Chief 547 Electoral Officer, Madras, and made an application (Ex.P.23) on 26 2 1974 for correction and change of the date of his birth, as noted in the Electoral Roll, from '14 5 1946 ' to '14 5 1943 '. His application was allowed and the entry in the Electoral Roll as to age wag amended accordingly on the 6th or 7th March 1974. On further cross examination, Shri John frankly conceded that before seeing the Baptism Register in the second week of February 1974, he had all along been under the genuine impression that he was born on 14 5 1946. It was only on seeing the Register that he came to believe that he was born in 1943. It is to be remembered that this Baptism Register (R. 4) is the same, which was found by the High Court to be a suspicious record, prepared in suspicious circumstances, wholly unworthy of reliance. 3, the eider brother of Shri John also stated that when the elders of the village asked him to contest the election, he replied that he had not attained the proper age, i.e. "31 years" which was necessary to contest the election. Immediately, the witness intervened: "What non sense you are talking ? You have attained the proper age . you must go and refer in the Church". About their going to Priest Rev. Fr. Peter Royan at the village Church and scrutinising the Baptism Register his version is more or less the same as of RW 1. This witness, as already noticed, admitted that at the time of his broth er, Shri John 's marriage, he had also signed the entry, exhibit P 29, in the Marriage Register on 6 4 1972. He further conceded that in this entry exhibit P 29, the age of the bride groom, Shri John, was mentioned as 26 years. He further conceded that in exhibit P. 29, the date of Shri John 's baptism is noted as 19 10 1946. But the witness, wanted the Court to have it believed that he had signed this entry without looking into it. This version was too incredible to be swallowed without demur. The conclusion was inescapable that on 6 4 1972, Shri J.D. Mohan, RW 3, the eldest brother of Shri John, whose parents were dead, knew that the particulars of this entry. showing his age to be 26 years on 6 4 1972, and the date of his baptism in 1946, were true. That is why he and his brother John, without raising any objection, affixed their signatures thereto in token of its correctness. We need not dilate on the question of Shri John 's age further. All aspects of this issue have been discussed threadbare by the High Court. Suffice it to say, that from the evidence on record it stood clearly established that on the date of the scrutiny of the nominations, Shri John was less than 30 years of are and in view of Article 84(b) of the Constitution he was not competent to contest the elec tion for the Rajya Sabha. His nomination was therefore improperly accepted by the Returning Officer, and this improper acceptance has, in so far as it concerned the returned candidate, Shri John, materially affected the result of the election. Shri John 's election was thus rightly set aside by the High Court. Now we come to the second question, whether Shri V. Subramanyan, appellant in C.A. 1907 of 1974, is entitled to be declared elected in lieu of Shri John whose election has been set aside ? 548 Shri Ramaswami, learned Counsel for this appellant, has advanced alternative arguments. It is submitted that since Shri Mohana Rangam did not secure any vote at all, he had ceased to be a continuing candidate and stood ' automatically excluded, leaving only Shri Subramanyam, sole continuing candidate in the field. It is emphasised that Shri Rangam has not filed any recriminatory petition. In this situa tion, it is maintained, Shri Subramanyam would be deemed to have been elected, although he had secured only 300 votes. Reference in this connection has been made to Rule 81(2) of the Conduct of Election Rules, 1961. The alternative argument of Shri Ramaswami is that since Shri John was not a qualified candidate, the votes cast in his favour have to be treated as thrown away, and even if both Shri Mohan Rangam and Shri Subramanyam are assumed to be continuing_ candidates, the surplus votes cast in favour of the five successful candidates had to be trans ferred and redistributed in favour of these continuing candidates. It is urged that for this purpose the Court should send for and scrutinise the ballot papers for further counting. Shri Ramaswami further pointed out that the observations of this Court in Viswanatha Reddy vs Konap pa Rudrappa Nadganda(1) to the effect, that the votes cast in favour of the disqualified candidate are to be treated as thrown away, are equally applicable to the elections for filling vacant seats in the Council of States, notwithstand ing the fact that these elections are held according to the system of proportional representation with a single trans ferable vote whereunder there is no question of obtaining majority of valid votes, but only the required quota. In support of his contentions Shri Ramaswami has copi ously referred to the treatise, the Single Transferable Vote by K.V. Krishnaswamy Aiyar published in 1946, and the rele vant provisions of the Conduct of Election Rules, 1961 (for short, referred to as the Election Rules). The provisions material for our purpose are contained.in Part VII of the Election Rules. Shri K.V. Krishnaswamy Aiyar m his book,The Single Transferable Vote (1946 Edn.) page 23, sums up the general principles of this mode of election, thus: "The single vote is transferable from one nominee to another and that takes place in two contingencies where there would otherwise be a wastage of votes. They are: (1 ) when a candidate obtains more than what is required for his success and therefore has an unnecessary surplus; (2) When a candidate polls so few votes that he has absolutely no chance and therefore the votes nominating him are liable to be wasted." Relevant Rules in Part VII of the Election Rules are modulated on the principles enunciated by Shri Aiyar in the aforesaid book. The (1) A.I.R. 1969 S.C. 604. 549 material provisions are contained in Rule 2(1)(c), 67, 70, 71, 73 to 81 and 85. Under the scheme and system envisaged by these Election Rules, each elector has only one vote, irrespective of the number of seats to be filled. But that single vote is transferable from one candidate to another. The ballot paper bears the names of the candidates, and the elector marks on it his preferences for the candidates by denoting it with the figures 1, 2, 3, 4 and so on against the names chosen by him and this denotation is understood to be alter native in the order indicated (vide Aiyar 's The Single Transferable Vote), The figure 1 set by the elector opposite the name of a candidate means "first preference"; the figure 2 set opposite the name of a candidate, the "second prefer ence", and so on [Rule 71(ii)]. The minimum number of valid votes requisite to secure the return of a candidate at the election is called the quota. At an election where only one seat is to be filled, every ballot paper is deemed to be of the value of 1 at each count, and the quota is determined by adding the values credit to all the candi dates, and dividing the total by 2, and adding 1 to the quotient, ignoring the remainder, if any, and the resulting number is the quota, vide, Rule 75 (1 ). At an election where more than one seat is to be filled, every ballot paper is deemed of the value of 100 and the quota is determined by adding the values credited to all the candidates, and divid ing the total by a number which exceeds by 1 the number of vacancies to be filled, and adding 1 to the quotient ignor ing the remainder, if any, and the resulting number is the quota (Rule 76). The computation in the preliminary process is as under: The returning officer first deals with the covers containing the postal ballot papers, and then opens the ballot boxes, counts the ballot papers and sorts out and rejects the ballot papers found invalid. A ballot paper is deemed invalid on which (a) the figure 1 is not marked; or (b) the figure 1 is set opposite the name of more than one candidate or is so placed as to render it doubtful to which candidate it is intended to apply; or (c) the figure 1 and some other figures are set opposite the name of the same candi date; or (d) there is any mark or writing by which the elector can be identified (Rule 73). After rejecting the invalid papers, the returning officer (a) arranges the remaining ballot papers in parcels accord ing to the first preference recorded for each candidate; (b) counts and records the number of papers in each parcel and the total number; and (c) credits to each candidate the value of the papers in his parcel. He then determines the quota in accordance with Rule 75(1), or Rule 76, if the election is to fill one seat or more than one seat, as the case may be. 550 If (at any election held for filling more than one seat) at the end of any count or at the end of the transfer of any parcel or sub parcel of an excluded candidate the value of ballot papers credited to a candidate is equal to, or great er than the quota, that candidate shall be declared elected (Rule 78). if at the end of any count the value of the ballot papers credited to a candidate is greater than the quota, the surplus is transferred in accordance with the provisions of Rule 79, to the continuing candidates indicat ed in the ballot papers of that candidate as being next in order of the electors ' preference [Sub Rule (1 ) of Rule79] "Surplus" means the number by which the value of the votes original and transferred, of any candidate exceed the quota [Sub rule (6) of Rule 71]. "Continuing candidate" means any candidate not elected and not excluded from the poll at any given time [Sub rule (1 ) of Rule 71]. If more than one candidate have a surplus, the largest surplus is dealt with first and the others in order of magnitude, but every sur plus arising on the first count is dealt with before those arising on the second count and so on. Where there are more surpluses than one to distribute and two or more surpluses are equal, regard shall be had to the original votes of each candidate and the candidate for whom most original votes are recorded shall have his surplus first distributed; and if the values of their original votes are equal,. the returning officer decides by lot which candidate shall have his sur plus first distributed. [Sub rules (2) & (3) of Rule 78]. "Original Vote", in relation to any candidate, means a vote derived from a ballot paper on which a first preference is recorded, for such candidate. If the surplus of any candidate to be transferred arises from original votes only, the returning officer shall exam ine all the papers in the parcel belonging to that candi date, divide the unexhausted papers into sub parcels accord ing to the next preferences recorded thereon and make a separate sub parcel of the exhausted papers [Clause (a) of sub rule (4) of Rule 78]. "Exhausted paper" means a ballot paper on which no further preference is recorded for a continuing candidate, provided that a paper shall be deemed to have become exhausted whenever (a) the names of two or more candidates, whether continuing or not, are marked with the same figure and are next in order of preference; or (b) the name of the candidate next in order of preference, whether continuing or not, is marked by a figure not falling consecutively after some other figure on the ballot paper or by two or more figures [Sub Rule (3) of Rule 71]. The Returning Officer has to ascertain the value of the papers in each sub parcel and of all the unexhausted papers. If the value of the unexhausted papers is equal or less than the surplus, he shall transfer all the unexhausted papers at the value at which they were received by the candidate whose surplus is being transferred. If the value of the unex hausted paVers is greater than the surplus, he shall trans fer the sub parcels of unexhausted papers and the value at which each paper shall be transferred shall be ascertained by dividing the surplus by the total number of unexhausted Papers [Sub Rule (4) of Rule 78]. Sub Rule (5) indicates the procedure where the surplus of any candidate to be transferred arises from transferred as well as orginal votes; All papers in the parcel or sub parcel of an elected candidate not tansferred under this rule have to set apart as finally dealt with [Sub Rule (7) of Rule 78]. 551 Rule 80 speaks of exclusion of candidates lowest on the poll. It reads: "80. Exclusion of candidates lowest on the poll. (1) If after all surpluses have been transferred as hereinbefore provided, the number of candidates elected is less than the required number,, the returning officer shall exclude from the poll the candidate lowest on the poll and shall distribute his unexhausted papers among the continuing candi dates according to the next preferences re corded thereon; and any exhausted papers shall be set apart as finally dealt with. (2) The papers containing original votes of an excluded candidate shall first be trans ferred, the transfer value of each paper being one hundred. (3 ) The papers containing transferred votes of an excluded candidate shall then be transferred in the order of the transfers in which, and at the value at which, he obtained them. (4) Each of such transfers shall be deemed to be a separate transfer but not a separate count. (5) If, as a result of the transfer of papers, the value of votes obtained by a candidate is equal to or greater than the quota, the count then proceeding shall be completed but no further papers shall be transferred to him. (6) The process directed by this rule shall be repeated on the successive exclusion one after another of the candidates lowest on the poll until such vacancy is filled either by the election of a candidate with the quota or as hereinafter provided. (7) If at any time it becomes necessary to exclude a candidate and two or more candi dates have the same value of votes and are the lowest on the poll, regard shall be had to the original votes of each candidate and the candidate for whom fewest original votes are recorded shall be excluded; and if the values of their original votes are equal the candi date with the smallest value at the earliest count at which these candidates had unequal values shall be excluded. (8) If two or more candidates are lowest on the poll and each has the same value of votes at all counts the returning officer shall decide by lot which candidate shall be excluded. " Rule 81 deals with the filling of the last vacancies. It may also be extracted in full because a good deal of argument is founded on it. It provides: "81. Filling the last vacancies. (1) When at the end of any count the number of continuing candidates is reduced to the number of vacancies remaining unfilled, the continu ing candidates shall be declared elected. 552 (2) When at the end of any count only one vacancy remains unfilled and the value of the papers of some one candidate exceeds the total value of the papers of all the other continuing candidates together with any sur plus not transferred, that candidate shall be declared elected. (3 ) When at the end of any count only one vacancy remains unfilled and there are only two continuing candidates and each of them has the same value of votes and no sur plus remains capable of transfer, the return ing officer shall decide by lot which of them shall be excluded; and after excluding him in the manner aforesaid, declare the other candi date. to be elected. " The stage is now set for dealing with the contentions canvassed before us. The first question that falls to be considered is: Whether Shri Mohana Rangam, on account of his failure to secure any vote in the first count is to be treated as excluded from the poll ? In other words, had he ceased to be a 'continuing candidate ' within the contempla tion of the Election Rules ? We have already referred to the definition of 'Continuing Candidate ' in Rule 71(1). The definition has two elements which must be satisfied before a candidate can be said to be a continuing candidate. He should be a "candidate not elected" and further. he must not have been excluded from the poll at any given time. Shri Mohann Rangam fulfils both these conditions. Shri Ramaswami however,, contended that this definition is to be interpreted and applied in the light of what has been said in Rules 74 and 81. The argument is that an essential pre requisite to the continuance of a candidate is the allotment of a "basket" or "parcel" under Rule 74, and only such candidate is entitled to the allotment of a 'ba sket ' who at the end of the count, gets some vote to his credit and opens his account. Since Shri Rangam proceeds the argument did not get any vote whatever, he stood auto matically excluded and no question of allotting any "parcel" to him arose. The contention must be repelled. There is nothing in Rule 74 or any other Rule which, at an election to fill more than one seat, requires or empowers the returning officer to exclude a candidate from the poll merely on the ground that in the counting of the first preferences, he has not secured any valid vote. SubRule (3) of Rule 75, to which reference was made at one stage, has no application to the instant case. That sub rule which requires the returning officer to exclude from the poll a candidate whose score is the lowest governs the counting of votes where only one seat is to be filled and at the end of any count, no candidate can be declared elected. Such is not the case before us. Rule 80 also can have no application because it comes into operation at a stage "after all sur pluses have been transferred". That stage never arrived in the instant case because in the first counting itself, all the six seats were filled up, six candidates 553 (including Shri John) having secured the requisite quota of first preference votes. Nor did the stage for applying Rule 81 arise, because at the end of the first count, no vacancy remained unfilled. We therefore, repel the contention of the learned coun sel and hold that Shri Mohana Rangam did not get automati cally excluded. Both he and Shri Subramanyan were 'contin uing candidates '. Shri Subramanyan could not be declared elected as he had not obtained the required quota of 3,201 votes. This takes us to the next question. Should all the votes that had polled in favour of the candidate (Shri John) who has been found by the Court to be statutorily disquali fied for election,, be regarded as thrown away, and in consequence, the appellant, Shri Subramanyan, who secured 300 votes as against none obtained by Shri Mohana Rangam, be declared elected ? Again, the answer to this question, in our opinion, must be in tire negative. It is nobody 's case that the electors who voted for Shri John, had at the time of election, knowl edge or notice of the statutory disqualification of this candidate. On the contrary, they must have been under the impression that Shri John was a candidate whose nomination had been validly accepted by the returning officer. Had the electors notice of Shri John 's disqualification, how many of them would have voted for him and how many for the other continuing candidates, including Sarv Shri Subramanyan and Mohan Rangam, and in what preferential order, remains a question in the realm of speculation and unpredictability. In the view we take, we are fortified by the observa tions in this Court 's decision in R.M. Seshadri vs G.V. Pai (1). In that case, the election of R.M. Seshadri to the Madras Legislative Council was set aside on the ground that he was guilty of the corrupt practice of hiring or procuring motor vehicles to carry voters. The total votes polled were 12,153. Since the voting was by a single transferable vote, three out of the five candidates were eliminated at different counts with the result that their votes were transferred to the second candidate named in the ballot. At the final count Seshadri received 5643 votes and his nearest rival, G.V. Pal received 5388 votes. The number of the voters who were carried in the hired or procured vehicles could not be ascertained. Before this Court, it was contended that the election of Seshadri having been set aside, G.V. Pai who had polled the next highest number of votes should be declared elected. Hidayatullah C.J. speaking for the Court, rejected this contention with these observations: "This (question) will depend on our reaching the conclusion that but for the fact that voters were brought through this cor rupt practiee to the polling booths, the result of the election had been materially affected In a single transferable vote, it is very difficult to say how the voting would have gone; , , at page 701 554 because if all the votes which Seshadri had got, had gone to one of the other candidates who got eliminated at the earlier counts, those candidates would have won. We cannot order a recount because those voters were not free from complicity. It would 'be speculating to decide how many of the voters were brought to the polling booths in car. We think that we are not in a position to declare Vasanta Pai as elected, because that would be merely a guess or surmise as to the nature of the voting which would have taken place if this corrupt practice had not been perpetrated. " The position in the instant case is no better. It is extremely difficult, if not impossible, to predicate what the voting pattern would have been if the electors knew at the time of election, that Shri John was not qualified to contest the election. In any case, Shri Subramanyan. was neither the sole continuing candidate, nor had he secured the requisite quota of votes. He cannot therefore, be declared elected. The dictum of this Court in Viswanatha vs Konappa (supra) does not advance the case of the appellant, Shri Subramanyan. In that case, the election in question was not held according to the system of a single transferable vote. There were only two candidates, in the field for a single seat, and one of them was under a statutory disqualifica tion, Shah J. (as he then was) speaking for the Court, held that the votes cast in favour of the disqualified candidate may be regarded as thrown away, even if the voters who had voted for him were unaware of the disqualification, and the candidate securing the next highest number of votes was declared elected. The learned Judge was however careful enough to add: "This is not to say that where there are more than two candidates in the field for a single seat, and one alone is disquali fied, on proof of disqualification all the votes cast in his favour will be discard ed and the candidate securing the next highest number of votes will be declared elected. In such a case, question of notice to the voters may assume, significance, for the voters may not, if aware of the disqualification, have voted for the disqualified candidate" The ratio decidendi of Viswanatha vs Konappa is applicable only where (a) there are two contesting candidates and one of them is disqualified,. (b) and the election is on the basis of single non transferable vote. Both these condi tions do not exist in the present case. As already dis cussed, Shri Subramanyan appellant was not the sole surviv ing continuing candidate left in the field, after exclusion of the disqualified candidate, Shri John. The election in question was not held by mode of single transferable vote according to which a simple majority of votes secured en sures the success of a candidate, but by proportional repre sentation with single transferable vote, under which system the success of a candidate normally depends on his securing the requisite quota. 555 However, the principle underlying the obiter in Viswanatha vs Konappa, which we have extracted, is. applica ble to the instant case because here, after the exclusion of the disqualified candidate, two continuing candidates were left in the field.

In the biennial elections of 1974 for filling six vacancies to the Rajya Sabha from the State of Tamil Nadu, there were eight contestants, including both the appellants and one R. Mohanarangam, the petitioner in Election Petition No. 1 of 1974. The requisite quota to secure the election of a candidate was fixed at (22400 +1)/6+1 +1 =3201 and the appellant John secured 3700 votes. While the appellant Subrahmanyam secured 300 votes, Mohanarangam failed to secure any. The rest of them secured more than the quota, thus leaving "surplus votes" for transfer within the mean ing of Rule 71 (6) of the Conduct of Election Rules. In the election petitions filed by Mohanarangam and Subrahmanyam, the election of Sri John was assailed on the ground that on March 12, 1974, the date of the scrutiny of the nominations, he was less than 30 years of age and as such he did not possess the qualifications as to age laid down under article 84(b) of the Constitution that the improper acceptance of John 's nomination has materially affected the election. The petitioners prayed that the election of Sri John be declared void and set aside under section 100 of the Representation of Peoples Act, 1951. Each of the petition ers claimed that in the event of Sri John 's election being set aside, he be declared elected under section 101 of the Act. A recrimination petition No. 1/74 under section 97 read with section 83 of the Representation of Peoples Act was also filed by the appellant Subramanyam, opposing Mohanarangam 's relief for the declaration under section 101 of the Act, alleging that since the petitioner Mohanarangam in E.P. 1/74 had not secured any vote, he, in the event of the election of Sri John being set aside, was not entitled to be declared elect ed in the place of John. The trial Judge of the High Court held that on the date of the scrutiny of nominations Sri John being.less than 30 years of age was not qualified under article 84(b) of the Constitution to contest the election to,the Rajya Sabha and accepting the election petition pro tanto set aside John s election. The trial Judge, however, declined t.o grant further declaration under section 101 in favour of either of the election petitioner. Dismissing the appeals, the Court, HELD: (1) From the evidence on record it stood clearly established that on the date of the scrutiny of nominations Sri John was less than 30 years of age 539 and in view of article 84(b) of the Constitution he was not competent to contest the election for the Rajya Sabha. His nomination was, therefore, improperly accepted by the Re turning Officer, and this improper acceptance has, in so far as ' it concerned the returned candidate, Sri John materially affected the result of the election. [547 F G] (2) The onus of proving that on the date fixed for the scrutiny of nominations, a contestant was less than 30 years of age was on the election petitioners. In the instant case, the petitioners had amply discharged this onus by bringing on record over whelming documentary evidence of a cogent and convincing character. This documentary evidence includes no less than a dozen previous admissions and declarations made between March 1964 and July 1973 by Sri John himself about his age, to the effect that he was born in 1946 and that his date of birth was 14.5.1946. Apart from the evidence of these prior admissions the election petitioners had brought other documentary evidence viz., the school record purport edly signed by John 's guardian, Secondary School Leaving Certificate 'and various other documents of the educational institutions, Marriage Register Bar Council Record and Church records etc. pointing to the conclusion that Sri John was born on 14.5.1946 and not on 14 5 1943. [542 D H, 543 A B F] (3) It is well settled that a party 's admission as de fined in sections 17 to 20 fulfilling the requirements of section 21, Evidence Act is substantive evidence proprio vigore. An admission, if clearly and unequivocally made is the best evidence against the party making it and though not conclusive, shifts the onus on to the maker on the principle that "what a party himself admits to be true may reasonably be presumed to be so" and until the presump tion was rebutted the fact admitted must be taken to be established. In the instant case, there are a number of clear admissions in prior declarations precisely and delib erately made in solemn documents by Shri John. These admis sions were made ante litem motam during the decade preceding the election in question. These admissions were entitled to great weight. They had shifted the burden on the appellant (Shri John) to show that they were incorrect. The appel lant had miserably failed to show that these admissions were incorrect. [543 C E] (4) Under Rule 71(1) of the Conduct of Election Rules, 1961, "Continuing candidate" means any candidate not elected and not excluded from the poll at any given time. Two elements must, therefore, be satisfied before a candidate can be said to be a Continuing candidate. He should be a "candidate not elected" and further he must not be excluded from the poll at any given time. In the instant case Sri Mohanarangam fulfils both these conditions. [550 B, 552 C] (5) The contention that an essential prerequisite to the continuance of a candidate is the allotment of a "bas ket" or "parcel" under Rule 74 and only such candidate is entitled to the allotment of a basket who at the end of the count gets some vote to his credit and opens his account, and since Mohanarangam did not get any vote whatever he stood automatically excluded is not correct. There is nothing in Rule 74 or any other Rule which, at an election to fill more than one seat, requires or empowers the Return ing Officer to exclude a candidate from the poll merely on the ground that in the counting of the first preferences, he has not received any valid vote. [552 E H] (6) Sub Rule (3) of Rule 75 which requires the Return ing Officer to exclude from the poll a candidate. whose score is the lowest governs the counting of votes where only one seat is to be filled and at the end of any count, no candidate can be declared elected. Sub Rule (3) of Rule 75 has no application to the instant case. [552 G] (7) Rule 80 can have n6 application because, it comes into operation at a stage "after all surpluses have been trans ferred. That stage never arrived in the instant case because in the first counting. itself all the six seats were filled up six candidates (including Shri John) having received the requisite quota of first preference votes. Nor did the stage for applying Rule 81 arise, because at the end of the first count, no vacancy remained untitled. In the instant case, shri Mohanarangam did not get automatically excluded. Both he and Sri Subrahmanyam were continuing candidates. Sri Subrahmanyam could not be declared elected as he had not obtained the required quota of 3201 votes. [522 H; 553 A] 540 (8) The ratio decidendi of Viswanatha vs Konappa is applica ble only where, (a) there are two contesting candidates and one of them is disqualified (b) and the election is on the basis of single non transferable vote. In the instant case the election in question was not held by mode of single non transferable vote according to which a simple majority of votes secured ensures the success candidate, but by proportional representation with single transferable yore under which system the success of a candidate normally depends on his securing the requisite quota. Shri Subrah manyam was not the sole surviving continuing candidate left in the field, after exclusion of the disqualified candi date, Shri John. [554 G H, 555 A] Wiswanatha vs Konappa AIR 1969 S.C. 604, distinguished. All the votes that had polled in favour of Shri John who has been found by the court to be statutorily disqualified for election cannot be regarded as thrown away and in conse quence, the appellant Shri Subrahmanyam who secure 300 votes as against none obtained by Shri Mohanarangam cannot be declared elected. Shri Subrahmanyam was neither the sole continuing candidate not had be secured the requisite quota of votes. It is nobody 's case that the electors who voted for Shri John had at the time of election knowledge or notice of the statutory disqualification of this candidate. On the contrary, they must have been under the impression that Shri John was a candidate whose nomination had been validly accepted by the Returning Officer. Had the electors notice of Shri John 's disqualification, how many of them would have voted for him and how many for the other continu ing candidates including Sarvashri Subrahmanyam and Mohana rangam and in what preferential order, remains a question in the realm of speculation and unpredictability. [553 B E] R.M. Seshadri vs G.V. Pai ; @ p. 701, fol lowed.

vil Appeals Nos. 1002 & 1003 of 1976. From the Judgment and Order dated 3.10.1972 and 18.9. 1975 of the Allahabad High Court in Civil Misc. Writ No. 2726 of 1970 and Civil Misc Writ Petition No. 9943 of 1975. Satish Chander, S.N. Singh, T.N. Singh and H.L. Srivas tava for the Appellants. J.P. Goyal, M.R. Bidsar and S.K. Jain for the Respondents. The Judgment of the Court was delivered by FATHIMA BEEVI, J. These appeals by special leave are directed against the judgments of the High Court of Allaha bad. The land in plots Nos. 6385 and 6386 measuring 5 bighas and 4 biswas had been in the possession of Ram Dayal as mortgagee under Baijnath who was the original tenant. Re spondents 1 to 3 are the descendants of Ram 960 Dayal. They made an application under section 9 of the U.P. Consolidation of Holdings Act, 1954 before the Consolidation Officer. They claimed tenancy fights on the basis of the deed dated 30.7.1945 and they stated that their names had been recorded in the Khatauni of 1359 Fasli; they are in cultivatory possession and have become adhivasis and subse quently sirdars. They alleged that the names of the appel lants herein have been wrongly entered in the Khatauni of 1353 Fasli and that the appellants have no right or posses sion over the land. The respondents prayed for entering their names as sirdars and scoring off the names of the appellants. This application was allowed by the Consolidation Offi cer by order dated 23.7.1967. The order was reversed by the Settlement Officer (Consolidation). The Deputy Director of Consolidation dismissed the revision filed by the respond ents. However, the writ petition filed by the respondents as C.M.W.P. No. 2726 of 1970 was allowed by the High Court by its judgment dated 3.10.1972 and the orders of the appellate and the revisional authorities were quashed thereby main taining the order of consolidation Officer. Civil Appeal No. 1002 of 1976 is directed against the judgment dated 3.10.1972 of the High Court. The appellants had filed a Special Appeal on 30th Novem ber, 1972 against the judgment dated 3.10.1972 of Single Judge of the High Court in C.M.W.P. No. 2726 of 1970. Howev er, the said Letters Patent Appeal was not maintainable and ultimately dismissed in view of the U.P. High Courts (Aboli tion of Letters Patent Appeal Amendment) Ordinance, 1972 which came into force on 30th June, 1972. This completes the narration of the fate of the writ petition No. 2726 of 1970 which finally culminated in favour of the respondents by order dated 3.10.72. The appellants did not challenge the order of the High Court dated 3.10.72 by taking any further steps of filing any special leave petition before this Court. On the con trary, on some mistaken and totally wrong advice of some counsel the appellants again initiated fresh proceedings by moving an application on 6.7.73 before the Settlement Offi cer Consolidation. That application was rejected on 30.10.74. A revision was filed against that order before the Deputy Director of Consolidation which was also rejected by order dated 21.7.75. Thereafter the appellants filed C.M.W.P. No. 9943 of 1975 before the High Court on 7.8.75 against the order of the Deputy Director Consolidation. This writ petition came to be dismissed by 961 order dated 18.9. This judgment of the High Court is challenged in Civil Appeal No. 1003 of 1976. When the High Court in the earlier Writ Petition No. 2726 of 1970 on the same subject matter had finally decided the matter in favour of the respondents by order dated 3.10. 1972, there was no question of giving any advice by any counsel in good faith to start proceedings afresh by moving a fresh application before the Consolidation authorities. No counsel could have given such advice in good faith to start proceedings afresh before the Consolidation authorities and then to claim benefit of such period under section 14 of the . It was elementary for any counsel of whatever standing to have known that none of the authorities of the Settlement or Consolidation department could have any right or juris diction to set aside the order of the High Court dated 3.10.1972. The Settlement Officer (Consolidation) as such was justified in dismissing the application by his order dated 30.10. 1974, and thereafter the revision by the Deputy Director (Consolidation) by order dated 21.7. The appellants then under the same mistaken advice not in good faith filed C.M.W.P. No. 9943 of 1975 which came to be dismissed by the High Court on 18.9. The second judg ment of the High Court is now challenged in Civil Appeal No. 1003 of 1976. Both the appeals had been filed after the expiry of the period of limitation. The appellants had applied for condo nation of delay on the ground that the appellants had been prosecuting the prior proceedings in good faith on legal advice and the period of more than three years taken in prosecuting the proceedings is liable to be excluded in computing the period of limitation under the provision of section 14 of the . The respondents had filed counter to the application and opposed the same. This Court granted special leave vide order dated 2.9. 1976 in both matters subject to the right of the respondents to argue the question of limitation and the applicability of section 14 of the at the hearing of the appeals. The first question that we have to decide is that of limitation. The delay of 1198 days according to the appel lants had occurred unwillingly and the appellants had been prosecuting with due diligence the earlier proceedings before the appellate and the revisional authorities and on the basis of the advice given by their counsel. There is no proper affidavit of either the appellants or the counsel in support of the application for condonation of delay. There is also no other material to indicate that the appellants had exercised due diligence in work 962 ing out their remedies and sought proper advice in the matter. When the party had no right of appeal, the proceed ings instituted before the High Court challenging the judg ment in the writ petition cannot be considered to be one in good faith. The subsequent proceedings are also not legal or valid. When the decision of the High Court in the writ petition was one quashing the orders of the appellate and the revisional authorities, the party could not proceed on the basis that the matter was restored to the lower authori ties for fresh decision. We are therefore not satisfied that there is any merit in the ground urged by the appellants for getting over the bar of limitation. The appeals are liable to be dismissed as time barred. We find that even on the merits, the appellants cannot succeed. The respondents based their claim on the patta in their favour under the deed of 30.7.1945. The Consolidation Officer accepted the genuineness of the deed and found title with the respondents. The appellants had claimed right under the subsequent document of 2.8. 1945 in continuation of an earlier deed of 23.11. The land was admittedly in the possession of Baijnath, the original tenant and he was dispossessed in execution of the decree obtained by the landlord in 1944. The tenancy in favour of Baijnath was subsisting when the deed of 23.11. 1943 was executed. The creation of a tenancy during the subsistence of the earlier one could not confer any right. Before the deed of 2.8. 1945 patta was already granted in favour of the respondents. The circumstances under which the same was granted also weighed in finding title in favour of the respondents. The landlord had obtained a decree against Baijnath when the land was mortgaged in favour of Ram Dayal. The mortgagee later on obtained the decree against the landlord for an amount of Rs.214 being the value of the crops in the land. An agree ment was subsequently entered into between the landlord and the respondents settling the claim under the decree and granting patta in favour of the respondents. These facts have been found in favour of the respondents by the Consoli dation Officer. The High Court in quashing the orders of the appellate and the revisional authorities was of opinion that there was apparent error on the face of the record. The appellate authority was found to be wrong in its conclusion that the respondents lost their right by the continued possession of the appellants. The High Court noticed that even before the Consolidation Officer, the appellants did not press their claim on the basis of the patta of 1943 and has also found that the deed of 23.11.1943 was not a valid settlement inasmuch as the land was in the possession of the sitting tenant. It was also noticed that soon after the deed of 2.8.1945, dispute arose regarding possession, that the 963 appellants had been dispossessed on the basis of the decree obtained by the respondents setting aside the order of a criminal court. Before the decree became final pending litigation, the U.P. Zamindari Abolition Act came into force. In view of the subsequent legislation, the respond ents have proceeded under the U.P. Consolidation Act and the proceedings culminated in the present appeals. In the light of the definite findings of the competent authority that the respondents have derived valid title as tenants under the deed of 30.7. 1945 and the apparent mis take in the proceedings of the appellate and the revisional authorities as found by the High Court, it is not now open to the appellants to contend that they are rightful tenants entitled to possession of the land. Though the claim based on deed of 23.11.1943 had not been pressed before the lower authorities, it has been contended before us that the appel lants have a case on the principle contained in section 43 of the Transfer of Property Act. The learned counsel for the appellants maintained that even if the deed of 23.11. 1943 was inoperative or was not valid for the reason that the landlord had no possession since they obtained possession on 30.6.1944, the appellants acquired tenancy right and that has been confirmed by the deed of 2.8. The argument, though attractive, is not acceptable. Section 43 of the Transfer of Property Act embodies the rule of estoppel by deed. The section enables the transferee to whom a transfer is made on fraudulent or erroneous repre sentation to lay hold at his option of any interest which the transferor may subsequently acquire in the property provided by doing so he does not adversely affect the right of any subsequent purchaser for value without notice. Thus when a lessor erroneously represents that he is authorised to lease a property and creates a lease of it and afterwards acquires that property, the lessee is entitled to have the property from the lessor. This principle has no application if the transfer is invalid. The transfer under the deed of 23.11. 1943 became inoperative not on account of any fraudu lent or erroneous representation. The settlement was invalid and inoperative on account of the subsisting lease in re spect of the land and as the landlord could not super impose a second lease in respect of the tenanted property, no interest could be created in favour of the appellants under that document and, therefore, there is no question of feed ing the estoppel. The execution of the deed dated 30.7. 1945 in favour of the respondents negatives the claim of the appellants having acquired any right after the property was taken delivery of in 1944. We therefore reject the conten tion. 964 We accordingly hold that there is no valid ground to interfere with the decision of the High Court. We therefore dismiss the appeals. In the facts and circumstances of the case, we direct the parties to bear their respective costs. S.B. Appeals dismissed.

The land in plots Nos. 6385 and 6386 had been in posses sion of Ram Dayal as mortgagee under Baijnath who was the original tenant. Respondents No. 1 3 are the descendants of Ram Dayal. They made an application under section 9 of U.P. Consolidation of Holdings Act, 1954 before the Consolidation Officer claiming tenancy rights on the basis of the deed dated July 30, 1945, stating that their names had been recorded in Khatauni of 1359 Fasli. They are in cultivatory possession and have become adhivasis and subsequently sir dars. They further contended that the appellants have no right of possession over the land and their names have been wrongly entered in the Khatauni No. 1353 Fasli. The respond ents prayed for entering their names as sirdars. This application was allowed by the Consolidation Offi cer vide order dated July 23, 1967. The Settlement Officer (Consolidation) reversed the order and the Deputy Director of Consolidation dismissed the revision filed by the re spondents. Subsequently the respondents filed a writ petition in the High Court. The High Court allowed the same and quashed the orders of the appellate and the revisional authorities, and maintained the order of the Consolidation Officer in its judgment dated 3rd October, 1972. The appellants filed a special leave on 30th November, 1972 against the judgment of the High Court dated 3rd Octo ber, 1972 under letters patent. It was not maintainable in view of the U.P. Courts (Abolition of Letters Patent Appeal Amendment) Ordinance, 1972 which came into force on 30th June, 1972. Thus Writ Petition finally culminated in favour of the respondents by High Court order dated 3rd October, 1972. 958 The appellants instead of challenging the order of the High Court by way of filing any Special Leave Petition before this Court, initiated fresh proceedings by moving an application on 6th July, 1973 before the Settlement Officer (Consolidation) which was rejected on 30th October, 1974. A revision was filed against the said order before the Deputy Director of Consolidation which was also rejected on 21st July, 1975. Thereafter the appellants moved the High Court again, and the Writ Petition filed by them was dismissed by its order dated 18th September, 1975. Since the subject matter had been finally decided by the High Court judgment of 3rd October, 1972 so to start pro ceedings afresh was not in good faith as none of the author ities of the Settlement or Consolidation could have any right or jurisdiction to set aside the order of the High Court. The second judgment of the High Court dated 18th September, 1975 was challenged in C.A. No. 1003 of 1976 in this Court. Dismissing the appeal, the Court, HELD: Both the appeals had been filed after the expiry of the period of limitation. The appellants had applied for condonation of delay on the ground that they had been prose cuting the prior proceedings in good faith and on legal advice so the period of more than three years be excluded in computing the period of limitation under section 14 ' of the . The Respondents filed counter to the application and opposed the same. [961D E] Special leave was granted by this Court on 2nd Septem ber, 1976 subject to the rights of the respondents to argue the question of limitation and applicability of section 14 of the at the hearing of the appeals. [961F] The appellants as to the question of limitation submit ted that the delay of 1198 days had occurred unwillingly though they had been prosecuting with due diligence before the appellate authorities but there is no proper affidavit either of the appellants or the Counsel in support of the application for condonation of delay. There is also no other material to indicate that the appellants had exercised due diligence in working out their remedies and sought proper advice in the matter. There was no right of appeal against the judgment of the High Court as it quashed the orders of the appellant and the revisional authorities so the proceed ings instituted by the party by restoring to the lower authorities for fresh decision are not legal or valid. Hence the appeals are liable to be dismissed as time barred. [961G H; 962A B] 959 Even on merits, the appellants cannot succeed. Admitted ly the original tenant was Baijnath but was dispossessed in execution decree obtained by the landlord in 1944. Thereaf ter the land was mortgaged in favour of Ram Dayal and the mortgagee obtained the decree against the landlord. The respondents subsequently entered into an agreement setting the claims under the decree and granting patta in favour of the Respondents in deed dated 30th July, 1945. These facts have been accepted by the Consolidation Officer and the deed and title were found to be in favour of the,respondents. The tenancy in favour of Baijnath was subsisting when the deed of 23rd November, 1943 was executed. The creation of a tenancy during the subsistence of the earlier one could not confer any right and even before the deed of 2nd August, 1945 patta was already granted in favour of the respondents. [962D G] Even the contention of the appellants that they have a case under section 43 of the Transfer of Property Act, which embodies the rule of estoppel by deed, is not applicable because the transfer under the deed of 23rd November, 1943 became inoperative because the settlement was invalid on account of the subsisting lease in respect of the Land and the landlord could not super impose a second lease in re spect of the tenanted property, so no interest could be created in favour of the appellants under that document of 2nd August, 1945 and therefore, there is no question of feeding the estoppel. [963E G]

N: Criminal Appeal No. 220 of 1974. Appeal by Special Leave from the Judgment and Order dated 9th January, 1974 of the Allahabad High Court in Criminal Appeal No. 356/77 connected with Criminal Appeal No. 723 of 1970. R. K. Garg, section section Bhatnagar, V. J. Francis and Sunil Kumar Jain for the Appellants. R. K. Bhat for the Respondent. The Judgment of the Court was delivered by BAHARUL ISLAM, J. This appeal by special leave has been directed against the judgment and order passed by the Allahabad High Court dismissing two appeals filed by the appellants before it. The appellants were convicted under Sections 302, 307 and 323 all read with Section 149 of the Penal Code. They were sentenced to imprisonment for life, each, under Section 302/149, rigorous imprisonment for 7 years, each, under Section 307/149 and rigorous imprisonment for six months, each, under Section 323/149 of the Penal Code. Appellants Harish Chandra and Nathu were further convicted under Section 148 of the Penal Code and sentenced to rigorous imprisonment for two years, each. The sentences were directed to run concurrently. The facts material for the purpose of disposal of this appeal may be stated thus. The prosecution alleges that there was 354 long standing enmity between the parties of the deceased and the appellants. Some time prior to the incident a flour mill was installed and a house constructed by P.W. 1, Pahelwan, in his plot of land. In front of the flour mill and the residence of Pahelwan there was some vacant land in his possession. The appellants had started throwing rubbish on the land. Pahelwan and his son, Ram Swarup (deceased) objected to this. The appellants were annoyed at the objection of Pahelwan and his son Ram Swarup. On 31st December, 1968 at about noon appellants Harish Chandra and Ram Sewak had some alteration with Pahelwan and Ram Swarup in connection with throwing of rubbish on the aforesaid land and as a consequence the relation between the parties worsened. In the evening at about 8 O 'clock on the 1st of January, 1969, appellant, Ram Sewak, armed with a lathi went to the front of the flour mill of Pahelwan and started to hurl abuses on Pahelwan and his son Ram Swarup. Appellant, Ram Sewak, challenged Pahelwan and his companions to see them that day. At that time, it has been alleged, an electric light was burning in the front of the room of the flour mill as usual. At the call of the appellant, Ram Sewak, the other appellants came variously armed with lathis and spears and started giving blows to Pahelwan and his son, Ram Swarup, both of whom, according to the prosecution, were unarmed. Pahelwan, somehow, managed to snatch the spear from the hand of the appellant, Ishwari, and started giving blows to the assailants in order to defend himself. At that time, it has been further stated, appellants Harish Chandra and Nathu fired their gun and pistol respectively. As a result, Ram Swarup was hit and he fell down in front of the flour mill. The shot of Nathu hit P.W. 1 Pahelwan, Lal Ram and Shri Kishan, all of whom received injuries. Lekh Raj, P.W., then attacked the appellants with his lathi, as a result of which some injuries were caused to the appellants including Harish Chandra. Thereafter the appellants escaped. Ram Swarup succumbed to bullet injuries while he was being removed to the police station. A first information report was lodged by P.W. 1, and eventually the appellants were committed to the court of Sessions that convicted and sentenced as stated above. Their appeal was also dismissed by the High Court as earlier stated. Learned counsel for the appellants submitted that large number of injuries had also been received by the appellants and that there was no finding by the courts below as to how the assault 355 initially started and which party was the aggressor, prosecution has not explained as to how the appellants received the injuries. As such, he submitted, the conviction for the offences with the aid of Section 149, Penal Code, was bad in law. In support of his contention he relied on a decision of this Court reported in AIR 1976 section C. 2263. This Court in A.I.R. 1976 S.C. 2263 has held: (1) That the prosecution has suppressed the genesis and the origin of the occurrence and has thus not presented the true version; (2) that the witnesses who have denied the presence of the injuries on the person of the accused are lying on most material point and therefore their evidence is unreliable; (3) that in case there is a defence version which explains the injuries on the person of the accused it is rendered probable so as to throw doubt on the prosecution case. The omission on the part of the prosecution to explain the injuries on the person of the accused assumes much greater importance where the evidence consists of interested or inimical witnesses or where the defence gives a version which competes in probability with that of the prosecution one. " The submission of the learned counsel is that the injuries found in the persons of the appellants have not been explained by the prosecution. The injuries are serious. The appellants had the right of private defence, and therefore, they have committed no offence. The submission of the learned counsel is not warranted by the findings of the High Court. The High Court agreeing with the trial Court has found that the prosecution case as alleged has been established by the evidence of the prosecution witnesses. The High Court as well as the trial Court has rejected the defence version of the case, in view of their inconsistent pleas before the Committing Court and the trial Court. Before the Committing Magistrate pleas of appellants, Harish Chandra and Soney Lal, were alibi. The defence of appellants, Ram Sewak and Nathu, was that the occurr 356 ence had not taken place on the land of P.W. 1, Pahelwan, as alleged by the prosecution, but it had taken place at a different place. According to them there was a quarrel in respect of some property between Ram Swarup, (deceased) and Zorawar, brother in law of Ram Swarup, in which appellant Nathu intervened whereupon Pahelwan (P.W. 1), Lala Ram, Shri Kishan, Triloki, Ram Swarup Prasad, Munna Jamadar, Lekthraj and others attacked the appellants and in that incident injuries were received by P.W. 1 and the deceased. The defence of appellant, Ishwari, before the Committing Magistrate was that Pahelwan (P.W.1), Lekh Raj and others attacked him, as a result of which he became unconscious. The defence of the appellants before the Sessions Judge was one of the right of private defence. The defence of appellant Harish Chander before the Sessions Judge was an alibi. The defence of the other appellants was that Ishwari had been returning from Ghurwal Chak. At that time he was attacked by the prosecution witnesses and the deceased. The incident took place on a land between residence and flour mill of P.W.1 and in that assault the appellants had to defend themselves. On a consideration of the evidence on record the learned High Court agreeing with the Sessions Judge has accepted the version of the prosecution and rejected that of the defence. In coming to that conclusion the High Court has also taken notice of the fact that P.W.1. had a licensed gun. Had he and Ram Swarup and other P.W 's been the aggressors, he (P.W.1) would not have come without the gun. In view of the "inconsistent pleas" and "in view of the fact that no infirmity worth the name has been shown in the statement of eye witnesses of the occurrence", the High Court accepted the prosecution case as true and held "that the defence case is false". The High Court has also held that "appellants were the aggressors". It is therefore, not correct to suggest as contended by the learned counsel for the appellants that there were no findings on record to show as to how the quarrel started and that the appellants were the aggressors. From the findings of learned courts below the facts that emerge are (1) that it was the appellants who were the aggressors; (2) that the occurrence took place on the land in front of the house of P.W. 1, Pahelwan, who was in possession thereof; (3) that P.W.1 and the deceased had the right of the private defence of property and person and they did exercise that right. Aggres 357 sors, even if they receive injuries from the victims of their aggression cannot have the right of private defence. The findings are that P.W.1 and the deceased were unarmed. P.W.1 snatched a weapon from one of the assailants and caused injuries on them. On the top of it two of the appellants brought fire arms and fired at the deceased and the P. W. 1, as a result of which the deceased expired. The submissions of learned counsel for the appellants do not stand scrutiny. This appeal has no merit and is dismissed.

The prosecution alleged that there was a long standing enmity between the parties of the deceased and the appellants. There was a vacant plot of land in front of the flour mill and residence of PW. 1. The appellants started throwing rubbish on this piece of land. PW.1 and his son, the deceased, objected to this. On the fateful day at about noon there was an altercation in connection with the throwing of rubbish, and at about 8 p.m. one of the appellants armed with a lathi went to the flour mill and challenged PW. 1 and his companions. At the call of this appellant, the other appellants who were armed with gun, pistol, lathi and spear arrived at the spot. PW. 1 managed to snatch the spear from the hands of one of the appellants and started giving blows to the assailants in order to defend himself. At that time two of the appellants fired their gun and pistol as a result of which the son of PW. 1 received injuries, to which he succumbed while being removed to the Police Station. The defence of the appellants was one of alibi and that the offence had not taken place on the land of PW. 1. The appellants were tried before the Sessions Judge who convicted and sentenced them under Sections 302 307 and 323 read with Section 149 of the Penal Code. The High Court dismissed the appeal. It agreed with the trial Court and found that the prosecution case was established by the evidence of the prosecution witnesses and that the defence version of the case had to be rejected on account of the inconsistent pleas made by the appellants before the committing court and the Sessions Court. In the appeal in this Court, it was contended that there was no finding by the trial and appellate courts as to how the assault initially started and which party was the aggressor, that the prosecution had not explained as to how the 353 appellants received the injuries, and that the appellants had the right of private defence and, therefore, they had committed no offence. Dismissing the appeal, ^ HELD: 1. The High Court rightly accepted the prosecution case as true and held that the defence case was false. [356 F] 2. The findings of the two courts below indicate that it was the appellants who were the aggressors and that the occurrence took place on the land lying in front of the house of PW. 1 who was in possession thereof and that the deceased and PW. 1 had the right of private defence of property and person and that they exercised that right. The appellants who were the aggressors, even if they received injuries from the victims of their aggression, cannot have any right of private defence. The findings are that the deceased and PW. 1 were unarmed and that P.W. 1 snatched the weapon from one of the assailants and caused injuries to them. If the deceased and the other prosecution witnesses had been the aggressors, PW. 1 would not have come without his licensed gun. [356 H 357A, 356E]

Appeal No. 556 of 1964. Appeal from the judgment and order dated March, 24, 1961 of the Assam and Nagaland High Court in M. A. (F) No. 29 of 1956. B. Sen and D. N. Mukherjee for the appellant. section G. Patwardhan and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal on a certificate granted by the Assam High Court and arises in the following circums tances. The appellant had obtained a money decree against Thakur Prosad Joyaswal and others in 1947. As the decree remained unsatisfied it was transferred from Calcutta to Gauhati for execution. On May 2, 1953, an application was made for execution in the court at Gauhati by attachment under 0. XXI, r. 46 of the Code of Civil Procedure of certain movable property of the judgment debtors which was said to be in the possession of the Sub Divisional Officer, Military Engineering Service, Pandu. Consequently an order was issued under O.XXI r. 46 (1)(c)(iii) prohibiting the Sub Divisional Officer from parting with 208 the property of the judgment debtors. It may be mentioned that the Sub Divisional Officer is subordinate to the Garrison Engineer, Shillong. Though certain applications were put in on behalf of the Sub Divisional Officer before the court, it was only on February 1, 1954 that the Acting Garrison Engineer, Shillong stated before the court that the movable property in question (i.e. 41 R.S. joists) had been sold and delivered as far back as November 22, 1951 to Messrs. Ghunilal Kanhaiyalal of Palasbari. This objection was considered by the execution court and it held on September 25, 1964 that this belated statement that the property in question had been sold as far back as November 22, 1951 could not be believed. The execution court therefore dismissed the objection and ordered execution to proceed. Thereafter orders were issued for the production of the joists but they were not produced. Thereupon the appellant applied that the Union of India should be considered to be the principal judgment debtor and execution should be levied against the Union of India. The Union of India objected to this and on April 21, 1956 the objection of the Union of India was dismissed and the execution court held that the Union of India be treated as the principal judgment debtor and be made liable to the extent of the proceeds of the attached joists. Later on the same day, a further legal argument was raised on behalf of the Union of India to the effect that as there was no surety bond the Union of India could not be treated as the principal judgment debtor. This objection was heard and finally the court ordered on April 28, 1956 that even though there was no surety bond executed on behalf of the Union ,of India it was liable as a surety. Thereupon the Union of India appealed to the High Court against the order of April 28, 1956. The High Court allowed the appeal and set aside the order ,of the execution court holding that no action could be taken against the Union of India under section 145 of the Code of Civil Procedure upon which the execution court had apparently relied. Thereupon the appellant asked for and obtained a certificate from the High Court, and that is how the matter has come before us. We are of opinion that there is no force in this appeal. Order XXI r. 46(i) provides that in the case of other movable property not in the possession of the judgment debtor, except property deposited in or in the custody of any court, the attachment shall be made by a written order prohibiting the person in possession of the same from giving it over to the judgment debtor. The necessary prohibitory order had been issued by the execution court in this case with respect to 41 joists and had been received by the Sub Divisional Officer. Such a prohibitory order is sufficient for the purpose of attachment, though the 20 9 property mentioned therein is not actually taken in possession by the Court. After attachment has been made in the manner provided by r. 46 the next step that the court has to take is to order sale of the property attached. Then comes O.XXI r. 79 which provides that where the property sold is movable property of which actual seizure has been made, it shall be delivered to the purchaser [see r. 79(1)]. But where the property sold is movable property in the possession of some person other than the judgment debtor, the delivery thereof to the purchaser shall be made by giving notice to the person in possession prohibiting him from delivering possession of the property to any person except the purchaser [see r. 79 (2)]. In the present case there was no actual seizure of the property but attachment had been made under O.XXI r. 46 (1). The proper procedure for the court to follow was to sell the property under O.XXI r. 64 and then pass an order under O.XXI r. 79 (2) for its delivery in the manner provided therein. The court however went on asking the Sub Divisional Officer to produce the property and when it was not produced it proceeded under section 145 of the Code. We agree with the High Court that section 145 has no application in the present case. Section 145 runs thus : "Where any person has become liable as surety (a) for the performance of any decree or any part thereof, or (b) for the restitution of any property taken in execution of a decree, or (c) for the payment of any money, or for the fulfilment of any condition imposed on any person, under an order of the court in any suit or in any proceeding consequent thereon, the decree or order may be executed against him, to the extent to which he has rendered himself personally liable in the manner therein provided for the execution of the decrees and such person shall, for the purposes of appeal be deemed a party within the meaning of section 47: Provided that such notice as the court in each case thinks sufficient has been given to the surety. " A bare perusal of section 145 shows that it applies when a person has become liable as surety. Now the mere fact that an attachment was made of 41 joists said to be lying with the Sub Divisional Officer by the issue of the prohibitory order under O.XXI r. 46 does not make the Sub Divisional Officer or the Union of India a surety for the performance of the decree which was in execution. There was no surety bond taken from the Sub Divisional Officer and the joists 2 1 0 were not actually seized by the court and handed over to the Sub Divisional Officer as suparddar on the basis of a surety bond. If that had been done some question may have arisen whether the Sub Divisional Officer did become a surety for the performance of the decree or part thereof. But where merely a prohibitory order is issued under 0. XXI r. 46(1) and attachment is made in that manner, there can be no question of the person to whom the prohibitory order is issued becoming a surety for the performance of the decree. We therefore agree with the High Court that section 145 of the Code was not applicable to this case and the execution court was completely wrong in holding that the Sub Divisional Officer became a surety simply because attachment had been made in the manner provided in O.XXI r. 46 (1),. The appeal fails and is hereby dismissed with costs to the Union of India. V.P.S. Appeal dismissed.

The appellant, who was the decree holder, applied for the execution of the decree. The Sub Divisional Officer, Military Engineering Service, was in possession of some movable property of the judgment debtor. The Court ordered attachment under 0. XXI, r. 46(1), Civil Procedure Code by prohibiting the Sub divisional Officer from handing over the property to the judgment debtor. Thereafter, in stead of following the proper price(lure which was to sell the property under O.XXI, r. 64 and then pass an order for its delivery under O.XXI, r. 79(2), the Court ordered the Sub divisional Officer to produce the property, and, when it was not produced, proceeded under section 145 of the Code treating the Union of India as the principal judgment debtor. HELD: Section 145 of the Code was not applicable to the cage. That section only applies when a person becomes liable as a surety and the execution Court was wrong in holding that the Sub divisional Officer became a surety simply because attachment had been made by the prohibitory order under O.XXI, r. 46(1). [209 H, 210 B C]

tion No. 102 of 1969. Petition under article 32 of the Constitution of India for a writ in the nature of habeas corpus. Vinoo Bhagat, for the petitioner. S.P. Mitra, G.S. Chatterjee for Sukumar Basu, for the respondents. The Judgment of the Court was delivered by Sikri, J. This is a petition under Article 32 of the Constitution by Shyamal Chakraborty who has been detained under the (hereinafter referred to as the Act). Three grounds have been urged by the learned counsel why we should issue a writ of habeas corpus directing his release: (1) that the detenu 's representation was not considered by the Government, (2) that the grounds furnished to the detenu mentioned offences under the Indian Penal Code and cannot be used for the purpose of detaining the detenu except in emergencies and (3) that the grounds do not have any relation to the maintenance of public order. Following are the facts as they emerge from the affidavits on record: The detenu was detained by an order No. 3846 D.D. (S) dated 13th November, 1968 passed by the Commissioner of Police, Calcutta in exercise of powers conferred on him by section 3(2) of the Act. The detenu was arrested on November 13, 1968 and was served with the grounds of detention both in English and in vernacular on the same day. On 15th November. 1968, the Commissioner of Police reported the fact of such detention of the petitioner together with the grounds and other particulars having bearing on the necessity of the order to. the State Government. On 19th November, 1968, the Governor was pleased to approve the said order of detention under section 3(3) of the Act and on the same day the Governor submitted the report to the Central Government under section 3(4) of the Act together with grounds and other particulars having bearing on the necessity of the order. On 7th December, 1968, his case was placed before the Advisory Board under section 9 of the Act. On 6th January, 1969, the Advisory Board after consideration of the materials placed before it was of the opinion that there was sufficient cause for detention of the petitioner. The petitioner had not submitted any representation to the State Government till then. By an order dated 8th January, 1969 the Governor was pleased to confirm the order of detention. It appears that on the 13th January, 1969 and 16th January, 1969 the detenu made 764 representations. After the receipt of these representations the same were sent by the Home Department to the Commissioner of Police for his report. On 1st April, 1969 the Commissioner of Police informed the Home Department that he did not recommend the release of the petitioner. But the representations of the petitioner were not received back from the Commissioner of Police with his letter of the 1st April, 1969. Later on the Commissioner of Police sent back the representation dated 13th January, 1969 to the Home Department. This Court on 28th March, 1969 issued a notice under Article 32 of the Constitution to the Commissioner of Police and to the State Government to show cause why rule nisi should not be issued made returnable three weeks hence. On receipt of this notice the State Government refrained from passing any order on the representation dated 13th January, 1969. The representation dated 16th January, 1969 is untraceable, but effort is being made to trace it. According to the Commissioner of Police it was on the same lines as the representation dated 13th January, 1969. It is necessary to. reproduce the grounds of detention served on the detenu and they are in the following terms : "You are being detained in pursuance of a detention order made under sub section (2) of section 3 of the (Act IV of 1950) on the following grounds: You have been acting in a manner prejudicial to the maintenance of public order by the commission of offences of rioting, assault etc. as detailed below: (1) That on 28 6 68 at about 6 p. m. you along with your associates being armed with lathis, iron rods, acid bulbs etc. committed a riot in Kumartuli Park in course of which you severely assaulted Shri Amal Krishna Roy of 20A, Abhoy Mitra Street and iron rods, acid bulbs etc. were indiscriminately used endangering human lives. (2) That on 23 7 68 at about 6.10 p.m. you along with your associates being armed with lathis, iron rod, hockey sticks etc. attacked constables Sankar Lal Bose and Jagdish Singh both of Shyampukur P.S. on Kaliprosad Chakraborty Street near the Gaudiya Math who went there to. discharge their lawful duties, as a result of which constable Sankar Lal Bose sustained bleeding injuries on his person. (3) That in the night of 3 10 68 between 11.50 p.m. and 1.30 a.m. you along with your associates being 765 armed with deadly weapons took part in a riot at Rabindra Sarani from Bug Bazar Street crossing to Kumartuli Street crossing in course of which bombs, brickbats and soda water bottles were indiscriminately hurled endangering human lives. You are hereby informed that you may make a representation to the State Government against the detention order and that such representation should be addressed to the Assistant Secretary to the Government of West Bengal, Home Department, Special Section, Writers ' Buildings, Calcutta and forwarded through the Superintendent of the Jail in which you are detained as early as possible. You are also informed that under section 10 of the (Act IV of 1950) the Advisory Board, shall, if you desire to be heard, hear you in person and that if you desire to be so heard by the Advisory Board you should intimate such desire in your representation to the State Government". Coming now to the first point raised by the learned counsel it seems to us that there has been no breach of the provisions of the Act. This Court has held that it is obligatory on the Government to deal with the representations made by the detenu, but the facts recited above show that the detenu did not choose to make a representation before the Advisory Board dealt with the matter, and further the State Government was in the process of dealing with the representation when this Court issued the notice. Moreover, in the representation dated 13th January, 1969, the detenu barely stated that the grounds were false and that the detenu was a poor man and the family conditions were miserable and he was living peacefully, in the town and had never committed any act which was manifestly prejudicial to the maintenance of public order or communal harmony. He prayed that "under the circumstances, I am to request you to kindly produce. me before the Advisory Board and release me. " At that stage it was impossible to produce him before the Advisory Board. The Advisory Board had already dealt with the matter. Under these circumstances we are unable to say that there has been a breach of section 7. We trust that the State Government will now immediately deal with the representation or representations and pass a suitable order. It will be convenient to deal with the points 2 and 3 mentioned above together. It is true, as urged by the learned counsel for the petitioner, that this Court has consistently held that the grounds must have relevance to the maintenance of public order, and that they should not relate merely to the maintenance of 766 order. It is true, as laid down by this Court, that the contravention of any law always affects order but before it can be said to affect public order it must affect the community or the public at large. As Ramaswami, J., put it in Pushkar Mukherjee & Ors. vs The State of West Bengal(1), "in this connection we must draw a line of demarcation between serious and aggravated forms of disorder which directly affect the community or injure the public interest and the relatively minor breaches of peace of a purely local significance which primarily injure specific individuals and only in a secondary sense public interest. " The question which arises is this: do the grounds reproduced above relate merely to maintenance of order or do they relate to the maintenance of public order ? It will be noticed that the detenu in each of these cases acted along with associates who were armed with lathis, iron rods, acid bulbs etc. It is clearly said in ground No. 1 that he committed a riot and indiscriminately used acid bulbs, iron rods, lathis etc. endangering human lives. This ground cannot be said to have reference merely to maintenance of order because it affects the locality and everybody who lives in the locality. Similarly, in the second ground, he alongwith his associates prevented the police constables from discharging their lawful duties and thus affected everybody living in the locality. In ground No. 3, again the whole locality was in danger as the detenu and his associates were armed with deadly weapons and these were in fact used for indiscriminately endangering human lives in the locality. The object of the detenu seems to have been to terrorise the locality and bring the whole machinery of law and order to a halt. We are unable to say that the Commissioner of Police could not in view of these grounds come to the conclusion that the detenu was likely to. act in a manner prejudicial to the maintenance of public order in the future and it was necessary to prevent him from doing so. The fact that public order is affected by an act which was also an offence under the Indian Penal Code seems to us to be irrelevant. In the result the petition fails and is dismissed. G.C. Petition dismissed.

The petitioner was arrested and detained by an order of the Commissioner of Police, Calcutta under section 3(2) of the . According to the grounds of detention supplied to him his activities were prejudicial to the maintenance of 'public order '. The petitioners ' case was placed before the Advisory Board and on obtaining its opinion the Governor confirmed the order of detention. It was after this that the petitioner made representations to the State Government. Then he filed the present petition under article 32 of the Constitution based on the following grounds: (i) that there was a breach of section 7 of the Act inasmuch as his representation 's were not considered by the Government; (ii) that the grounds furnished to him mentioned offences under the Indian Penal Code and these could not be used for the purpose of detention except in emergencies: (iii) that the grounds did not have any relation to 'public HELD: (i) It is obligatory on the Government to deal with the representations made by the detenu, but in the present case the detenu made his representations only after the Advisory Board had dealt with the matter. The State Government was in the process of dealing with his representation. In the circumstances it could not be said that there had been a breach of section 7 of the Act. [765 E G] (ii) The contravention of any law always affects order but before it can be said to affect public order it must affect the community or the public at large. [766 A] Pushkar Mukherjee & Ors. vs The State of West Bengal, ; , applied. The grounds of detention supplied to the detenu in the present case showed that on one occasion he took part in rioting along with associates armed with lathis, iron rods and acid bulbs. On another occasion he took part in assaulting a constable on duty. On a third occasion he and his associates were armed with deadly weapons which were actually used in indiscriminately endangering human lives in the locality. [766 C D] From, these activities the object of the detenu seems to have been to terrorise the locality and bring the whole machinery of law and order to a halt. The conclusion of the detaining authority that the detenu was likely to act in a manner prejudicial to the maintenance of public order in the future and it was necessary to prevent him from doing so, was justified. [766 E F] 763 The fact that public sector was affected by an act which was also an offence under the Indian Penal Code .was irrelevant. [766 F]

Civil Appeal No. 297 of 1983. From the Judgment and order dated 11 1.1983 of the Delhi High Court in C.W No 1858 of 1981 Soli J. Sorabjee, A.N. Haksar, Ravinder Narain P.K. Ram. 703 D.N. Mishra and Appellant in person (in C.A. No. 2658 of 1983) for the Appellants K. Parasaran, Attorney General, A K. Ganguli, K. Swamy and C.V.S. Rao for the Respondents The Judgment of the Court was delivered by DUTT, J. This appeal is directed against the judgment of the Delhi High Court allowing in part only the petition of the appellants under Article 226 of the Constitution of India The appellant No. 1, J.K. Cotton Spinning & Weaving Mills Limited, has a composite mill wherein it manufactures fabrics of different types. In order to manufacture the said fabrics, yarn is obtained at an intermediate stage. The yarn so obtained is further processed in an integrated process in the said composite mill of the appellant No. 1 for weaving the same into fabrics. The appellants do not dispute that the different kinds of fabrics which are manufactured in the mill are liable to payment of excise duty on their removal from the factory. They also do not dispute their liability in respect of yarn which is also removed from the factory. It is the contention of the appellants that no duty of excise can be levied and collected in respect of yarn which is obtained at an intermediate stage and, thereafter, subjected to an integrated process for the manufacture of different fabrics. Indeed, on a writ petition of the appellants, the Delhi High Court by its judgment dated October 16, 1980 held that yarn obtained and further processed within the factory for the manufacture of fabrics could not be subjected to duty of excise. It is the case of the appellants that in spite of the said decision of the Delhi High Court, the Central Board of Excise has wrongly issued a circular dated September 24, 1980 purporting to interpret rules 9 and 49 of the Central Excise Rules, 1944 (hereinafter referred to as 'the Rules ') and directing the subordinate excise authorities to levy and collect duty of excise in accordance therewith. In the said circular, the Board has directed the subordinate excise authorities that "use of goods in manufacture of another commodity even within the place/premises that have been specified in this behalf by the Central Excise officers in terms of the powers conferred under rule 9 of the Rules, will attract duty". As the said circular was being implemented to the prejudice of the appellants, they filed a writ petition before the Delhi High Court, inter alia, challenging the validity of the circular. During the pendency of the writ petition in the Delhi High 704 Court, the Central Government by a Notification No . 20/82 C. dated 20.2.1982 amended rules 9 and 49 of the Rules. Section 51 of the Finance Act, 1982 provides that the amendments in rules 9 and 49 of the Rules shall be deemed to have, and to have always had the effect on and from the date on which the Rules came into force i.e. February 28, 1944. After the said amendments of the Rules with retrospective effect, the appellants amended the writ petition and challenged the constitutional validity of section 5 1 of the Finance Act, 1982 and of the amendments to rules 9 and 49 of the Rules. The High Court came to the conclusion that section S I and rules 9 and 49 of the Rules, as amended, were valid. It has, however, been held that the retrospective effect given by section S I will be subject to the provisions of sections 11A and 11B of the (hereinafter referred to as 'the Act ') Further, it has been held that the yarn which is produced at an intermediate stage in the mill of the appellants and subjected to the integrated process of weaving the same into fabrics, will be liable to payment of excise duty in view of the amended provisions of rules 9 and 49 of the Rules. But the sized yarn which is actually put into the integrated process will not again be subjected to payment of excise duty for, the unsized yarn, which is sized for the purpose, does not change the nature of the commodity as yarn. The writ petition was, accordingly, allowed in part. Hence this appeal by the appellants upon a certificate granted by the High Court. F At this stage, we may refer to rules 9 and 49 before and after amendment of the same. The relevant portion of rule 9 before the same was amended is as follows: "Rule 9. Time and manner of payment of duty. (1) No excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf whether for consumption, export, or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these Rules or as the Collector may require, and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form: " [The remaining provisions of rule 9 which are not relevant for our purpose are omitted. ] 705 By a Notification No. 20/82 C.B. dated 20.2.1982 of the Central Government, rule 9 was amended by the addition of the following A Explanation thereto: "Explanation. For the purposes of this rule excisable goods produced, cured or manufactured in any place and consumed or utilised (i) as such or after subjection to any process or processes; or (ii) for the manufacture of any other commodity, whether in a continuous process or otherwise, in such place or any premises appurtenant thereto, specified by the Collector under sub rule (1), shall be deemed to have been removed from such place or premises immediately before such consumption or utilisation." Rule 49 before its amendment was as follows: "Rule 49. Duty chargeable only on removal of goods from the factory premises or from an approved place of storage. (1) Payment of duty shall not be required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under rule 9 or are about to be removed from a store room or other place of storage approved by the Collector under rule 47:" [The remaining provisions of rule 49 which are not relevant for our purpose are omitted . ] By the said Notification rule 49 was amended by the addition of an Explanation thereto as follows: "Explanation. For the purposes of this rule, excisable goods made in a factory and consumed or utilised (i) as such or after subjection to any process or processes; or (ii) for the manufacture of any other commodity, whether in a continuous process or otherwise, in such factory or place or premises specified under rule 9 or store 706 room or other place of storage approved by the Collector under rule 47, shall be deemed to have been issued out of, or removed from such factory, place, premises, store room or other place of storage, as the case may be, immediately before such consumption or utilisation. " It has been already noticed that by section 5 1 of the Finance Act, 1982, amendments made to rules 9 and 49 have been given retrospective effect from the date on which the Rules came into force, that is to say, from February 28, 1944 It is not disputed before us that under section 3(1) of the Act, the taxing event is the production or manufacture of the goods in question. Indeed, section 3 provides that 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 or manufactured in India and at the rates set forth in the First Schedule. It is, therefore, clear that as soon as the goods in question are produced or manufactured, they will be liable to payment of excise duty. While section 3 lays down the taxable event, rules 9 and 49 provide for the collection of duty. There is a distinction between levy and collection of duty. In The Province of Madras vs Boddu Paidanna & Sons, A.I.R. 1942 FC 33 it has been observed by the Federal Court as follows: "There is in theory nothing to prevent the Central Legislature from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it afterwards, whether it be sold, consumed, destroyed or given away. A taxing authority will not ordinarily impose such a duty, because it is much more convenient administratively to collect the duty (as in the case of most of the Excise Acts) when the commodity leaves the factory for the first time, and also because the duty is intended to be an indirect duty which the manufacturer or producer is to pass on to the ultimate consumer, which he could not do if the commodity had, for example, been destroyed in the factory itself. It is the fact of manufacture which attracts the duty, even though it may be collected later. " Relying upon the aforesaid observation of the Federal Court, it has been urged by Mr. Soli Sorabjee, learned Counsel appearing on behalf of the appellants, that although it is true that as soon as the commodity is manufactured or produced it is liable to the payment of 707 excise duty, the duty will not, however, be collected unless the commodity leaves the factory. It is submitted by him that the commodity must be removed from one place to another either for the purpose of consumption in the factory or for sale outside it before excise duty an be claimed. Counsel submits that rules 9 and 49, as they stood before they were amended, and even the main part of these two rules after amendment, indicate in clear terms that so long as the goods which are manufactured in the factory are not removed, there is no question of payment of excise duty on the goods. Several decisions have been cited on behalf of the appellants to show that some High Courts also have taken the view that removal is the main criterion for the collection of excise duty on the commodity produced or manufactured inside the factory or the place of manufacture. We shall presently refer to these decisions. It may, however, be noticed that the decisions are not also uniform on the interpretation of rules 9 and 49, as they stood before amendment. We are, however, really concerned with the interpretation of these two rules after amendment, but as much submissions have been made by the parties in the light of the decisions of the High Courts on the interpretation of these two rules, we would like to refer to the same. In Caltex oil Refining (India) Ltd. vs Union of India and others, it has been held by the Delhi High Court that there can be removal only if the product goes out of one stream of production into another stream of production or if the product is issued out of or taken out or consumed if no further processing of that product is to be done. Further, it has been observed that there can be no removal of a product within the plant itself so long as the product is in the process of manufacture. According to this decision, if the product, which is obtained at an intermediate stage of an integrated and uninterrupted process of manufacture, there is no removal of such product. But, if the intermediary product is transferred from one plant to another for the manufacture of another commodity, there will be removal for the purpose of collection of duty. In an earlier decision in Delhi Cloth & General Mills Co. Ltd. vs Joint Secretary, Government of India, the Delhi High Court had taken a different view. In that case calcium carbide manufactured in the factory in one plant was used to generate acetylene gas by the transfer of the article from one plant to another in the same factory. The question that came up for consideration of the High Court was whether there was removal of calcium carbide for the 708 purpose of levy and collection of excise duty. The High Court relied upon the definition of 'factory ' under section 2(e) of the Act and took the view that the definition was not restricted to only the part in which the excisable goods were manufactured. It was, accordingly, held that it could not, therefore, be said that calcium carbide made by the petitioner Company was removed from the factory in which it was produced. This decision lays down that so long as a commodity is not removed from the factory premises, there is no removal within the meaning of rules 9 and 49. A similar view has been taken by the Delhi High Court in a later decision in Modi Carpets Ltd. vs Union of India, where the High Court has expressed the view that o excise duty can be levied and recovered on 'sliver ' obtained by the petitioners, if it is consumed within the very premises in which it is manufactured because in such cases there is no removal of sliver from the place of manufacture as envisaged by rules 9 and 49 More or less a similar view has been taken by the Delhi High Court in another decision in Synthetics and Chemicals Ltd., Bombay vs Government of India, [19801 E.L.T. 675. In that case, the petitioner manufactured Bentol, a mixture of Benzene and Toluene, in the factory, which was again used for the manufacture or rubber The High Court took the view that it was not a case of removal under rules 9 and 49 and, as such, no excise duty was payable on Bentol. We may notice another decision of the Delhi High Court in Devi Dayal Electronics and Wires Ltd. vs Union of India, [ In that case it has been held that since the impugned resins (polyester or phenolic resins) are not removed from the place of manufacture but are used for the manufacture of end product (Varnish) within the plant itself, there is no removal of goods within the meaning of rule 9 read with rule 49 of the Rules. Thus it appears that there is a conflict of opinion in the decisions of the Delhi High Court as to what is meant by the word 'removal ' for the purpose of payment of excise duty. Two views have been expressed by the Delhi High Court. One view is that so long as any product manufactured in the factory is not actually removed from the factory premises, there is no removal and, accordingly, no excise duty is payable on the product, even if the product is used for the manufacture of another commodity inside the factory. The other view is that if at one stage a commodity known to the market is produced and is transferred, within the factory for the manufacture of another commodity, there is removal within the meaning of rules 9 and 49. 709 Apart from the above two views, there is a third view which has A also been expressed by the Delhi High Court, namely, that if an intermediate product is obtained in an integrated process of manufacture of a commodity, there is no removal and, therefore, such intermediate product although known to the market and comes under a particular tariff item yet, as there is no removal, there will be no question of payment of excise duty on such intermediate product. The Nagpur Bench of the Bombay High Court in Oudh Sugar Mills Ltd. vs Union of India, [ has adopted the second and third views. It has been held that if the purpose of removal of excisable goods is consumption in the same place where the excisable goods are manufactured or cured or if such excisable goods are used in the manufacture of any other goods in the same place, this cannot be done without payment of excise duty at the place and in the manner prescribed. Further, it has been held that where the plant of production is treated as a composite plant and where the process of manufacture is an integrated, continuous and uninterrupted process, a transfer of a produce which is a component of the final produce from one part of the plant to another, does not amount to removal as contemplated by rule 9. According to this decision, a process of onward movement of a component for being converted into a final product is not covered by the concept of removal contemplated by the provision of rule 9 of the Rules. In Oudh Sugar Mills Ltd. vs Union of India, the Allahabad High Court has taken more or less the same view as that of the Bombay High Court. It has been observed that an intermediate product which by itself is goods known to the market and is used in captive consumption for bringing out altogether a new goods not by an integrated process, but by a distinct and separate process, is liable to excise duty before its removal. So far as captive consumption is concerned, the Gujarat High Court has taken the same view as that of the Allahabad High Court in Maneklal Harilal Spg. & Mfg. Co. Ltd. vs Union of India, where it has been held by the Allahabad High Court that excise duty is payable when yarn is removed from the spinning department to the weaving department for the manufacture of fabrics All the above decisions relate to rules 9 and 49 before they were amended. Leaving aside the question of specification for the time being. rule 9 before its amendment prohibits the removal of excisable goods 710 whether for consumption, export or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid. It is manifestly clear from rule 9 that it contemplates not only removal from the place where the excisable goods are produced, cured or manufactured or any premises appurtenant thereto, but also removal within such place or premises for captive consumption or 'home consumption ', as it is called. Thus if a commodity which is manufactured in such place or premises and is used for the manufacture of another commodity, then it will be a case of removal for the purpose of payment of excise duty. This view which we take clearly follows from the expression "whether for consumption, export or manufacture of any other commodity in or outside such place". Thus consumption of excisable goods may be within such place or outside such place. The decisions which have taken the view that if a commodity manufactured within the factory in one plant is transferred to another plant for the purpose of production of another commodity will be removal for the purpose of payment of excise duty are, in our opinion, correct. It is not easily understandable why the definition of expression 'factory ' under section 2(e) of the Act has been taken resort to in some of the decisions for the purpose of interpretation of rule 9. There can be no doubt that if a commodity is taken outside the factory it will be removal, but rule 9 does not, in any manner, indicate that it is only when the goods are removed from the factory premises it will be removal and when the excisable goods manufactured within the factory is removed from one plant to another it will not be a case of removal. On the contrary, as noticed already, rule 9 clearly embraces within it captive consumtion of excisable goods, that is to say, when excisable goods manufactured in the factory are used for production of another commodity. Now the question is whether rule 9 before it was amended also envisaged a case of an intermediate product obtained in an integrated and continuous process of manufacture of another commodity, that is, the end product. It must be admitted that prima facie rule 9 does not show that it also covers a case of integrated, continuous and uninterrupted process of manufacture producing a commodity at an intermediate stage which again is utilised in such continuous process for the manufacture of the end product The learned Attorney General, appearing on behalf of the Union of India, submits that rule 9 and rule 49 also envisaged such a case of integrated process of manufacture of the end product using a product produced at an intermediate stage In support of his contention he has placed reliance on an unreported decision of the Bombay High Court in Misc. 491 of 1964, dated April, 711 30, 1970 (Nirlon Synthethic Fibres & Chemicals Ltd. vs Shri R.K. Audim, Assistant Collector & Ors.) The learned Single Judge of the Bombay High Court took the view that a continuous or integrated process of manufacture was not initially contemplated by rule 9 or rule 49, but after the addition of a new set of rules being rules 173A to 173K to the Rules by the Notification dated May 11, 1968 a continuous and integrated process of manufacture came to be contemplated by the scheme of the Act and the Rules. Reliance has been placed by the learned Judge on the Explanation to rule 173A as added by the said Notification dated May 11, 1968. The Explanation is as follows: "Explanation The expression 'home use ' means the consumption of such goods within India for any purpose and includes use of such goods in the place of production or manufacture or any other place or premises (whether by continuous process or not), for manufacture of any commodity. Reliance has also been placed on rule 173G which provides for the procedure to be followed by an assessee who is a manufacturer of matches or cigarettes or cheroots. The relevant portion of rule 173G is a proviso thereto which is as follows: "Provided that the duty due on the goods consumed within the factory in a continuous process may be so paid at the end of the factory day. " From the above provisions of the Explanation to rule 173A and the proviso to rule 173G, the learned Judge has taken the view that a continuous or integrated process of manufacture has come to be contemplated by the scheme of the Act and the Rules framed thereunder for the first time only in May, 1968, the scheme having been brought into force with effect from June 1, 1968 and prior thereto such a continuous or integrated manufacturing process was never contemplated by the Act or the Rules. learned Attorney General gets inspiration from the said unreported case of the Bombay High Court and submits that atleast since after May, 1968, rule 9 and rule 49 envisage the case of an integrated and continuous process of manufacture involving the use or utilisation of a commodity produced at an intermediate stage of such process for the manufacture of an end product or commodity. It is submitted by him that if the interpretation as given by the learned 712 Single Judge of the Bombay High Court in the above unreported decision is accepted, in that case, it will not be necessary to consider the effect of amended rule 9 or rule 49, that is to say, the Explanations that have been added to these two rules. It may be that the concept of continuous or integrated process of manufacture has been recognised in the Explanation to sub rule (2) of rule 173A and in the proviso to rule 173G but we do not think that rule 9 or rule 49 should be interpreted in the light of provisions of the Explanation to sub rule (2) of rule 173A or the proviso to rule 173G Moreover, we are not concerned with the interpretation of rule 9 and rule 49, as they stood before the amendment. In the instant case, the appellants have challenged rule 9 and rule 49 as amended by the Notification dated February 20, 1982 We are, therefore, concerned with the interpretation of these rules as amended, particularly the question of validity of these rules. Before we proceed to consider the contentions made on behalf of the parties, it may be stated that in view of the divergence of judicial opinions as to the interpretation of rules 9 and 49, before they were amended, the Explanations to rules 9 and 49 have been added so as to obviate any doubt. The Explanations to rule 9 and rule 49, inter alia, provide that commodity obtained at an intermediate stage of manufacture in a continuous process shall be deemed to have been removed from such place or premises as mentioned in sub rule (1) of rule 9 This deeming provision has been given retrospective effect by virtue of section S l of the Finance Act 1982. It is urged by Mr. Sorabjee, learned Counsel for the appellants, that the amended rule 9 and rule 49 are arbitrary and unreasonable inasmuch as the goods which, in fact, are not removed from the factory and which are incapable of removal because of the nature and construction of the plant or the nature and character of the manufacturing process, are fictionally treated as having been removed. It is submitted that as a result of the amendment of these rules the appellants are exposed to excessive hardship for not complying with the statutory provisions In view of the length of the retrospective operation of the amendments, namely 38 years from the date of the commencement of the Act, that is, February 28, 1944 the appellants would be called upon to pay enormous amount of duty in respect of the entire quantity of goods which have come into existence and have been captively consumed within the factory premises. The appellants will not, however, be able to pass on this burden to consumers and will have to bear 713 the same themselves It is submitted that in view of the arbitrariness and unreasonableness of the amendments and the hardships that will be caused to the appellants and other manufacturers of excisable goods, the amendments should be struck down as violative of the provisions of Article 14 and Article 19(1)(g) of the Constitution of India. It is not disputed that the Legislature is competent to make laws both prospectively and retrospectively But, as pointed out by this Court in Jawaharmal vs State of Rajasthan and others, [ 19661 I S.C. R. 890, the cases may conceivably occur where the court may have to consider the question as to whether excessive retrospective operation prescribed by a taxing statute amounts to the contravention of the citizens ' fundamental rights; and in dealing with such a question the court may have to take into account all the relevant and surrounding facts and circumstances in relation to the taxation. Again in Rai Ramkrishna & others vs State of Bihar, [ 1964] I S C.R 897 this Court has pointed out that if the retrospective feature of a law is arbitrary and burdensome, the statute will not be sustained and the reasonableness of each retrospective statute will depend on the circumstances of each case; and the test of the length of time covered by the retrospective operation cannot, by itself, necessarily be a decisive test. The apprehension of the appellants is that the amendments to rules 9 and 49 having been made retrospective from the date the Rules were framed, that is from February 28, 1944, the appellants and others similarly situated may be called upon to pay enormous amounts of duty in respect of intermediate goods which have come into existence and again consumed in the integrated process of manufacture of another commodity There can be no doubt that if one has to pay duty with retrospective effect from 1944, it would really cause great hardship but, in our opinion, in view of section I IA of the Act, there is no cause for such apprehension. Section I IA(I) of the Act provides as follows: "Section l1A. (1) When any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, a Central Excise officer may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short levied or short paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: 714 Provided that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub section shall have effect, as if for the words "six months", the words "five years ' were substituted. Explanation. Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of six months or five years, as the case may be " Under section 11A( I) the excise authorities cannot recover duties not levied or not paid or short levied or short paid or erroneously refunded beyond the period of six months, the proviso to section l IA not being applicable in the present case. Thus although section 5 l of the Finance Act, 1982 has given retrospective effect to the amendments of rules 9 and 49, yet it must be subject to the provision of section 11A of the Act. We are unable to accept the contention of the learned Attorney General that as section 5 1 has made the amendments retrospective in operation since February 28, 1944, it should be held that it overrides the provision of section 11A. If the intention of the Legislature was to nullify the effect of section 11A, in that case, the Legislature would have specifically provided for the same Section 5 1 does not contain any non obstante clause nor does it refer to the provision of section 1 IA. In the circumstances it is difficult to hold that section 5 l overrides the provision of section 1 IA. It is, however, contended by the learned Attorney General that as the law was amended for the first time on February 20, 1982, the cause of action for the excise authorities to demand excise duty in terms of the amended provision, arose on that day, that is, on February 20, 1982 and, accordingly, the authorities are entitled to make such demand with retrospective effect beyond the period of six months. But such demand, though it may include within it demand for more than six months, must be made within a period of six months from the date of the amendment. There is no provision in the Act or in the Rules enabling the excise authorities to make any demand beyond the periods mentioned 715 in section 11A of the Act on the ground of the accrual of cause of action. The question that is really involved is whether in view of section 5 1 of the Finance Act, 1982, section 11A should be ignored or not. In our view section S I does not, in any manner, affect the provision of section 11A of the Act. In the absence of any specific provision overriding section 1 IA, it will be consistent with rules of harmonious construction to hold that section 51 of the Finance Act, 1982 in so far as it gives retrospective effect to the amendments made to rules 9 and 49 of the rules, is subject to the provision of section 11A. In the circumstances, there is no question of the amended provision of rule 9 and rule 49 being arbitrary, unreasonable or violative of the provision of Article 14 and Article 19(1)(g) of the Constitution of India. We may now deal with the challenge made to the retrospective operation of amendments of rules 9 and 49 on another ground. In order to appreciate the ground of such challenge, we may once more refer to section 51 of the Finance Act, 1982. The Explanation to section 5 1 provides as follows: "Explanation. For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force. " Under the Explanation, although rules 9 and 49 have been given retrospective effect, an act or omission which was not punishable before the amendment of the Rules, will not be punishable after amendment. The Explanation does not however, provide for the penalties and confiscation of goods. It is the contention of the appellants that as the appellants had not complied with the requirements of the amended rules 9 and 49, they would be subjected to penalties and their goods would be confiscated under the amended rules 9 and 49 read with rule 173Q of the Rules with retrospective effect. It is, accordingly, submitted on behalf of the appellants that the amendment of these two rules with retrospective effect is arbitrary and unreasonable and should be struck down as violative of Article 14 of the Constitution. Attractive though the argument is, we regret we are unable to accept the same. It is true that the Explanation to section 51 has not mentioned anything about the penalties and confiscation of goods but H 716 we do not think that in view of such non mention in the Explanation excluding imposition of penalties for acts or omissions before amendment. such penalties can be imposed or goods can be confiscated by virtue of the amended provisions of rules 9 and 49. It will be against all principles of legal jurisprudence to impose a penalty on a person or to confiscate his goods for an act or omission which was lawful at the time when such act was performed or omission made, but subsequently made unlawful by virtue of any provision of law. The contention made on behalf of the apellants is founded on the assumption that under the Explanation to section 5 1, the penalties can be imposed and goods can be confiscated with retrospective effect. In the circumstances, the challenge to the amendments of rules 9 and 49, founded on the provision of the Explanation to section 51 of the Finance Act, 1982, is without any substance and is rejected The appellants have also challenged the prospective operation of the Explanation to rules 9 and 49 introduced by amendments of the same. It is strenuously uged by Mr. Sorabjee, learned Counsel for the appellants, that even after amendment there must be removal of the goods from one place to another for the purpose of collection of excise duty. Our attention has been drawn on behalf of the appellants to clause (b) of sub section (4) of section 4 of the Act, which defines "place of removal" as follows: "Sub section (4) For the purpose of this section, (a). . . . . . . (b) "place of removal" means (i) a factory or any other place or premises of production or manufacture of the excisable goods; or (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from where such goods are removed. It is submitted on behalf of the appellants that the Explanations to rule 9 and rule 49 are ultra vires the provision of clause (b) of sub section (4) of section 4 of the Act inasmuch as "place of removal" as defined therein, does not contemplate any deemed removal, but a 717 physical and actual removal of the goods from a factory or any other place or premises of production or manufacture or a warehouse etc. A This contention is unsound and also does not follow from the definition of "place of removal . Under the definition "place of removal" may be a factory or any other place or premises of production or manufacture of the excisable goods etc The Explanation to rules 9 and 49 do not contain any definition of "place of removal", but provide that excisable goods produced or manufactured in any place or premises at an intermediate stage and consumed or utilised for the manufacture of another commodity in a continuous process, shall be deemed to have been removed from such place or premises immediately before such consumption or utilization. Clause (b) of sub section (4) of section 4 has defined "place of removal", but it has not defined 'removal '. There can be no doubt that the word 'removal contemplated shifting of a thing from one place to another. In other words, it contemplates physical movement of goods from one place to another It is well settled that a deeming provision is an admission of the non existence of the fact deemed. Therefore, in view of the deeming provisions under Explanations to rules 9 and 49, although the goods which are produced or manufactured at an intermediate stage and, thereafter, consumed or utilised in the integrated process for the manufacture of another commodity is not actually removed, shall be construed and regarded as removed. The Legislature is quite competent to enact a deeming provision for the purpose of assuming the existence of a fact which does not really exist. It has been already noticed that the taxing event under section 3 of the Act is the production or manufacture of goods and not removal The Explanations to rules 9 and 49 contemplate the collection of duty levied on the production of a commodity at an intermediate stage of an integrated process of manufacture of another commodity by deeming such production or manufacture of the commodity at an intermediate stage to be removal from such place or premises of manufacture. The deeming provisions are quite consistent with section 3 of the Act As observed by the Federal Court in Boddu 's case (supra) there is in theory nothing to prevent the central legislature from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it after wards, whether it be sold, consumed or destroyed or given away. It is for the convenience of the taxing authority that duty is collected at the time of removal of the commodity. There is, therefore, nothing unreasonable in the deeming provision and, as discussed above, it is quite in conformity with the provision of section 3 of the Act The contention that the amendments to rules 9 and 49 are ultra vires clause H 718 (b) of sub section (4) of section 4 of the Act, is without substance and is overruled. It is next contended on behalf of the appellants that even assuming that there can be fictional removal as provided in the Explanation to rules 9 and 49, there cannot be such fictional or deemed removal without the specification of the place where the excisable goods are produced, cured or manufactured or any premises appurtenant thereto. Rule 9(1), inter alia provides that no excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf until the excise duty leviable thereon has been paid. The Explanations to rules 9 and 49 refer to the specification that has been made by the Collector under sub rule (1) of rule 9. It is submitted on behalf of the appellants that as no specification has been made by the Collector of such place or premises appurtenant thereto, the provision of deemed removal with regard to the commodity produced at the intermediate stage and consumed or utilised in the continuous process of manufacture of the end product, is inapplicable. It is contended that so long as such specification is not made by the Collector of the place of manufacture or of any premises appurenant thereto, the provision of deemed removal as contained in the Explanations to rule 9 and 49 cannot be given effect to. On the other hand, it is contended by the learned Attorney General that specification of the place of manufacture and other places for the storage of the goods, is made in the licence which is required to be obtained under rule 174 of the Rules. Rule ]78 provides for the form. of licence. Clause (b) of rule 178(1) provides that every licence granted or renewed under rule 176 shall have reference only to the premises, if any, described in such licence. Form A L. IV is the form of an application for licence under rule 176. In the Schedule to the Form, description of the premises intended to be used as a factory and of each main division or sub division of the factory has to be given. Further, the detailed description of store room or other place of storage and the purpose of each has also to be given in the application form for the grant of licence for the manufacture of excisable goods. Again under rule 44 of the Rules, the Collector may require any manufacturer to make a prior declaration of factory premises and its equipments. Such a declaration has to be given in Form D 2 in respect of buildings, rooms, vessel, etc. In view of the particulars which are required to be given by a licensee for the manufacture of excisable goods, it is submitted by the learned Attorney General that the specification that is 719 required to be made under rule 9(1), is made in the licence and in the declaration that has to be furnished by the manufacturer in Form D 2. It is true that under rule 9(1) there is a provision for specification by the Collector, but the question is what has to be specified by the Collector. It is the contention of the appellants that the Collector has to specify the place of manufacture and also any premises appurtenant thereto. We are, however, unable to accept this contention. The place where the goods are to be manufactured by a manufacturer, that is to say, the site of the factory cannot be specified by the Collector. It is for the manufacturer to choose the site or the place where the factory will be constructed and goods will be manufactured. Rule 9(1), in our opinion, does not require the Collector to specify the place where the excisable goods are produced, cured or manufactured. The words "which may be specified by the Collector in this behalf" occurring in rule 9(1) of the Rules do not qualify the words "any place where they are produced, cured or manufactured ', but relate to or qualify the words "any premises appurtenant thereto". In other words, if the place of removal is not the place where the goods are produced, cured or manufactured, but any premises appurtenant to such place, in that case, the Collector has to specify such premises for the purpose of collection of excise duty. Thus the contention of the appellants that the Collector has to specify the place of manufacture and also any premises appurtenant thereto under rule 9(1) of the Rules, is without any substance. Our attention has, however, been drawn to the impugned circular dated September 24, 1980 issued by the Central Board of Excise & Customs. In clause 3 of the circular, it is stated as follows: "Mere approval of the ground plan in a routine manner will not suffice for purposes of rule 9 as under the said rule the place of production etc. Or premises appurtenant thereto have also to the specified separately " Under the circular, the Collector is required to specify under rule 9(1) both the place of production and premises appurtenant thereto, if any. In view of this direction given in the circular, the learned Counsel for the appellants submits that it is not only binding on the Collector and the other officers of the Central Excise Department, but also the circular is in the nature of contemporanea exposito rendering useful aid in the construction of the provision of rule 9(I) of the Rules. This contention finds support from the decision of this Court in K.P. Var 720 ghese vs The Income Tax officer, Ernakulam, [1982] I S.C.R. 629 relied on by the learned Counsel of the appellants. Indeed, it has been observed in that case that the rule of construction by reference to contemporanea exposito is a well established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the 13 statute is plain and unambiguous. In our opinion, the language of rule 9(1) admits of only one interpretation and that is that the specification that has to be made by the Collector is of any premises appurtenant to the place of manufacture or production of the excisable goods. The specification is not required to be made and, in our view, cannot be made of the place of manufacture or production of the excisable goods. Apart from that, as observed by Subba Rao, J., upon a review of all the decisions on the point, in an earlier decision of this Court in the Senior Electric Inspector and others vs Laxmi Narayan Chopra, ; , the maxim contemporanea exposito as laid down by Coke was applied to construing ancient statutes but not to interpreting Acts which are comparatively modern. Further, it has been observed that in a modern progressive society it would be unreasonable to confine the intention of a Legislature to the meaning attributable to the word used at the time the law was made and, unless a contrary intention appears, an interpretation should be given to the words used to take in new facts and situations, if the words are capable of comprehending them. Most respectfully we agree with the said observation of Subba Rao, J. In the circumstances, we do not agree with the direction of the Board of Central Excise & Customs given in the impugned circular that both the place of manufacture and the premises appurtenant thereto must be specified by the Collector under rule 9 1(1) of the Rules. Thus, there being no question of specification of the place of manufacture, the contention of the appellants that without such specification there cannot be any deemed removal, fails. In view of the discussion made above, we hold that the amendments to rules 9 and 49 are quite legal and valid. Further, section S 1 of this Finance Act, 1982 giving retrospective effect to the said amendments is also legal and valid. In the instant case, the appellants are liable to pay excise duty on the yarn which is obtained at an intermediate stage and, thereafter, further processed in an integrated process for weaving the same into fabrics. Although it has been alleged that the yarn is obtained at an intermediate stage of an integrated process of manufacture of fabrics, it appears to be not so. After the yarn is produced it is sized and, 721 thereafter, subjected to a process of weaving the same into fabrics. Be that as it may, as we have held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty. In our view, the High Court by the impugned judgment has rightly held that the appellants are not liable to pay any excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics. No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn. For the reason aforesaid, the judgment of the High Court is affirmed and this appeal is dismissed. There will. however, be no order as to costs. Civil Appeal Nos. 2658 and 4168 of 1983. In view of the judgment passed in Civil Appeal No. 297 of 1983, these appeals are also dismissed. There will, however, be no order as to costs. S.L. Appeals dismissed.

% The appellant No. 1, J.K. Cotton Spinning and Weaving Mills Limited, has a composite mill wherein it manufactures fabrics of different types, for which yarn is obtained at an intermediate stage, and the yarn is processed in an integrated process in the said composite mill for weaving the same into fabrics. The Central Board of Excise issued a Circular dated September 24, 1980, purporting to interpret the rules 9 and 49 of the Central Excise Rules, 1944 (the Rules) and directing the subordinate excise authorities to levy and collect excise duty in accordance therewith. The Board further directed vide the said Circular that the use of the goods in the manufacture of another commodity even within the place premises specified in this behalf by the Central Excise officers in terms of the powers conferred under rule 9 of the Rules, would attract duty. As the implementation of the Circular worked to the prejudice of the appellants, they filed a writ petition in the High Court, challenging the validity of the Circular. During the pendency of the said writ petition, the Central Government issued a Notification dated February 20, 1982, amending the rules 9 and 49 of the Rules, with section 51 of the Finance Act, 1982, providing that the amendments in the rules 9 and 49 shall be deemed to have, and to have always had, the effect with retrospective effect from the date on which the Rules came into force i.e. February 28, 1944. Upon the amendments of the rules 9 and 49, with retrospective effect of the amendments, the appellants amended their writ petition above said to challenge the constitutional validity of Section 51 of the Finance Act abovementioned and the amendments to the rules 9 and 49. 701 The High Court allowed the writ petition in part. It held (i) that section 51 and the rules 9 and 49 as amended were valid, (ii) the retrospective effect allowed by section 51 would be subject to the provisions of sections 11A and 11B of the (the Act), (iii) the yarn produced at an intermediate stage in the mill of the appellants and subjected to the integrated process of weaving into fabrics, would be liable to payment of excise duty in view of the amended provisions of the rules 9 and 49, but the sized yarn actually put into the integrated process would not again attract excise duty. The appellants then filed this appeal (Civil Appeal No. 297 of 1983) before this Court by certificate. Dismissing the Appeal, the Court, ^ HELD: The decisions of various High Courts cited, deal with the rules 9 and 49 of the Central Excise Rules, 1944, as they stood before they were amended by the Government Notification dated February 20, 1982. In this case, what is involved is the interpretation of the said two rules after their amendment and the constitutional validity of the rules as amended. The amendments to the rules 9 and 49 are quite legal and valid. Section 51 of the Finance Act, 1982, giving retrospective effect to the said amendments is also legal and valid. The apprehension of the appellants that the amendments to rules 9 and 49 having been made retrospective from the date the rules were framed, that is, February 28, 1944, the appellants may be called upon to pay enormous amounts of duty in respect of the intermediate goods which have come into existence and again consumed in the integrated process of manufacture of another commodity, is not right. In view of section 11A of the Finance Act, there is no cause for such an apprehension. Under Section 11A(1), the excise authorities cannot recover duties not levied or not paid or short levied or short paid or erroneously refunded beyond the period of six months, the proviso to section 11A not being applicable in the present case. Thus though section 51 has given retrospective effect to the amendments of rules 9 and 49, it must be subject to the provision of section 11A of the Act. Section 51 does not contain any non obstante clause, nor does it refer to the provision of section 11A, and it is difficult to hold that section 51 overrides the provision of section 11A. [712F H; 714D F] The appellants are liable to pay excise duty on the yarn obtained at an intermediate stage and, thereafter, further processed in an integrated process for weaving the same into fabrics. Although it has been alleged that the yarn is obtained at an intermediate stage of an 702 integrated process of manufacture of fabrics, it appears to be not so. After the yarn is produced, it is sized, and thereafter, subjected to a process of weaving the same into fabrics. As the Court has held that the commodity which is obtained at an intermediate stage of an integrated process of manufacture of another commodity, is liable to the payment of excise duty, the yarn that is produced by the appellants is also liable to payment of excise duty. [720G H: 721A B] The High Court has rightly held that the appellants are not liable to pay excise duty on the yarn after it is sized for the purpose of weaving the same into fabrics. No distinction can be made between unsized yarn and sized yarn, for the unsized yarn when converted into sized yarn does not lose its character as yarn. The judgment of the High Court affirmed. [721B C] In view of the decision of the Court in the Civil Appeal No. 297 of 1983, the Civil Appeals Nos. 2658 and 4168 of 1983 also dismissed. [721D] The Province of Madras vs Boddu Paidanna and Sons AIR ; Caltex oil Refining (India) Ltd. vs Union of India & Ors. , Delhi Cloth and General Mills Co. Ltd. vs Joint Secretary, Government of India, ; Modi Carpets Ltd. vs Union of India, ; Synthetics and Chemicals Ltd. Bombay vs Government of India, , Devi Dayal Electronics and Wires Ltd. vs Union of India, [1982] E.L.T. 33; Oudh Sugar Mills Ltd. vs Union of India, [1980] E.L.T. 327, Oudh Sugar Mills Ltd. vs Union of India, [1982] E.L.T. 927, Maneklal Harilal Spg. & Mfg. Co. Ltd. vs Union of India, ; Nirlon Synthetic Fibres & Chemicals Ltd. vs Shri R.K. Audim; Assistant Collector & Ors. In Misc. 491 of 1964, unreported judgment of Bombay High Court, dated April 30, 1970, Jawaharmal vs State of Rajasthan & Ors., ; ; Rai Ramkrishna and Ors. vs State of Bihar, ; , K.P. Verghese vs The Income Tax officer, Ernakulam; , and Senior Electric Inspector and Ors. vs Laxmi Narayan Chopra, ; , referred to.

ivil Appeal No. 4779 of 1989. From the Judgment and Order dated 3.8.1987 of the Delhi High Court in S.A.O. No. 393 of 1986. Ashok Sen, Ms. section Janani and Mrs. Urmila Kapoor for the Appellant. G.C. Lalwani and P.N. Misra for the Respondent. The Judgment of the Court was delivered by VERMA, J. Leave granted. The landlord Shri Shiv Chander Kapoor has preferred this appeal by special leave against the judgment dated August 3, 1987 passed by the Delhi High Court in S.A.O. No. 393 of 1986 whereby the High Court dismissed the landlord 's appeal against the Order dated October 14, 1986 of the Rent Control Tribunal affirming in appeal the order dated August 9, 1985 of the Rent Controller dismissing the landlord 's application dated October 12, 1983 for restoration of possession of the premises let out for residence to the tenant Amar Bose for the limited period of three years w.e.f. June 8, 1980 under section 21 of the Delhi Rent Control Act, 1958 (hereinafter referred as the 'Act '). The true scope of the enquiry con templated when the tenant assails validity of the Rent Controller 's permission granted under section 21 of the Act for creation of a tenancy for limited period arises for determination in the present case. The premises is the second floor of the building beating No. 19/10, Old Rajinder Nagar, New Delhi comprising of two rooms, a kitchen, bathroom and lavatory let out for resi dence on a monthly rent of Rs.800 apart from electricity and water charges. The landlord offered to let out the premises for three years only w.e.f. June 8, 1980 for the reason that it would be needed by his family thereafter when his son got married, to which the tenant consented. Accordingly, by an agreement in writing between the parties the premises was so let out for the limited period of three years w.e.f June 8, 1980 with the 302 permission of the Rent Controller obtained under section 21 of the Act. The order of the Rent Controller is as under: "In view of the statements of the parties made above, I am satisfied that there is no collu sion or fraud. I am also satisfied that the petitioner does not require the suit premises for a limited period of three years. Permis sion, therefore, is hereby granted to the petitioner Sh. Shiv Chander Kapoor to let out his premises No. 19/10, situated at Old Ra jinder Nagar, New Delhi, the details of which are given in the site plan Ext. AI to the respondent for residential purpose for a limited period of three years with effect from 8.6.1980". On failure of the tenant Amar Bose to restore possession of the premises to the landlord on expiry of the period of limited tenancy, an application dated October 12, 1983 was filed by the landlord before the Rent Controller praying for execution of the aforesaid order by delivery of vacant possession of the premises to the landlord. The tenant filed his objection to the execution application which was replied by the landlord. The Rent Controller by order dated August 9, 1985 rejected the landlord 's application taking the view that the permission granted under section 21 of the Act was invalid so that the tenant could not be evicted on expiry of the period of three years. The landlord 's further appeal to the Rent Control Tribunal and then to the Delhi High Court failed. Hence this further appeal. The Rent Controller upheld the tenant 's objection that the landlord 's son being aged only about 19 or 20 years on the date of expiry of the period of limited tenancy while the minimum age prescribed by law for marriage being 21 years the ground that the premises would be needed on the son 's marriage after three years was untenable. On this basis it was held that creation of tenancy for the limited period of three years amounted to fraud and misrepresenta tion by the landlord rendering invalid the permission grant ed under section 21 of the Act. This view has been upheld by the Rent Control Tribunal and then the Delhi High Court, treating the grant of permission by Controller to be mechan ical and without application of mind. The tenant also con tended that the landlord was in possession of the remaining building which comprises of sufficient accommodation to meet the bona fide need of the landlord 's family; and that the premises were constructed in 1972 and the second floor of the building was never occupied by the landlord being let out to other tenants from time to time. In substance 303 the grounds taken by the tenant were two, namely (1) the landlord 's son was below the prescribed minimum age for marriage of 21 years on the date of the expiry of the period of three years of the limited tenancy which showed that the reason given was false, and (2) absence of bona fide need of the landlord for occupying the premises, namely, the second floor of the building. The High Court 's order is based only on the first ground. The scope of enquiry contemplated under section 21 of the Act when the tenant assails validity of the Controller 's permission to create a limited tenancy thereunder was seri ously debated at the heating of this appeal. On behalf of the appellant/landlord it was urged that the scope is limit ed to examining only the existence of jurisdictional facts which permit grant of permission to creat a tenancy for limited period and no more. On this basis, learned counsel for the appellant contended that the above first ground alone was within the scope of enquiry which too has been wrongly decided by the High Court on a misconstruction of Section 21. On the other hand it was contended on behalf of the respondent tenant that the enquiry extends also to examining the other ground viz. existence of landlord 's bona fide need to occupy the premises on expiry of the period of limited tenancy. The same earlier decisions of this Court on the point were relied on by both sides with equal vehemence in support of the rival contentions. Section 21 is as under: "Recovery of possession in case of tenancies for limited period. (1) Where a landlord does not require the whole or any part of any premises for a particular period, and the landlord, after obtaining the permission of the Controller in the prescribed mannner, lets the whole of the premises or part thereof as a residence for such period as may be agreed to in writing between the landlord and the tenant and the tenant does not, on the expiry of the said period, vacate such premises, then, not withstanding anything contained in Section 14 or in any other law, the Controller may, On an application made to him in this behalf by the landlord within such time as may be pre scribed, place the landlord in vacant posses sion of the premises or part thereof by evict ing the tenant and every other person who may be in occupation of such premises. (2) While making an order under sub section (1), the Con 304 troller may award to the landlord such damages for the use or occupation of the premises at such rates as he considers proper in the circumstances of the case for the period from the date of such order till the date of actual vacation by the tenant". Chapter III of the Delhi Rent Control Act, 1958 compris ing of Sections 14 to 25 contains provisions relating to control of eviction of tenants. The object of enacting the Rent Control laws is well known and it does not need an elaborate enunciation. Suffice it ' to say that in view of acute shortage of housing accommodation, more particularly in the bigger cities, these laws have been enacted to regu late the letting of the available premises and an attempt has been made to reconcile the conflicting interests of landlords and the need for the protection of tenants. Sec tion 14 of the Delhi Rent Control Act gives protection to the tenants against eviction and specifies the grounds on which alone the landlord can obtain an order of the compe tent authority to recover possession of any premises let out to a tenant. Apparently, it was realised that some premises may be available for being let only for a limited period where the landlord did not require the same during that period alone provided the landlord was assured of restora tion of possession on expiry of the limited period. However, while enacting a provision permitting the creation of a tenancy for limited period to utilise such premises and alleviate to some extent the suffering of persons needing residential accommodation, it was necessary also to ensure that the provision was not misused by capricious landlords to circumvent Section 14 of the Act. It was to achieve this dual purpose that Section 21 was enacted in the Delhi Act to encourage landlords who did not need any premises for a limited period only, to let it out for such period with the assurance of restoration of possession at the end of that period without being required to satisfy Section 14 of the Act. The provision also contains an internal check upon an unscrupulous landlord by requiting the Rent Controller 's permission to be granted in the given circumstances only. The conditions on which permission can be granted by the Rent Controller under Section 21 are specified in Section 21 itself. A fortiori when the question arises about the valid ity of the Rent Controller 's permission it can be tested only with reference to the specified conditions subject to which alone permission can be granted by the Controller. No outside factor can be imported either for grant of the permission thereunder or for adjudicating its validity at a subsequent stage. Section 21 being in the nature of an exception to the ordinary mode of 305 eviction of tenants prescribed under section 14 of the Act, it must be strictly construed and the scope thereof limited to its contents. Section 1 of the Act is by itself the complete provision relating to the creation of a tenancy for limited period and recovery of possession on expiry of that period. Thus, Section 21 is a self contained code in this behalf. Section 21 permits the creation of a tenancy for limited period "Where the landlord does not require the whole or any part of premises for a particular period"; and it is to be let for 'residence '. These words of the provision specify the jurisdictional facts which alone permit creation of a tenancy for limited period. The remaining provision provides the machinery for doing so by an agreement in writing be tween the landlord and the tenant on the basis of which permission of the Controller is obtained. The provision further says that if On expiry of the said period the tenant does not vacate such premises, then 'notwithstanding any thing contained in Section 14 or in any other law ' the Con troller may on an application by the landlord place the landlord in vacant possession of the premises by evicting the tenant and every other person who may be in occupation of such premises. The enquiry contemplated at the stage of grant of permission by the Controller under this provision requires the Controller to be satisfied that the landlord does not require such premises for a limited period only; and the said premises is to be let as a residence in terms of an agreement in writing between the landlord and tenant. On satisfaction of the existence of these facts, the Con troller grants permission for creation of tenancy for a limited period under this provision. When recovery of pos session of the premises is sought thereafter by the landlord under this provision then the Controller is to restore possession to the landlord "notwithstanding anything con tained in Section 14 or in any other law" subject only to the requirements of this provision. Obviously it is the existence of a valid permission of the Controller for creation of a tenancy for limited period under this provision which brings into existence a valid limited tenancy and, therefore, such valid permission is a sine qua non of Controller 's jurisdiction to order restora tion of possession on expiry of that period under the second part of Section 21. It is, therefore, the obligation of the Controller to examine the question of validity of his earli er permission, if such an objection is raised before he orders restoration of possesion to the landlord on expiry of the limited term. However, that enquiry must be limited only to the existence of the aforesaid jurisdictional facts at the time of grant of permission and no more. This is quite evident from the expression 'notwithstanding anything con tained in Section 14 or in any 306 other law '. in the second part of Section 21 itself. This is the inbuilt safeguard in the provision against its misuse. We have no doubt that the language of Section 21 of the Act clearly forbids the Controller from embarking on an enquiry beyond the ambit of Section 21 itself which may impinge into the sphere of Section 14 of the Act or any other law. We have no hesitation in holding that it is the existence of the aforesaid jurisdictional facts at the time of grant of permission to create a limited tenancy which alone is required to be determined by the Controller, if and when, validity of his permission is assailed at a subsequent stage. This being the scope of his enquiry while granting permission, the scope of enquiry at the subsequent stage cannot be wider. For this reason any objection to the valid ity of the permission on a ground other than non existence of the jurisdictional facts at the time of grant of permis sion is untenable and beyond the scope of the Controller 's power to examine validity of his earlier permission before directing restoration of possession to the landlord under section 21 of the Act. In short, the scope of enquiry before the Controller when validity of the permission granted by him is assailed is to determine: whether, the permission accorded by him earlier was not really to the creation of a genuine tenancy for limited period but to a mere pretence of the landlord for circumventing the provisions of Section 147 If so, such an act being a fraud on the statute, it does not bind the tenant whose consent to the sham transaction is obtained taking advantage of his unequal bargaining power, and he can assail the permission. It is equally plain that the object of enacting Section 21 to permit creation of tenancies for limited period should not be frustrated by unduly enlarging the scope of that enquiry at the behest of a tenant who having given his free consent to the creation of a genuine limited tenancy thereafter attempts to thwart restoration of possession to the landlord by raising untenable pleas in spite of the clear prohibition made by the words "notwith standing anything contained in Section 14 or in any other law" This delicate balance between the two conflicting interests has to be borne in mind, in order to give true effect to Section 21 and thereby to promote the object of its enactment. We may now refer to the decisions of this Court. S.B. Naronah vs Prem Kurnari Khanna, ; is the first decision on the point which deals comprehensively with the scope of Section 21 of the Act. Krishna lyer, J. speak ing for the Bench said as follows: 307 "Parliament was presumably keen on maximising accommodation available for letting, realising the scarcity crises. One source of such spare accommodation which is usually shy is poten tially vacant building or part thereof which the landlord is able to let out for a strictly limited period provided he has some credible assurance that when he needs he will get it back . . The problem is felt most for residential uses. So the law has to make itself credit worthy. Section 21 is the answer". "Section 21 overrides Section 14 precisely because it is otherwise hedged in with drastic limitations and safeguards itself against landlords ' abuses . . What, then, are those conditions and safe guards? The first condition is that the land lord does not require the demised premises "for a particular period" only . . The Controller must be satisfied that the landlord means what he says and it is not a case of his not requiring the property indefinitely as distinguished from a specific or particular limited period of say one year, two years or five years. If a man has a house available for letting for an indefinite period and he so lets it, even if he specifies as a pretence, a period or term in the lease, Section 21 cannot be attracted. On the other hand, if he gives a special reason why he can let out only for a limited period and requires the building at the end of that period . . it is good compliance. The second condition is that the letting must be made for a resi dential purpose. The house must be made over 'as a residence ' ." "The fact that a landlord and a potential tenant together apply, setting out the formal ingredients of Section 21, does not relieve the Controller from being vigilant to inquire and satisfy himself about the requisites of the landlord 's non requirement "for a particu lar period" and the letting itself being 'as a residence '. A fraud on the statute cannot be permitted . . " "If he makes a mindless order the Court, when challenged 308 at the time of execution, will go into the question as to whether the twin conditions for sanction have really been fulfilled. Of course, there will be a presumption in favour of the sanction being regular, but it will still be open to a party to make out his case that in fact and in truth the conditions which make for a valid sanction were not present . . " " . . the sanction granted under Section 21, if it has been procured by fraud or collu sion, cannot withstand invalidity because, otherwise, high public policy will be given and hostage to successful collusion . . Collusion between the strong and the weak cannot confer validity where the mandatory prescriptions of the law are breached or betrayed". (emphasis supplied) S.B. Naronah 's case has thereafter been consistently followed by this Court and treated as the correct analysis of Section 21. With respect, we concur and reiterate that the scope of Section 21 is succinctly summarised in the above extracts. There is nothing in this decision to support the respondent tenant 's contention in this appeal that the scope of enquiry is wider permitting determination of the landlord 's bona fide need of the pemises as if such a ground for eviction specified in Section 14 of the Act has to be proved. Extending the enquiry to that extent will indeed be against the express prohibition enacted in Section 21 it self. The next decision in V. section Rahi and Anr. vs Smt. Ram Chambeli, ; Venkataramiah, J. (as he then was) speaking for the Bench applied the decision in S.B. Naronah 's case and pointed out that even though the initial presumption was that the permission granted by the Control ler under section 21 of the Act was regular yet the material produced should be examined in order to be satisfied that there has not been any misuse of the said provision by the landlord taking advantage of the helpless situation of the tenant due to house scarcity. Facts of that case show that the scope of enquiry was limited only to examining existence of the jurisdictional facts at the time of grant of permis sion by the Controller. In Smt. Dhanwanti vs D.D. Gupta, [1986] 3 SCC 1, it was held on the facts of that case that permissions for letting out to the same tenant for limited period obtained more than once after expiry of each said 309 period was by itself not sufficient to establish that the premises was available for being let out for an indefinite period; without showing absence of landlord 's intention to occupy the premises. Notice was taken of the common knowl edge that it is not possible for a man to plan his future life with any degree of definiteness and changing circum stances may justify such a course. The principle applied was the same and the ultimate conclusion was reached on the particular facts of that case. In Inder Mohan Lal vs Ramesh Khanna, ; , it was held that the presumption of validity of the permission given by the Controller was not rebutted by the tenant since there was no evidence to show non existence of any of the essential conditions which enable the permission to be granted. The earlier decisions of this Court starting with Naronah 's case were referred and the test indicated therein was applied. In S.K. Lata vs R.C. Chhiba and Another, ; , the permission given by the Controller for creation of tenancy for a limited period was held to be vitiated on the ground of fraud on statute because the permission was ob tained without disclosing that the tenant had already been inducted under an oral lease and was in possession of the premises prior to the application made before the Control ler. It was, therefore, held applying the same test that an essential condition for grant of sanction under section 21 by the Rent Controller did not exist. Now the only remaining point is the requirement of notice during enquiry into validity of the Controller 's permission before ordering restoration of possession to the landlord. A decision of this Court on this point isJ. R. Vohra vs India Export House (P) Ltd. & Anr. , ; In J.R. Vohra 's case it was reiterated that the condi tions specified for grant of permission by the Controller under section 21 must be 'truely fulfilled and not by way of any make belief before the Controller grants his permission for the creation of such limited tenancy '. After reiterating this position the Court proceeded to consider the require ment of a notice to the tenant before issuing warrant of possession in favour of landlord. It was held that the competing claims of the landlord and the tenant can be harmonised not by insisting upon service of a prior notice on the tenant before the issuance of the warrant of posses sion to evict him but by insisting upon his approaching the Rent Controller during the currency of the limited tenancy for adjudication of his pleas no sooner he discovers facts and 310 circumstances that tend to vitiate ab initio the initial grant of permission. It was observed that there is no reason for the tenant to wait till the landlord makes his applica tion for recovery of possession to raise his plea. It was further observed that in case the tenant comes to know, aliunde, of the landlord 's application for recovery of possession even without notice to him, he may raise his plea at that stage and the Controller would enquire into the same but in that situation the tenant may run the risk of getting his plea rejected as an after thought. It was expressly held in this decision that there is no obligation on the part of the Rent Controller to serve a notice on the tenant before issuing the warrant of possession on the landlord 's applica tion made after expiry of the period of limited tenancy for recovery of possession. It is obvious from the decision in J.R. Vohra 's case that the tenant is expected to raise such a plea during currency of the limited tenancy and on such a plea being raised by the tenant enquiry into it is contemplated. Even though it is not expressly said in Vohra 's case, it is implicit that on such an application being made by the tenant requiring adjudication by the Controller, it is the Controller 's obligation to issue notice of the same to the landlord and then to make the adjudication with opportunity to both sides to prove their respective contentions. As for the requirement of notice to the tenant before issuing the warrant of possession in favour of the landlord on his application for recovery of possession on expiry of the limited tenancy, it appears to us also that no notice to the tenant at that stage is either contemplated or expedi ent. This appears to be the reasonable view which is in accord with the scheme of Section 21. Obviously notice is to be given of a fact which may otherwise be not known to the notice. The period of limited tenancy and the date of its expiry are known to the tenant from the very inception. The tenant is equally aware of his own default in restoring vacant possession of such premises to the landlord on expiry of that period. It is only these facts, well known to the tenant, which compel the landlord to apply for recovery of possession pursuant to the tenant 's default. The plea of invalidity, if any, of Controller 's earlier permission must equally be known to the tenant at least by then coupled with his knowledge that unless a declaration is made at his instance that the Controller 's permission is invalid, he must vacate, the limited tenancy having expired. Why then should a notice to him at that stage be necessary and for what useful purpose? We cannot think of any good reason to require a notice to the tenant at that stage. The object of enquiring into the validity of the Controller 's permission under section 21 is only to ensure that essentials of a limited tenancy 311 existed and the same was genuine; and it is not meant to permit raising of frivolous pleas which would frustrate the very object of its enactment. This view protects the honest tenants and only curbs the frivolous and vexatious pleas. There is another aspect of the matter. The Controller 's permission when granted to create a limited tenancy under section 21 of the Act is presumed to be valid unless de clared otherwise. It is, therefore, for the person assailing its validity to get such a declaration from a proper forum in a proper proceeding. Unless this is done, the order remains enforceable. The duty is clearly on the tenant himself to raise the plea of invalidity and unless the order is declared invalid at his instance, it is enforceability cannot be doubted. In Wade 's Administrative Law, 6th Edn. at pp 35 1 353, there is an illuminating discussion of this topic. It has been pointed out that 'void ' is meaningless in an absolute sense; and 'unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders '. In the words of Lord Diplock, "the order would be presumed to be valid unless the presumption was rebutted in competent legal proceedings by a party entitled to sue". For the above reasons, we are in respectful agreement with the view taken in J.R. Vohra 's case (supra) that there is no obligation on the Controller to issue notice to the tenant of the landlord 's application for recovery of posses sion made on expiry of the period of tenancy for a limited period under section 21 of the Act, but an enquiry on the tenant 's plea has to be made to the extent indicated, if the tenant assails validity of the Controller 's permission even at that stage. We shall now consider the merits of this case on the basis indicated above. The High Court has upheld rejection of the landlord 's application for recovery of possession under section 21 of the Act on the ground that the land lord 's son would be about 19 or 20 years old on expiry of three years period of limited lease but he could not be married till he attained the prescribed minimum age of 21 years which showed that the Controller 's order granting permission was mindless and was obtained by fraud. The permission has, therefore, been held invalid. In our opin ion, the High Court as well as the authorities below it misconstrued the requirements of Section 21 of the Act. It is not a case where the landlord did not have a son who was expected to be 312 married some time after three years. In substance the reason for availability of the accommodation for the limited period of three years only given by the landlord was that the premises was not needed by the landlord till his son got married some time after three years. The reason was not to be construed as a statement that the son was to be married exactly on the date on which three years expired. The date of son 's marriage could not be foreseen or estimated with such precision as to coincide with the date of expiry of the limited lease. All that has to be seen is whether the period of limited tenancy was indicated by the landlord with refer ence to a foreseeable future event and the estimate of time of its occurrence was not unreasonable. When the period of limited tenancy is stated on the basis of a future event, the happening of which is reasonably certain at that time though the precise date of the future event cannot be pre dicted with precision, the landlord 's estimate of the period after which the event is expected to happen, unless unrea sonable must be accepted for this purpose as genuine. This would satisfy the test of a genuine limited tenancy if there be no other factor indicating it to be a mere pretence adopted by the landlord. This test is fully satisfied in the present case. Merely because the son 's age then was about one year below the prescribed minimum age for marriage the estimate of landlord that he would not need the premises for three years only till his son 's marriage cannot be treated as a pretence. One year 's period for settling and arranging performance of the marriage is nothing unusual since exist ence of the basic facts is undisputed. Existence of this jurisdictional fact to justify the permission has not been negatived and no material has been produced by the tenant to substantiate his plea. The other ground taken by the respondent tenant is that the existing accommodation available with the landlord is sufficient for the needs of his family. It is sufficient to state that the enquiry contemplated under section 21 in this behalf is not the same as that for determining existence of the ground of bona fide need of the landlord for an order of eviction under section 14 of the Act, and Section 14 is expressly superceded by Section 21. This question is, there fore, beyond the scope of the present enquiry. The respondent tenant also contended that the premises was constructed in 1972 and the landlord had never occupied this premises viz., the second floor of the building for his personal use and had even let out the first floor prior to 1980. In the present case the respondenttenant did not produce any material to prove letting out of any part of the building much less this premises i.e. second floor of the building. 313 After the arguments were concluded before us and the judg ment was reserved, the respondent has filed an application under order 41 Rule 27 read with Section 15 1 C.P.C. for admitting additional evidence to show letting out of the second floor of the building. It has been stated that the evidence could not be produced in the Courts below since the objections were not listed for investigation by the Courts. No cogent ground is shown to permit any additional evidence when no attempt to produce any evidence was made in any of the Courts below upto the High Court or even here till conclusion of the hearing before us. The application is rejected. The lease for limited period of three years ex pired in 1983 and more than six years have been spent since then in this litigation at the stage of recovery of posses sion. The facts of the case indicate that the respondent 's plea is a clear after thought and is baseless. The absence of existence of any jurisdictional fact not having been proved by the respondent tenant even after objecting to recovery of possession on expiry of the period of limited tenancy there was no ground to refuse restoration of possession to the landlord. More than twice the period of the limited lease has expired even after the date of expiry of the lease. We see no reason to delay any more the relief due to the landlord. Consequently, the appeal is allowed. The impugned orders passed by the Rent Controller, Rent Control Tribunal and the High Court are set aside and the landlord 's application for recovery of possession is allowed. The respondent tenant shall also pay Rs.2,000 as costs to the appellant landlord in addition to an amount equal to that calculated on the basis of the monthly rent for the entire period till the date of restoration of possession. Y. Lal Appeal allowed.

This is a land lord 's appeal. By an agreement in writing between the parties, the second floor of the premises bear ing No. 19/10, Rajinder Nagar, New Delhi was let out to the Respondent for a limited period of three years w.e.f. June 8, 1980, with the permission of the Rent Controller obtained under section 21 of the Act. The Respondent tenat having failed to deliver vacant possession of the premises in question, after the expiry of the stipulated period, the appellant moved an application before the Rent Controller for execution of his order by delivery of possession of the premises to him. The Respondent tenant filed an objection to the said application to which the appellant replied duly. The Rent Controller rejected the appellant 's application taking the view that the permission granted under section 21 of the Act was invalid and thus the tenant could not be evicted on the expiry of 3 years. The Rent Controller there by upheld the tenant 's objection that the landlord 's son being aged only 19 or 20 years, on the date of the expiry of the period of limited tenancy while the minimum age pre scribed by law for marriage being 21 years the ground that the premises were needed for the son 's marriage was not tenable. The Rent Controller accordingly held that creation of limited tenancy amounted to fraud and misrepresantation by the landlord which rendered the permission invalid. The appellant 's appeal to the Tribunal as also to the High Court having failed, he has filed this appeal after obtaining Special Leave. The Tribunal and the High Court affirmed the view of the Rent Controller treating the grant of permission by the Controller to be mechanical and without application of mind. Allowing the appeal, this Court, HELD: The object of enquiring into the validity of the Control 300 ler 's permission under section 21 is only to ensure that essentials of a limited tenancy existed and the same was genuine; and it is not meant to permit raising of frivolous pleas which would frustrate the very object of its enact ment. This view protects the honest tenants and only curbs the frivolous and vexatious pleas. [310H; 311A] Controller 's permission when granted to create a limited tenancy under sec. 21 of the Act is presumed to be valid unless declared otherwise. It is, therefore, for the person assailing its validity to get such a declaration from a proper forum in a proper proceedings. Unless this is done, the order remains enforceable. The duty is clearly on the tenant himself to raise the pleas of invalidity and unless the order is declared invalid at his instance, its enforce ability cannot be doubted. [31lB C] All that has to be seen is whether the period of limited tenancy was indicated by the landlord with reference to a foreseeable future event and the estimate of time of its occurrence was not unreasonable. [312B] When the period of limited tenancy is stated on the basis of a future event the happening of which is reasonably certain at that time though the precise date of the future event cannot be predicted with precision, the landlord 's estimate of the period after which the event is expected to happen, unless unreasonable must be accepted for this pur pose as genuine. This would satisfy the test of a genuine limited tenancy if there be no other factor indicating it to be a mere pretence adopted by the landlord. [312C D] The enquiry contemplated under section 21 in this behalf is not the same as that for determining existence of ground of bona fide need of the landlord for an order of eviction under section 14 of the Act, and section 14 is expressly superseded by section 21. The scope of enquiry is limited only to the existence of the jurisdictional facts at the time of grant of the permission when its validity is chal lenged subsequently. [312F] The absence of existence of any jurisdictional fact not having been proved by the respondent tenant even after objecting to recovery of possession on expiry of the period of limited tenancy, there was no ground to refuse restora tion of possession to the landlord. [313C] S.B. Naronah vs Prem Kumari Khanna, ; ; V.S. Rahi & Anr. vs Smt. Ram Chambeli, ; ; Smt. Dhanwanti vs D.D. Gupta, [1986] 3 SCC 1; Inder Mohan Lal vs 301 Ramesh Khanna; , ; S.K. Lata vs R.C. Chhiba & Anr,, ; and J.R. Vohra vs India Export Hlouse (P) Ltd. & Anr. , ; , referred to.

Appeals Nos. 415 to 419 of 1964. Appeals from the judgment and decree dated April 12, 1961, of the Kerala High Court in O.P. Nos. 88 of 56, 240 of 1956E, 117 of 1957, 50 of 1958 and 156 of 1958. C. K. Daphtary, Attorney General and V. A. Syeid Muhammad, for the appellants (in all the appeals). G. B. Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the respondents (in all appeals). 583 The Judgment of the Court was delivered by Mudholkar J. The only point which arises for decision before us in this group of five appeals from a common judgment delivered by the High Court of Kerala in six writ petitions, five of which were preferred by the respondents and one by M/s. Brooke Bond (India) Ltd., is whether section 2 of the Kerala Profession Tax (Validation and Reassessment) Act, 1958 (Act No. XIV of 1958) is invalid on the ground that it violates the provisions of ' article 276 of the Constitution. The relevant part of article 276 of the Constitution runs thus: "276(1) Notwithstanding anything in Article 246 no law of the Legislature of a State relating to taxes for the benefit of the State or of a municipality district board, local board or other local authority therein in respect of professions, trades, callings, or employments shall be invalid on the ground that it relates to a tax on income. Provided that if in the financial year immediately preceding the commencement of this Constitution there was in force in the case of any State or any such municipality, board or authority a tax on professions, trades, callings or employments the rate, or the maximum rate, of which exceeded two hundred and fifty rupees per annum, such tax may continue to be levied until provision ' to the contrary is made by Parliament by law, and any law so made by Parliament may be made either generally or in relation to any specified States, municipalities, boards or authorities. " It is common ground that before the Constitution came into force the Quilon Municipality had, in exercise of the power conferred by section 91 of the Travancore District Municipalities Act, 23 of 1116 M.E. corresponding to the year 1940 (hereafter referred to as the Act) imposed a profession tax upon every company and every person who, among other things, transacts business within the limits of the municipality for not less than a certain period during a year. Sub section (1) of section 91 further provides that a company or person liable to pay the tax shall pay a half yearly tax assessed in accordance with the rules mentioned in Schedule H. 'Me Schedule contains, amongst other things, rules, and rules 16 and 18 are the only rules relevant for consideration in these appeals. Rule 16 sets out slabs of half yearly income for the purpose of assessment of companies and persons to the LlSup./65 12 584 tax. In this rule the assesees are divided into 12 classes. In the first class come assessees whose half yearly income exceeds Rs. 21,000 who have to pay a tax of Rs. 275 per half year. Next below it is cl. (2) which provides that those whose half yearly income exceeds Rs. 18,000 but does not exceed Rs. 21,000 shall pay a tax of Rs. 225 every half year. The liability of assessees whose incomes are below Rs. 18,000 goes on diminishing in each lower slab. Then there is a proviso to sub r. (1) which runs thus "Provided that a company whose half yearly income is more than twenty one thousand rupees shall, notwithstanding anything contained in this or any other rule, pay in addition to the maximum half yearly tax of rupees two hundred and seventy five and additional half yearly tax on such excess calculated at the rate of one rupee per one hundred rupees or part thereof." With respect to assessees falling within the first slab the proviso thus imposes an additional tax over and above Rs. 275 every half year. We are not concerned with the remaining sub rules of r. 16. Rule 18 contains three sub rules but we are concerned ,only with sub rr. (1) and (2) and they are as follows : "(1) Where a company or person transacts busi ness in any half year exclusively in the area of a single municipality, the income of such company or person from the transaction of such business shall, for the purpose of levying profession tax under this Act during the half year, be deemed to be (a) where income tax is assessed on such company or person under the Travancore Income tax Act for the year, comprising the half year, one half of the amount at which the profits and gains of such business are computed under Section 8 of the Travancore Income tax Act for the purpose of assessing the income tax; and (b) where the amount of the said profits and gains is not ascertainable or where such company or person is not assessed to income tax, such percentage as our Government may prescribe, of the turn over of the business transacted in the area of the municipality during the half year or where this is also unascertainable during the corresponding half year of the previous year. 585 (2) Where a company or person transacts business partly in the area of a municipality and partly outside such area, the income of such company or person from the transaction of business in the area of the municipality shall, for the purpose of levying profession tax under this Act, be deemed to be the percentage prescribed under clause (b) of sub rule (1) of the turnover of the business transacted in such area during the half year or the corresponding half year of the previous year, as the case may be." By a notification of August 28, 1947 the appropriate authority empowered by section 325 of the Act to frame rules added the following proviso to sub r. (2) : "Provided that in the case of a company or person assessable to income tax, the total profits earned by the company or person as disclosed by the Income tax assessment for the whole State for the year comprising the half year for which the profession tax is to be levied, shall be divided in the proportion of the turn over of the business of the company or person in the Municipality and outside, for purposes of assessment to profession tax. " By the operation of section 3 of the Indian Finance Act, 25 of 1950 the Travancore Income tax Act stood repealed and the municipal authorities construed the reference to the Travancore Income tax Act in sub r. (1) of r. 18 as reference to the Indian Income tax Act. They also construed the reference to the Travancore Income tax Act in the proviso to sub r. (2) in the same way. In Harrisons and Crosfield Ltd. vs Commissioner of Quilon Municipality(1) the Travancore Cochin High Court held that the proviso had only provided for the adoption of certain figures representing the total profits as disclosed by the Income tax assessment for a particular year in which the emphasis was upon the assessable area, which, after the coming into force of the Indian Income tax Act in the State of Travancore became impossible of ascertainment and that, therefore, the entire proviso was rendered obsolete. Thereafter, the appropriate authortiy amended sub rr. (1) and (2) of r. 18 by notification dated February 15, 1956 as follows : "(1) In clause (a) of sub rule (1) of rule T.C. 1003. 586 .lm15 (a) for the words 'Travancore Income Tax Act ' wherever they occur, the words and figures 'Indian Income Tax Act, 1922 ' shall be substituted. (b) for the word and figure 'Section 8 ' the word and figure 'Section 10 ' shall be substituted. (2) In the proviso to sub rule (2) of Rule 18 for the words 'whole State ' the words 'whole of the Indian Union ' shall be substituted. These amendments shall be deemed to have come into effect from 1st April 1950. " The validity of the amendments was challenged before the High Court in Highland Produce Co. Ltd. vs The Commissioner, Alleppey Municipal Council(1) on the ground that the power conferred by section 325 of the Act to frame rules could not be exercised so as to give retrospective operation to any rule. The High Court accepted the contention add thereupon Act 14 of 1958, the validity of section 2 of which is challenged before us, was enacted by the Kerala Legislature. That provision reads thus "Validation of the levy or collection of profession tax under the Travancore District Municipalities Act, 1116 : Notwithstanding any judgment, decree or order of any court, the amendments to the Taxation and Finance Rules contained in Schedule It to, the Travancore District Municipalities Act, 1116 (XXIII of, 1116) made by Notification No. LS. 11 13975/55/ DD dated 15th February, 1956 of the Government of the former State of Travancore Cochin, shall be deemed to have come into force with effect from the first day of April, 1950 and the validity of the levy or collec tion of profession tax made under the said Act and Rules shall not be called in question on the ground that the amendments made by the notification aforesaid cannot have any retrospective operation, and any profession tax so levied but not collected may be collected as if the said amendment had been validly made with effect from the first day of April, 1950. " It will be clear from the language of this provision that the legislature purported to validate the levy and collection of the tax under the amended proviso by validating the amendment of the proviso. The High Court struck down this section and now the (1) O.P. Nos. 196 to 202 of 1955 decided in October, 1956. 587 Quilon Municipality and its Commissioner have come up before us in appeal. The learned Attorney General who appears for the appellants contends that what the Act does is merely to adapt the machinery for the assessment and levy of the tax to a situation arising out of the repeal of the Travancore Income Tax Act by section 3 of the Indian Finance Act, 1950 and replacing that Act by the Indian Income tax Act. It, therefore, according to him, does not infringe the provisions of article 276 of the Constitution. He also contends that the retrospectivity given to the provision does not infringe the aforesaid constitutional provision. In support of the contention he has relied upon the decision in Mst. Jadao Bahuji vs Municipal Committee Khandwa(1). Before dealing with the effect of the amendment made to the proviso added in the year 1947 we must first consider whether the proviso merely purported to create a machinery for implementing the tax. We will assume that under section 325 of the Act it was competent to the State Government of Travancore to enact the proviso which it did in the year 1947. If we look at r. 18 (2) as it stands it is clear that it did provide the means of assessing profession tax upon a company or person transacting business partly in the area of the municipality and partly outside such area. Under sub r. (2) what the assessing authority had to do was to ascertain what was the turnover of the business transacted by the assessee within the municipal area and calculate the profits which the assessee will be deemed to have earned on the basis of the percentage prescribed by the Government under cl. (b) of sub r. Thus, the basis for taxation was the amount of profits deduced in this manner. Now, if we look at the proviso as it stood when it was first enacted in February, 1947 it would be clear that it contemplates the division of the profits earned by the assessee in the whole State between the turn over of the business within the municipal area and the turn over of the business outside the area. The total profits would, under the proviso, be the amount disclosed by the income tax assessment for the whole State and their division was to be in the proportion of the turnover of the business within the municipality and outside it. Obviously, therefore, what the proviso did was to introduce a new basis for assessment of the taxable income. We say so because the assessment of profits in this way links up their computation with the income assessed for levying income tax. Under the Travancore Income tax Act only a certain set of deductions (1) 588 were permissible. Now, if an assessee has in fact expended money for certain purposes but such expenses are not allowable deductions under the Travancore Income tax Act, it would follow that the profits calculated by reference to the income tax assessment may work out higher than those actually earned by the assessee. We do not know what was the percentage prescribed by the Government of Travancore under cl. (b) of sub r. (1) of r. 18. But it is possible that the assessable profits determined with reference to that provision may have been less than those determined under the proviso. In any case it cannot be said with certainty that the profits arrived at would have been iden tical in the two cases. From the fact that the State enacted the proviso it would not be unreasonable to assume that the State thereby expected that the municipality would earn more income than under a computation made under sub r. (2) of r. 18 read with cl. (b) of sub r. (1) of r. 18. Another thing which the proviso of 1947 did was to take out of the category of assessees dealt with by sub r. (2) of r. 18 such companies or persons as were assessable to income tax. Sub rule (2) as it stood, treated companies and persons transacting business partly in the area of the municipality and partly outside such area on a uniform footing irrespective of the question whether a company or a person was assessed to income tax or not. For the first time the proviso put in a separate class those who were assessed to income tax. The proviso thus affected the basis of assessment of tax and did not merely deal with the procedure for assessing the tax. In the circumstances we cannot accept the contention of the learned Attorney General that the proviso did not affect either the basis or the incidence of the tax but merely provided a machinery for implementing the tax. Therefore, while dealing with the amendment made in the year 1956 we have to bear in mind that it was made in a provision concerning the basis of taxation. The question then would be whether the amended proviso was likely to enhance an assessee 's liability. No doubt, the object was to adapt the earlier proviso to the situation created by the repeal of the Travancore Income tax Act. But whatever was its object, we have to ascertain its effect on an assessee 's liability to pay the profession tax. The proviso as it originally stood had linked up the deter mination of the profits liable to tax under the rules with the Travancore Income tax Act. The amendment of sub r. (1) of 589 r. 18 has the effect of linking it up with the Indian Income tax Act. By the amendment of the proviso the words "the whole of Indian Union" are now to be read therein for the words "the whole State". Mr. Pai for the respondent contended that in consequence of the amendment the total profits earned by a company or person as disclosed by the income tax statement for the whole of India will now have to be divided in the same proportion as the turnover of the business of the company or person within the municipality bore to the turn over outside the municipality, 'or the purpose of assessment of the tax. The result of this, according to him, may sometimes be that a much larger amount of profits will have to be taken into account for assessing the tax than under the unmended proviso. He says that the amount of assessable profits would depend upon the permissible deductions under the Indian Income tax Act and that if they are fewerthan before the result would be that assessable profits determine( under the Indian Income tax Act would be higher than those under the Travancore Income tax Act. As no detailed comparison of the provisions of the Travancore Income tax Act as it force at the date of the amendment with those of the Indian Income tax Act was made during the argument, we are not in a position to say whether in fact the assessable profits under the Indian Income tax Act would have been larger than those under the Travancore Act at that time. We cannot, however, deny the Possibility of the permissible deductions under the Indian Income tax Act being fewer than those under the Travancore Act as it stood at the date of its repeal. Again, since the amendment introduces a different statute with reference to which assessable profits are to be ascertained it is possible that the amended proviso may enhance the tax liability not only of assesees falling within the first slab but also of assessees falling in the lower slabs. Mr. Pai has sought to demonstrate by reference to actual figures that in respect of certain periods the present assessee 's liability to pay the tax as ascertained under the amended proviso would be higher than what it would have been under the amended proviso. These figures are to be found in three statements filed in the High Court by the respondents and marked as Ex 4, 13 and 23. The statements are identical and we would on refer to the first of them. In column 1 of exhibit 4 is mentioned the year of assessment; in the second column the turnover within the Quilon Municipality is set out; in the third column the turn over relating to profits 590 assessable to Travancore income tax Act is set out; in the fourth column the turnover in India is set out; in the fifth column income assessable under the Travancore Income tax Act, had it been in force, is set out; in the sixth column income assessed under the Indian Income tax Act is set out. From these figures income computed as per proviso to r. 18(2) before its amendment has been set out. If 'X ' is the figure in col. 5, 'Y ' is the figure in col. 3 and 'Z ' the figure in col. 2, the amount of Income before the amendment of the proviso would then be x/y x Z. We might call it 'The(1) [i.e. 'taxable income (1) ']. In tie last column of the statement the taxable income computed as per the proviso after its amendment is set out. This is arrived at by ,dividing the income assessed under the Indian Income tax. Act which we will call 'A ' by the turn over in India which we will call 'B ' and multiplying it by the turnover within the Quilon Municipality i.e. 'Z '. The taxable income thus arrived at i.e. A x Z might be called 'TI (2) '. It would appear by the comparison of the figures in col. 7 with those in col. 8 that in respect of the periods ending on June 30, 1949; June 30, 1950; June 30, 1951; June 30, 1954 and June 30, 1955 TI(2) is lower than TI(1). But in respect of periods ending on June 30, 1152; June 30, 1953 and June 30, 1956 TI(2) is higher than TI (1). Since the Attorney General does not accept the correctness of the figures in columns 2 to 5 we will regard them as merely hypothetical. But even on the basis of these hypothetical figure it is apparent that by applying the amended proviso the quantum of liability to pay tax on the same turn over with respect to the same period would, in certain cases, be higher than what it would have been by applying the unmended proviso. The burden of tax is thus liable to be increased in certain circumstances. We have already pointed out that the amendment of 1956 was to operate as from April, 1950, that is, from a point of time coinciding with the repeal of the Travancore Income tax ct. But then the proviso is given operation subsequent to the commencement of the Constitution, and the provisions of article 276 would stand in the way of the legislature which validated it. The learned Attorney General relying upon the decision of this Court in Mst. Jadao Bahuji 's case(1) contended that he Kerala legislature was competent to give retrospectivity to a validating law and that since the legislature has validated he amendment to the proviso as from April, 1950, the amendment is valid and took effect from that date. The decision upon (1) 591 which he has relied is distinguishable. That was a case in which the Validating Act had validated the imposition of a tax in excess of Rs. 50 not for a period subsequent to March 31, 1939 but for a period prior to that date. The contention of the assessee was that as the Validating Act was passed subsequent to the coming into force of section 142 A of the Government of India Act, 1935 it was beyond the competence of the provincial legislature. This contention was rejected by this Court. The case before us. however, is different because the Validating Act purported to validate a profession tax to an extent above Rs. 250 subsequent to the commencement of the Constitution. The following obser vations of this Court in that case in fact militate against the contention of the learned Attorney General : "There can be no doubt that if a law was passed after the amendment and sought to impose taxes on professions etc., for any period after March 31, 1939, it had to conform to the limit prescribed by section 142 A(2). The prohibition in the second subsection operated to circumscribe the legislative power by putting a date line after which a tax in excess of Rs. 50 per annum per person for a period after the date line could not be collected unless it came within the proviso." (p. 642). For all these reasons the amendment must, therefore, be regarded as violating the provisions of article 276 and we hold that the Kerala Legislature was incompetent to enact section 2 of the Validating Act. We accordingly dismiss the appeals with costs. There will be one set of hearing fees. Appeals dismissed.

The Quilon Municipality levied, in the pre Constitution period, a profession tax under powers conferred by the Travancore District Municipalities Act (Act 23 of 11 16 M.E., corresponding to 1940 A.D.). The tax was leviable on a half yearly basis on companies and persons transacting busi ness in the municipal area for not less than a certain period in a year. The rates were laid down in rule 16 of the Second Schedule to the aforesaid Act, and were on a graduated scale varying with the income of the assessee. Under Rule 18(2), as it originally stood the income of an assessee transacting business inside as well as outside the area of the Municipality was to be deemed to be a prescribed percentage of the turnover of the business inside the Municipality. A proviso was however added to Rule 18(2) in 1947 which laid down that in the case of the assessees who were assessed to income tax under the Travancore Income tax Act, the income for the purpose of levying the profession tax would be computed in the following manner i.e. the profits earned by the assessee in the whole State as disclosed by the assessment under the said Act would be divided in the proportion of the turnover of the business inside and outside the Municipality and the portion thus found attributable to the business in the Municipal area would be subjected to profession tax. In 1950, after the promulgation of the Constitution, section 3 of the Finance Act (Act 25 of 1950) repealed the Travancore Income tax Act and replaced it by the Indian Income tax Act, 1922. Thereafter Municipalities in Travancore began to construe the re ferences to the Travancore Income tax Act in rule 18 as references to the Income tax Act, but this procedure was held to be illegal by the Travancore Cochin High Court by a judgment delivered in 1955. The appropriate authority, thereupon by Notification dated 15th February 1956, amended rule 18 to provide, Inter alia, that, with effect from 1 4 50 references to the Travancore Income tax Act in that rule would be read as references to the Indian Income tax Act, and income under the proviso to sub rule (2) would be computed with reference to the income in the whole of the Indian Union instead of the income in the whole of Travancore State. The amended proviso was also struck down by the High Court, on the ground that it was retrospective in operation. Thereupon the Kerala Legislature passed the Kerala Profession Tax (Validation and Reassessment) Act, 1958 (Act 14 of 1958) which in section 2 provided that the levy of the tax under the aforesaid amendment would remain valid and would not be open to challenge on the ground that it had retrospective operation. 'Me respondents who were taxed by the Quilon Municipality under the amended proviso challenged the Validating Act before the Kerala High Court contending that it was a post Constitution law which in imposing a profession 582 tax of more than Rs. 250 per year on certain classes of assessees contravened the terms of article 276(2) of the Constitution. This contention was upheld by the High Court. Aggrieved thereby, the Quilon Municipality appealed to the Supreme Court. It was contended on behalf of the appellants that what the impugned Act did was merely to adapt the machinery for the assessment and levy of the tax to a situation arising out of the repeal of the Travancore Income tax Act and its replacement by the Indian Income tax Act in 1950, and therefore there was no contravention of article 276(2). Nor was the Article contravened by the retrospective given to the provision in question. HELD: (i) The proviso to rule 18(2) introduced in 1947 was not a mere machinery provision. Under rule 18(2) as it originally stood the income of all assessees transacting business both inside and outside the Municipality was, for the purpose of levying profession tax, computed on the basis of a percentage of the turn over inside the municipality. The proviso created a different procedure in the case of those who were assessed to income tax by linking up their income for the purpose of the profession tax with their profits in the whole State as assessed under the Travancore Income tax Act. Thus a new class of assessees came into being which had not existed before the proviso was enacted. The method of computing income laid down in the proviso was also likely to result in a different incidence of tax liability in the case of those covered by it. Considering all this, the argument that the proviso did not affect either the basis or the incidence of the tax, could not be accepted. [588 F]. (ii) The amendment of 1956 linked up the determination of the profits liable to profession tax with the Indian Income tax Act instead of the Travancore Income tax Act. Also, under the amended proviso to rule 18(2), the profits in the whole of the Indian Union and not merely in the State of Travancore, would be the basis of computing income for the purpose of levying profession tax. The provisions of the Indian and Travancore Income tax Acts were different and the territory of the Indian Union was much larger than that of Travancore, and these differences were likely to affect the tax liability of those covered by the said amendment. [590 E F]. (iii) The argument that the Kerala Legislature was competent to give retrospectivity to a validating law and that since the legislature had validated the amendment to the proviso as from April 1950, the amendment was valid, could not be accepted. The proviso had been given operation subsequent to the commencement of the Constitution and the provisions of article 276 would therefore stand in the way of the legislature which validated it. [590 F H]. Jaclao Bahuji vs Municipal Committee, Khandwa, , distinguished.